LML4805 EXAM PACK 2023

LML4805 EXAM
PACK 2023




UPDATED
REVISION PACK

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LML4805

EXAM PACK




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EXAM PACK


DEFINITIONS

Distinguish (in a single sentence, where possible, and with the aid of
examples, where necessary) between:

QUESTION 1:
The insured and the person concluding the insurance contract with
the insurer
 the person taking out the insurance (ie, the person
concluding the contract with the insurer) A may insure his
or her own interest in his or her own house. A may insure
his or her own interest in B’s house. A may insure B’s
interest in his or her own (A’s) house, or in B’s house, or in
C’s house.
 the insured is the person who enjoys protection in terms of
the policy and he is the 1 st holder of the policy.


QUESTION 2:
The insured, the life insured and the beneficiary in terms of a life
insurance contract;
 the insured is the person who enjoys protection in terms of
the policy and he is the 1 st holder of the policy.
 The life insured is the person whose life is insured
 The beneficiary is the person who will benefit from the
policy

John insures his wife Mary’s life and names his daughter Grace as
beneficiary


QUESTION 3:
A void and a voidable insurance contract
 void: no contract comes into existance because it excludes
one of the basic requirements
 voidable: a valid contract comes into exitsnance but may be
terminated or enforced at the will of the innocent party

QUESTION 4:
Fire insurance and marine insurance;
 Marine insurance; is a contract of indemnity and is aimed at
providing the insured with indemnity against his loss caused
to the owners of ships


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 Fire insurance: the insurer will be liability in terms of
indemnity insurance for loss caused by fire damage
Look at the nature of he event insured against



QUESTION 5:
Positive and negative misrepresentation by an insured;
 Positive misrepresentation: insured makes a positive
incorrect statement about a material fact

 Negative misrepresentation: insured fails to disclose a
material fact to the insurer

QUESTION 6:
A limitation on risk and an exception to risk in an insurance contract
 A limitation on risk : the insured has the onus to prove the
event was caused by the event insured against and not the
excluded clause: must prove death – and exclude suicide as a
cause of death

 An exception to risk in an insurance contract: insurer must
prove that the event was caused by the execption = death was
caused by suicide


QUESTION 7:
The objective and the subjective test for the materiality of facts
 The IR proves that IT seee the fact as material = subjective
test
 Reasonable person would consider the fact to be material =
complete OBJECTIVE TEST (Mutual and Federal Case)

QUESTION 8:
An insurance contract and an insurance policy.
 An insurance contract: An insurance contract is a tangible
agreement

 An insurance policy: The policy is the reduction of that
agreement into a tangible form.

QUESTION 9:
A cover note and an insurance policy;
 An insurance policy: The policy is the reduction of that
agreement into a tangible form.

 A cover note: document issued by the insurance company
giving temporary insurance until a formal policy is issued



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