Life, Accident and Health Insurance in the United States
2nd Edition
CAL-STATE EXAMS
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TABLE OF CONTENTS
LIFE, ACCIDENT AND HEALTH INSURANCE IN THE U.S.
LESSON ONE — POLICY PROVISIONS, OPTIONS AND BENEFITS
Life Insurance: Mutual Assent - Mental Competence - Consideration - Lawful Purpose - Obligations and Duties of a Life Insurance Agent - Entire Contract Clause - Insuring Clause - Free Look Provision - Consideration - Policy Owner's Rights - Insurable Interest - Beneficiary Designations - Modes of Premium Payment - Grace Period - Automatic Premium Loan Provision - Reinstatement - Policy Loans - Nonforfeiture Options - Dividends - Dividend Options - Guaranteed Insurability Benefit - Incontestable Clause - Assignments - Suicide Clause - Misstatement of Age Provision - Settlement Options - Payor Clause - Waiver of Premium Provision - Accidental Death Benefit - Dismemberment Provision - Conversion Option - Representation - Warranty - Accident and Health Insurance: Insuring Clause - Free Look Provision - Probationary Period - Deductible - Elimination Period - Co-insurance - Preexisting Conditions - Renewability Provisions - Waiver of Premium Provision - Exclusions - Mandatory Uniform Policy Provisions - Optional Uniform Policy Provisions.
LESSON TWO — TYPES OF INSURANCE POLICIES AND COVERAGES
Life Insurance: Endowment Insurance - Term Insurance - Whole Life Insurance - Universal Life Insurance - Family Policies - Annuities - Accident and Health Insurance: Disability Income Insurance - Business Overhead Expense Insurance - Business Health Insurance - Accidental Death and Dismemberment - Medical Expense Policies - Hospital Expense Policies - Surgical Expense Policies - Hospital Indemnity Benefit V Medicare - Medicaid.
LESSON THREE — GROUP INSURANCE, TAXATION, RETIREMENT
Life Insurance: Third-Party Ownership - Group Life Underwriting - Group Life Conversion Privileges - Standard Policy Provisions - I.R.A.s - Keoghs - Tax Sheltered Annuity Retirement Plan - Social Security - Life Insurance Taxation - Accident and Health Insurance: Characteristics of Group Health Insurance - Basic Forms of Group Health Insurance - Dependent Coverage - Principal Kinds of Group Health Insurance - Underwriting Process - Costs - Occupational vs. Non-occupational Coverage - Total, Partial and Residual Disability - Blue Cross-Blue Shield Plans - Health Insurance Taxation.
LESSON FOUR — BUSINESS INSURANCE
Qualified and Unqualified Retirement Plans - Buy-Sell Agreements - Salary Continuation Plans - Split Dollars Plans - Key Employee Insurance.
LESSON ONE: POLICY PROVISIONS, OPTIONS AND BENEFITS
What requirements must be present for an insurance contract to be binding on the parties?
The following requirements must be present for an insurance contract to be binding:
(1) There must be a manifestation of mutual assent to the terms of the contract by each of the parties to the contract;
(2) The parties to the contract must have the legal capacity to make a contract;
(3) The parties to the contract must exchange legal consideration; and
(4) The contract must be for a lawful purpose.
Mutual assent. Whether a contract is made by the parties signing a written agreement or by two parties shaking hands, the parties involved have agreed to something. Such mutual agreement is the basis for the legal requirement of mutual assent. Mutual assent presumes that one party has made an offer and that the other party has accepted it. If the parties have not manifested mutual assent to the promises and terms of the agreement, no legally enforceable contract can exist. Manifestation of assent means that any reasonable person would conclude that there was agreement between the parties involved.
For insurance policies, as well as for other contracts, the requirement of mutual assent is met by the existence of the process of offer and acceptance. In the life insurance, however, several variables must be considered in determining who is the offeror — the one who has made the offer — and who is the offeree — the one to whom the offer has been made.
Legal capacity. In order for a contract to be binding on all parties, the parties must have the legal capacity to make a contract. This requirement, when applied to insurance contracts, means that the insurance company has the legal capacity to issue the policy and that the applicant has the legal capacity to purchase the policy.