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Death and illness are example of: Perils Hazards Risk retention Speculative Risk |
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| A device for the transfer of individual risk to a company is called: |
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| It is practical to reduce the premiums paid to an insurance company by what? |
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What is your greatest asset? |
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| The consideration given by a proposed insured to form a contract includes what ? |
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| Money plus statements in the application |
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| Dividend are normally paid to who? |
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| The policyowners of a mutual company |
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| The type of company which has no stockholders and no membership requirement is call? |
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| The type of company that is often formed by a religious, national or ethnic organization is called? |
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| The type of company in which the stockholders elect the board of directors is called? |
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What types of insurance companies is managed by an attorney-in-fact? |
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| An insurance company chartered in Germany would be considered an _? |
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| Businesses that wish to collectively self insure would form a: |
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What is all insurance policies? |
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| What is the two broad principles which form a legal foundation of all insurance policies? |
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Doctrine of Utmost Good faith and Doctrine of Reasonable Expectations |
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| What does the doctrine of utmost good faith says? |
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| Each party must substantially rely on the integrity of the other party. |
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| What are the five essential parts of a contract? |
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Definition
Offer Acceptance Consideration Legal Capcity or legally competent parties Legal purpose |
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What does the Agreement compose of ? |
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| What does consideration consist of? |
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| Something of value, such as money, promises, property or service. |
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| What is consist of offer? |
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| What is a company consideration? |
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| The company's consideration is the promise contained in the policy to perform actions. |
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| What is the application's consideration consists of? |
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Definition
Settlement (payment) of the first premium and Statements made in the application Applicant= $ + statement |
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| Warranty= the absolute truth |
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| Representations are statement that are true to the applicant's best knowledge and belief. |
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| What is misrepresentations? |
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| Misrepresentations are plain, old-fashioned lies. |
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Concealment is the failure to fully disclose all pertinent information. Hiding the truth |
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The doctrine of representations says that a statement is vaild if the applicant thought he was telling the truth. Therefore,only an intentional misrepresentation or concealment could jeopardize the contract. |
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| What applies to material risk? |
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Definition
A statment is material ONLY if the company would have rejeted the applicant had they known the truth from the beginning. Exclusion - age, gender, tabacco |
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Definition
(think capable) The parties to the contract must be of legal age, sane, sober, of sound mind and under no legal handicap or duress. |
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| Guardian for minors are need when? |
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Definition
| There are a need for providing life and health coverages for minors. |
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| What age is it that minor can sign for themselves? |
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Definition
Age 15 They also must authorized a contract |
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| What purpose of a legal purose? |
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Definition
Insurable Interest The applicant must be in a position to lose something of value if the insured person should die Consent: The proposed insured must also sign the application. (permission) |
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| What are the two elements that could occur prior to reaching an agreement? |
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Definition
| Counter offers and invitations to make an offer. |
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| What does counter offer do? |
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Definition
| It VOID what came before. |
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| When does an invitation in the negotiating process happen? |
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Definition
| It will always come before the offer. |
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| Application only (no money send) ? |
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Definition
This is an invitation to make an offer. The company issues and delivers a policy and an invoice for the premium owed (offer). The customer pays the first premium (acceptance) |
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| Prepaid application (with money) |
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Definition
The customer submits the application along with the settlement ($) of the first premium. (offer) The company issues and delivers the policy exactly as requested. IF the company come back with a difference offer (called COUNTER OFFER) |
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| What happen when a counter offer is involved? |
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Definition
The last counter offered before the acceptance is considered the legal offer. |
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| When does the coverage start? |
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Definition
The coverage START when it is physical delivered tot the applicant. Even now the coverage start when the agent manually delivers the policy to the applicant unless both of the following factors are present |
