LOMA 311 mod 4 Exam Questions and
Answers 100% Pass
individual life insurance contracts can be characterized as - ✔✔-Informal contracts that
require no special formalities to be valid. The legally adequate consideration for a life
insurance contract consists of the applicant's submission of an application for insurance
and payment of the initial premium, and the insurer's promise to pay contractual
benefits.
-Unilateral contracts under which only one party—the insurer—makes legally
enforceable promises=========Life insurance contracts are unilateral contracts in
which only the insurer makes a legally enforceable promise—that it will pay policy
benefits upon the occurrence of the events insured against. Thus, the applicant must
pay adequate consideration in exchange for the insurer's contractual promises.
++++Legally adequate consideration for a life insurance contract consists of the
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,applicant's submission of an application for insurance and the payment of the initial
premium.
-Aleatory contracts under which one party—the policyowner—provides something of
value to another party—the insurer—in exchange for a conditional promise
- Contracts of adhesion that one party—the insurer—prepares and that the other
party—the applicant—must accept or reject as a whole without any bargaining between
the parties
the parties must meet four requirements to form a valid life insurance contract: - ✔✔(1)
the parties must mutually assent to the contract, (2) they must exchange legally
adequate consideration, (3) they must have contractual capacity, and (4) the contract
must be for a lawful purpose.======+=============Insurance agents typically
have actual authority to accept initial premium payments on behalf of an insurer.
Insurance agents, however, generally do not have actual authority to accept renewal
premium payments. In addition, with the exception of binding an insurer to providing
temporary coverage under a premium receipt, an agent does not have actual authority
to enter into binding life insurance contracts on an insurer's behalf.++Agents typically
have authorization to issue a premium receipt to an applicant who completes an
application and pays the initial premium. Depending on the terms of the receipt, the
insurer may be contractually bound to provide temporary insurance coverage under the
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,receipt. With the exception of binding an insurer to providing temporary coverage
under a premium receipt, an agent generally is not authorized to enter into binding life
insurance contracts on an insurer's behalf.
Offer and Acceptance - ✔✔The insurer can accept an applicant's offer by (1) issuing a
policy that contains the same terms as those stated in the applicant's offer and (2)
delivering the policy to the applicant. When a valid contract is created, the applicant
becomes the policyowner.
If an applicant does not pay the initial premium when she submits an application for
insurance, then she has not made an offer. Rather, she has invited the insurer to make
an offer. The insurer can make an offer to contract
by issuing a policy and delivering it to the applicant. Note that the policy the insurer
issues and delivers need not be the same policy the applicant applied for. The applicant
can accept the insurer's offer by accepting the policy and paying the initial premium.
Counteroffers - ✔✔When an insurer issues a policy on terms other than those applied
for, the insurer has rejected the initial offer and has made a counteroffer.
An insurer often makes a counteroffer when it classifies the prospective
insured as a higher risk than the prospective insured has applied for.
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, Withdrawing an offer - ✔✔an offeror usually can withdraw an offer at any time before
the offeree has accepted the offer. Thus, an applicant who has applied for an insurance
policy and
paid the initial premium has the right to withdraw that offer at any time before the
insurer accepts the offer. If an applicant withdraws an offer, then the insurer generally
must return the premium the applicant paid.
Rejecting an offer - ✔✔Because a contract is a consensual relationship, the offeree can
reject an offer or counteroffer from the other party. An applicant for insurance has the
right to reject any offer made by an insurer and to receive a refund of the initial
premium she paid, until the offer is accepted.
Contractual Capacity - ✔✔For an insurance contract to be valid, the parties to the
contract must have contractual capacity. Insurers that are licensed to conduct business
within the applicable state have the legal capacity to enter into insurance contracts in
the state.
limitations that state laws place on minors' purchases of life insurance:
-The age at which minors may enter into valid and binding insurance contracts
varies from age 14 to age 16, depending on the state.
