NC Life Insurance - Other Life Topics - Chapter Quiz with Verified Solutions A+ GRADED!!

NC Life Insurance - Other Life Topics - Chapter Quiz with Verified Solutions Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as A. Binding contracts. B. Contracts of adhesion. C. Unilateral contracts. D. Aleatory contracts. (B) Contracts of adhesion Insurance policies are written by the insurer and submitted to the insured on a "take it or leave it" basis. The insured does not have any input into the contract, but simply adheres to the contract. If only one party to an insurance contract has made legally enforceable promise, what kind of contract is it? A. Conditional B. Unilateral C. Aleatory D. Bilateral B. Unilateral In a unilateral contract, only one of the parties to the contract is legally bound to do anything Which of the following individuals must have insurable interest in the insured? A. producer B. policy owner C. beneficiary D. underwriter B. policy owner policy owner-the policy owner must have an insurable interest in the insured, i.e. his/her own life if the policy owner and the insured is the same person, or in the life of a family member or a business partner. When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will A. Issue the policy anyway and pay the face value to the beneficiary B. Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved C. Return the premium to Y's estate, since it has no obligation to pay the death claim D. Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued A. Issue the policy anyway and pay the face value to the beneficiary The conditional receipt says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for.