General Insurance Health Agents and Contracts Flashcards
A ________ is an agreement between two or more parties enforceable by law
contract
In order for insurance contracts to be legally binding, they must have 4 essential elements
- Agreement — offer and acceptance;
- Consideration;
- Competent parties; and
- Legal purpose.
In insurance, the _________ usually makes the offer
when submitting the application.
applicant
___________ takes place when an insurer’s underwriter approves the application and issues a policy
Acceptance
The binding force in any contract is the
_________________
consideration
_______________ is something of value that each party gives to the other
Consideration
The consideration on the part of _____________ is the payment of premium and the representations made in the application.
the insured
The _________________ must be capable of entering into a contract in the eyes of the law
parties to a contract
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.
Legally Compotent
To ensure legal purpose of a Life Insurance policy, for example, it must have both: _______________and _______
insurable interest and consent.
A contract without a legal purpose is considered void, and cannot be____________ by any party
enforced
Aleatory =
unequal values
unilateral = ____________
one-sided (only oneparty makes a promise)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_only one party (insurer) prepares acontract, and the other party (insured) accepts it as is
adhesion
Insurance contracts are ____________,
which means there is an exchange of unequal amounts or values
aleatory
an insurance contract is a_____________
because it is between the insurance company and an individual
personal contract
the__________ cannot be changed to someone else without the written consent of the insurer
insured
In a ______________, only one of the parties to the contract is legally bound todo anything
unilateral contract
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
conditional contract
any ambiguity in the contract should be interpreted
in favor of the____________
insured
______________ is sometimes referred to as
reimbursement
Indemnity
_________________
(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
Indemnity
The principle of _______________ implies that there will be no fraud,misrepresentation or concealment between the parties.
utmost good faith
____________ are statements believed to be true to the best of one’s knowledge, but they are not guaranteed to be true
Representations
_____________ are the answers the insured gives to the questions on the insurance application
representations
Untrue statements on the application are considered
_____________ and could void the contract
misrepresentations
A_____________________ is a statement that, if discovered, would alter the underwriting decision of the insurance company
material misrepresentation
If ______________ are intentional
, they are considered fraud.
material misrepresentations
A ________ is an absolutely true statement upon which the validity of the insurance policy depends
warranty
Breach of ___________ can be considered grounds for voiding the policy or a return of premium
warranties
______________ is the legal term for the intentional withholding of information of a material fact that is crucial in making a decision
Concealment
_________ 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.
Fraud
_______is the voluntary act of relinquishing a legal right, claim or privilege.
Waiver
___________ 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
Estoppel
