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LML4805 EXAM PACK 2023
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LML4805Exam Pack
2023
LATEST QUESTIONS
AND ANSWERS
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LML4805
EXAM PACK
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EXAM PACK
DEFINITIONS
Distinguish (in a single sentence, where possible, and with the aid of
examples, where necessary) between:
QUESTION 1:
The insured and the person concluding the insurance contract with
the insurer
the person taking out the insurance (ie, the person
concluding the contract with the insurer) A may insure his
or her own interest in his or her own house. A may insure
his or her own interest in B’s house. A may insure B’s
interest in his or her own (A’s) house, or in B’s house, or in
C’s house.
the insured is the person who enjoys protection in terms of
the policy and he is the 1 st holder of the policy.
QUESTION 2:
The insured, the life insured and the beneficiary in terms of a life
insurance contract;
the insured is the person who enjoys protection in terms of
the policy and he is the 1 st holder of the policy.
The life insured is the person whose life is insured
The beneficiary is the person who will benefit from the
policy
John insures his wife Mary’s life and names his daughter Grace as
beneficiary
QUESTION 3:
A void and a voidable insurance contract
void: no contract comes into existance because it excludes
one of the basic requirements
voidable: a valid contract comes into exitsnance but may be
terminated or enforced at the will of the innocent party
QUESTION 4:
Fire insurance and marine insurance;
Marine insurance; is a contract of indemnity and is aimed at
providing the insured with indemnity against his loss caused
to the owners of ships
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Fire insurance: the insurer will be liability in terms of
indemnity insurance for loss caused by fire damage
Look at the nature of he event insured against
QUESTION 5:
Positive and negative misrepresentation by an insured;
Positive misrepresentation: insured makes a positive
incorrect statement about a material fact
Negative misrepresentation: insured fails to disclose a
material fact to the insurer
QUESTION 6:
A limitation on risk and an exception to risk in an insurance contract
A limitation on risk : the insured has the onus to prove the
event was caused by the event insured against and not the
excluded clause: must prove death – and exclude suicide as a
cause of death
An exception to risk in an insurance contract: insurer must
prove that the event was caused by the execption = death was
caused by suicide
QUESTION 7:
The objective and the subjective test for the materiality of facts
The IR proves that IT seee the fact as material = subjective
test
Reasonable person would consider the fact to be material =
complete OBJECTIVE TEST (Mutual and Federal Case)
QUESTION 8:
An insurance contract and an insurance policy.
An insurance contract: An insurance contract is a tangible
agreement
An insurance policy: The policy is the reduction of that
agreement into a tangible form.
QUESTION 9:
A cover note and an insurance policy;
An insurance policy: The policy is the reduction of that
agreement into a tangible form.
A cover note: document issued by the insurance company
giving temporary insurance until a formal policy is issued
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