Life insurance contracts Flashcards
What gives you peace of mind in life insurance
The contract
Why are so many life insurance claims paid?
Because of the liberal interpretation of life insurance
What is the legally binding agreement in a life insurance contract
For the insurer to compensate the beneficiary
When is the last time you speak to your life insurer
Inception
Aleatory relationship
Based on the probability that something may or may not happen
What parts of a contract must be in place for it to be legally binding? (5)
- Agreement
- Consideration
- ICLR
- Formality
- Capacity
When is agreement formed?
When the offer (proposal form) is accepted by the insurer
Consideration in a life insurance contract
Exchange money premium for promise of cover
Can court rule if consideration is adequate or not
No, consideration need not be adequate
Discuss ICLR in a lif insurance contract
Since it is a commercial contract ICLR is assumed and is assumed to be legally bound unless the intention is rebutted.
What are the requirements for consideration
Must be legal, cant be from the past and need not be adquet
What form must a life insurance contract take?
Written
Who does not have capacity to enter a life insurance contract
- Person under 18 unless they need life insurance (married)
- Convicts in prison or on parole
- Drunk people
- People of unsound mind
What is used to underweight clients?
Proposal form
How long can it take to get a quote back and why?
Up to 2 months because of how much checking they need to do
What must be in a life insurance contract?
- Who is insured
- What risks are covered
- What is insured (life =, illness..)
- Period or term
- Consideration (premium)
Fraudulent misrepresentation
Intentional or lazy