Insurance is a method of transferring, for a fee, the financing responsibility for the risk to another party. Insurance polices are legal contracts. There are four elements that constitute a legal, binding contract. Which of the following is NOT out of those elements?
Answer(s): B
It is a characteristic of insurance policy according to which the insured decides whether or not to pay the premium to be covered by the policy. If the insured pays the premium, the insurance coma pay is obliged to make payments as stated in the policy. What is it?
Answer(s): A
Insurance contracts are also considered in that they are legal documents that required the insurer to pay if covered events occur. Because the insurance company creates the contract, it is liable if there are any ambiguities in the contract language.
Insurance companies assist individuals in managing personal risk through risk pooling. Risk pooling is based on fact that the probability of any one type of loss occurring for a given individual is small. Therefore insurers can insure:
Whole life policies accrue a cash value that the insurer must surrender to the policyholder if the policy does not remain in force until the policyholder's death. The actual cash value payable to the policyholder in this circumstance would be:
Answer(s): D
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