Section Three - Legal Concepts Flashcards
Under a contract of adhesion
A. There is the potential for an unequal exchange of value
B. The insurer’s obligation are dependent upon certain acts of the insured individual
C. the terms must be accepted or rejected in full.
D. Only one party makes any kind of enforceable promise.
the terms must be accepted or rejected in full
In an insurance contract, the applicant’s consideration is the
A. offer and acceptance
B. premium only
C. Statements made in the application and the premium
D. Statements made in the application only.
statements made in the application and premium
In an insurance contract, the element that shows each party is giving something of value is called
A. offer
B. acceptance
C. consideration
D. purpose
Consideration
Which of the following is an example of the insured’s consideration?
A. Insurer’s promise to pay benefits
B. A paid premium
C. Legal purpose
D. Intent
a paid premium
Bob and Tom start a business. Since each partner contribute an important element to the success of the business, the decide to take life insurance policies out o each other and name each other as beneficiaries. Eventually they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob’s death.
Who will receive Bob’s policy proceeds.
A. Tom’s Spouse
B. Bob’s estate
C. Bob’s spouse
D. Tom
Tom
In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered
A. Voidable
B. Conditional
C. aleatory
D. unilateral
unilateral
The power given to an individual producer that is not specifically addressed in his contract is considered what type of authority?
A. discreet
B. apparent
C. implied
D. express
Implied
Who is responsible for assembling the policy forms for insureds?
A. State Insurance Departments
B. NAIC
C. Insurance carriers
D. Insurance products
Insurance carriers
The term which describes the fact that both parties of a contract may not receive the same value referred to as
A. Apparent
B. Estoppel
C. Aleatory
D. Unilateral
aleatory
Which best describes a conditional insurance contract?
A. A contract that requires certain conditions or acts by the individual
B. A contract that has the potential for the unequal exchange of consideration for both parties.
C. A contract where one party “adheres” to the terms of the contract
D. A contract where only one party makes any kind of enforceable contract
A contract that requires certain conditions or acts by the insured individual
Which of the following is present when an applicant stands to lose value if the insured dies?
A. Insurability
B. offer and acceptance
C. Insurable interest
D. Consideration
Insurable interest
In order for a contract to be valid, it must
A. be filled with the state
B. be signed and witnessed by an attorney
C. be in writing
D. contain an offer and acceptance
Contain an offer and acceptance
Insurable interest does not occur in which of the following relationships?
A. sister and brother
B. parent and child
C. Business partners
D. Business owner and business client
Business owner and business client
A professional liability for which producers can be sued for mistakes of putting a policy into effect is called
A. fiduciary bond
B. errors and omissions
C. fiduciary trust
D. errors and oversights
errors and omissions
Legal purpose is a term used in contract law meaning?
A. there must be an offer and acceptance
B. the contract must be aleatory
C. there must be legal reasons for entering into the contract
D. the contract must be a contract of adhesion
There must be legal reasons for entering into the contract
