A Life Insurance Arrangement Which Circumvents?

A Life Insurance Arrangement Which Circumvents? A life insurance arrangement which circumvents estate taxes is one in which the proceeds of the life insurance policy are paid to a trust. The trust then pays the beneficiary of the trust, typically the insured’s children. This arrangement allows the children to receive the proceeds of the life insurance policy tax-free.

What does the term consideration mean in insurance? In insurance, consideration refers to the exchange of something of value between the insured and the insurer. Typically, the consideration is money, but it can also be a promise by the insured to do something in return for coverage (like getting a car inspected before the policy starts).

What does consideration mean? Consideration means that the parties to a contract are both giving and receiving something of value. It can be an act, a forbearance, or a promise.

What is the consideration given by an insurer? The consideration given by an insurer is the promise to pay a particular sum of money to the insured party in the event that they suffer a particular type of loss.


Frequently Asked Questions

What Is The Consideration Given By An Insurer In The Consideration?

An insurer considers a number of factors when pricing a policy, including the likelihood of a claim being made and the severity of that potential claim. They also look at the cost of cover, the company’s reinsurance arrangements and their own running costs.

What Is The Consideration Given By An Insurer In The Consideration Clause Of A Life Policy Quizlet?

The consideration given by an insurer in the consideration clause of a life policy is the promise to pay the beneficiary of the policy a sum of money upon the death of the insured.

In What Ways Are Insurance Policies Called Aleatory Contracts?

An insurance policy is a type of aleatory contract. An aleatory contract is a contract in which the parties agree to exchange consideration (usually money) in the event of a particular event occurring. In the case of an insurance policy, the insured party agrees to pay a premium in exchange for the insurance company’s promise to pay out a benefit if the insured party suffers a loss.

In What Way Are Insurance Policies Said To Be Aleatory Quizlet?

A policy is aleatory if the outcome of the risk is determined by chance. This means that the insurer and the insured have different expectations about what will happen.

What Does Consideration Mean In Terms Of Insurance?

When an insurance company considers an applicant for coverage, the company is looking at the risk associated with providing coverage to that applicant. The company is also looking at the premium that it would charge for that coverage.

What Is An Example Of Aleatory Contract?

An example of an aleatory contract is an insurance policy. The terms of the policy may be uncertain because they depend on future events, such as whether or not a particular person will file a claim.

Which Of The Following Best Describes The Aleatory Nature Of An Insurance Contract?

An insurance contract is aleatory because it is based on the principle of uncertainty. The insured risks losing something, while the insurer risks not receiving anything if a loss occurs.

Which Feature Of An Insurance Policy Makes It An Aleatory Contract?

An insurance policy is an aleatory contract because it is based on the principle of uncertainty. The insurer agrees to pay a specified amount of money to the policyholder in the event that a particular event occurs, such as a fire. However, the policyholder cannot predict with certainty whether or not the event will occur, and so they are taking a risk when they purchase the policy.

In What Ways Are Insurance Policies Said To Be Aleatory?

Aleatory contracts are those in which the probability of losses and the amount of potential losses are uncertain. The term comes from the Latin alea, meaning “dice.” In most jurisdictions, an insurer’s liability under an insurance policy is limited to the amount specified in the policy, regardless of the actual loss suffered by the insured. This is known as the principle of indemnity. Aleatory contracts are said to be impartial because each party accepts the risk of potential loss.

What Is A Consideration In A Policy?

A consideration in a policy is the effect that the policy will have on different people and groups. The policymaker must consider how the policy will impact individuals, businesses, and other organizations. They must also consider how the policy will be implemented and what resources will be needed to carry it out.


A life insurance arrangement which circumvents the estate tax would allow a person to pass on their assets to their heirs without having to pay taxes on the inheritance. This would be beneficial for the person who dies, as they would be able to keep more of their assets, and it would also be beneficial for their heirs, as they would inherit more money. However, this type of life insurance arrangement is not legal in all states, so it is important to check with a lawyer before setting up such an arrangement.

A Life Insurance Arrangement Which Circumvents?

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