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| To be legally acceptable, a contract must be made with a definite, unqualified ___________ by one party and the ___________ of its exact terms by the other party. |
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| The object of the contract and the reason the parties enter into the agreement must be legal. A contract in which one party agrees to commit murder for money is not legal. |
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| Insurance contracts are _______ in that (1) there is an element of chance for both of the contracting parties and (2) the dollar values exchanged may not be equal. |
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| Insurance contracts are ______ in that only one party, the insurer makes any kind of enfoceable promise. |
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| A _______ contract pays a stated sum, regardless of the actual loss incurred, when the contingency insured against occurs. For example a life insurance contract. |
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| A statement made by the applicant that is guaranteed to be true. It becomes part of the contract and, if found to be untrue, can be grounds for revoking the contract. |
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| The failure by the applicant to disclose a known material fact when applying for insurance. |
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| The legal impediment to one party denying the consequences of its own actions or deeds if such actions or deeds result in another party acting in a specific manner or if certain conclusion are drawn. In other words, it is the loss of defense. |
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| An act of deciet; misinterpretation of a material fact made knowingly, with the intention of having another person rely on that fact and consequently suffer a financial hardship. |
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| Authority a principal intends to, and actually does, give to its agent. Granted by means of the agent's contract, which is the principal's appointment of the agent to act on its behalf. |
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| The appearance of, or the assumption of, authority based on the actions, words, or deeds of the principal or because of circumstances the principal created. |
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| The value given in exchange for the promises sought. In an insurance contract it is given by the applicant in exhance for the insurer's promise to pay benefits, and it also consists of the application and initial premium. |
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| To be enfoceable, a contract must be entered into by __________. The insurer must be liscensed. The applicant must not be a minor, the mentally infirm or under the influence of alcohol and narcotics. Other possible applicants include business entities, trusts and estates. |
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| Insurance contracts are contracts of ________. This means that the contract has been prepared by one party (the insurer); it is not the result of negotiation between the parties. |
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| An insurance contract is _______ in that the insurer's promise to pay benefits is dependent on the occurrence of the risk insured against. If the risk does not materialize, no benefits are paid. |
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| The person acquiring the contract (the applicant) must be subject to loss upon death, illness, or disability of the person being insured. A policy obtained by a person not having _______ is not valid and cannot be enforced. __________ in terms of life and health must exist at inception. For property and casualy must exist at time of the claim. |
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| A statement made by the applicant that she believe to be true. |
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| The voluntary giving up of a legal, given right. |
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| A rule that states when parties put their agreement in writing, all previous verbal statements come together in that writing, and a written contract cannot be changed or modified by oral evidence. |
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| An agreement without legal effect. Not a contract at all because it lacks one of the elements specified by law for a valid contract. |
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| Authority that is not expressly granted but which the agent is assumed to have in order to transact the business of the principal. |
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| Life insurance is not ______ between the insurer and insured. The owner of the policy has no bearing on the risk the insurer has assumed. For this reason, people who buy life insurance policies are called policyowners rather than policyholders. |
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| Indemnity/Reimbursement Contract |
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| A __________ contract is one that pays an amount equal to the loss; it attempts to return the insured to her original financial position. For example fire and health insurance. |
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| An agreement which, for a reason satisfactory to the court, may be set aside by one of the parties to the contract. |
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