Term
| in order for insurance contracts to be legally binding, there are 4 essential elements |
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Definition
1. agreement-offer and acceptance
2. consideration
3. competent parties
4.legal purpose |
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Term
| in order for insur contracts to be legally binding, the 1st of 4 elements states there must be a definite offer by one party, and the other party must |
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Definition
| accept this offer in its exact terms. |
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Term
| in insurance, the applicant usually makes the offer when submitting the application. |
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Definition
| acceptance takes place when an insurer's underwriter approves the application and issues the policy |
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Term
| the binding force in any contract is |
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Definition
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Term
| consideration is something of value that |
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Definition
| each party gives to the other |
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Term
| the consideration on the part of the insured is the |
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Definition
| payment of premium and the representations made in the application |
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Term
| the consideration on the part of the insurer is the |
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Definition
| promise to pay in the event of loss |
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Term
| generally, in order for parties to enter into a contract in the eyes of the law, both parties must be |
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Definition
| of legal age, mentally competent to understand the contract, and not under the influence of drugs or alcohol |
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Term
| to ensure purpose (the purpose of a policy must be legal and not against public policy) of a life insurance policy, it must have both |
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Definition
| consent and insurable interest |
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Term
| a contract without a legal purpose is considered |
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Definition
| void, and cannot be enforced by any party |
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Term
| insurable interest can be proven by |
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Definition
| love and affection, economic or financial loss |
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Term
| in life and health insur., insurable interest is required |
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Definition
| at the time of policy issuance |
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Term
| a unique aspect of the health insur contract is a |
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Definition
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Term
| a conditional contract requires that certain conditions be met by the policy owner and the company in order for the |
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Definition
| contract to be executed, and before each party fulfills their obligations |
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Term
| an example of a conditional contract is when the insured must |
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Definition
| pay the premium and provide proof of loss in order for the insurer to cover the claim |
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Term
| a unilateral contract is when |
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Definition
| only one of the parties is bound to do anything |
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Term
| in an unilateral contract, the insured makes no legally binding promises. however, an |
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Definition
| insurer is legally bound to cover losses by a policy in force |
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Term
| a contract of adhesion is prepared by one of the parties (insurer) and the |
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Definition
| insured accepts or rejects it. these insur policies are offered on a 'take it' or leave it basis |
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Term
| when a policy is drawn up w/ little or no negoations and the insured has little to say about its provisions, its a |
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Definition
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Term
| adhesion contracts are health insurance contracts that are offered as |
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Definition
| take it or leave it basis by the insurer |
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Term
| this is an absolute true statement upon which the validity of the ins. policy depends |
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Definition
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Term
| breach of warranty can be grounds for |
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Definition
| voiding the policy or a return of premium |
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Term
| because of its strict definition, statements made for health and life ins. policies by applicants |
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Definition
| are not considered warranties except in cases of fraud |
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Term
| these statements are believed to be true to the best of one's knowledge, but they are not guaranteed to be true |
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Definition
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Term
| for insurance purposes, representations are the answers the |
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Definition
| the insured gives to the questions on the application |
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Term
| untrue statements on an application are considered |
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Definition
| misrepresentations and could void the contract |
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Term
| a statement, that if discovered, would alter the decision of the underwriter is considered to be a |
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Definition
| material misrepresentation |
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Term
| if material misrepresentations are intentional, they are considered |
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Definition
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Term
| the acceptance of risk is determined by checking the indiv risk against |
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Definition
| many factors directly related to the risk's potential for loss |
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Term
| Divorce is a qualifying event under |
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Definition
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Term
| To be eligible under HIPPA regulations, an individual converting to an individual health plan had to be covered under the previous group plan for |
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Definition
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Term
| Business overhead expense policies cover |
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Definition
| Leased equipment expenses |
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Term
| For a business overhead expense policy, the benefits are usually |
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Definition
| Put in place for the purpose of reimbursing the policyholder during the period of total disability |
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