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. Agency
The head of the state department of insurance.
An insurance company that is incorporated outside the United States.
A temporary contract that puts an insurance policy into force before the premium has been paid.
An insurance sales office or company.

2. Legal Reserve

3. Pro Rata Cancellation
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.
Insurance that provides protection for a specific period of time.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.

4. Straight Life
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 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 legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.

5. Certificate
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.
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 infectious and incurable disease caused by the human immunodeficiency virus (HIV).

6. Accidental Death Benefits
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 ratio of the incidence of sickness to the number of well persons in a given group of people over a given period of time.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
A demand of a person to stop committing an action that is in violation of a provision.

7. Mortality Table
A patient who is expected to die within an amount of time specified in the policy.
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.
A table showing the probability of death at specified ages.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.

8. Ancillary
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
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.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.

9. Face
The person who receives the proceeds from the policy when the insured dies.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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.
The first page of a policy.

10. Controlled Business
A statement usually obtained from the applicant's doctor.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.

11. Risk - Pure
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A variation of whole life insurance that charges a level annual premium and provides a level - guaranteed death benefit to the insured's age 100 and will endow for the face amount if the insured lives to age 100. Limited-pay life is designed so that
The individual's age when a policy is issued.

12. Application
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
Any supplemental agreement attached to and made a part of the policy indicating the policy expansion by additional coverage - or a waiver of a coverage or condition.
The voluntary abandonment of a known or legal right or advantage.
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.

13. Administrator
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
A combination of a flexible premium and adjustable life insurance.
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.

14. Medical Savings Account
The act of signing an insurance policy by a licensed resident agent.
An employer-funded account linked to a high deductible medical insurance plan.
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.

15. Spendthrift Clause
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
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 person making application for - or offering him/herself or another to be insured under an insurance contract.
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.

16. Adhesion

17. Long-Term Disability Insurance
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A facility which is licensed by the state to provide 24 hour nursing care.
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.
Withdrawing the money from a qualified plan and placing it into another qualified plan.

18. Proof of Loss
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A claim form that a claimant must submit after a loss occurs.
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.

19. Accumulation Period
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
An insurance company that is incorporated outside the United States.
A fee or commission charged at the time of purchase of an annuity or a security.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.

20. Expiration
The date specified in the policy as the date of termination.
Insurer's location of incorporation and the legal ability to write business in a state.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.

21. Rebating
The difference between the Medicare approved amount for a service or supply and the actual charge.
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
A claim form that a claimant must submit after a loss occurs.
Any inducement offered in the sale of insurance products that is not specified in the policy.

22. Rider
Any supplemental agreement attached to and made a part of the policy indicating the policy expansion by additional coverage - or a waiver of a coverage or condition.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
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.

23. Primary Beneficiary
Organizations that process claims and pay benefits in an insurance policy
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
The person who is named as first to receive benefits from a policy.
Protection against loss due to sickness or bodily injury.

24. Estoppel
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
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 facility which is licensed by the state to provide 24 hour nursing care.
A legal impediment to denying a fact or restoring a right that has been previously waived.

25. Cafeteria Plan
An insurance company that is incorporated outside the United States.
The individual's age when a policy is issued.
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 selection of health care benefits from which an employee may choose the ones that he/she needs.

26. Insurability

27. Unearned Premium
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 amount of the premium for which the policy protection has been given.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
The portion of premium for which policy protection has not yet been given.

28. Contract
An agreement between two or more parties enforceable by law.
Choices available to the insured/owner for distribution of insurance proceeds.
A provision that specifies to whom claims payments are to be made.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.

29. Twisting

30. Omnibus Budget Reconciliation Act
A physical or mental impairment - either congenital or resulting from an injury or sickness.
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.
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 statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.

31. Endow
A temporary contract that puts an insurance policy into force before the premium has been paid.
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.
To reach the maturity date or time at which the face amount equals cash values.
A circumstance that increases the likelihood of a loss.

32. Buy-Sell Agreement
An insurance company authorized and licensed to transact business in a particular state.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
The accounting measurement of an insurer's future obligations to pay claims to policyowners.

33. Parol Evidence Rule
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 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.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
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.

34. Disability
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
A special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.

35. Boycott
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 one person refuses to do business with another until he or she agrees to certain conditions.
Insurance agent or broker.
An insurance company that conducts business in the state of incorporation.

36. Commingling
Legal term that distinguishes oral statements from written statements.
An insurance company authorized and licensed to transact business in a particular state.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.

37. Home Health Agency

38. Grace Period
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 fee or commission charged at the time of purchase of an annuity or a security.
Termination of a policy because the premium has not been paid by the end of the grace period.
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.

39. Notice of Claim

40. Reciprocal Exchange
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
The effect a person's indifference concerning loss has on the risk to be insured.
The amount payable upon the death of the person whose life is insured.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.

41. Underwriter
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.

42. Comprehensive Policy
Withdrawing the money from a qualified plan and placing it into another qualified plan.
A claim to a provider or medical supplier to receive payments directly from Medicare.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

43. Reinsurance
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
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.
The act that stipulates federal standards for private pension plans.

44. Birthday Rule
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.
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 amount payable upon the death of the person whose life is insured.
A type of hazard that arises from the physical characteristics of an individual - such as a physical disability due to either current circumstance or a condition present at birth.

45. Certificate of Authority
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
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.
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
The act that stipulates federal standards for private pension plans.

46. Medicare
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 provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date. This coverage continues only until the employee returns to
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

47. Activities of Daily Living (ADLs)
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.

48. Express Authority

49. Option
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
Life insurance provided for members of a group.
An insurance company authorized and licensed to transact business in a particular state.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.

50. Actual Cash Value (ACV)