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. Fixed Annuity
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.


2. Term Insurance
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.
An employer-funded account linked to a high deductible medical insurance plan.
Insurance that provides protection for a specific period of time.
The voluntary abandonment of a known or legal right or advantage.


3. Transfer
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.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
Health insurance policies that cover only specific accidents or diseases.
A basic principle of insurance under which the risk of financial loss is assigned to another party.


4. Contributory
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
A group insurance plan that requires the employees to pay part of the premium.


5. Boycott
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.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
Type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability - but is still not able to perform at the same level as before becoming disabled.
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).


6. Preferred Risk
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
The person or organization that is protected by insurance; the party to be indemnified.


7. Waiver of Cost
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 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.
Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.


8. Payment of Claims
Legal term that distinguishes oral statements from written statements.
A provision that specifies to whom claims payments are to be made.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
An insurance policy that provides payment if the insured's death is the result of an accident.


9. Loss
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
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 reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
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.


10. Mode of Payment
An agent licensed in a state in which he or she is not a resident.
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.
A physical illness - disease - or pregnancy - but not a mental illness.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.


11. Express Authority

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12. Waiver of Premium
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
The first page of a policy.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.


13. Intentional Injury
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.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
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.
Any group or individual who provides health care services.


14. Recurrent Disability
A type of insurance that pays benefits for medical - surgical - and hospital costs.
A policy provision that specifies the period of time during which the recurrence of an injury or illness will be considered a continuation of a prior period of disability.
The first page of a policy.
A contract that provides income for a specified period of years - or for life.


15. Physical Exam and Autopsy
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 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.
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.
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.


16. Living Benefits Rider
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
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 group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.


17. Straight Life
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.


18. Assignment (Life)
The transfer of ownership rights of a life insurance policy from one person to another.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.
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.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.


19. Group Health Insurance
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.
A material stipulation in the policy that if breached may void coverage.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
Health coverage provided to members of a group.


20. Consumer Reports

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21. Hazard
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
A circumstance that increases the likelihood of a loss.
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.
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.


22. Policyowner
A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash - he/she might choose never to fly in a plane).
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.


23. Twisting

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24. Adhesion

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25. Binder (Binding Receipt)
Health and social services provided under the supervision of physicians and medical health professionals for persons with chronic diseases or disabilities. Care is usually provided in a Long-Term Care Facility which is a state licensed facility that
A temporary contract that puts an insurance policy into force before the premium has been paid.
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.
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'


26. Mortality Table
A principle stating that the larger the number of similar exposure units considered - the more closely the losses reported will equal the underlying probability of loss.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
A single policy that is designed to insure two or more lives.
A table showing the probability of death at specified ages.


27. Noncancelable
A person who relies on another for support and maintenance.
An insurance contract that the insured has a right to continue in force by payment of premiums that remain the same for a substantial period of time.
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.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.


28. Substandard Risk
A unit of measure used to determine rates charged for insurance coverage.
The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.


29. Implied Authority
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.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
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.


30. Alien Insurer
The cause of a possible loss.
The date when the face amount of the life insurance becomes payable.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.
An insurance company that is incorporated outside the United States.


31. Standard Risk
The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.


32. Illustration
A unit of measure used to determine rates charged for insurance coverage.
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'
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.


33. Medicaid
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
The withholding of known facts which - if material - can void a contract.
The third in line to receive the benefits of a life insurance policy.
A medical benefits program jointly administered by the individual states and the federal government.


34. Grace Period
A basic principle of insurance under which the risk of financial loss is assigned to another party.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.
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.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.


35. Comprehensive Policy
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.


36. Admitted (Authorized) Insurer
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.
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 basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
An insurance company authorized and licensed to transact business in a particular state.


37. Proceeds

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38. Insuring Clause
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.


39. Multiple Employer Welfare Association (MEWA)
Any entity of at least two employers - other than a duly admitted insurer - that establishes an employee benefit plan for the purpose of offering or providing accident and sickness or death benefits to the employees.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
An insurance company authorized and licensed to transact business in a particular state.


40. Death Benefit
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
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.
The amount payable upon the death of the person whose life is insured.
A claim to a provider or medical supplier to receive payments directly from Medicare.


41. Loan Value
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
A special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.
The full face value of a policy.


42. Warranty
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
The voluntary abandonment of a known or legal right or advantage.
A facility which is licensed by the state to provide 24 hour nursing care.
A material stipulation in the policy that if breached may void coverage.


43. Accelerated Benefits
Lessening the possibility or severity of a loss.
Disability from which the insured does not recover.
A table showing the probability of death at specified ages.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.


44. Joint 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.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.
A single policy that is designed to insure two or more lives.


45. Domicile of Insurer

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46. Concealment
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
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 withholding of known facts which - if material - can void a contract.
A claim to a provider or medical supplier to receive payments directly from Medicare.


47. Reserve
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.
The amount of time an employee has to sign up for a contributory group health plan.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.


48. Endorsement
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
Insurance that does not pay dividends.
Special powers granted to an agent by his or her agency contract.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.


49. Permanent Disability
The individual's age when a policy is issued.
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
Disability from which the insured does not recover.
The date when the face amount of the life insurance becomes payable.


50. Income Replacement Contracts

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