Legal Concepts of the Insurance Contract 2023 Questions
and Answers Complete
If the agency contract gives the producer the authority to solicit insurance but
states nothing about the collection of premiums, the producer normally has
authority to collect premiums based on
* Implied authority
* Express authority
* Apparent authority
* Licensee authority
Implied authority
Which characteristic of an insurance contract means there is a potential for
unequal exchange of value for both parties?
* Aleatory
* Adhesion
* Unilateral
* Conditional
Aleatory ( Insurance contracts are aleatory. Aleatory contracts are conditioned upon the
occurrence of an event. The benefits provided by an insurance policy may or may not
exceed the premiums paid.)
An agent is an individual that represents whom?
* Insurer
* Insured
* Broker
* Himself/Herself
Insurer (An agent is an individual who is authorized by an insurer to sell goods and
services on its behalf. An agent is also the insurer's representative in dealing with the
public.)
All of the following are considered to be typical characteristics describing the
nature of an insurance contract EXCEPT
* Bilateral
* Unilateral
* Aleatory
* Adhesion
Bilateral
Which of the following statements describes an insurable interest?
* The policyowner must expect to benefit from the insured's death.
* The policyowner must expect to suffer a loss when the insured dies or becomes
disabled. (The policyowner must face the possibility of losing money or
something of value in the event of the death or disability of the insured.)
* The beneficiary, by definition, has an insurable interest in the insured.
* The insured must have a personal or business relationship with the beneficiary.
The policyowner must expect to suffer a loss when the insured dies or becomes
disabled. (The policyowner must face the possibility of losing money or something of
value in the event of the death or disability of the insured.)
, The authority of an agent which is spelled out in the written words of the agency
contract between the agent and the insurer is called
implied authority
apparent authority
presumed authority
expressed authority (Express authority is the authority a principal deliberately
gives to its agent. Express authority is granted by means of the agent's contract,
which is the principal's appointment of the agent to act on its behalf.)
In life insurance, an insurable interest in the life of the insured must exist
Only at the inception of the contract (Insurable interest must only exist at the time
of application.)
Only at the death of the insured
During the first two years of the contract
Throughout the period of the contract
Which of the following statements about authority is NOT correct?
Express authority is granted by means of the agent's contract.
Express authority is determined by a principal's conduct.
Implied authority is not overtly extended in the agent's contract but does permit
many of the agent's operations.
Apparent authority can be assumed from the actions of the principal.
Which of the following best describes the concept that the consideration is not
equal in contract law?
Adhesion
Warranty
Subrogation
Aleatory (Insurance contracts are aleatory. This means there is an element of
chance and potential for unequal exchange of value for both parties. An aleatory
contract is conditioned upon the occurrence of an event. Consequently, the
benefits provided by an insurance policy may or may not exceed the premiums
paid.)
Which of the following is an example of legal consideration?
Politeness
Application and initial premium (Consideration can be defined as something of
value given in exchange for the promises sought. In an insurance contract,
consideration is given by the applicant in the form of paying premiums in
exchange for the insurer's promise to pay benefits.)
Legal purpose
Offer and acceptance
The term which describes the fact that both parties of a contract may NOT receive
the same value is referred to as
Apparent
Estoppel
Aleatory ( Aleatory is a term that describes the fact that both parties of a contract
may NOT receive the same value.)
Unilateral
and Answers Complete
If the agency contract gives the producer the authority to solicit insurance but
states nothing about the collection of premiums, the producer normally has
authority to collect premiums based on
* Implied authority
* Express authority
* Apparent authority
* Licensee authority
Implied authority
Which characteristic of an insurance contract means there is a potential for
unequal exchange of value for both parties?
* Aleatory
* Adhesion
* Unilateral
* Conditional
Aleatory ( Insurance contracts are aleatory. Aleatory contracts are conditioned upon the
occurrence of an event. The benefits provided by an insurance policy may or may not
exceed the premiums paid.)
An agent is an individual that represents whom?
* Insurer
* Insured
* Broker
* Himself/Herself
Insurer (An agent is an individual who is authorized by an insurer to sell goods and
services on its behalf. An agent is also the insurer's representative in dealing with the
public.)
All of the following are considered to be typical characteristics describing the
nature of an insurance contract EXCEPT
* Bilateral
* Unilateral
* Aleatory
* Adhesion
Bilateral
Which of the following statements describes an insurable interest?
* The policyowner must expect to benefit from the insured's death.
* The policyowner must expect to suffer a loss when the insured dies or becomes
disabled. (The policyowner must face the possibility of losing money or
something of value in the event of the death or disability of the insured.)
* The beneficiary, by definition, has an insurable interest in the insured.
* The insured must have a personal or business relationship with the beneficiary.
The policyowner must expect to suffer a loss when the insured dies or becomes
disabled. (The policyowner must face the possibility of losing money or something of
value in the event of the death or disability of the insured.)
, The authority of an agent which is spelled out in the written words of the agency
contract between the agent and the insurer is called
implied authority
apparent authority
presumed authority
expressed authority (Express authority is the authority a principal deliberately
gives to its agent. Express authority is granted by means of the agent's contract,
which is the principal's appointment of the agent to act on its behalf.)
In life insurance, an insurable interest in the life of the insured must exist
Only at the inception of the contract (Insurable interest must only exist at the time
of application.)
Only at the death of the insured
During the first two years of the contract
Throughout the period of the contract
Which of the following statements about authority is NOT correct?
Express authority is granted by means of the agent's contract.
Express authority is determined by a principal's conduct.
Implied authority is not overtly extended in the agent's contract but does permit
many of the agent's operations.
Apparent authority can be assumed from the actions of the principal.
Which of the following best describes the concept that the consideration is not
equal in contract law?
Adhesion
Warranty
Subrogation
Aleatory (Insurance contracts are aleatory. This means there is an element of
chance and potential for unequal exchange of value for both parties. An aleatory
contract is conditioned upon the occurrence of an event. Consequently, the
benefits provided by an insurance policy may or may not exceed the premiums
paid.)
Which of the following is an example of legal consideration?
Politeness
Application and initial premium (Consideration can be defined as something of
value given in exchange for the promises sought. In an insurance contract,
consideration is given by the applicant in the form of paying premiums in
exchange for the insurer's promise to pay benefits.)
Legal purpose
Offer and acceptance
The term which describes the fact that both parties of a contract may NOT receive
the same value is referred to as
Apparent
Estoppel
Aleatory ( Aleatory is a term that describes the fact that both parties of a contract
may NOT receive the same value.)
Unilateral
