front 1 Policies are contracts | back 1 governed by contract law: 1. proposal (offer) 2. approval (acceptance) 3, Monies exchanged (consideration) 4. lawful reason for contract (legal purpose) 5. All parties to contact must be capable & adept (competent parties) |
front 2 Misrepresentation (false info) | back 2 For company to void a contract the info in question must be material to the decision to extend coverage. |
front 3 Concealment | back 3 The insurer must prove the applicant willfully & intentionally concealed info of a material nature. |
front 4 impersonation or false pretense | back 4 Having a someone present to be you, also a form of fraud. |
front 5 Parol (or Oral) Evidence Rule | back 5 limits effects of oral statement b/f contract execution, anything written is held - everything stated should be listed there. |
front 6 Consideration | back 6 Completed application, premium payment made by applicant & accepted by insurer is known as such. |
front 7 Right of assignment | back 7 Policyowner can give the policy to another w/written notice to the insurer (contract transfer) |
front 8 Aleatory | back 8 unequal contingencies for loss/profit for both parties $ values exchanged aren't equal, element of chance for both parties. |
front 9 Commutative | back 9 Dollar values ARE equal |
front 10 Adhesion | back 10 Contract of adhesion is prepared by the INSURER rather than by negotiation btwn the contracting parties. Agent prohibited form negotiating |
front 11 Unilateral | back 11 Only the insurance company that pledges anything. Only the policyowner can terminate the policy @ any time, prohibits the insurer from doing so (unless premiums aren't paid) |
front 12 Bilateral Contract | back 12 Both parties (insured and insurer) make legally enforceable promises. |
front 13 Valued contracts | back 13 pays a predetermined amount. Called a contract of Utmost good faith |
front 14 Indemnity contracts (reimbursement contracts) ***Look into this further, doesn't make sense to me**** | back 14 Pay loss amount only amount necessary to rtn insured to same position they were b/f the loss, up to policy limit. |
front 15 Insurable Interest | back 15 must have a valid $ interest to person or thing insured at time of purchase. Consent of the insured person is required! (w/o considered a bet/wager) |
front 16 Estoppel **Look into further, unclear** | back 16 Precludes a person from asserting something contrary to what is implied by a previous action or statement of that person, or by a previous pertinent judicial determination. |
front 17 Constructive Policy Delivery (or Attornment) | back 17 Approved policy delivered to policy hold by any means (agent, mail, etch) |
front 18 Agent Delivery ("free-look" period begins) (steps that must complete) | back 18 1 Deliver policy (physically, mail, email or "e-signature") 2. Collect initial premium 3. Explain policy rating, provisions & riders 4 Get statement of good health from policy holder 5 Get signed delivery receipt. |
front 19 Collecting the Initial Premium (must by Agent) | back 19 If not received w/application, must get when policy is delivered. Policy only b/c effective on the initial premium payment. |
front 20 Explaining Provisions, Riders & Rating | back 20 Explain what it covers, provisions attached, riders or benefits that wasn't originally there. Riders: additional benefits or benefits company took/limited Rating: explain as it affects the premium |
front 21 Verification of Insured's Medical Condition (agency duty) | back 21 - no changes since application (obtain a statement of good health from policyholder) **If significant changes the agent must rtn policy to company, they will examine again & adjust. |
front 22 Delivery Receipt (agent must) | back 22 Get a signed delivery receipt from policy holder Deliver it to the insurance company |
front 23 Policy Summary or Declarations Page (Agent must) | back 23 Usually the 1st page (list the terms, conditions info, benefits info, coverage limits, cost & premiums.) Required to be delivered |
front 24 Conditional Receipt | back 24 Company has "window of time" they can issue or refuse to approve policy. If during that time a claim is filed, company will pay a benefit if it would have been issued. If initial premium paid for policy that doesn't require medical exam, applicant is covered immediately. (doesn't make sense) |