Life and Health License Maine

Lapse - answer-policy termination due to nonpayment of premium Premium - answer-amount paid to the insurance company for the insurance policy "Insurance Transaction" (by email or other means) - answer-Solicitation Negotiations Sale Advising an individual concerning coverage or claims Elements of legal contract to be legally binding (4 Essential elements) - answer-1. Agreement 2. Consideration 3. Competent Parties 4. Legal Purpose Consideration (contract) - answer-Is something of value that each party gives to another. Insured = payment on premium Insurer = promise to pay in event of loss. Competent Parties - answer-Must be entering contract in eyes of the law. -Both parties must be legal age, mentally competent, not under influence of alcohol or drugs. Contract of Adhesion - answer-prepared by one party (insurer) and accepted or rejected by the other party. Aleatory Contract - answer-Means exchange of unequal amounts or values. Premium paid is small in relation to amount paid by insurer in event of loss. Unilateral Contract - answer-Only one parties to the contract is legally bound to do anything. (Insured = no legally binding promises, Insurer promises to pay losses covered by policy) Conditional Contract - answer-Certain conditions met by policy owner and company in order for the contract to be executed. (Proof of loss...) Warranty - answer-Absolutely true statement upon which the validity of insurance policy depends. Representations - answer-Statements believed to be true to best of one's knowledge. Misrepresentations & Material Misrepresentations can lead to..... - answer-FRAUD "Completing application" - answer-2 basic Parts: Part 1: general information Part 2: Medical information Agent's Report - answer-Provides the agents personal observations concerning the proposed insured. Changes in Application - answer-Should have applicant initial the change or complete a new application. Consequences of Incomplete Application - answer-Incomplete then must return it to applicant. If a policy is issued with questions left, insurer waived it right to have an answer to the question. Collecting premium - answer-Whenever agent collects premium, must issue "premium receipt." "Conditional receipt" is used only when the applicant submits a prepaid application. Replacement - answer-Terminating policy or letting it lapse, and getting a new one. Underwriting - answer-Risk selection process. Underwriter responsible for selecting only those risks that are considered insurable and meet insurer's standards. Sources of underwriting information - answer-Application Agent's Report Investigative Consumer Report (Inspection) - answer-Underwriter can order inspection from investigation firm or credit agency. (subject to fair credit reporting act) Fair Credit Reporting Act - answer-est. procedures that consumer-reporting agencies must follow. Consumer Reports - answer-written / oral information regarding consumers credit, character, reputation, or habits. Investigative consumer reports - answer-Similar to Consumer report but use information from friends, neighbors and associates. Medical Information Bureau (MIB) - answer-(A nonprofit trade organization) Owned by member insurance companies, receives medical information from insurance companies and maintains confidential information.