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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. Pro Rata Cancellation
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.
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.

2. Errors and Omissions Policy (E&O)
Uncertainty as to the outcome of an event when two or more possibilities exist.
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.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.

3. Free Look
A physical condition that existed before the effective date of the policy - usually excluded from coverage.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
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.
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

4. Consumer Reports

5. Spendthrift Clause
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.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
The transfer of ownership rights of a life insurance policy from one person to another.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.

6. Reduction
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.
Disability from which the insured does not recover.
Lessening the possibility or severity of a loss.
Insurance agent or broker.

7. Assignment (Health)
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 claim to a provider or medical supplier to receive payments directly from Medicare.
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.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.

8. Domicile of Insurer

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

10. Utmost Good Faith
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 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.
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.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.

11. Insured
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
The person or organization that is protected by insurance; the party to be indemnified.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
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.

12. Agent
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.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
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.
An agent licensed in a state in which he or she is not a resident.

13. Director (Commissioner - Superintendent)
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
The head of the state department of insurance.
A policy premium that remains the same over the period of time premiums are paid.

14. Accident
An insurance company that is incorporated outside the United States.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
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.

15. Limited-Pay Whole Life

16. Indemnify
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
The person who has possession of the policy - usually the insured.

17. Application
A false statement or lie that can render the contract void.
The individual's age when a policy is issued.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.

18. Adult Day Care
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 facility which is licensed by the state to provide 24 hour nursing care.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.
An agreement between two or more parties enforceable by law.

19. Rider
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
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 provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance.

20. Misrepresentation
A false statement or lie that can render the contract void.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
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.

21. Excess Insurance
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
An insurance company authorized and licensed to transact business in a particular state.
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
Insurance that pays over and above or in addition to basic policy limits.

22. Natural Premium
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A type of insurance that protects the insured against loss due to accidental bodily injury.
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.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.

23. Actual Cash Value (ACV)

24. Adjustable Life
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
An optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.
A facility which is licensed by the state to provide 24 hour nursing care.
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.

25. Intermediate Care
The effect a person's indifference concerning loss has on the risk to be insured.
The first page of a policy.
The amount a physician or supplier actually bills for a particular service or supply.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.

26. Adverse Selection
Protection against loss due to sickness or bodily injury.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
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.

27. Hazard - Morale

28. Whole Life Insurance

29. Valued Contract
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
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 circumstance that increases the likelihood of a loss.
A claim form that a claimant must submit after a loss occurs.

30. Domestic Insurer
A claim to a provider or medical supplier to receive payments directly from Medicare.
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.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
An insurance company that conducts business in the state of incorporation.

31. Accidental Death Benefits
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.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
An insurance policy that provides payment if the insured's death is the result of an accident.
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.

32. Pure Protection
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
The appearance or the assumption of authority based on the actions - words - or deeds of the principal or because of circumstances the principal created.

33. Maturity Date
The date when the face amount of the life insurance becomes payable.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
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 length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.

34. Physical Exam and Autopsy
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
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.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.

35. Custodial Car
Care that is rendered to help an insured complete his/her activities of daily living.
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 process of reviewing - accepting or rejecting applications for insurance.
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.

36. Orthodontics
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.

37. Loss of Income Insurance
The difference between the Medicare approved amount for a service or supply and the actual charge.
The effect a person's indifference concerning loss has on the risk to be insured.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.

38. Probationary Period
The person who is named as first to receive benefits from a policy.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.

39. Paid-Up Insurance
The date specified in the policy as the date of termination.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
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.

40. Settlement Options
Choices available to the insured/owner for distribution of insurance proceeds.
The authority granted to an agent by means of the agent's written contract.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
An organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee.

41. Risk
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
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.
Uncertainty as to the outcome of an event when two or more possibilities exist.
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.

42. Annual Statement
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
To reach the maturity date or time at which the face amount equals cash values.
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.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.

43. Lump Sum
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.
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
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.

44. Preferred Provider Organization (PPO)

45. Home Health Services
A clause that defines the insurance company's and the insured's right to cancel or renew coverage.
Time between the beginning of a disability and the start of disability insurance benefits.
An insurance company that is incorporated in another state.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.

46. Extension of Benefits

47. Aleatory
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
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.

48. Activities of Daily Living (ADLs)
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.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
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 annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.

49. Birthday Rule
Insurance organizations that have no capital stock - but are owned by the policyholders.
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 person who receives the proceeds from the policy when the insured dies.
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.

50. Buyer's Guide
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
The head of the state department of insurance.
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