1. For a life insurance policy to be valid, insurable interest must exist:

At the time of application

In life insurance, insurable interest must exist at the inception of the policy (application), unlike property insurance where it must exist at the time of loss.

2. The principle requiring both the applicant and insurer to deal honestly and disclose material facts is called:

Utmost good faith

Insurance contracts are based on utmost good faith, obligating both parties to honesty and full disclosure of material facts.

3. A life insurance contract is a contract of adhesion, which means:

The insurer drafts it and the applicant accepts or rejects it

A contract of adhesion is prepared by one party (the insurer) and offered on a take-it-or-leave-it basis; ambiguities are generally construed against the drafter.

4. An insurance contract is described as aleatory because:

The values exchanged may be unequal depending on a future event

An aleatory contract involves an exchange of unequal amounts; the insured pays premiums while the insurer may pay a much larger benefit if a covered event occurs.