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Unfortunately, it is not possible to set the check box in the Terms & Conditions widget to be selected by default. I believe in practice and the design of the widget, it is not checked by default so that users who are filling out the form should need to first understand what is the terms before actually agreeing to. Having it checked by default would actually defeat the purpose of it, I believe.
However, if you would still like to have that option, I can forward it to our developers as a feature request, although I cannot guarantee that it will be implemented.
As a workaround, you can use the default check box field under the "Basic Field" section, that allows you to set default check boxes as selected. Here's a sample form: https://form.jotform.com/62681409595971. Here's a screenshot on how it is setup:
I hope that helps.