Colorado Health Insurance Questions &
Answers(SCORED A+)
Agent -ANSWER Agents are the agents of the insurer
Producer -ANSWER Usually includes agents and brokers
Applicant or proposed insured -ANSWER A person applying for insurance
Consent -ANSWER permission to do something
Insurable Interest -ANSWER The policy owner must face the possibility of losing money
or something of value in the event of loss
insurance policy -ANSWER a contract between a policyowner (and/or insured) and an
insurance company which agrees to pay the insured or the beneficiary for loss caused
by specific events
Insured -ANSWER Person covered by the insurance policy, may or may not be the
policy holder.
Insurer (principal) -ANSWER the company who issues an insurance policy
Policyowner -ANSWER the person entitled to exercise the rights and privileges in the
policy
Premium -ANSWER the money paid to the insurance company for the insurance policy
Contracts to be legally binding: -ANSWER Agreement- Offer and acceptance
Consideration
Competent parties
Legal Purpose
Offer -ANSWER needs to be by one party and the other party accepts offer in exact
terms.
Applicant -ANSWER usually makes the offer when submitting the application.
Acceptance -ANSWER takes place when an insurer's underwriter approves the
application and issues a policy
Consideration -ANSWER Is the value that each party gives each other.
, Insured -ANSWER person who makes payment of premium and rpresents made in the
application
Insurer -ANSWER Promise to pay in the event of a loss
T/F Insurers considerations is the promise to pay for losses, insureds consideration is
the premium and statements on the application -ANSWER True
Parties to a contract -ANSWER Must be capable of entering into a contract in the eyes
of the law. Both parties need to be legal age, mentally competent and not under the
influence of drugs/alcohol.
Legal -ANSWER Must have both insurable interest and consent.
Insurable interest -ANSWER Proven by love and affection, economic or financial loss
required at the time of policy insurance. Must experience financial loss due to an
accident or sickness that befalls the insured.
Warranty -ANSWER True statements of validity of the insurance policy depend.
Breach of Warranty -ANSWER can be considered grounds for voiding policy or a return
of premium.
Representations -ANSWER statements believed to be true to the best of one's
knowledge, but they are not guaranteed to be true
Untrue statements -ANSWER statements on an application that are considered
misrepresentations and could void contract.
Material Misrepresentation -ANSWER Discovered after underwriting decision of the
insurance company.
If material misrepresentations are intentional -ANSWER They are considered fraud.
Conditional Contract -ANSWER Requires that certain conditions must be met by the
policyowner and the company in order for the contract to be executed, and before each
party fulfills its obligations.
Unilateral Contract -ANSWER only one of the parties to the contract is legally bound to
do anything. Insured makes no legally binding promises, insurer is legally bound to pay
losses covered by policy to force.
No legal actions for cancellation -ANSWER When someone loses job, unemployment
and premiums are current insure can't refuse to pay death benefit.
Answers(SCORED A+)
Agent -ANSWER Agents are the agents of the insurer
Producer -ANSWER Usually includes agents and brokers
Applicant or proposed insured -ANSWER A person applying for insurance
Consent -ANSWER permission to do something
Insurable Interest -ANSWER The policy owner must face the possibility of losing money
or something of value in the event of loss
insurance policy -ANSWER a contract between a policyowner (and/or insured) and an
insurance company which agrees to pay the insured or the beneficiary for loss caused
by specific events
Insured -ANSWER Person covered by the insurance policy, may or may not be the
policy holder.
Insurer (principal) -ANSWER the company who issues an insurance policy
Policyowner -ANSWER the person entitled to exercise the rights and privileges in the
policy
Premium -ANSWER the money paid to the insurance company for the insurance policy
Contracts to be legally binding: -ANSWER Agreement- Offer and acceptance
Consideration
Competent parties
Legal Purpose
Offer -ANSWER needs to be by one party and the other party accepts offer in exact
terms.
Applicant -ANSWER usually makes the offer when submitting the application.
Acceptance -ANSWER takes place when an insurer's underwriter approves the
application and issues a policy
Consideration -ANSWER Is the value that each party gives each other.
, Insured -ANSWER person who makes payment of premium and rpresents made in the
application
Insurer -ANSWER Promise to pay in the event of a loss
T/F Insurers considerations is the promise to pay for losses, insureds consideration is
the premium and statements on the application -ANSWER True
Parties to a contract -ANSWER Must be capable of entering into a contract in the eyes
of the law. Both parties need to be legal age, mentally competent and not under the
influence of drugs/alcohol.
Legal -ANSWER Must have both insurable interest and consent.
Insurable interest -ANSWER Proven by love and affection, economic or financial loss
required at the time of policy insurance. Must experience financial loss due to an
accident or sickness that befalls the insured.
Warranty -ANSWER True statements of validity of the insurance policy depend.
Breach of Warranty -ANSWER can be considered grounds for voiding policy or a return
of premium.
Representations -ANSWER statements believed to be true to the best of one's
knowledge, but they are not guaranteed to be true
Untrue statements -ANSWER statements on an application that are considered
misrepresentations and could void contract.
Material Misrepresentation -ANSWER Discovered after underwriting decision of the
insurance company.
If material misrepresentations are intentional -ANSWER They are considered fraud.
Conditional Contract -ANSWER Requires that certain conditions must be met by the
policyowner and the company in order for the contract to be executed, and before each
party fulfills its obligations.
Unilateral Contract -ANSWER only one of the parties to the contract is legally bound to
do anything. Insured makes no legally binding promises, insurer is legally bound to pay
losses covered by policy to force.
No legal actions for cancellation -ANSWER When someone loses job, unemployment
and premiums are current insure can't refuse to pay death benefit.
