Test your basic knowledge |

Life And Health Insurance Exam

Instructions:

Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Exposure
A unit of measure used to determine rates charged for insurance coverage.
Insurance furnished by nongovernmental insuring organizations.
Termination of a policy because the premium has not been paid by the end of the grace period.
An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies - loses his/her sight - or loses two limbs due to an accident.

2. Fraud
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
The ratio of the incidence of sickness to the number of well persons in a given group of people over a given period of time.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.

3. Short-Term Disability Insurance
A group or individual policy that covers disabilities of 13 to 26 weeks - and in some cases for a period of up to two years.
An insurance company authorized and licensed to transact business in a particular state.
The fair and equal bargaining by both parties in forming the contract - where the applicant must make full disclosure of risk to the company - and the insurance company must be fair in underwriting the risk.
A rider that is added to a life insurance policy to pay log-term care benefits. The amount of benefits available for LTC depends upon the life insurance benefits available; however - the benefits paid toward LTC will reduce the life insurance policy'

4. Standard Provisions
A method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insured's account; the amount of responsibility assumed but not reinsured by the insurance company.
Authority that is not expressed or written into the contract - but which the agent is assumed to have in order to transact the business of insurance for the principal.
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
Requirements approved by state law that must appear in all insurance policies.

5. Attending Physician's Statement (APS)

6. Commingling
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
An insurance sales office or company.
A person who relies on another for support and maintenance.
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.

7. Buyer's Guide
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
A contract offered on a "take-it-or-leave-it" basis by an insurer - in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
The accounting measurement of an insurer's future obligations to pay claims to policyowners.
A member organization which is unable to pay its contractual obligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction.

8. Notice of Claim

9. Birthday Rule
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A type of health insurance that usually carries a large deductible and pays covered expenses up to a high limit whether the insured is in or out of the hospital.
The method of determining primary coverage for a dependent child - under which the plan of the parent whose birthday occurs first in the calendar year is designated as primary.

10. Probationary Period
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
The third in line to receive the benefits of a life insurance policy.
A type of individual or group insurance that provides coverage for illness until the insured reaches age 65 and for life in the case of an accident.

11. Service Plans
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
A demand of a person to stop committing an action that is in violation of a provision.
Life or health insurance companies formed to provide insurance for members of an affiliated lodge - religious organization - or fraternal organization with a representative form of government.

12. Certificate of Insurance
Any life insurance written on the life of a minor.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
A period of time - usually required by law - during which a policyowner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for a

13. Contributory
The head of the state department of insurance.
A group insurance plan that requires the employees to pay part of the premium.
A statement usually obtained from the applicant's doctor.
A nonforfeiture value in which an insurer loans a part or all of the cash value of the policy assigned as security for the loan to the policyowner.

14. Intentional Injury
An act that is intended to cause injury. Self- inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
A period of time - usually required by law - during which a policyowner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for a
An organization that is formed by - or on behalf of - a group of insurers to develop rates for those insurers - and to file the rates with the insurance department on behalf of its members. They may also act as a collection point for actuarial data.

15. Buy-Sell Agreement
The amount a physician or supplier actually bills for a particular service or supply.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
A circumstance that increases the likelihood of a loss.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.

16. Lapse
The person who has possession of the policy - usually the insured.
The head of the state department of insurance.
A situation in which two parties provide the same help or advantages to each other (for example - Producer A living in State A can transact business as a nonresident in State B if State B's resident producers can transact business in State A).
Termination of a policy because the premium has not been paid by the end of the grace period.

17. Medical Information Bureau (MIB)
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
The maximum amount a physician may charge a Medicare beneficiary for a covered service if the physician does not accept assignment of the Medicare approved amount.
An information database that stores the health histories of this database for underwriting purposes.individuals who have applied for insurance in the past. Most insurance companies subscribe to
A method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insured's account; the amount of responsibility assumed but not reinsured by the insurance company.

18. Proof of Loss
An arrangement that allows someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds when and where they are most needed - before death.
A claim form that a claimant must submit after a loss occurs.
Requirements approved by state law that must appear in all insurance policies.
A special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.

19. Medicare Supplement Insurance
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.
A termination of a policy by an insurer on the anniversary or renewal date.
A contract offered on a "take-it-or-leave-it" basis by an insurer - in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
A contract that legally binds only one party to contractual obligations after the premium is paid.

20. Claim
A request for payment of the benefits provided by an insurance contract.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
Insurance organizations that have no capital stock - but are owned by the policyholders.
A type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.

