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. Adverse Selection
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
A person who relies on another for support and maintenance.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.


2. Certificate of Insurance
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
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 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.
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.


3. Long-Term Care (LTC)
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
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
The amount payable upon the death of the person whose life is insured.
The withholding of known facts which - if material - can void a contract.


4. Accidental Death and Dismemberment (AD&D)

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5. Loan Value
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
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 entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").


6. Long-Term Disability Insurance
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.
Any group or individual who provides health care services.
A combination of a flexible premium and adjustable life insurance.
Termination of a policy because the premium has not been paid by the end of the grace period.


7. Over Insurance
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
A general term used to refer to various forms of whole life insurance policies that remain in effect to age 100 so long as the premium is paid.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.


8. Accidental Death Insurance

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9. Hospice
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.
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.
The effect a person's indifference concerning loss has on the risk to be insured.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.


10. Accident Insurance
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
The individual's age when a policy is issued.
Care that is rendered to help an insured complete his/her activities of daily living.
A type of insurance that protects the insured against loss due to accidental bodily injury.


11. Surrender
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
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 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.


12. Basic Illustration
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.
The person or organization that is protected by insurance; the party to be indemnified.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.


13. Attending Physician's Statement (APS)

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14. Death Benefit
A liability insurance company owned by its members - which are exposed to similar liability risks by virtue of being in the same business or industry.
The amount payable upon the death of the person whose life is insured.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
The act that stipulates federal standards for private pension plans.


15. Basic Hospital Expense Insurance
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
A material stipulation in the policy that if breached may void coverage.
Any inducement offered in the sale of insurance products that is not specified in the policy.
Choices available to the insured/owner for distribution of insurance proceeds.


16. Group Life
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
Life insurance provided for members of a group.


17. Consideration
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
Selling assets as a method of raising capital.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
An agent/broker who handles insurer's funds in a trust capacity.


18. Loss
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
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.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
The difference between the Medicare approved amount for a service or supply and the actual charge.


19. Health Savings Accounts (HSAs)
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
Plans designed to help individuals save for qualified health expenses.
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.
Type of care in which part-time nursing or home health aide services - speech therapy - physical or occupational therapy services are given in the home of the insured.


20. 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 provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
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 fee or commission charged at the time of purchase of an annuity or a security.


21. Basic Medical Expense Insurance
The required amount to pay damages or for property loss - which is calculated based on the property's current replacement value minus depreciation.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
Insurer's location of incorporation and the legal ability to write business in a state.


22. Insurable Interest
Termination of a policy because the premium has not been paid by the end of the grace period.
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.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
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.


23. Excess Insurance
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
Any life insurance written on the life of a minor.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
Insurance that pays over and above or in addition to basic policy limits.


24. Buyer's Guide
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 booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
Choices available to the insured/owner for distribution of insurance proceeds.
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.


25. Single Premium Whole Life (SPWL)

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26. Natural Premium
Any inducement offered in the sale of insurance products that is not specified in the policy.
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.
Insurance organizations that have no capital stock - but are owned by the policyholders.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.


27. Recurrent Disability
Insurance agent or broker.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
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.
An agent/broker who handles insurer's funds in a trust capacity.


28. Policyholder
The person who has possession of the policy - usually the insured.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
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.


29. Secondary Beneficiary
The effect a person's indifference concerning loss has on the risk to be insured.
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.
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.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.


30. Partial Disability

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31. CSO Table (The Commissioner's Standard Ordinary Table)
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
The third in line to receive the benefits of a life insurance policy.
A mortality table used in life insurance that mathematically predicts the likelihood of death.


32. Lapse
An insurance company that is incorporated outside the United States.
Termination of a policy because the premium has not been paid by the end of the grace period.
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.
Insurance that provides protection for a specific period of time.


33. Alzheimer's Disease
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
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.
Type of care in which part-time nursing or home health aide services - speech therapy - physical or occupational therapy services are given in the home of the insured.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.


34. Sharing
An insurance company that is incorporated in another 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.
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 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'


35. Hazard - Physical
An agent/broker who handles insurer's funds in a trust capacity.
The act that stipulates federal standards for private pension plans.
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.
The person who receives the proceeds from the policy when the insured dies.


36. Capital Amount
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.


37. Total Disability
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.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.


38. Spendthrift Clause
A patient who is expected to die within an amount of time specified in the policy.
A fee or commission charged at the time of purchase of an annuity or a security.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.


39. Blanket Medical Insurance
The difference between the Medicare approved amount for a service or supply and the actual charge.
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.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.


40. Respite Care
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
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 age of the insured at a determined date.
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.


41. Rider
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
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 claim to a provider or medical supplier to receive payments directly from Medicare.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.


42. Indemnify
The head of the state department of insurance.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.


43. Certificate of Authority
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
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.
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.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.


44. Rescission
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.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
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.


45. Convertible
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
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.
The difference between the Medicare approved amount for a service or supply and the actual charge.
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).


46. Foreign Insurer
An agent licensed in a state in which he or she is not a resident.
An insurance company that is incorporated in another state.
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.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.


47. Nonresident Agent
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.
Any group or individual who provides health care services.
An agent licensed in a state in which he or she is not a resident.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.


48. Loss of Income Insurance
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A provision that specifies to whom claims payments are to be made.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.


49. Paid-Up Insurance
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.


50. Assignment (Life)
The transfer of ownership rights of a life insurance policy from one person to another.
An insurance company authorized and licensed to transact business in a particular state.
A fee or commission charged at the time of purchase of an annuity or a security.
A life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.