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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. Term Insurance
Insurance that provides protection for a specific period of time.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
A statement usually obtained from the applicant's doctor.
A false statement or lie that can render the contract void.

2. Payor Benefit
The person who is named as first to receive benefits from a policy.
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.
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 inpatient and outpatient claims on individuals by hospitals - skilled nursing facilities - home health agencies - hospices and certain other providers of health services.

3. Underwriter
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
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 payment made by insurers to agents or brokers for the sale and service of policies.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.

4. Commingling
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 clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
An agent licensed in a state in which he or she is not a resident.
The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance.

5. Risk - Speculative
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.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
The person who is named as first to receive benefits from a policy.
The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.

6. Probationary Period
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
The first page of a policy.
An insurance sales office or company.

7. Liquidation
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.
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.
Selling assets as a method of raising capital.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.

8. Actual Cash Value (ACV)

9. Long-Term Care (LTC)
The person who is named as first to receive benefits from a policy.
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
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
Requirements approved by state law that must appear in all insurance policies.

10. Waiver of Premium
Any group or individual who provides health care services.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
The accounting measurement of an insurer's future obligations to pay claims to policyowners.
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.

11. Rescission
The accounting measurement of an insurer's future obligations to pay claims to policyowners.
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.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
Care that is rendered to help an insured complete his/her activities of daily living.

12. Principal Amount
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 statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
A contract that legally binds only one party to contractual obligations after the premium is paid.
The full face value of a policy.

13. Commission
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
The payment made by insurers to agents or brokers for the sale and service of policies.
A medical benefits program jointly administered by the individual states and the federal government.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.

14. Buyer's Guide
A contract that legally binds only one party to contractual obligations after the premium is paid.
An insurance company that is incorporated in another state.
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.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.

15. Apparent Authority
The appearance or the assumption of authority based on the actions - words - or deeds of the principal or because of circumstances the principal created.
A situation in which two parties provide the same help or advantages to each other (for example - Producer A living in State A can transact business as a nonresident in State B if State B's resident producers can transact business in State A).
Organizations that process claims and pay benefits in an insurance policy
The inclusion of causes of loss (perils) which are covered within a scope of a policy.

16. Home Health Care
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).
An organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee.
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 group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.

17. Certificate
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
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 statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.

18. Integrated LTC Rider

19. Participating Policies (Par)
A single policy that is designed to insure two or more lives.
Insurance that pays dividends to policyholders.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.

20. Dual Choice
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
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.
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 person who evaluates and classifies risks to accept or reject them on behalf of the insurer.

21. Consumer Reports

22. Agency
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 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 statement usually obtained from the applicant's doctor.
An insurance sales office or company.

23. Secondary Beneficiary
The act of signing an insurance policy by a licensed resident agent.
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 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 false statement or lie that can render the contract void.

24. Basic Illustration
A single policy that is designed to insure two or more lives.
An entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.

25. Alzheimer's Disease
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
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 policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
The age of the insured at a determined date.

26. Parol
Any inducement offered in the sale of insurance products that is not specified in the policy.
The person who receives the proceeds from the policy when the insured dies.
Legal term that distinguishes oral statements from written statements.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

27. Renewability Clause

28. Loss of Income Insurance
The appearance or the assumption of authority based on the actions - words - or deeds of the principal or because of circumstances the principal created.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.

29. Consideration Clause
The portion of premium for which policy protection has not yet been given.
An agent/broker who handles insurer's funds in a trust capacity.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
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.

30. Mode of Payment
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
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.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.

31. Morbidity Rate
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
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 method of premium payment - whether annually - semiannually - quarterly - or monthly.
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.

32. Supplemental Illustration
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
Canceling the policy with a less than proportionate return of premium.
A demand of a person to stop committing an action that is in violation of a provision.
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.

33. Adult Day Care
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 program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.
An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies - loses his/her sight - or loses two limbs due to an accident.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.

34. Policy Loan
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.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
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.

35. Renewable Term
Unplanned - unforeseen traumatic injury to the body.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
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.
The amount of time an employee has to sign up for a contributory group health plan.

36. Disability Income Insurance

37. Hospice
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.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
An agent licensed in a state in which he or she is not a resident.
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

38. Rider
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.
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 type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.

39. Misrepresentation
Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness.
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 false statement or lie that can render the contract void.
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.

40. Front-End Load
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 method of premium payment - whether annually - semiannually - quarterly - or monthly.
A fee or commission charged at the time of purchase of an annuity or a security.
A contract that provides income for a specified period of years - or for life.

41. Commissioner (Superintendent - Director)
The chief executive and administrative officer of a state insurance department.
An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies - loses his/her sight - or loses two limbs due to an accident.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
The accounting measurement of an insurer's future obligations to pay claims to policyowners.

42. Accident
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.
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 unplanned - unforeseen event which occurs suddenly and at an unspecified place.
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.

43. Primary Policy
A type of insurance that pays benefits for medical - surgical - and hospital costs.
An agreement between two or more parties enforceable by law.
A legal impediment to denying a fact or restoring a right that has been previously waived.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.

44. Medicare Supplement Insurance
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.

45. Peril
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
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.
Care that is rendered to help an insured complete his/her activities of daily living.
The cause of a possible loss.

46. Tertiary Beneficiary
The third in line to receive the benefits of a life insurance policy.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
A table showing the probability of death at specified ages.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.

47. Reciprocity

48. Medical Savings Account
An employer-funded account linked to a high deductible medical insurance plan.
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
A claim form that a claimant must submit after a loss occurs.
Lessening the possibility or severity of a loss.

49. Skilled Nursing Care
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 process of reviewing - accepting or rejecting applications for insurance.
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
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.

50. Buy-Sell Agreement
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.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
The age of the insured at a determined date.