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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. Reserve
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
A group or individual policy that covers disabilities of 13 to 26 weeks - and in some cases for a period of up to two years.

2. Contract
The age of the insured at a determined date.
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 payment made by insurers to agents or brokers for the sale and service of policies.
An agreement between two or more parties enforceable by law.

3. Principal Amount
The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
The full face value of a policy.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.

4. Probationary Period
Insurance furnished by nongovernmental insuring organizations.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.

5. Liquidation
Selling assets as a method of raising capital.
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
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
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.

6. Omnibus Budget Reconciliation Act
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
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 age of the insured at a determined date.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.

7. Policyowner
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 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.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
Lessening the possibility or severity of a loss.

8. Natural Premium
Insurance organizations that have no capital stock - but are owned by the policyholders.
A group insurance plan that requires the employees to pay part of the premium.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
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.

9. Fraud
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.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance.

10. Activities of Daily Living (ADLs)
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
The payment made by insurers to agents or brokers for the sale and service of policies.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.

11. Unilateral Contract
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.
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 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 contract that legally binds only one party to contractual obligations after the premium is paid.

12. Endodontics
The first page of a policy.
The legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.

13. Unearned Premium
A physical or mental impairment - either congenital or resulting from an injury or sickness.
The portion of premium for which policy protection has not yet been given.
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.
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.

14. Primary Beneficiary
The person who is named as first to receive benefits from a policy.
Canceling the policy with a less than proportionate return of premium.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.

15. Nonmedical

16. Front-End Load
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
A contract that legally binds only one party to contractual obligations after the premium is 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.
A fee or commission charged at the time of purchase of an annuity or a security.

17. Level Premium
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 policy premium that remains the same over the period of time premiums are paid.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
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.

18. Mode of Payment
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
Insurer's location of incorporation and the legal ability to write business in a state.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
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.

19. Medigap
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.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
A legal impediment to denying a fact or restoring a right that has been previously waived.

20. Standard Risk
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
The authority granted to an agent by means of the agent's written contract.

21. Paid-Up Insurance
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
The process of reviewing - accepting or rejecting applications for insurance.
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.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.

22. Limiting Charge
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
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.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.

23. Reinsurance
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
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 federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential - accurate - relevant and properly used.
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.

24. Birthday Rule
A termination of a policy by an insurer on the anniversary or renewal date.
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 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.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.

25. Capital Amount
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
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 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

26. Policyholder
The person who has possession of the policy - usually the insured.
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.
The third in line to receive the benefits of a life insurance policy.
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.

27. Coercion
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
An insurance sales office or company.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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.

28. Issue Age

29. Investigative Consumer Report

30. Emergency
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
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.
An injury or disease which occurs suddenly and requires treatment within 24 hours.
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.

31. Terminally Ill
The portion of premium for which policy protection has not yet been given.
Special powers granted to an agent by his or her agency contract.
A patient who is expected to die within an amount of time specified in the policy.
An insurance sales office or company.

32. Medicare
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
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 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.
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.

33. 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
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 appearance or the assumption of authority based on the actions - words - or deeds of the principal or because of circumstances the principal created.
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.

34. Health Savings Accounts (HSAs)
Plans designed to help individuals save for qualified health expenses.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.
The individual's age when a policy is issued.
Life insurance provided for members of a group.

35. Joint Life
A single policy that is designed to insure two or more lives.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
Lessening the possibility or severity of a loss.
A type of insurance that protects the insured against loss due to accidental bodily injury.

36. CSO Table (The Commissioner's Standard Ordinary Table)
A type of insurance that protects the insured against loss due to accidental bodily injury.
Insurance that pays dividends to policyholders.
A mortality table used in life insurance that mathematically predicts the likelihood of death.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.

37. Accident
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.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
Unplanned - unforeseen traumatic injury to the body.
Any life insurance written on the life of a minor.

38. Presumptive Disability
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 amount of the premium for which the policy protection has been given.
The date when an insurance policy begins (also known as the inception date). The period of time in which an employee may enroll in a group health care plan without having to provide evidence of insurability.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.

39. Law of Large Numbers
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 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 termination of a policy by an insurer on the anniversary or renewal date.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.

40. Warranty
The effect a person's indifference concerning loss has on the risk to be insured.
A material stipulation in the policy that if breached may void coverage.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
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.

41. Face
The first page of a policy.
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
The person who is named as first to receive benefits from a policy.
Insurance organizations that have no capital stock - but are owned by the policyholders.

42. Convertible
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 specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
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.
The law that provides for the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer eligible - and for the insured's dependents for up to 36 months in cases of loss of eligibili

43. Noncancelable
Life insurance provided for members of a group.
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.
Legal term that distinguishes oral statements from written statements.
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.

44. Disability
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
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.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
A type of insurance that protects the insured against loss due to accidental bodily injury.

45. Hazard
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
A circumstance that increases the likelihood of a loss.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.

46. Disability Income Insurance

47. Straight Life
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
Insurance that provides protection for a specific 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 contract that provides income for a specified period of years - or for life.

48. Risk - Standard
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.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
A facility which is licensed by the state to provide 24 hour nursing care.
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.

49. Rider
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
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.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.

50. Settlement Options
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 amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A rule that states a contract may not be altered without written consent of both parties; in other words - the contract may not be altered by an oral agreement.
Choices available to the insured/owner for distribution of insurance proceeds.