Massachusetts Insurance Agent Exam Answered with 100% Correct Answers

What are the two components of an agreement? - Ans: Offer and acceptance. Elements of a legal contract - Ans: 1. Agreement 2. Consideration 3. Competent Parties 4. Legal Purpose Property and Liability Policy - Ans: Owned by the policy owner. It is a personal contract. Who is not considered to have legal capacity? - Ans: 1. Minors 2. Insane Persons 3. Individuals Under the Influence 4. Person Coerced 5. Enemy Aliens 6. Convict Unilateral - Ans: An act in exchange for a promise or a promise exchanged for an act already performed. Adhesion - Ans: Drafted by insurer, accepted by applicant. Aleatory - Ans: Unequal payment or consideration. Conditional - Ans: Specific expectations must be met in order for the contract to be executed. Utmost Good Faith - Ans: Each party must tell the truth. Representations - Ans: Statements made by applicant recorded on the application. Material Misrepresentation - Ans: An untrue statement that would cause rejection. Warranty - Ans: A statement guaranteed to be absolutely true. Concealment - Ans: Failure to disclose. Fraud - Ans: Deliberately deceiving. Waiver - Ans: Intentional abandonment or voluntary relinquishment of a known right as found in a policy. Example: Insured lets an excluded driver drive their car. Estoppel - Ans: A false statement made by one party, which is relied on by another.