NC Life Insurance - Other Life Topics - Chapter Quiz with
Verified Solutions
Contracts that are prepared by one party and submitted to the other party on a
"take it or leave it" basis are classified as
A. Binding contracts.
B. Contracts of adhesion.
C. Unilateral contracts.
D. Aleatory contracts.
(B) Contracts of adhesion
Insurance policies are written by the insurer and submitted to the insured on a "take it or
leave it" basis. The insured does not have any input into the contract, but simply
adheres to the contract.
If only one party to an insurance contract has made legally enforceable promise,
what kind of contract is it?
A. Conditional
B. Unilateral
C. Aleatory
D. Bilateral
B. Unilateral
In a unilateral contract, only one of the parties to the contract is legally bound to do
anything
Which of the following individuals must have insurable interest in the insured?
A. producer
B. policy owner
C. beneficiary
D. underwriter
B. policy owner
policy owner-the policy owner must have an insurable interest in the insured, i.e. his/her
own life if the policy owner and the insured is the same person, or in the life of a family
member or a business partner.
When Y applied for insurance and paid the initial premium on August 14, he was
issued a conditional receipt. During the underwriting process, the insurance
company found no reason to reject the risk or classify it other than as standard. Y
was killed in an automobile accident on August 22, before the policy was issued.
In this case, the insurance company will
A. Issue the policy anyway and pay the face value to the beneficiary
B. Negotiate a reduced settlement with the beneficiary due to the unusual
Verified Solutions
Contracts that are prepared by one party and submitted to the other party on a
"take it or leave it" basis are classified as
A. Binding contracts.
B. Contracts of adhesion.
C. Unilateral contracts.
D. Aleatory contracts.
(B) Contracts of adhesion
Insurance policies are written by the insurer and submitted to the insured on a "take it or
leave it" basis. The insured does not have any input into the contract, but simply
adheres to the contract.
If only one party to an insurance contract has made legally enforceable promise,
what kind of contract is it?
A. Conditional
B. Unilateral
C. Aleatory
D. Bilateral
B. Unilateral
In a unilateral contract, only one of the parties to the contract is legally bound to do
anything
Which of the following individuals must have insurable interest in the insured?
A. producer
B. policy owner
C. beneficiary
D. underwriter
B. policy owner
policy owner-the policy owner must have an insurable interest in the insured, i.e. his/her
own life if the policy owner and the insured is the same person, or in the life of a family
member or a business partner.
When Y applied for insurance and paid the initial premium on August 14, he was
issued a conditional receipt. During the underwriting process, the insurance
company found no reason to reject the risk or classify it other than as standard. Y
was killed in an automobile accident on August 22, before the policy was issued.
In this case, the insurance company will
A. Issue the policy anyway and pay the face value to the beneficiary
B. Negotiate a reduced settlement with the beneficiary due to the unusual
