life and Health Insurance - FIN-3660

Please be sure to include a citation and a copy of any informational source you use. Copy and paste your cited information at the end of this assignment.

1. Please define and provide an example of each of the following terms.

a. commutative contract

b. aleatory contract

c. unilateral contract

d. contract of adhesion

e. formal contract

2. Briefly discuss four requirements for a valid contract.

a.

b.

c.

d.

3. Joe Rigsby purchased a life insurance policy on his life from INS Life, Inc. Mr. Rigsby purchased the policy after a court had declared him to be mentally incompetent. In this situation, is the contract for insurance is valid? Explain.

4. The following statements are about the general requirements that must be met for a valid life insurance contract to be formed. Please explain whether and why the following statements are correct or incorrect.

5. (1) Only an insurer must express its intent to be bound by the terms of an insurance contract in order to fulfill the requirement of mutual assent.

(2) An applicant gives the application and the initial premium and promises to pay the renewal premiums as consideration for a life insurance contract.

(3) In order for an insurance contract to be valid, each party to the contract must give or promise something that is of value to the other party.

(4) The requirement of lawful purpose in the making of an insurance contract is fulfilled by the presence of an offer and the acceptance of that offer.

6. 5. The following statements are about contractual capacity in the formation of contracts. Please explain whether and why the following statements are correct or incorrect.

(1) If an insurer issues a policy to a person who is younger than the permissible age to

purchase insurance, the insurer can sue to avoid the policy.

(2) An insurer acquires its legal capacity to issue an insurance contract by being licensed or authorized to do business as an insurer by the proper regulatory authority.

(3) To establish a valid contract in most jurisdictions, an individual must first prove his legal capacity in a court of law.

(4) Corporations are generally presumed to have the same contractual capacity as that of a minor.