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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. Reciprocity

2. Secondary Beneficiary
The legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss.
The person who is named to receive benefits upon the death of the insured if the (primary) first-named beneficiary is no longer alive or does not collect all the benefits due to his/her own death.
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 chief executive and administrative officer of a state insurance department.

3. Cafeteria Plan
Insurance that does not pay dividends.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
The person who has possession of the policy - usually the insured.
A method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group.

4. Paid-Up Insurance
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
A false statement or lie that can render the contract void.
A facility for the terminally ill that provides supportive care such as pain relief and symptom management to the patient and his/her family. Hospice care is covered under Part A of Medicare.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.

5. Health Savings Accounts (HSAs)
Plans designed to help individuals save for qualified health expenses.
A statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
Type of care in which part-time nursing or home health aide services - speech therapy - physical or occupational therapy services are given in the home of the insured.
A representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim.

6. Multiple-Employer Trust (MET)
Life insurance provided for members of a group.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
Care that is rendered to help an insured complete his/her activities of daily living.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.

7. Medicaid
A medical benefits program jointly administered by the individual states and the federal government.
Organizations that process claims and pay benefits in an insurance policy
An insurance company that has not applied for - or has applied and been denied a Certificate of Authority and may not transact insurance in a particular state.
The act of signing an insurance policy by a licensed resident agent.

8. Fraternal Benefit Societies
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.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.

9. Waiver
A periodic payment to the insurance company to keep the policy in force.
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.
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.
The voluntary abandonment of a known or legal right or advantage.

10. Certificate of Authority
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
A document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.

11. Mortality Table
A table showing the probability of death at specified ages.
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.
The individual's age when a policy is issued.
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.

12. Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986

13. Sharing
An injury or disease which occurs suddenly and requires treatment within 24 hours.
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
The amount payable upon the death of the person whose life is insured.
A method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group.

14. Adjustable Life
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.
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.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

15. Annual Statement
The effect a person's indifference concerning loss has on the risk to be insured.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
Withdrawing the money from a qualified plan and placing it into another qualified plan.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.

16. Health Insurance
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
The person or organization that is protected by insurance; the party to be indemnified.
Protection against loss due to sickness or bodily injury.

17. Legal Reserve

18. Agent
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.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
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.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.

19. Personal Contract

20. Pre-Existing Condition
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A claim to a provider or medical supplier to receive payments directly from Medicare.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.

21. Accident
An insurance policy that provides payment if the insured's death is the result of an accident.
A statement usually obtained from the applicant's doctor.
The portion of premium for which policy protection has not yet been given.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.

22. Coinsurance
An entity certified by the insured's health plan that provides health care services under contract.
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
The payment made by insurers to agents or brokers for the sale and service of policies.
A person trained in the technical aspects of insurance and related fields - particularly in the mathematics of insurance; a person who - on behalf of the company - determines the mathematical probability of loss.

23. Insurability

24. Living Benefits Rider
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
A claim to a provider or medical supplier to receive payments directly from Medicare.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.

25. Countersignature
The act of signing an insurance policy by a licensed resident agent.
An optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
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.

26. Misrepresentation
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A false statement or lie that can render the contract void.
A circumstance that increases the likelihood of a loss.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

27. Warranty
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.
A form of misrepresentation in which an agent persuades an insured/owner to cancel - lapse - or switch policies - even when it's to the insured's disadvantage.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
A material stipulation in the policy that if breached may void coverage.

28. Rebating
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
Any inducement offered in the sale of insurance products that is not specified in the policy.
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
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).

29. Coverage
An insurance company that is incorporated outside the United States.
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'
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
The first page of a policy.

30. Accidental Death and Dismemberment (AD&D)

31. Utmost Good Faith
Health coverage provided to members of a group.
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.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.

32. Risk - Substandard
The law that provides for the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer eligible - and for the insured's dependents for up to 36 months in cases of loss of eligibili
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.

33. Presumptive Disability
Requirements approved by state law that must appear in all insurance policies.
The person who is named to receive benefits upon the death of the insured if the (primary) first-named beneficiary is no longer alive or does not collect all the benefits due to his/her own death.
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.

34. Nonrenewal
A statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
A termination of a policy by an insurer on the anniversary or renewal date.
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

35. Lloyd's Associations
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
The third in line to receive the benefits of a life insurance policy.
A termination of a policy by an insurer on the anniversary or renewal date.

36. Rescission
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 basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
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.
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.

37. Adult Day Care
Written and /or oral statements regarding a consumer's credit - character - reputation - or habits collected by a reporting agency from employment records - credit reports - and other public sources.
A part of the insurance contract that states that both parties must give something of value for the transfer of risk - and specifies the conditions of the exchange.
An insurance sales office or company.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.

38. Natural Premium
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
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.
A material stipulation in the policy that if breached may void coverage.
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.

39. Non-participating Policies (Non-par)
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
Insurance that does not pay dividends.

40. Extended Care Facility
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 facility which is licensed by the state to provide 24 hour nursing care.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
Uncertainty as to the outcome of an event when two or more possibilities exist.

41. Application
A life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.

42. Skilled Nursing Care
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 applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.

43. Director (Commissioner - Superintendent)
A person who relies on another for support and maintenance.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
The effect a person's indifference concerning loss has on the risk to be insured.
The head of the state department of insurance.

44. Medigap
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.
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.
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.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.

45. Explanation of Medicare Benefits
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
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.
Organizations that process claims and pay benefits in an insurance policy

46. Participating Policies (Par)
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
Insurance that pays dividends to policyholders.
Insurance that does not pay dividends.

47. Physical Exam and Autopsy
A type of insurance that pays benefits for medical - surgical - and hospital costs.
An entity certified by the insured's health plan that provides health care services under contract.
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.
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.

48. Buyer's Guide
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.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.

49. Health Maintenance Organization (HMO)
To reach the maturity date or time at which the face amount equals cash values.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
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.
An insurance company that has not applied for - or has applied and been denied a Certificate of Authority and may not transact insurance in a particular state.

50. Authorized (Admitted) Insurer
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
The amount of the premium for which the policy protection has been given.
An insurance company authorized and licensed to transact business in a particular state.
Time between the beginning of a disability and the start of disability insurance benefits.