1 | Page
NJ HEALTH AND ACCIDENT INSURANCE
EXAM 2025 UPDATED ACTUAL EXAM WITH
CORRECT SOLUTIONS.
In order for insurance contracts to be legally binding, they must
have 4 essential elements: - correct answer- 1. agreement
2. Consideration
3. Competent parties
4. legal purpose
consideration - correct answer- The binding force in a contract
that requires something of value to be exchanged for the
transfer of risk. The consideration on the part of the insured is
the representations made in the application and the payment of
premium; the consideration on the part of the insurer is the
promise to pay in the event of loss.
conditional contract - correct answer- Certain conditions must
be met by all parties to the contract when a loss occurs in order
for the contract to be legally enforceable.
unilateral contract - correct answer- only one of the parties to
the contract is legally bound to do anything; the insurer is
legally bound to pay losses covered by a policy force
, 2 | Page
contract of adhesion - correct answer- prepared by the insurer
and accepted or rejected by the other party
warranty - correct answer- An absolutely true statement upon
which the validity of the insurance policy depends.
representations - correct answer- statements believed to be
true to the best of one's knowledge
Material Misrepresentation - correct answer- A statement that, if
discovered, would alter the underwriting decision of the
insurance company.
Fair Credit Reporting Act - correct answer- established
procedures that consumer-reporting agencies must follow in
order to ensure that records are confidential, accurate, relevant,
and properly used
Medical Information Bureau - correct answer- owned by
member insurance companies. It is a nonprofit trade
organization that receives adverse medical information from
NJ HEALTH AND ACCIDENT INSURANCE
EXAM 2025 UPDATED ACTUAL EXAM WITH
CORRECT SOLUTIONS.
In order for insurance contracts to be legally binding, they must
have 4 essential elements: - correct answer- 1. agreement
2. Consideration
3. Competent parties
4. legal purpose
consideration - correct answer- The binding force in a contract
that requires something of value to be exchanged for the
transfer of risk. The consideration on the part of the insured is
the representations made in the application and the payment of
premium; the consideration on the part of the insurer is the
promise to pay in the event of loss.
conditional contract - correct answer- Certain conditions must
be met by all parties to the contract when a loss occurs in order
for the contract to be legally enforceable.
unilateral contract - correct answer- only one of the parties to
the contract is legally bound to do anything; the insurer is
legally bound to pay losses covered by a policy force
, 2 | Page
contract of adhesion - correct answer- prepared by the insurer
and accepted or rejected by the other party
warranty - correct answer- An absolutely true statement upon
which the validity of the insurance policy depends.
representations - correct answer- statements believed to be
true to the best of one's knowledge
Material Misrepresentation - correct answer- A statement that, if
discovered, would alter the underwriting decision of the
insurance company.
Fair Credit Reporting Act - correct answer- established
procedures that consumer-reporting agencies must follow in
order to ensure that records are confidential, accurate, relevant,
and properly used
Medical Information Bureau - correct answer- owned by
member insurance companies. It is a nonprofit trade
organization that receives adverse medical information from