21. Assignment (Life)
The transfer of ownership rights of a life insurance policy from one person to another.
Daily nursing care or skilled care - such as administration of medication - diagnosis - or minor surgery that is performed by or under the supervision of a skilled professional.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.

22. Flexible Spending Account (FSA)
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
A life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
A contract that provides income for a specified period of years - or for life.

23. Home Health Services
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
An agent/broker who handles insurer's funds in a trust capacity.
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.

24. Conditional Contract
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
A provision that allows an insurer - at its own expense - to have an insured physically examined when a claim is pending or to have an autopsy performed where not prohibited by law.
A type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.

25. Waiver of Cost
A disability rider - found in Universal Life Insurance - that waives the cost of the insurance but does not waive the cost of premiums necessary to accumulate cash values.
A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential - accurate - relevant and properly used.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
A federal law which extends the minimum COBRA continuation of group health care coverage from 18 to 29 months for qualified beneficiaries who are disabled at the time of qualification.

26. Group Disability Insurance
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
Organizations that process claims and pay benefits in an insurance policy
The date when an insurance policy begins (also known as the inception date). The period of time in which an employee may enroll in a group health care plan without having to provide evidence of insurability.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.

27. Over Insurance
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
Insurance that pays over and above or in addition to basic policy limits.
Time between the beginning of a disability and the start of disability insurance benefits.
A circumstance that increases the likelihood of a loss.

28. Indemnify
A form of insurance whereby one insurance company (the reinsurer) in consideration of a premium paid to it - agrees to indemnify another insurance company (the ceding company) for part or all of its liabilities from insurance policies it has issued.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
A policy that may be exchanged for another type of policy by contractual provision - at the option of the policyowner - and without evidence of insurability (i.e. term life changed to a form of permanent life).
The amount of premium that must be collected from each member of a group composed of the same age - sex and risk in order to pay $1 -000 for each death that will occur in the group each year.

29. Consumer Reports

30. Binder (Binding Receipt)
A temporary contract that puts an insurance policy into force before the premium has been paid.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
The termination of an insurance contract due either to material misrepresentation by the insured or by fraud - misrepresentation - or duress on the part of the agent/insurer.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.

31. Group Health Insurance
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
Health coverage provided to members of a group.
Insurance that pays dividends to policyholders.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

32. Ancillary
A claim to a provider or medical supplier to receive payments directly from Medicare.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.

33. Administrator
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
Insurance that does not pay dividends.
A prepaid medical service plan in which specified medical service providers contract with the HMO to provide services. The focus of the HMO is preventive medicine.

34. Integrated LTC Rider

35. Permanent Disability
Insurance agent or broker.
Disability from which the insured does not recover.
Protection against loss due to sickness or bodily injury.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.

36. Primary Policy
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

37. Domestic Insurer
Insurance furnished by nongovernmental insuring organizations.
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
A medical benefits program jointly administered by the individual states and the federal government.
An insurance company that conducts business in the state of incorporation.

38. Whole Life Insurance

39. Superintendent (Commissioner - Director)
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.
The head of the state department of insurance.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.

40. Loss
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.

41. Aleatory
A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance.
A table showing the incidence of sickness at specified ages.
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.

42. Apparent Authority
The appearance or the assumption of authority based on the actions - words - or deeds of the principal or because of circumstances the principal created.
Uncertainty as to the outcome of an event when two or more possibilities exist.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.

43. Activities of Daily Living (ADLs)
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
Plans designed to help individuals save for qualified health expenses.
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

44. Straight Life
Insurer's location of incorporation and the legal ability to write business in a state.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
A type of insurance that protects the insured against loss due to accidental bodily injury.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.

45. Hospital Confinement Rider
Care that is rendered to help an insured complete his/her activities of daily living.
An optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
The payment made by insurers to agents or brokers for the sale and service of policies.

46. Domicile of Insurer

47. Coercion
The difference between the Medicare approved amount for a service or supply and the actual charge.
Disability from which the insured does not recover.
The voluntary abandonment of a known or legal right or advantage.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.

48. Nonqualified Pla
A type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.
A type of benefit plan that may discriminate - is not required to be filed with the IRS - and does not provide a current tax deduction for contributions.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

49. Disability Income Insurance

50. Earned Premium
A rule that states a contract may not be altered without written consent of both parties; in other words - the contract may not be altered by an oral agreement.
The amount of the premium for which the policy protection has been given.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.