Which Of The Following Is True Of Life Insurance Contracts?

They are contracts between two parties (insurer and insured) as per requirements of Indian Contract Act, 1872 is true about life insurance contracts.

What is a life insurance contract?

Life insurance is a contract between an insurer and a policy owner. A life insurance policy guarantees the insurer pays a sum of money to named beneficiaries when the insured dies in exchange for the premiums paid by the policyholder during their lifetime.

Which of the following is true regarding group term life insurance policies?

All of the following are true regarding group term life insurance, EXCEPT: Evidence of insurability is not required to renew coverage. The correct answer is: The policy is issued for one year and may be renewed annually with evidence of insurability.

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Which of the following is an example of liquidity in a life insurance contract quizlet?

Which of the following is an example of liquidity in a life insurance contract? The cash value available to the policyowner. Liquidity in life insurance refers to availability of cash to the insured. Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs.

What are the characteristics of a life insurance contract?

Features of Life Insurance Contract

  • Nature of General Contract.
  • Insurable Interest.
  • Utmost Good Faith.
  • Warranties.
  • Proximate Cause.
  • Assignment and Nomination.

What are the 4 elements of an insurance contract?

There are 4 requirements for any valid contract, including insurance contracts:

  • offer and acceptance,
  • consideration,
  • competent parties, and.
  • legal purpose.

What is an insurance contract called?

An insurance policy – also called a contract of adhesion (yeah, like glue) because you agree to stick to the contract terms and conditions – is an agreement between you and your insurer outlining the coverage they’ll provide you, others in the policy, your stuff, and your place.

Which of the following is true regarding a policy issued to a labor union?

policy. Which of the following is TRUE regarding a policy issued to a labor union insuring members of the organization for the benefit of persons other than the union or organization? must be all the members of the union premiums must be paid either from funds of the union, or contributed by members.

Which of the following is true regarding the insurance amount in a credit life policy?

Which of the following is true regarding the insurance amount in a credit life policy? Creditor can only insure the debtor for the amount owed. – In decreasing policies, face amount decreases, but premium remains constant. – In level term & increasing term policies, premium also remains level.

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Which is true regarding a variable whole life policy?

Which statement is true concerning a Variable Universal Life policy? With Variable Universal Life, the policyowner controls the investment of cash values and selects the timing and amount of premium payments. Consideration is given by the insurer by promising to pay a death benefit to a named beneficiary.

What does Liquidity refers to in a life insurance policy?

With respect to life insurance, liquidity refers to how easily you can access cash from the policy. The concept applies mostly to permanent life insurance, because it accumulates cash value over time. Term life insurance doesn’t have that cash-value component.

Which of the following in not an example of a business use of life insurance?

Which of the following is NOT an example of a business use of Life Insurance? Workers Compensation is a benefit payable when a worker is injured by a work-related injury, regardless of fault or negligence. It is not considered a business use of insurance.

Which of the following settlement options in life insurance is known as straight life?

Which of the following settlement options in life insurance is known as straight life? The life-income option, also known as straight life, provides the recipient with an income that he or she cannot outlive. It pays the benefit while the beneficiary is alive; however, the payments stop at the beneficiary’s death.

What are the main policies of life insurance?

Let’s dig deeper into these categories to understand how to choose one of the types of life insurance policy in India.

  • Term Insurance Plan.
  • Term Insurance with Return of Premium.
  • Unit Linked Insurance Plan (ULIP)
  • Unit Linked Insurance Plan (ULIP)
  • Endowment Policy.
  • Moneyback Policy.
  • Moneyback Policy.
  • Whole Life Insurance.
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What is the nature of insurance contract?

Nature of contract is a fundamental principle of insurance contract. An insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal. A contract should be simple to be a valid contract.

What are the principles of life insurance?

In the insurance world there are six basic principles that must be met, ie insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution.

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