Life and Health Insurance Exam

Unilateral Contract

One party is legally bound by an enforceable promise of future performance (policyholder can stop paying premiums anytime)

Conditional Contract

Insurer and insured must meet specific conditions for the contract to be valid

Aleatory Contract

Exchange of value is unequal and depends on uncertain future events.

Representations

Statements you make to the insurer when applying for a policy (what you state to believe is true, “I dont smoke”)

Warranties

Statements that must be true (if false the insurer can void the policy)

Concealment

Failing to disclose important info (if material, insurer can void)

Adhesion Contract

The insurer writes all the terms, insured can only accept or reject. No negotiating

Indemity

Reimbursement, prevents people from profiting from insurance claims