A Key Consequence of the Designation of Insurance Contracts as Contracts

question 39

True/False

A key consequence of the designation of insurance contracts as contracts of the utmost good faith is the imposition on the insured of a duty to disclose.

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Definitions:

Present Value Index

A financial metric used to evaluate the present value of future cash flows in relation to the initial investment, also known as the profitability index.

Compound Interest

The method of calculating interest where both the original principal and the accumulated interest from past periods on a loan or deposit are considered.

Estimated Cost

Estimated cost refers to the projection or approximation of the cost associated with a particular project, product, or service.

Straight-Line Depreciation

A method of depreciation where an equal amount of depreciation is allocated each year over the useful life of the asset.