POL California Life: Contract Law

Which of the following is NOT a required element of an insurance contract?

Counteroffer

Which of the following would be covered by contract law?

An insured suing the insurer for failure to provide promised benefits.

What other term is used to refer to unintentional torts?

Negligence

What is a wrongful act of violation of someone's rights that leads to legal liability called?

Tort

Because an insurance policy is a contract between the insurer and the insured, it must conform to the state laws governing contracts which require all of the following elements EXCEPT...

Conditions

An agreement that is enforced by law is known as a/an...

Contract

In forming an insurance contract, when does acceptance usually occur?

When an insurer approves a prepaid application

Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as...

Contracts of adhesion

When an insured makes truthful statements on the application for insurance and pays the requires premium, it is known as which of the following?

Consideration

Which of the following is NOT consideration on the part of an insured?

Promise to submit timely claims.

Submitting a statement of Good Health

Premium payment

Representations on the application

In insurance, an offer is usually made when...

The application is submitted

What other term is used to refer to unintentional torts?

Negligence

L's insurer has made all of the decisions regarding the provisions included in her policy. L finds an objectionable provision and wants to negotiate it with the insurer but it not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe?

Adhesion

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values.

All of the following must be specified in an insurance policy EXCEPT....

The financial rating of the insurer

the parties between who the contract is made

The risk insured against

The period during which the insurance is in force

What is an insured party entitled to receive if an international concealment is discovered?

Rescission of the policy

According to the Code, how many separate requirements should an insurance policy have?

6

The violation of a material warranty or other material provision of a policy allows

Both the insurer and the insured to rescind

The key factor of representation that allows the insured party to rescind the contract is

If the representation is false in a material point

An intentional or unintentional concealment entitles the affective party o which of the following?

Rescission of Contract

Subrogation of a Contract

Estoppel

Waiver of concealment conditions

An applicant knowingly fails to communicate information hat would help an under writer make a sound decision regarding coverage. This is an example of...

Which of the following best describes the policy non-renewal?

Discountenance of an insurance policy by the insured on the policy anniversary date

During the grace period a policy owner can...

Pay a late premium without penalty

The act of revoking or terminating an insurance policy is called...

Cancellation

A contract between an insured and an insurance company which agrees to pay the insured for a loss caused by a specific event is...

A policy

Which of the following best describes an insurance policy?

A contract between an insured and an insurer that guarantees payment for loss caused by a specific event .

The price of insurance for each exposure unit is known as

Rate

How is the premium in an insurance policy determined?

By multiplying the rate by the number of units of insurance purchased

A life insurance application is asking if the applicant has applied for any other life insurance within the past 6 months. The applicant states that he applied for $15,000 coverage from XYZ Co., but fails to mention the $150,000 coverage with DEF Co. The applicant is guilty of...

Concealment

All of the following are reasons an insurer or an insured would have the right to rescind a policy EXCEPT

The amount of paid claims exceeds the premiums paid .

An intentional omission in determining if a warranty is false

The violation of a material warranty

When concealment is unintentional

In which of the following examples would a contract between and insurer and a prospective insured be legal?

The applicant has a prior felony conviction.