Page 30 - Life Assurance

5- Oral contracts of insurance may be valid,
but they should be avoided whenever possible.

6- Insurance is a contract of adhesion and
any ambiguities (unclear) are construed
(explained) against the insurer.

Insurance is a conditional contract.

7- A manuscript policy is not a contract of
adhesion. It provides the risk manager an
opportunity to determine the suitable insurance
policy to meet very special needs.

8- Group insurance provides benefits to a
number of persons under a single master
contract. Low-cost protection is provided,
because the employer pays part or all of the
premiums. Evidence of insurability is usually not
required. Larger groups are subject to
experience rating, by which the group’s loss
experience determines the premiums charged.

9- Certain underwriting principles are
followed in group insurance to obtain favorable
loss experience:

- Insurance should be incidental to the
group.

- There should be a flow of persons through
the group.

- The benefits should be determined by
some formula that precludes individual selection
of insurance amounts.

94 Life41/life/life 08