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. Express Authority

2. Residual Disability
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.
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.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

3. Death Benefit
The amount payable upon the death of the person whose life is insured.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.

4. Activities of Daily Living (ADLs)
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A temporary contract that puts an insurance policy into force before the premium has been paid.

5. Long-Term Disability Insurance
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.
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 individual or group insurance that provides coverage for illness until the insured reaches age 65 and for life in the case of an accident.
A periodic payment to the insurance company to keep the policy in force.

6. Natural Premium
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 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 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.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.

7. Group Health Insurance
Health coverage provided to members of a group.
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 date specified in the policy as the date of termination.
A mortality table used in life insurance that mathematically predicts the likelihood of death.

8. Twisting

9. Gatekeeper Model

10. Pure Protection
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
A physical illness - disease - or pregnancy - but not a mental illness.
The amount of the premium for which the policy protection has been given.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.

11. Loss of Income Insurance
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
A mortality table used in life insurance that mathematically predicts the likelihood of death.
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.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.

12. Aleatory
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
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.
An injury or disease which occurs suddenly and requires treatment within 24 hours.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.

13. Policy Loan
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
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 basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
An entity certified by the insured's health plan that provides health care services under contract.

14. Periodontics
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.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
The act that stipulates federal standards for private pension plans.

15. Standard Risk
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 applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
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.
Organizations that process inpatient and outpatient claims on individuals by hospitals - skilled nursing facilities - home health agencies - hospices and certain other providers of health services.

16. Boycott
An insurance policy that provides payment if the insured's death is the result of an accident.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
The amount a physician or supplier actually bills for a particular service or supply.

17. Insurability

18. Fraud
An insurance company that is incorporated outside the United States.
The first page of a policy.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
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

19. Nonmedical

20. Reserve
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.

21. Application
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.

22. Group Disability Insurance
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
A special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
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.

23. Principal Amount
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 full face value of a policy.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
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.

24. Defamation

25. Morbidity Table
An organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee.
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
A legal impediment to denying a fact or restoring a right that has been previously waived.
A table showing the incidence of sickness at specified ages.

26. Claim
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
A request for payment of the benefits provided by an insurance contract.
The person who is named as first to receive benefits from a policy.

27. Reinsurance
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
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 person who relies on another for support and maintenance.
The act that stipulates federal standards for private pension plans.

28. Lloyd's Associations
The age of the insured at a determined date.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.

29. Waiver of Premium
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.
A claim form that a claimant must submit after a loss occurs.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
The binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on th

30. Accumulation Period
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
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 that provides protection for a specific period of time.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.

31. Non-participating Policies (Non-par)
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
Insurance that does not pay dividends.
Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness.
A statement usually obtained from the applicant's doctor.

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

33. Waiver of Cost
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.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
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 insurance company that conducts business in the state of incorporation.

34. Oral Surgery
Insurer's location of incorporation and the legal ability to write business in a state.
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.
The full face value of a policy.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.

35. Medical Expense Insurance
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
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 type of insurance that pays benefits for medical - surgical - and hospital costs.
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.

36. 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 periodic payment to the insurance company to keep the policy in force.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
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.

37. Agency
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.
An insurance sales office or company.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
Health insurance policies that cover only specific accidents or diseases.

38. Sickness
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
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.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
A physical illness - disease - or pregnancy - but not a mental illness.

39. Coercion
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
The chief executive and administrative officer of a state insurance department.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.

40. Assignment (Life)
Plans designed to help individuals save for qualified health expenses.
The transfer of ownership rights of a life insurance policy from one person to another.
An employer-funded account linked to a high deductible medical insurance plan.
The full face value of a policy.

41. Insured
The person or organization that is protected by insurance; the party to be indemnified.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
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.
The date specified in the policy as the date of termination.

42. Life Expectancy
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.
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.

43. Warranty
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
A material stipulation in the policy that if breached may void coverage.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

44. Physical Exam and Autopsy
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
A physical illness - disease - or pregnancy - but not a mental illness.
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 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.

45. Preferred Risk
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
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.
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 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.

46. Multiple-Employer Trust (MET)
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 entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.

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.
An insurance company authorized and licensed to transact business in a particular state.
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.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.

48. Home Health Agency

49. Issue Age

50. Unearned Premium
The portion of premium for which policy protection has not yet been given.
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.