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Understanding Insurance Contracts: A Detailed Quiz

Explore key insurance policies through interactive flashcards designed to enhance understanding and retention. This quiz focuses on defining various types of insurance policies, aiding learners in grasping complex concepts and...

Questions: 12 | Attempts: 12 | Last updated: Aug 4, 2025

Sample Question 1
An Insurance policy represents a special kind of agreement known as a contract, define contract:

It is an informal agreement that can be easily changed.

It is a legally enforceable agreement between two or more parties.

It is a temporary agreement that does not require any signatures.

It is a verbal agreement with no legal standing.

Sample Question 2
What is the difference between an individual life or health insurance policy and a group policy?

In an individual contract, the parties are the insurance co. that issued the policy and the individual who owns it. In a group contract, the parties are the insurer that issued the policy and the group policyholder, which is the person who decides what type of group coverage there will be.

Individual policies are typically more expensive than group policies due to the personalized coverage they offer.

In an individual contract, the parties are the employer and the individual, while in a group contract the parties are the individual and the insurance company.

The main difference is that an individual policy covers one person at a time while a group policy covers multiple individuals under one contract.

Sample Question 3
There are several types of contracts - explain the difference between Formal and Informal Contracts and which one do life and health insurance policies fall under?

Informal contracts are not legally binding while formal contracts are

Formal contracts are usually temporary in nature while informal contracts are permanent

Formal contracts are always oral agreements while informal contracts are always in writing

A formal contract is one that is enforceable because the parties to the contract met certain formalities concerning the form of the agreement. They must be in writing and that the written document contains some form of seal. An Informal contract is also enforceable but can either be in writing or an oral agreement and the parties must meet requirements as to the substance of the agreement rather than the form of the agreement. Life and Health Ins. Contracts are informal.

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