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. Level Premium
A provision that specifies to whom claims payments are to be made.
A policy premium that remains the same over the period of time premiums are paid.
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.
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


2. Short-Rate Cancellation
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
Canceling the policy with a less than proportionate return of premium.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.


3. Noncancelable
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 insurance company that is incorporated in another state.
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.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.


4. Multiple Employer Welfare Association (MEWA)
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 physical illness - disease - or pregnancy - but not a mental illness.
A contract that provides income for a specified period of years - or for life.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.


5. Exclusions
An agreement between two or more parties enforceable by law.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
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.


6. Paid-Up Insurance
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
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 policy on which all premiums have been paid but which has not matured due either to death or endowment.
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.


7. Admitted (Authorized) Insurer
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
An insurance company authorized and licensed to transact business in a particular state.
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.


8. Over Insurance
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
An excessive amount of insurance that would result in overpayment to the insured in the event of a 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 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.


9. Reciprocal Exchange
A contract that legally binds only one party to contractual obligations after the premium is paid.
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.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.


10. Preferred Risk
The effect a person's indifference concerning loss has on the risk to be insured.
Any group or individual who provides health care services.
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.


11. Issue Age

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12. Single Premium Whole Life (SPWL)

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13. Dread (Specified) Disease Policy
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.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.


14. Hazard - Morale

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15. Liquidation
The authority granted to an agent by means of the agent's written contract.
Selling assets as a method of raising capital.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A material stipulation in the policy that if breached may void coverage.


16. Loan Value
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
The first page of a policy.
Legal term that distinguishes oral statements from written statements.
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.


17. Nonforfeiture Values
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
Life insurance provided for members of a group.
A provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date. This coverage continues only until the employee returns to
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.


18. Intermediate Care
Care that is rendered to help an insured complete his/her activities of daily living.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
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.


19. Accidental Death and Dismemberment (AD&D)

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20. Endodontics
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 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
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.


21. Secondary Beneficiary
An employer-funded account linked to a high deductible medical insurance 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 contract that legally binds only one party to contractual obligations after the premium is paid.
A single policy that is designed to insure two or more lives.


22. Fraud
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
Requirements approved by state law that must appear in all insurance policies.
An insurance sales office or company.
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.


23. Free Look
A temporary contract that puts an insurance policy into force before the premium has been paid.
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 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
Plans designed to help individuals save for qualified health expenses.


24. Utmost Good Faith
Disability from which the insured does not recover.
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.
A single policy that is designed to insure two or more lives.
An insurance company that is incorporated in another state.


25. Adverse Selection
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
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.
A group insurance plan that requires the employees to pay part of the premium.


26. Disability Income Insurance

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27. Defamation

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28. Commission
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.
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.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
The payment made by insurers to agents or brokers for the sale and service of policies.


29. Cash Value
A claim form that a claimant must submit after a loss occurs.
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.
An agreement between two or more parties enforceable by law.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.


30. Risk - Standard
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
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
An agreement between two or more parties enforceable by law.


31. Actual Cash Value (ACV)

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32. Insurable Interest
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
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.


33. Loss
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
An insurance company authorized and licensed to transact business in a particular state.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
A demand of a person to stop committing an action that is in violation of a provision.


34. Reinsurance
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
A type of benefit plan that may discriminate - is not required to be filed with the IRS - and does not provide a current tax deduction for contributions.
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.
Organizations that process claims and pay benefits in an insurance policy


35. Surrender
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
The head of the state department of insurance.
Time between the beginning of a disability and the start of disability insurance benefits.
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.


36. Life Expectancy
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 policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
A patient who is expected to die within an amount of time specified in the policy.


37. Basic Medical Expense Insurance
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.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
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 information database that stores the health histories of this database for underwriting purposes.individuals who have applied for insurance in the past. Most insurance companies subscribe to


38. Basic Illustration
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.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.


39. Rider
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.
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.
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 level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.


40. Coordination of Benefits
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.
Insurance that pays over and above or in addition to basic policy limits.
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.


41. Juvenile Life
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
Plans designed to help individuals save for qualified health expenses.
Any life insurance written on the life of a minor.
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'


42. Indemnify
Termination of a policy because the premium has not been paid by the end of the grace period.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.


43. Accidental Death Insurance

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44. Buyer's Guide
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
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 combination of a flexible premium and adjustable life insurance.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.


45. Nonqualified Pla
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 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.
A false statement or lie that can render the contract void.
A type of benefit plan that may discriminate - is not required to be filed with the IRS - and does not provide a current tax deduction for contributions.


46. Periodontics
An insurance company authorized and licensed to transact business in a particular state.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
An insurance company that is incorporated in another state.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.


47. Carriers
A single policy that is designed to insure two or more lives.
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.
Organizations that process claims and pay benefits in an insurance policy
The act of signing an insurance policy by a licensed resident agent.


48. Standard Provisions
Requirements approved by state law that must appear in all insurance policies.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
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.
An insurance company that is incorporated in another state.


49. 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.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
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 ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.


50. Alzheimer's Disease
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.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.