- The types of insurance that minors may purchase vary by state law. Some
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Answers 100% Pass
individual life insurance contracts can be characterized as - ✔✔-Informal contracts that
require no special formalities to be valid. The legally adequate consideration for a life
insurance contract consists of the applicant's submission of an application for insurance
and payment of the initial premium, and the insurer's promise to pay contractual
benefits.
-Unilateral contracts under which only one party—the insurer—makes legally
enforceable promises=========Life insurance contracts are unilateral contracts in
which only the insurer makes a legally enforceable promise—that it will pay policy
benefits upon the occurrence of the events insured against. Thus, the applicant must
pay adequate consideration in exchange for the insurer's contractual promises.
++++Legally adequate consideration for a life insurance contract consists of the
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,applicant's submission of an application for insurance and the payment of the initial
premium.
-Aleatory contracts under which one party—the policyowner—provides something of
value to another party—the insurer—in exchange for a conditional promise
- Contracts of adhesion that one party—the insurer—prepares and that the other
party—the applicant—must accept or reject as a whole without any bargaining between
the parties
the parties must meet four requirements to form a valid life insurance contract: - ✔✔(1)
the parties must mutually assent to the contract, (2) they must exchange legally
adequate consideration, (3) they must have contractual capacity, and (4) the contract
must be for a lawful purpose.======+=============Insurance agents typically
have actual authority to accept initial premium payments on behalf of an insurer.
Insurance agents, however, generally do not have actual authority to accept renewal
premium payments. In addition, with the exception of binding an insurer to providing
temporary coverage under a premium receipt, an agent does not have actual authority
to enter into binding life insurance contracts on an insurer's behalf.++Agents typically
have authorization to issue a premium receipt to an applicant who completes an
application and pays the initial premium. Depending on the terms of the receipt, the
insurer may be contractually bound to provide temporary insurance coverage under the
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,receipt. With the exception of binding an insurer to providing temporary coverage
under a premium receipt, an agent generally is not authorized to enter into binding life
insurance contracts on an insurer's behalf.
Offer and Acceptance - ✔✔The insurer can accept an applicant's offer by (1) issuing a
policy that contains the same terms as those stated in the applicant's offer and (2)
delivering the policy to the applicant. When a valid contract is created, the applicant
becomes the policyowner.
If an applicant does not pay the initial premium when she submits an application for
insurance, then she has not made an offer. Rather, she has invited the insurer to make
an offer. The insurer can make an offer to contract
by issuing a policy and delivering it to the applicant. Note that the policy the insurer
issues and delivers need not be the same policy the applicant applied for. The applicant
can accept the insurer's offer by accepting the policy and paying the initial premium.
Counteroffers - ✔✔When an insurer issues a policy on terms other than those applied
for, the insurer has rejected the initial offer and has made a counteroffer.
An insurer often makes a counteroffer when it classifies the prospective
insured as a higher risk than the prospective insured has applied for.
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, Withdrawing an offer - ✔✔an offeror usually can withdraw an offer at any time before
the offeree has accepted the offer. Thus, an applicant who has applied for an insurance
policy and
paid the initial premium has the right to withdraw that offer at any time before the
insurer accepts the offer. If an applicant withdraws an offer, then the insurer generally
must return the premium the applicant paid.
Rejecting an offer - ✔✔Because a contract is a consensual relationship, the offeree can
reject an offer or counteroffer from the other party. An applicant for insurance has the
right to reject any offer made by an insurer and to receive a refund of the initial
premium she paid, until the offer is accepted.
Contractual Capacity - ✔✔For an insurance contract to be valid, the parties to the
contract must have contractual capacity. Insurers that are licensed to conduct business
within the applicable state have the legal capacity to enter into insurance contracts in
the state.
limitations that state laws place on minors' purchases of life insurance:
-The age at which minors may enter into valid and binding insurance contracts
varies from age 14 to age 16, depending on the state.
- The types of insurance that minors may purchase vary by state law. Some
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