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. Partial Disability

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2. Persistency
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
A false statement or lie that can render the contract void.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.


3. Fair Credit Reporting Act
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
A temporary contract that puts an insurance policy into force before the premium has been paid.
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 life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.


4. Defamation

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5. Liquidation
An employer-funded account linked to a high deductible medical insurance plan.
Unplanned - unforeseen traumatic injury to the body.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
Selling assets as a method of raising capital.


6. Contributory
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.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.
A group insurance plan that requires the employees to pay part of the premium.
Legal term that distinguishes oral statements from written statements.


7. Conditional Contract
The authority granted to an agent by means of the agent's written contract.
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
A table showing the incidence of sickness at specified ages.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.


8. Valued Contract
Insurance that pays over and above or in addition to basic policy limits.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
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.
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.


9. Indemnify
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
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.
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.


10. Flexible Spending Account (FSA)
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
The first page of a policy.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.


11. Pro Rata Cancellation
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
Insurance that pays over and above or in addition to basic policy limits.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.


12. Effective Date
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
Special powers granted to an agent by his or her agency contract.
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).
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.


13. Viatical Settlement
Insurance that pays dividends to policyholders.
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 person who relies on another for support and maintenance.
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.


14. Enrollment Period
The amount of time an employee has to sign up for a contributory group health plan.
Health coverage provided to members of a group.
The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance.
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


15. Carriers
Insurance agent or broker.
A type of insurance that protects the insured against loss due to accidental bodily injury.
Organizations that process claims and pay benefits in an insurance policy
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.


16. Out-of-Pocket Costs
Requirements approved by state law that must appear in all insurance policies.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
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.


17. Risk
An agent/broker who handles insurer's funds in a trust capacity.
An insurance company authorized and licensed to transact business in a particular state.
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.
Uncertainty as to the outcome of an event when two or more possibilities exist.


18. Approved Amount
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.
A clause that defines the insurance company's and the insured's right to cancel or renew coverage.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
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.


19. Flexible Premium
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
Any life insurance written on the life of a minor.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
A basic principle of insurance under which the risk of financial loss is assigned to another party.


20. Peril
The cause of a possible loss.
The first page of a policy.
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
A table showing the incidence of sickness at specified ages.


21. Nonadmitted (Nonauthorized)
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
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.
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.
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.


22. Comprehensive Policy
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A circumstance that increases the likelihood of a loss.
A mortality table used in life insurance that mathematically predicts the likelihood of death.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.


23. Capital Amount
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
A group insurance plan that requires the employees to pay part of the premium.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
A person making application for - or offering him/herself or another to be insured under an insurance contract.


24. Joint Life
A single policy that is designed to insure two or more lives.
A demand of a person to stop committing an action that is in violation of a provision.
A facility which is licensed by the state to provide 24 hour nursing care.
A combination of a flexible premium and adjustable life insurance.


25. Underwriter
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
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.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.


26. Reciprocal Exchange
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 unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
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 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.


27. Risk - Standard
A temporary contract that puts an insurance policy into force before the premium has been paid.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).


28. Life Expectancy
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.


29. Waiting Period
The person who receives the proceeds from the policy when the insured dies.
Time between the beginning of a disability and the start of disability insurance benefits.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.


30. Custodial Car
Care that is rendered to help an insured complete his/her activities of daily living.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
The effect a person's indifference concerning loss has on the risk to be insured.


31. Preferred Provider Organization (PPO)

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32. Natural Premium
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
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.


33. Insuring Clause
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
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.
The head of the state department of insurance.
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.


34. Cafeteria Plan
The amount of the premium for which the policy protection has been given.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
A selection of health care benefits from which an employee may choose the ones that he/she needs.


35. Payment of Claims
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
A provision that specifies to whom claims payments are to be made.
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.
A federal requirement that employers who have 25 or more employees - who are within the service area of a qualified HMO - who pay minimum wage - and offer a health plan - must offer HMO coverage as well as an indemnity plan.


36. Home Health Services
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A contract that provides income for a specified period of years - or for life.
A table showing the probability of death at specified ages.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.


37. Hospice
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.
A model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
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.


38. Reduction
Lessening the possibility or severity of a loss.
Care that is rendered to help an insured complete his/her activities of daily living.
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.
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.


39. Terminally Ill
A patient who is expected to die within an amount of time specified in the policy.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
Insurance that provides protection for a specific period of time.


40. Accidental Death Insurance

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41. Accidental Bodily Injury
Unplanned - unforeseen traumatic injury to the body.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
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.
A financial interest in the life of another person; a possibility of losing something of value if the insured should die. In life and health insurance - insurable interest must be stated at the time of policy issue.


42. Activities of Daily Living (ADLs)
Life insurance provided for members of a group.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
A rider found in juvenile policies which waives the premiums if the person paying them (often the parent) is disabled or dies while the child is still a minor.
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).


43. Nonrenewal
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A termination of a policy by an insurer on the anniversary or renewal date.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
The amount payable upon the death of the person whose life is insured.


44. Private Insurance
Insurance furnished by nongovernmental insuring organizations.
An insurance company authorized and licensed to transact business in a particular state.
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
A legal impediment to denying a fact or restoring a right that has been previously waived.


45. Actual Cash Value (ACV)

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46. Whole Life Insurance

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47. Actuary
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.
A model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
Any inducement offered in the sale of insurance products that is not specified in the policy.


48. Representations
Insurance that pays over and above or in addition to basic policy limits.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
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.


49. Major Medical Insurance
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 person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
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.


50. Insurance
A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against a loss by a specified future contingency or peril in return for payment of a premium.
Special powers granted to an agent by his or her agency contract.
A life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.
The head of the state department of insurance.