health part Flashcards
what is not an essential part of the insurance contract
counteroffer
what do insurance contracts need to be legally binding?
agreement (offer and acceptance), consideration, competent parties, and legal purpose
when an insurer and insured enter into a contract, the insured must be what?
legal age and mentally competent
when is an insurance offer usually made?
when the completed application is submitted
what is consideration?
something of value that is transferred between the two parties to form a legal contract
examples of consideration in a policy
- something of value exchanged between parties
- the premium amount paid at the time of application
- the promise to pay covered losses
when an insured makes truthful statements oh the application for insurance and pays the required primum is known as what?
consideration
in forming an insurance contract. When does acceptance usually occur?
when an insurers underwriter approves coverage
A life insurance policy has a legal purpose if both of which of the following elements exist?
insurable interest and consent
what is an insurable interest?
the applicant must experience a financial loss when the insured is hurt or sick. Insurable interest is only needed by the applicant and only at the time of the applicant
an insurance policy is a legal contract and it must conform to the state laws governing contracts which don’t require…..
conditions
A misrepresentation would be considered fraud on an insurance application if….
if it is intentional and material
what is a material of misrepresentation?
a statement, if discovered, would alter the underwriting decision of the insurance company
what are representations?
written or oral statements made by the applicants that are considered true to the best of the applicants knowledge
what is a warranty?
a statement that is guaranteed to be true and if untrue may breach an insurance contract.
A contract is conditional when…
the contract is formed on the basis that certain conditions are met
what happens in a unitlateral contract?
the insured is not legally bound to do anything. The insurer, however must pay losses covered by the policy
What is a contract on adhesion
prepared by the insurer; the insureds only option is to accept or reject the policy as it is written
what is a unilateral contract?
one sided: only one of the parties makes an enforceable promise
what is an aleatory contract?
requires a small amount of premium for a large risk
what is an application
an applicants written request to an insurer for the company to issue a contract, based on the information provided
what does the MIB (Medical Information Bureau) provide?
information about an applicants medical history
What is the Feral Fair Cedit Reporting Act?
regulates consumer reports, also known as consumer investigative reports, or credit reports
Who makes up the MIB?
insurers, so they can compare with other companies on the info they have collected on a potential insured with info other insureds have discovered
