In health insurance all types of medical expense

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In Health insurance , all types of medical expense coverages are contracts of indemnity and are similar to property and liability contracts. On the other hand, income replacement paid under health insurance contracts must be assimilated to a life insurance type of coverage. The Characteristics of Insurance Contracts Legal Aspects Insurance contracts, in all countries, are subject not only to the same basic law that governs all types of contracts, but also to some legal principles that have been developed to handle the legal problems associated with insurance and summarized in Table 8.2 . 9 , 10 In order for a contract to be legally valid there must be (1) an agreement between the two parties (usually refer to "offer and acceptance"), (2) a valuable consideration, and (3) legal capacity and purpose. Beyond the necessary contractual conditions, certain elements are peculiar to the insurance policy. Generally the policy is unilateral and only the insurer is obligated to act. It is also a conditional and aleatory contract. As a contract of "utmost good faith," (uberrimae fidei) a certain degree of honesty is presumed from both parties. This principle imposes a higher standard of honesty on the two parties than is usually expected in ordinary commercial contracts. To avoid a contract, a warranty (a statement contained in the contract and which requires that a particular condition exists) must be false, a representation (a statement made by the insured to the insurer on which the latter relies to price the contract) must be false and materially important, and concealment made with intent to deceive (the insured has an obligation to inform the insurer about facts that may be materially important). Table 8.2 Legal Aspects of an Insurance Contract A Valid Contract: - Legal purpose - Legal capacity - Obligations An Insurance Contract: - Personal contract
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- Unilateral contract - Conditional contract - Aleatory ( Contingent) contract - Contract of "utmost good faith" Standardization and Structure of Contracts The terms of an insurance contract are embodied in a written document called the insurance policy. Policy forms vary in complexity depending upon the type of insurance coverage but a certain degree of standardization exists and these standards are very similar from one country to another. Also, a certain degree of uniformity exists and is essential in the presentation (the structure) of insurance policies (Table 8.3). The terminology used is peculiar to insurance but the declarations, insuring agreement, definitions, exclusions, and conditions are the essential parts of all insurance policies. In addition to the basic policy form, an insurance policy frequently contains several attached forms, riders, or endorsements modifying the coverage. Table 8.3 Typical Structure of an Insurance Contract Declaration: Identification of the insured and coverage.
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  • Fall '15
  • insurance contract

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