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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. Underwriting
The process of reviewing - accepting or rejecting applications for insurance.
The act that stipulates federal standards for private pension plans.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.

2. Front-End Load
A fee or commission charged at the time of purchase of an annuity or a security.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
The amount a physician or supplier actually bills for a particular service or supply.

3. Coinsurance Clause
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.
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
A demand of a person to stop committing an action that is in violation of a provision.
A basic principle of insurance under which the risk of financial loss is assigned to another party.

4. Controlled Business
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
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.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.

5. Indemnify
Insurance organizations that have no capital stock - but are owned by the policyholders.
The chief executive and administrative officer of a state insurance department.
The effect a person's indifference concerning loss has on the risk to be insured.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.

6. Partial Disability

7. Birthday Rule
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
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 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.

8. Rider
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
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.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.

9. Defamation

10. Commingling
The accounting measurement of an insurer's future obligations to pay claims to policyowners.
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 provision that specifies to whom claims payments are to be made.
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.

11. Accidental Death Benefits
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 policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.
An insurance company that is incorporated outside the United States.
A policy premium that remains the same over the period of time premiums are paid.

12. Renewability Clause

13. Implied Authority
Canceling the policy with a less than proportionate return of premium.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
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 combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.

14. Exclusions
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
A claim form that a claimant must submit after a loss occurs.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.

15. Level Premium
A group insurance plan that requires the employees to pay part of the premium.
An unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation.
A policy premium that remains the same over the period of time premiums are paid.
A selection of health care benefits from which an employee may choose the ones that he/she needs.

16. Multiple-Employer Trust (MET)
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
The age of the insured at a determined date.

17. Convertible
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 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).
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
Care that is rendered to help an insured complete his/her activities of daily living.

18. Maturity Date
A person making application for - or offering him/herself or another to be insured under an insurance contract.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
The date when the face amount of the life insurance becomes payable.
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.

19. Reduction
The portion of premium for which policy protection has not yet been given.
Lessening the possibility or severity of a loss.
A contract that legally binds only one party to contractual obligations after the premium is paid.
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.

20. Payor Benefit
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.
Organizations that process claims and pay benefits in an insurance policy
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.

21. Flexible Spending Account (FSA)
A medical benefits program jointly administered by the individual states and the federal government.
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.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.

22. Paid-Up Insurance
The process of reviewing - accepting or rejecting applications for 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 policy on which all premiums have been paid but which has not matured due either to death or endowment.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.

23. Comprehensive Major Medical
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
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 combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
Time between the beginning of a disability and the start of disability insurance benefits.

24. Adult Day Care
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
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.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.

25. Estoppel
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 legal impediment to denying a fact or restoring a right that has been previously waived.
The payment made by insurers to agents or brokers for the sale and service of policies.
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

26. Reserve
An illustration furnished in addition to a basic illustration that may be presented in a different format than the basic illustration - but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
Termination of a policy because the premium has not been paid by the end of the grace period.
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.

27. Spendthrift Clause
Health coverage provided to members of a group.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
The difference between the Medicare approved amount for a service or supply and the actual charge.

28. Buyer's Guide
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 facility which is licensed by the state to provide 24 hour nursing care.
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 booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.

29. Personal Contract

30. Carriers
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
Care that is rendered to help an insured complete his/her activities of daily living.
Organizations that process claims and pay benefits in an insurance policy
A person making application for - or offering him/herself or another to be insured under an insurance contract.

31. Deductible
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
The effect a person's indifference concerning loss has on the risk to be insured.
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
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.

32. Annual Statement
An insurance company that is incorporated in another state.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.

33. Intentional Injury
An illustration furnished in addition to a basic illustration that may be presented in a different format than the basic illustration - but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration.
Plans designed to help individuals save for qualified health expenses.
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 contract that provides income for a specified period of years - or for life.

34. Waiver
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 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 voluntary abandonment of a known or legal right or advantage.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.

35. Warranty
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
A material stipulation in the policy that if breached may void coverage.
Legal term that distinguishes oral statements from written statements.

36. Service Plans
The amount of the premium for which the policy protection has been given.
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.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
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.

37. Medicare
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.
A termination of a policy by an insurer on the anniversary or renewal date.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
The difference between the Medicare approved amount for a service or supply and the actual charge.

38. Group Health Insurance
The withholding of known facts which - if material - can void a contract.
Health coverage provided to members of a group.
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.

39. CSO Table (The Commissioner's Standard Ordinary Table)
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
A mortality table used in life insurance that mathematically predicts the likelihood of death.
An agreement between two or more parties enforceable by law.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.

40. Policyholder
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.
A demand of a person to stop committing an action that is in violation of a provision.
The person who has possession of the policy - usually the insured.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.

41. Total Disability
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
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.
Any group or individual who provides health care services.

42. Commission
The first page of a policy.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
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.
The payment made by insurers to agents or brokers for the sale and service of policies.

43. Medical Expense Insurance
The individual's age when a policy is issued.
The voluntary abandonment of a known or legal right or advantage.
A type of insurance that pays benefits for medical - surgical - and hospital costs.
Benefits required by state law to be paid to an employee by an employer in the case of injury - disability - or death as the result of an on-the-job hazard.

44. Mutual Companies
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
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.
Insurance organizations that have no capital stock - but are owned by the policyholders.
A legal impediment to denying a fact or restoring a right that has been previously waived.

45. Foreign Insurer
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 chief executive and administrative officer of a state insurance department.
An insurance company that is incorporated in another state.
The amount a physician or supplier actually bills for a particular service or supply.

46. Basic Illustration
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
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 ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A single policy that is designed to insure two or more lives.

47. Buy-Sell Agreement
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
Insurance that pays over and above or in addition to basic policy limits.
A facility which is licensed by the state to provide 24 hour nursing care.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.

48. Excess Charge
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 difference between the Medicare approved amount for a service or supply and the actual charge.
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.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.

49. Risk
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.
Uncertainty as to the outcome of an event when two or more possibilities exist.
A claim form that a claimant must submit after a loss occurs.
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).

50. Reciprocal Exchange
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
An agent/broker who handles insurer's funds in a trust capacity.
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death - whenever that may be.