MICHIGAN LIFE INSURANCE STATE
REVIEW SHEET LATEST QUESTIONS AND
SOLUTIONS GRADED A+
⩥ Implied authority.
Answer: This is an authority that's not explicitly granted to the agent in
the contract of agency, but which common sense dictates the agent has.
This authority enables the agent to carry out routine responsibilities.
⩥ Indemnity contract.
Answer: This type of contract attempts to return the insured to his
original financial position
⩥ Insurable interest.
Answer: This is the financial, economic, and emotional impact
experience by a person who suffers a covered loss. Person has an
insurable interest if she has more to gain by not experiencing the loss.
⩥ Insurance policy.
Answer: This is a written contract in which one party promises to
indemnify another against a loss that arises from an unknown event
⩥ Legal purpose.
,Answer: This means that an insurance contract must be legal in nature
and not an opposition to public policy
⩥ Material misrepresentation.
Answer: This is a false statement being made by an applicant that
influences either an insurer decision to accept the risk, or the
classification and pricing of a risk that's accepted by the insurer
⩥ Misrepresentation.
Answer: Is this statement being made as a legal representation that's
factually, incorrect, either totally or in part
⩥ Parole evidence rule.
Answer: This rule states that, when the parties agree in writing, all
previous verbal statements come together. A written contract cannot be
changed or modified by parole (oral) evidence
⩥ Policy rider or endorsement.
Answer: This is an amendment, which is added to an insurance contract
that overrides terms in the original policy. Riders may or remove
coverages, change, deductibles, or advise any other policy feature. In
general, a policy owner must pay an additional premium to add a policy
writer that enhances policy benefits.
⩥ Reasonable expectations.
,Answer: This indicates that the insured is entitled to coverage under a
policy that any sensible and prudent person would expect it to provide
⩥ Representations.
Answer: These are statements made by the applicant that he considers
true and accurate to the best of his belief
⩥ Rule regarding ambiguities.
Answer: This rule applies to contracts of adhesion. Courts will interpret
the terms of an insurance contract in favor of the insured if there's a legal
dispute in the court, holds the terms of the contract to be ambiguous. The
insurer is responsible for ensuring that the contract is clear since it
creates a policy terms as a contract of adhesion.
⩥ Subrogation.
Answer: This is the right for an insured to pursue a third-party that
caused an insurance loss to the insured
⩥ Unilateral.
Answer: This is the type of contract in which only one party - the insurer
- makes any kind of enforceable promise. The promises remain in force
for as long as the insured pays the required premium.
⩥ Utmost good faith.
, Answer: The statement is based on the belief that both policy owner and
the insurer must know all of the material facts and relevant information.
As such, they will provide each other with all material facts and relevant
information.
⩥ Valued contract.
Answer: This type of contract pays a stated sum, regardless of the actual
loss incurred. Life insurance contracts are examples
⩥ Void contract.
Answer: This contract is an agreement that has never really been
enforced because it lacks one of the essential elements of a contract. For
example, if a third-party (rather than the applicant for insurance) provide
a urine sample for an analysis, this active impersonation derives the
insurer of the information it needs. In effect, the applicant is
withholding, necessary consideration; therefore, any policy is void from
the dates issued. In other words, it never really goes into affect.
⩥ Voidable contract.
Answer: This type of contract is an agreement that may be set aside by
one of the parties in the contract for a reason that satisfactory to the
court
⩥ Waiver.
Answer: This is the volunteer giving up of a legal, given right
REVIEW SHEET LATEST QUESTIONS AND
SOLUTIONS GRADED A+
⩥ Implied authority.
Answer: This is an authority that's not explicitly granted to the agent in
the contract of agency, but which common sense dictates the agent has.
This authority enables the agent to carry out routine responsibilities.
⩥ Indemnity contract.
Answer: This type of contract attempts to return the insured to his
original financial position
⩥ Insurable interest.
Answer: This is the financial, economic, and emotional impact
experience by a person who suffers a covered loss. Person has an
insurable interest if she has more to gain by not experiencing the loss.
⩥ Insurance policy.
Answer: This is a written contract in which one party promises to
indemnify another against a loss that arises from an unknown event
⩥ Legal purpose.
,Answer: This means that an insurance contract must be legal in nature
and not an opposition to public policy
⩥ Material misrepresentation.
Answer: This is a false statement being made by an applicant that
influences either an insurer decision to accept the risk, or the
classification and pricing of a risk that's accepted by the insurer
⩥ Misrepresentation.
Answer: Is this statement being made as a legal representation that's
factually, incorrect, either totally or in part
⩥ Parole evidence rule.
Answer: This rule states that, when the parties agree in writing, all
previous verbal statements come together. A written contract cannot be
changed or modified by parole (oral) evidence
⩥ Policy rider or endorsement.
Answer: This is an amendment, which is added to an insurance contract
that overrides terms in the original policy. Riders may or remove
coverages, change, deductibles, or advise any other policy feature. In
general, a policy owner must pay an additional premium to add a policy
writer that enhances policy benefits.
⩥ Reasonable expectations.
,Answer: This indicates that the insured is entitled to coverage under a
policy that any sensible and prudent person would expect it to provide
⩥ Representations.
Answer: These are statements made by the applicant that he considers
true and accurate to the best of his belief
⩥ Rule regarding ambiguities.
Answer: This rule applies to contracts of adhesion. Courts will interpret
the terms of an insurance contract in favor of the insured if there's a legal
dispute in the court, holds the terms of the contract to be ambiguous. The
insurer is responsible for ensuring that the contract is clear since it
creates a policy terms as a contract of adhesion.
⩥ Subrogation.
Answer: This is the right for an insured to pursue a third-party that
caused an insurance loss to the insured
⩥ Unilateral.
Answer: This is the type of contract in which only one party - the insurer
- makes any kind of enforceable promise. The promises remain in force
for as long as the insured pays the required premium.
⩥ Utmost good faith.
, Answer: The statement is based on the belief that both policy owner and
the insurer must know all of the material facts and relevant information.
As such, they will provide each other with all material facts and relevant
information.
⩥ Valued contract.
Answer: This type of contract pays a stated sum, regardless of the actual
loss incurred. Life insurance contracts are examples
⩥ Void contract.
Answer: This contract is an agreement that has never really been
enforced because it lacks one of the essential elements of a contract. For
example, if a third-party (rather than the applicant for insurance) provide
a urine sample for an analysis, this active impersonation derives the
insurer of the information it needs. In effect, the applicant is
withholding, necessary consideration; therefore, any policy is void from
the dates issued. In other words, it never really goes into affect.
⩥ Voidable contract.
Answer: This type of contract is an agreement that may be set aside by
one of the parties in the contract for a reason that satisfactory to the
court
⩥ Waiver.
Answer: This is the volunteer giving up of a legal, given right
