Key Concepts
coverage on human lives
What is Life insurance
Proposed Insured
what is applicant
only one of the parties to the contract is legally bound to do anything
What is unilateral contract
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
Section that provides the agent's personal observations concerning the proposed insured.
What is agent's (producer's) report
when an insurer’s underwriter approves the application and issues a policy.
What is acceptance
policy termination due to nonpayment of premium
What is lapse?
an agreement between two or more parties enforceable by law
What is a contract
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
the general questions about the applicant, such as name, age, address, birth date, gender, income, marital status, and occupation.
What is general information
statements believed to be true
What is Representation
the company who issues an insurance policy
What is insurer?
Which is the primary source of information used for insurance underwriting?
What is application?
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
The type of receipt issued will determine when coverage will be effective.
What is a premium receipt
To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss.
What is Insurable Interest
the person entitled to exercise the rights and privileges in the policy
What is Policyowner
The binding force in any contract
What is consideration
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
Issue the policy anyway and pay the face value to the beneficiary
information on the prospective insured's medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives.
What is medical information
adverse medical information from insurance companies and maintains confidential medical impairment information on individuals.
What is MIB
intentional misrepresentation or deceit with the intent to induce a person to part with something of value
what is fraud
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.
What is conditional Contract
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons.
which is used only when the applicant submits a prepaid application.
What is a conditional receipt
a statement that, if discovered, would alter the underwriting decision of the insurance company.
What is material misrepresentation
a transfer of risk of loss from an individual or a business entity to an insurance company
What is insurance
which means there is an exchange of unequal amounts or values.
What is aleatory
When the insurer relinquishes control of the policy by mailing it to the policyowner, policy is considered legally delivered.
what is delivery receipt
a practice of terminating an existing policy or letting it lapse, and obtaining a new one.
What is replacement