MO Health and Life Insurance Exam
Adverse Selection:
️ Insuring of risks that are more prone to losses than the average risk.
Agent/Producer:
️ Legal representative of the insurance company.
Producer:
️ Includes agents and brokers.
Agent:
️ Agent of the insurer.
Ap...
✔️ Insuring of risks that are more prone to losses than the average risk.
Agent/Producer:
✔️ Legal representative of the insurance company.
Producer:
✔️ Includes agents and brokers.
Agent:
✔️ Agent of the insurer.
Applicant:
✔️ A person applying for insurance.
Beneficiary:
✔️ Person who receives benefits of an insurance policy.
Death Benefit:
✔️ The amount paid upon the death of the person insured through life insurance.
Insurance Policy:
✔️ A contract between a policy owner and the insurance company which agrees to pay the insured or
beneficiary for losses caused by special events.
Insured:
, ✔️ Person covered by the insurance policy who may or may not be the policy owner.
Insurer:
✔️ The company that issues the insurance policy.
Lapse:
✔️ Policy termination due to nonpayment of premium.
Life Insurance:
✔️ Coverage of human lives.
Policy Owner:
✔️ The person entitled to exercise the rights and privileges of the policy.
Premium:
✔️ The money paid to the company for the policy.
### Elements of a Legal Contract
Elements of a Legal Contract:
✔️ 1. Agreement Offer and acceptance
✔️ 2. Consideration
✔️ 3. Competent parties
✔️ 4. Legal purpose
Agreement:
✔️ Applicant makes an offer when submitting an application.
Consideration:
, ✔️ The binding force in any contract. Each party gives to one another. The insurer's consideration is
the promise to pay in the event of loss.
Competent Parties:
✔️ Parties must be competent in the eyes of the law; must be of legal age and mentally competent.
Legal Purpose:
✔️ The contract must not be against public policy and must include insurable interest and consent.
### Types of Contracts
Contract Adhesion:
✔️ The insured must accept the entire contract with all of its terms and conditions. It is presented on
a takeitorleaveit basis by the insurer.
Aleatory Contract:
✔️ The exchange of value is unequal.
Unilateral Contract:
✔️ Only one party (the insurer) is legally bound to do anything. The insured makes no legally binding
promises, but the insurer is legally bound to pay losses covered by the policy in force.
Conditional Contract:
✔️ An agreement where both parties must perform specific duties and follow rules of conduct for the
contract to be enforceable.
Warranty:
✔️ An absolute true statement.
Breach of Warranty:
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