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  • Insurance Quiz #1

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    An insurance contract is an agreement where one party agrees to indemnify another against financial loss from an unknown or contingent event. Key elements of an insurance contract include an insurable interest, assumption of risk by the insurer for a fee (premium), and distribution of losses among a large group of insured individuals. There are various types of insurance like life, health, property, and liability insurance which protect against losses to persons or property. The essential parties are the insurer who assumes the risk, and the insured who is indemnified upon the occurrence of the specified event.

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    Insurance Reviewer

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    An insurance contract is an agreement where one party agrees to indemnify another against financial loss from an unknown or contingent event. Key elements of an insurance contract include an insurable interest, assumption of risk by the insurer for a fee (premium), and distribution of losses among a large group of insured individuals. There are various types of insurance like life, health, property, and liability insurance which protect against losses to persons or property. The essential parties are the insurer who assumes the risk, and the insured who is indemnified upon the occurrence of the specified event.

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    189 views2 pages

    Insurance Quiz #1

    Uploaded by

    melaniem_1
    An insurance contract is an agreement where one party agrees to indemnify another against financial loss from an unknown or contingent event. Key elements of an insurance contract include an insurable interest, assumption of risk by the insurer for a fee (premium), and distribution of losses among a large group of insured individuals. There are various types of insurance like life, health, property, and liability insurance which protect against losses to persons or property. The essential parties are the insurer who assumes the risk, and the insured who is indemnified upon the occurrence of the specified event.

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    © All Rights Reserved
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    Quiz #1

    Definition of Insurance Contract


    An insurance contract is an agreement whereby one undertakes, for a
    consideration, to indemnify another against loss, damage or liability arising from
    a contingent or unknown event
    Doing or Transacting an Insurance Business
    (1) Making or proposing to make, as an insurer, any insurance contract
    (2) Making or proposing to make, as a surety, any contract of suretyship as
    a vocation and not merely incidental to the legitimate business or
    activity of the surety
    (3) Doing any kind of business, including a reinsurance business, specifically
    recognized as constituting the doing of an insurance business within the
    meaning of this Code
    (4) Doing or proposing to do any business in substance equivalent to any of
    the foregoing in a manner designed to evade the provisions of this Code
    Functions of Insurance
    (1) Principal function: risk bearing
    (2) Subsidiary functions
    (a) Stimulates business enterprises
    (b) Encourages business efficiency and enterprises
    (c) Promotes loss-prevention
    (d) Encourages savings
    (e) Solves social problems
    (3) Indirect functions
    (a) Investment of funds
    (b) Use of reserve funds
    (c) Effect on prices
    (d) As a basis of credit
    What may be Insured
    Sec 3: Any contingent or unknown event, whether past or future, which may
    damnify a person having insurable interest, or create a liability against him, may
    be insured against, subject to the provisions of this chapter.
    The consent of the spouse is to necessary for the validity of an insurance policy
    taken out by a married person on his/her life or that of his/her children.
    All rights, title and interest in the policy of insurance taken out by an original
    owner on the life or health of the person insured shall automatically vest in the
    latter upon the death of the original owner, unless otherwise provided for in the
    policy.
    Insurance Taken by a Minor
    (Deleted portion) Any minor of age 18 years or more, may, notwithstanding such
    minority, contract for life, health, and accident insurance, with any insurance

