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What is the consideration given by an insurer in the consideration clause?

What is the consideration given by an insurer in the consideration clause?


Answer

What is the consideration given by an insurer in the Consideration clause of a life policy?

Consideration is given by the insurer by promising to pay a death benefit to a named beneficiary. The payment of the face amount of the policy is payable at the end of such preselected period.

 

Hereof, what is the consideration given by an insurer?

For insurers, consideration also refers to the money paid out to you should you file an insurance claim. This means that each party to the contract must provide some value to the relationship. You need to be legally competent to enter into an agreement with your insurer.

 

Also Know, what kind of insurance policy pays a specified monthly income?

When you buy a term life policy, an insurance company promises that it will pay your beneficiaries a set amount if you die during the policy's term. In exchange, you pay a monthly premium to the company for the duration of that term.

 

Likewise, which of the following is an example of the insured's consideration?

An example of the insured's consideration is a paid premium. Which of the following is an example of legal consideration? Application and initial premium. Consideration can be defined as something of value given in exchange for the promises sought.

 

Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy?

The premium rate for a life insurance policy is based on two underlying concepts: mortality and interest. A third variable is the expense factor which is the amount the company adds to the cost of the policy to cover operating costs of selling insurance, investing the premiums, and paying claims.

 

26 Related Question Answers Found

 

Which type of policy contains a monthly mortality charge?

Variable Universal Life is comprised of monthly mortality charges and self directed investment choices.

 

What type of life insurance incorporates flexible premiums?

"Variable universal life insurance draws upon the features of two types of cash value insurance - universal life and variable life. Like universal life, variable universal life incorporates flexible premium payments, an adjustable death benefit and death benefit options."

 

What is a statement made in an insurance application?

Representation — a statement made in an application for insurance that the prospective insured represents as being correct to the best of his or her knowledge.

 

What is a warranty in insurance?

A warranty in an insurance policy is a promise by the insured party that statements affecting the validity of the contract are true. Most insurance contracts require the insured to make certain warranties. Only misrepresentations on conditions and warranties in the contract give an insurer such rights.

 

What is the primary factor that determines the benefits paid?

(The major factor in determining the benefit amount paid under a disability income policy is wages.)

 

Which type of policy is considered to be overfunded?

Modified Endowment Contract. A policy that is overfunded to where it does not meet the 7-pay test is considered a Modified Endowment Contract.

 

What is contract of adhesion in insurance?

Adhesion Contract Explained In an insurance contract, the company and its agent has the power to draft the contract, while the potential policyholder only has the right of refusal; they cannot counter the offer or create a new contract to which the insurer can agree.

 

What are the elements of an insurance policy?

Like most common-law concepts, it has taken many individual cases and many decades—in some cases, centuries—to develop a settled view of the necessary elements for a valid insurance policy. These elements are a definable risk, a fortuitous event, an insurable interest, risk shifting, and risk distribution.

 

What make a contract valid?

Most contracts only need to contain two elements to be legally valid: All parties must be in agreement (after an offer has been made by one party and accepted by the other) (after an offer has been made by one party and accepted by the other). Something of value must be exchanged — such as cash, services, or goods (or a promise to exchange such an item) — for something else of value.

 

Which of the following are elements of all valid contracts?

The Elements of a Valid Contract Offer and Acceptance. An offer occurs when one party presents something of value that they wish to exchange for something else of value. Consideration. Mutuality or Intention. Legality. Capacity. Creating Your Next Contract.

 

What is implied authority defined as quizlet?

What is implied authority defined as? Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?

 

Which is not an element of a valid contract?

A contract has six important elements so that it will be valid which is offer, acceptance, consideration, intention to create legal relation, certainty and capacity. If the main elements are not in contract, it would be an invalid contract.

 

When the exchange of value is unequal The contract is considered?

Aleatory Contract — an agreement concerned with an uncertain event that provides for unequal transfer of value between the parties. Insurance policies are aleatory contracts because an insured can pay premiums for many years without sustaining a covered loss.

 

What is implied authority defined as?

Implied authority refers to an agent with the jurisdiction to perform acts that are reasonably necessary to accomplish the purpose of an organization. Under contract law, implied authority figures have the ability to make a legally binding contract on behalf of another person or company.