1. In a life insurance purchase, insurable interest must exist between the applicant and insured:

At the time the policy is applied for

For life insurance, insurable interest must exist when the policy is applied for, not necessarily at the time of loss.

2. Insurers can more accurately predict losses as the number of similar insured exposures increases because of the:

Law of large numbers

The law of large numbers improves the accuracy of loss predictions as the pool of similar exposures grows.

3. An insurance contract is one of adhesion because:

One party writes it and the other accepts it as offered

A contract of adhesion is drafted by the insurer and offered to the applicant on a take-it-or-leave-it basis.

4. An insurance contract is aleatory because:

The amounts exchanged may be unequal and depend on an uncertain event

An aleatory contract involves an unequal exchange of value contingent on an uncertain event.