Basic Fundamentals of Insurance| Questions with 100% correct answers | verified

Agent/Producer - a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer Applicant or proposed insurer - a person applying for insurance Consent - permission to do something Insurable Interests - the policyowner facing the possibility of losing something of value in the event of loss Insurance Policy - a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events Insured - Person covered by the insurance policy; may or may not be the policyowner Insurer (Principal) - the company who issues an insurance policy Policyowner - the person entitled to exercise the rights and privileges in the policy Premium - the money paid to the insurance company for the insurance policy Insurance - the transfer of financial responsibility associated with a potential of a loss (risk) to an insurance company, which in turn spreads the cost of unexpected losses to many individuals Requirements of forming a contract - 1. agreement-- offer and acceptance 2. consideration 3. competent parties 4. legal purposeAcceptance - takes place when an insurers underwriter approves the application and issues a policy