    company
    duly authorized to do business in the Philippines, provided the
    insurance is taken on his own life and the beneficiary appointed is the minors
    estate or the minors father, mother, wife, child, brother or sister.
    The married woman or the minor herein allowed to take out an insurance policy
    may exercise all the rights and privileges of an owner under a policy.
    Characteristics of an Insurance Contract
    (1) Voluntary
    (2) Aleatory
    (3) Consensual
    (4) Conditional
    (5) Personal
    (6) Contract of indemnity
    (7) Property in legal contemplation
    (8) Unilateral
    Requisites of an Insurance Contract
    (1) A subject matter in which the insured has an insurable interest
    (2) Event or peril insured against which may be any (future) contingent or
    unknown event, past or future, and a duration for the risk thereof
    (3) A promise to pay or indemnify in a fixed or ascertainable amount
    (4) A consideration for the promise, known as the premium
    (5) A meeting of the minds of the parties upon all the foregoing essentials
    (6) Competent to enter into a contract
    (7) Not contrary to law
    (8) Not contrary to public policy
    Elements of Insurance Contract
    (1) The insured possesses an interest capable of pecuniary estimation
    (insurable interest)
    (2) The insured is subject to a risk of loss through the destruction or
    impairment of that interest by the happening of designated perils
    (3) The insurer assumes the risk of loss
    (4) Such assumption of risk is part of a general scheme to distribute actual
    losses among a large group of persons bearing a similar risk
    (5) As consideration for the insurers promise, the insured makes a ratable
    contribution (premium)
    Main Classification of Insurance
    (1) Insurance against loss or impairment of property interest
    (2) Insurance against loss of earning power due to death, accidental injury,
    ill-health, sickness, old age, or any other disability
    (3) Insurance to against contingent liability to make payment against
    another
    Insurable Interest
    Sec 10: Every person has an insurable interests in the life and death:

    (1) Of himself, his spouse and of his children


    (2) Of any person on whom he depends wholly or in part for education or
    support, or in whom he has a pecuniary interest
    (3) Of any person under a legal obligation to him for the payment of money,
    respecting property or services, of which death or illness might delay or
    prevent the performance
    (4) Of any person upon whose life any estate or interest vested in him
    depends
    General Classes of Life Policies
    (1) Insurance upon ones life
    (2) Insurance upon life of another
    (3)
    Classification of Insurance Contracts under the Code
    (1) Life insurance contracts
    (2) Non-life insurance contracts
    (3) Contracts of suretyship or bonding
    Types of
    (1)
    (2)
    (3)

    Life Insurance
    Individual life
    Group life
    Industrial life

    Types of
    (1)
    (2)
    (3)

    Non-Life Insurance
    Marine
    Fire
    Casualty

    Persons
    (1)
    (2)
    (3)

    Obliged to Support Each Other (Art 195 FC)


    The spouses
    Legitimate ascendants and descendants
    Parents and their legitimate children and the legitimate or illegitimate
    children of the latter
    (4) Parents and their illegitimate children and the legitimate or illegitimate
    children of the latter
    (5) Legitimate brothers and sisters, whether of full or half-blood

    Parties to an Insurance Contract


    Sec 6: Every corporation, partnership, or association duly authorized to transact
    insurance business as elsewhere provided in this Code, may be an insurer

    Parties in a Contract of Insurance


    (1) Insurer assumes or accepts the risk of loss and undertakes for a
    consideration to indemnify the insured on the happening of a specified
    contingent event
    (2) Insured in whose favor the contract is operative and who is indemnified
    against
    Who may be an Insurer
    (1) Foreign or domestic insurance company or corporation
    (2) Individual, partnership or association
    Capacity of Party Insured
    (1) Natural person
    (a) Must be competent to make a contract
    (b) Must possess insurable interest in the subject of insurance
    (c) Not a public enemy
    (2) Juridical person may take out insurance on property owned by it
    Lawyers Oath
    I, (state your name), do solemnly swear that I will maintain my allegiance to the
    Republic of the Philippines; I will support its Constitution and obey laws as well as
    the lawful orders of the duly constituted authorities therein; I will do no falsehood,
    nor consent to doing of any in court; I will not wittingly nor willingly promote or
    sue any groundless, false, or unlawful suits, or give aid or consent to the same; I
    will delay no man for money or malice, and will conduct myself as a lawyer
    according to the best of my knowledge and discretion with all good fidelity as well
    as to the courts as to my clients; and I impose upon myself this voluntary
    obligations without any mental reservation or purpose of evasion. So help me
    God.

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