Which One of the Following Is True Concerning Consideration in Property

question 73

Multiple Choice

Which one of the following is true concerning consideration in property insurance?

• A) Dollars must change hands from the insured to the insurer before a contract exists.
• B) The only valid consideration is cash payment of all premiums in full.
• C) Abiding by the contractual language and paying the premium is the consideration the insured provides.
• D) If the premium is not paid at the time of a loss, the insured is given a 30-day grace period to pay.

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Definitions:

Extrinsic Documents

Documents that are not part of the original contract but are referenced and incorporated by implication or necessity.

Specification of Heirs

is the process or legal document in which a person designates who will inherit their assets after death.

Nuncupative Will

An orally delivered will, often made in anticipation of imminent death, and usually requiring witnesses, with legal recognition varying by jurisdiction.

Notarial Will

A will that is drafted and executed with formalities dictated by law, often involving a notary and witnesses.