NJ Accident and Health Producer insurance Exam Chapter 1 with Complete Solutions

NJ Accident and Health Producer insurance Exam Chapter 1 with Complete Solutions The Agent/ Producer is The legal representative of an insurance company The Applicant/ Proposed insured is a person applying for the insurance The insurable interest is the policy owner facing the possibility of losing something of value in the event of loss What does Consent mean? permission to do something What is an Insurance Policy? a contract between a policy owner and insurance company which agrees to pay for loss caused by specific event the "insured" is The person covered by the insurance policy; may or may not be the policy owner The "insurer" is the principal or company who issues an insurance policy What is the "Policyowner"? the person entitled to excercise the right and privileges in the policy What is "Premium" The money paid to the insurance company for the insurance policy What are the elements of a legal contract? Agreement (offer & accepted), Consideration, Competent Parties and Legal purpose Insurable Interest is proven by love and affection, economic or financial loss. In life and health insurance, it is required at the time of policy issuance. When a contract is "conditional" it... requires that certain conditions must be met by the policyowner and the company in order for the contract to be excecuted A unilateral contract mean only one of the parties to the contract is legally bound to do anything. The insured makes no legally binding promises. However, insurer is legally binding to pay losses covered by a policy in force A contract of adhesion is a contract prepared by the insurer and accepted or rejected by the insured. it's on a take-it or leave-it bases and any ambiguities in the contract will be settled in favor of the insured. What is a Warranty an absolutely true statement upon which the validity of the insurance policy depends. What does Representation mean in a contract? statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true. Untrue statements on application are considerd misrepresentations and