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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. Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986

2. Assignment (Health)
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 life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.
A claim to a provider or medical supplier to receive payments directly from Medicare.
The full face value of a policy.

3. Insolvent organization
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
Protection against loss due to sickness or bodily injury.
Insurance that does not pay dividends.
A member organization which is unable to pay its contractual obligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction.

4. Presumptive Disability
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 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 provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.

5. Authorized (Admitted) Insurer
An insurance company authorized and licensed to transact business in a particular state.
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.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
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.

6. Legal Reserve

7. Rider
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
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.

8. Warranty
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
A material stipulation in the policy that if breached may void coverage.
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.

9. Terminally Ill
Any inducement offered in the sale of insurance products that is not specified in the policy.
A legal impediment to denying a fact or restoring a right that has been previously waived.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
A patient who is expected to die within an amount of time specified in the policy.

10. 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.
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 policy premium that remains the same over the period of time premiums are paid.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.

11. Nonauthorized (Nonadmitted)
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
A termination of a policy by an insurer on the anniversary or renewal date.
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.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

12. Agent
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
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.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.

13. Reciprocity

14. Standard Risk
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
The head of the state department of insurance.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.

15. Rebating
An employer-funded account linked to a high deductible medical insurance plan.
Any inducement offered in the sale of insurance products that is not specified in the policy.
An insurance company authorized and licensed to transact business in a particular state.
Protection against loss due to sickness or bodily injury.

16. Rescission
The first page of a policy.
Organizations that process claims and pay benefits in an insurance policy
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.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.

17. Morbidity Table
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
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 statement sent to a Medicare patient indicating how the Medicare claim will be settled.
A table showing the incidence of sickness at specified ages.

18. Coverage
The date when the face amount of the life insurance becomes payable.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
Choices available to the insured/owner for distribution of insurance proceeds.
Withdrawing the money from a qualified plan and placing it into another qualified plan.

19. Risk
Care that is rendered to help an insured complete his/her activities of daily living.
Uncertainty as to the outcome of an event when two or more possibilities exist.
A policy premium that remains the same over the period of time premiums are paid.
A contract that provides income for a specified period of years - or for life.

20. Settlement Options
Canceling the policy with a less than proportionate return of premium.
Choices available to the insured/owner for distribution of insurance proceeds.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
The amount of the premium for which the policy protection has been given.

21. Earned Premium
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 amount of the premium for which the policy protection has been given.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
Legal term that distinguishes oral statements from written statements.

22. Acquired Immunodeficiency Syndrome (AIDS)
The date when the face amount of the life insurance becomes payable.
The amount payable upon the death of the person whose life is insured.
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
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

23. Proof of Loss
A claim form that a claimant must submit after a loss occurs.
Similar to consumer reports in that they also provide information on the consumer's character - reputation - and habits.
Insurance furnished by nongovernmental insuring organizations.
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.

24. Pure Protection
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
An insurance company authorized and licensed to transact business in a particular state.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.

25. Accumulation Period
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
A medical benefits program jointly administered by the individual states and the federal government.
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.

26. Sickness
A physical illness - disease - or pregnancy - but not a mental illness.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
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.

27. Insurer
The cause of a possible loss.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
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 entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").

28. Deductible
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.
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 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.
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.

29. Free Look
An insurance company authorized and licensed to transact business in a particular state.
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
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.
Insurance that pays over and above or in addition to basic policy limits.

30. Permanent Life Insurance
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.
The difference between the Medicare approved amount for a service or supply and the actual charge.
Any entity of at least two employers - other than a duly admitted insurer - that establishes an employee benefit plan for the purpose of offering or providing accident and sickness or death benefits to the employees.
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.

31. Decreasing Term
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
Insurance that pays dividends to policyholders.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.

32. Nonforfeiture Values
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
Care that is rendered to help an insured complete his/her activities of daily living.
A unit of measure used to determine rates charged for insurance coverage.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.

33. Beneficiary
Insurance that provides protection for a specific period of time.
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 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 receives the proceeds from the policy when the insured dies.

34. Lump Sum
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.

35. Multiple-Employer Trust (MET)
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
An agent licensed in a state in which he or she is not a resident.

36. Primary Beneficiary
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.
The person who is named as first to receive benefits from a policy.
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.

37. Certificate of Authority
The person who has possession of the policy - usually the insured.
Choices available to the insured/owner for distribution of insurance proceeds.
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.
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.

38. Health Savings Accounts (HSAs)
Plans designed to help individuals save for qualified health expenses.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.

39. Activities of Daily Living (ADLs)
An entity certified by the insured's health plan that provides health care services under contract.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
Any life insurance written on the life of a minor.

40. Applicant
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
Unplanned - unforeseen traumatic injury to the body.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
The date when the face amount of the life insurance becomes payable.

41. Waiver of Cost
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
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 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.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.

42. Risk - Standard
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.
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 applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.

43. Gatekeeper Model

44. Defamation

45. Enrollment Period
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.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
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 amount of time an employee has to sign up for a contributory group health plan.

46. Implied Authority
A person who relies on another for support and maintenance.
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.
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
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.

47. Tertiary Beneficiary
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A unit of measure used to determine rates charged for insurance coverage.
The third in line to receive the benefits of a life insurance policy.
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.

48. Risk - Speculative
Uncertainty as to the outcome of an event when two or more possibilities exist.
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 uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.

49. Reinsurance
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
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.
An agent/broker who handles insurer's funds in a trust capacity.
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

50. Health Insurance
Protection against loss due to sickness or bodily injury.
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 full face value of a policy.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.