PSI Ohio Insurance Practice Exam

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Study for the Ohio Insurance Test. Prepare with flashcards and multiple choice questions, each question accompanied by hints and explanations. Excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What are essential elements of a contract in insurance?

Offer, acceptance, and exclusion
Offer, acceptance, and consideration
Premium, claim, and benefit
Fiduciary duty, risk, and compensation

The correct answer is: Offer, acceptance, and consideration

In the context of insurance contracts, the essential elements are offer, acceptance, and consideration. The offer is the proposal made by one party (usually the insurer) to provide coverage under specific terms. Acceptance occurs when the other party (the insured) agrees to the terms of the offer, commonly evidenced by signing the policy or paying the initial premium. Consideration refers to what each party stands to gain from the contract. In insurance, consideration is often represented by the premium that the insured pays in exchange for the insurer's promise to provide coverage. This mutual exchange solidifies the agreement and is a foundational principle in all types of contracts, ensuring that both parties have something of value at stake. Other options include aspects that may be related to insurance but do not encapsulate the foundational agreement necessary to form a valid contract. Elements like exclusions, premiums, claims, and fiduciary duties are important in the broader context of insurance policies but do not serve as the fundamental building blocks of contract formation.