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Chapter 14: Insurance Contract - Coggle Diagram
Chapter 14: Insurance Contract
Valid insurance Contract
Contract between insurer and insured
Offer and acceptance
Offeror (client)
Invitation to Treat
Capacity to contract
Consensus ad idem
If no misrepresentations
Caveat emptor
Let the buyer beware
Only holds true if consensus ad idem
holds true
Insurable interest
Consideration
Renumeration in exchange for doing
or forbearing some things
Renumeration is the premium insurers
take in exchange for covering the insured
Duty of Disclosure
Proposer is
Prudent Insurer
Opinion of
insured
is irrelevant
Opinion of
insurer
is
relevant as
evidence
Inducement
Link between non-disclosure by proposer and decision by insurer to enter into the contract
Warranty
statement guaranteed to be
true in all respects (like swearing)
Insurer has right to void the contract
ab initio
if there are
any inaccurate statements
that have been
warranted
Representations
Insurer has no right to rescind contract
unless the misrepresentation fact
was material to risk
Waiver
intentional
Estoppel
when insurance professional creates impression of a fact and innocent
Breach of Contract
Vitiating Factors
Misrepresentation
Statement of fact and not
statement of opinion
Made by party to contract
Material
Material loss has been sufferred
Duress
Coerced
Illegal contract
Mistake
Consent is
Non Est Factum
not my deed
Policy-owner Rights
Which of the following is not found in the policy schedule?
General Provisions
Applicable to all policies
Non Forfeiture Options
when client does not
want policy to lapse
Reduced Paid-up Insurance
Early completion of
insurance plan
Extended Term Insurance
Changes it to a
term insurance
Cash Value option
Surrender the policy
when client does not
indicate an option
Automatic Premium Loan
Interest is chargeable on loans
LI policy which is in force for at
least
3 years
shall not lapse due
to non-payment of premiums
Incontestability clause
Insurer undertakes not to dispute validity of
contract and void it after period of 1-2 years
Suicide clause
Policy is void if LI commit suicide
within specified period of time
Grace period
Misstatement of age
Reduce SA to that which premiums
paid will purchase
Refund excess premiums paid
without interest
Endorsement
amendments to insurance policy
that becomes part
Guidelines on Endorsement