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. Stock Companies
A person making application for - or offering him/herself or another to be insured under an insurance contract.
The voluntary abandonment of a known or legal right or advantage.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.


2. Director (Commissioner - Superintendent)
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 head of the state department of insurance.
The date when the face amount of the life insurance becomes payable.
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.


3. Accident Insurance
The effect a person's indifference concerning loss has on the risk to be insured.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
A type of insurance that protects the insured against loss due to accidental bodily injury.
An insurance company that conducts business in the state of incorporation.


4. Dual Choice
The third in line to receive the benefits of a life insurance policy.
Any life insurance written on the life of a minor.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
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.


5. Domestic Insurer
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
The third in line to receive the benefits of a life insurance policy.
An insurance company that conducts business in the state of incorporation.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.


6. Superintendent (Commissioner - Director)
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 head of the state department of insurance.
A policy on which all premiums have been paid but which has not matured due either to death or endowment.
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.


7. Admitted (Authorized) Insurer
The head of the state department of insurance.
A method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group.
An insurance company authorized and licensed to transact business in a particular state.
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.


8. Insurer
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
The portion of premium for which policy protection has not yet been given.
An entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").


9. Payor Benefit
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.
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 booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
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.


10. Adverse Selection
The act of signing an insurance policy by a licensed resident agent.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
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 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.


11. Effective Date
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.
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.
The chief executive and administrative officer of a state insurance department.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.


12. Terminally Ill
A patient who is expected to die within an amount of time specified in the policy.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
Any inducement offered in the sale of insurance products that is not specified in the policy.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.


13. Carriers
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
Organizations that process claims and pay benefits in an insurance policy
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.


14. Activities of Daily Living (ADLs)
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
A contract that legally binds only one party to contractual obligations after the premium is paid.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.


15. Permanent Life Insurance
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.
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
Lessening the possibility or severity of a loss.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.


16. Hazard - Morale


17. Level Premium
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
A policy premium that remains the same over the period of time premiums are paid.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.


18. Alien Insurer
The head of the state department of insurance.
An insurance company that is incorporated outside the United States.
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.
An insurance sales office or company.


19. Exposure
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
A facility which is licensed by the state to provide 24 hour nursing care.
A unit of measure used to determine rates charged for insurance coverage.


20. Home Health Services
A person who relies on another for support and maintenance.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.


21. Annual Statement
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
A type of hazard that arises from the physical characteristics of an individual - such as a physical disability due to either current circumstance or a condition present at birth.
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).
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.


22. Juvenile Life
Any life insurance written on the life of a minor.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
A table showing the probability of death at specified ages.
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.


23. Multiple-Employer Trust (MET)
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
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 statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.


24. Back-End Load
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.
Continuation of life insurance coverage if the insured becomes totally disabled and is unable to pay the premiums.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.


25. Coordination of Benefits
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy - thus avoiding claims overpayments.
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 policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
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.


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


27. Coinsurance
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.
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
A temporary contract that puts an insurance policy into force before the premium has been paid.


28. Commissioner (Superintendent - Director)
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.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
The chief executive and administrative officer of a state insurance department.
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


29. Group Health Insurance
Termination of a policy because the premium has not been paid by the end of the grace period.
Health coverage provided to members of a group.
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.
The effect a person's indifference concerning loss has on the risk to be insured.


30. Principal Amount
The full face value of a policy.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.


31. Aleatory
A form of misrepresentation in which an agent persuades an insured/owner to cancel - lapse - or switch policies - even when it's to the insured's disadvantage.
A 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.
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.
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.


32. Coverage
An act that is intended to cause injury. Self- inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered.
A facility which is licensed by the state to provide 24 hour nursing care.
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.


33. Extended Care Facility
A facility which is licensed by the state to provide 24 hour nursing care.
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
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.
Insurer's location of incorporation and the legal ability to write business in a state.


34. Credit Life Insurance
A liability insurance company owned by its members - which are exposed to similar liability risks by virtue of being in the same business or industry.
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 special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
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.


35. Adhesion


36. Foreign Insurer
A table showing the probability of death at specified ages.
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.
An insurance company that is incorporated in another state.
A termination of a policy by an insurer on the anniversary or renewal date.


37. Applicant
The head of the state department of insurance.
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
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).


38. Transfer
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
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 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.
A basic principle of insurance under which the risk of financial loss is assigned to another party.


39. Reduction
Insurance organizations that have no capital stock - but are owned by the policyholders.
A medical benefits program jointly administered by the individual states and the federal government.
Lessening the possibility or severity of a loss.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.


40. Risk
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
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.
Uncertainty as to the outcome of an event when two or more possibilities exist.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.


41. Endorsement
An entity certified by the insured's health plan that provides health care services under contract.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.


42. Binder (Binding Receipt)
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'
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.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
A temporary contract that puts an insurance policy into force before the premium has been paid.


43. Disclosure
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.
A form of misrepresentation in which an agent persuades an insured/owner to cancel - lapse - or switch policies - even when it's to the insured's disadvantage.
A selection of health care benefits from which an employee may choose the ones that he/she needs.


44. Parol Evidence Rule
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
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.
A fee or commission charged at the time of purchase of an annuity or a security.
An entity certified by the insured's health plan that provides health care services under contract.


45. Twisting


46. Home Health Care
Termination of a policy because the premium has not been paid by the end of the grace period.
Plans designed to help individuals save for qualified health expenses.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
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.


47. Claim
An act that is intended to cause injury. Self- inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered.
A request for payment of the benefits provided by an insurance contract.
A unit of measure used to determine rates charged for insurance coverage.
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.


48. Lapse
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
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.
Termination of a policy because the premium has not been paid by the end of the grace period.
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.


49. Fraud
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
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.


50. Assignment (Health)
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
A claim to a provider or medical supplier to receive payments directly from Medicare.
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).
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.