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| Coverage will start when the agent delivers the policy unless 2 factors are present: |
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Definition
The application is prepaid and Some form of Interim Insuring Agreement is used (Conditional Receipt) |
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| When will coverage start if there no money to accompanies the application? |
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Definition
When the agent manually delivers the policy to the applicant and collects the initial premium. |
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| When will coverage start if the application is prepaid, but the company uses no form of Interim Insuring Agreement? |
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Definition
| Coverage will not begin until the agent delivers the policy to the applications. |
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Term
What is a Statement of Continued Good Health? |
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Definition
| The Statement of Continued Good Health is a statement that some company required an applicate sign. |
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What is an Interim Insuring Agreement? |
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Definition
It is an attempt at compromise designed to speed up coverage for the applicant while still allowing the company the opportunity to check out the applicant . APPLICANT MUST PREPAID. |
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| What is conditional Receipt? |
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Definition
The conditional receipt is used when an applicant is submits with a prepaid application. EITHER The date of the application or the date of the MEDICAL EXAM whichever is LATER If the applicant is insurable as applied for on the date. |
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| What does insurable means? |
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Definition
| The applicant is acceptance at the rates and risk category for which he or she applied according to the company's usual underwriting practices. |
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| What happen when a client coverage is NOT accept? |
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Definition
The MONEY $ is send back to client. |
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On Jan. 1 an agent take a prepaid application and issue a Conditional Receipt. Joe completes his required medical exam on Jan 6. If Joe is uninsurable at the rate category he applied for, what day is he accepted and what will the company do? |
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Definition
Joe coverage starts on Jan 6. If there is no coverage then the company refund his premium. |
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If an insured died in interim, what is the insurance company question? |
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Definition
Was he insurable on the later date (applic. or date of medical exam)? If yes, then company may pay. |
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Term
Was he insurable on the later date (applic. or date of medical exam)? |
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Definition
If yes, then company may pay. If no, then premium is paid back. |
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| What is the If...then....conditional insurance policies? |
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Definition
| If there is a loss, then the company is obligated to pay. |
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What is it call when a insurance company pay a predetermined amount of money in an event of a loss? |
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What does unlaterial means? |
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Definition
It means that insurance contract are one sided. = one promise. |
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Life and health policies are considered contracts of adhesion. The company wrote it; they are stuck with it; they must adhere to it. - one author |
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Definition
The contract must be personal in nature. "She is insuring her loss upon his death." - it you babe. |
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Its means that a contract is not always balance. "Joe could recieve first premium, die, and his beneficiary, Jolene, would recieve $50,000. " |
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A waiver is the intentional and voluntary relinquishing of a known right or privilege. "A company can waiver right to receiving premium under certain situation = Waiver of Premium." "Joe's bad knees could make him unable to get coverage until he waiver his knees problem in the future = Impairment Rider." |
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Term
If a question on the application is not answered by applicant and the company issued and delievers the policy anyways.
Is the contract voidable?
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Definition
| No, the company waiver its right to recieve an answer to that question. The company CANNOT change the policy afterward. |
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| It is an act of deception or cheating in order to financially benefit yourself at the expense of another. |
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| What is a company refer to as? |
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A person of position of fiancial trust. |
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What result in embezzlement? |
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Definition
Taking the premium for myself. |
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| Mixing of funds with my own. |
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| What an agent also know as? |
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Who does a agent represents? |
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| Who does a medical examiners belong to? |
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| Who does solictors represent? |
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| Who does the broker represents? |
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Definition
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| What is the different between agent and broker? |
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Definition
Agent = producer Broker = producer for the insurED. |
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What is the 3 powers of agency? |
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Definition
| Expressed, Implied and Apparent. |
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Term
What expressed authority? What is implied authority? What is apparent authority? |
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Definition
In writing. got to have it to do your job. reasonable expectations. |
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| What does a Conditional Receipt states? |
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Definition
| It states that coverage will start on the date of application, or the date of medical examination, which ever is last, if n only if ED is insure for the policy which he applied for on that date. |
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