General Insurance Health Agents and Contracts

Question 1

A ________ is an agreement between two or more parties enforceable by law

Answer 1

contract

Question 2

In order for insurance contracts to be legally binding, they must have 4 essential elements

Answer 2

1. Agreement — offer and acceptance;
2. Consideration;
3. Competent parties; and
4. Legal purpose.

Question 3

In insurance, the _________ usually makes the offer

when submitting the application.

Answer 3

applicant

Question 4

___________ takes place when an insurer’s underwriter approves the application and issues a policy

Answer 4

Acceptance

Question 5

The binding force in any contract is the

_________________

Answer 5

consideration

Question 6

_______________ is something of value that each party gives to the other

Answer 6

Consideration

Question 7

The consideration on the part of _____________ is the payment of premium and the representations made in the application.

Answer 7

the insured

Question 8

The _________________ must be capable of entering into a contract in the eyes of the law

Answer 8

parties to a contract

Question 9

To be considered ___________to enter a contract one must be
be of legal age
mentally competent to understand the contract
not under the influence of drugs oralcohol.

Answer 9

Legally Compotent

Question 10

To ensure legal purpose of a Life Insurance policy, for example, it must have both: _______________and _______

Answer 10

insurable interest and consent.

Question 11

A contract without a legal purpose is considered void, and cannot be____________ by any party

Answer 11

enforced

Question 12

Aleatory =

Answer 12

unequal values

Question 13

unilateral = ____________

Answer 13

one-sided (only oneparty makes a promise)

Question 14

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_only
one party (insurer) prepares acontract, and the other party (insured) accepts it as is

Answer 14

adhesion

Question 15

Insurance contracts are ____________,

which means there is an exchange of unequal amounts or values

Answer 15

aleatory

Question 16

an insurance contract is a_____________

because it is between the insurance company and an individual

Answer 16

personal contract

Question 17

the__________ cannot be changed to someone else without the written consent of the insurer

Answer 17

insured

Question 18

In a ______________, only one of the parties to the contract is legally bound todo anything

Answer 18

unilateral contract

Question 19

a ____________ requires that certain conditions must be met by the policy owner and the company in order for the contract to be executed, and before each party fulfills its obligations

Answer 19

conditional contract

Question 20

any ambiguity in the contract should be interpreted

in favor of the____________

Answer 20

insured

Question 21

______________ is sometimes referred to as

reimbursement

Answer 21

Indemnity

Question 22

_________________
(sometimes referred to as
reimbursement) is a provision in an insurance policy that states that in the event of loss, an insured or a beneficiary is permitted to collect only to the extent of the financial loss, and is not allowed to gain financially because of the existence of an insurance contract

Answer 22

Indemnity

Question 23

The principle of _______________ implies that there will be no fraud,misrepresentation or concealment between the parties.

Answer 23

utmost good faith

Question 24

____________ are statements believed to be true to the best of one’s knowledge, but they are not guaranteed to be true

Answer 24

Representations

Question 25

_____________ are the answers the insured gives to the questions on the insurance application

Answer 25

representations

Question 26

Untrue statements on the application are considered

_____________ and could void the contract

Answer 26

misrepresentations

Question 27

A_____________________ is a statement that, if discovered, would alter the underwriting decision of the insurance company

Answer 27

material misrepresentation

Question 28

If ______________ are intentional

, they are considered fraud.

Answer 28

material misrepresentations

Question 29

A ________ is an absolutely true statement upon which the validity of the insurance policy depends

Answer 29

warranty

Question 30

Breach of ___________ can be considered grounds for voiding the policy or a return of premium

Answer 30

warranties

Question 31

______________ is the legal term for the intentional withholding of information of a material fact that is crucial in making a decision

Answer 31

Concealment

Question 32

_________ is the intentional misrepresentation or intentional concealment of a material fact used to induce another party to make or refrain from making a contract, or to deceive or cheat a party. _______ is grounds for voiding an insurance contract.

Answer 32

Fraud

Question 33

_______is the voluntary act of relinquishing a legal right, claim or privilege.

Answer 33

Waiver

Question 34

___________ is a legal process that can be used to prevent a party to a contract fromre-asserting a right or privilege after that right or privilege has been waived

Answer 34

Estoppel