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. Face
A physical condition that existed before the effective date of the policy - usually excluded from coverage.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
The first page of a policy.


2. Omnibus Budget Reconciliation Act
A federal law which extends the minimum COBRA continuation of group health care coverage from 18 to 29 months for qualified beneficiaries who are disabled at the time of qualification.
A 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 tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A policy premium that remains the same over the period of time premiums are paid.


3. Orthodontics
A single policy that is designed to insure two or more lives.
Insurance that does not pay dividends.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.


4. Home Health Agency

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5. Avoidance
Lessening the possibility or severity of a loss.
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash - he/she might choose never to fly in a plane).
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.


6. Binder (Binding Receipt)
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.
A temporary contract that puts an insurance policy into force before the premium has been paid.
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.
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


7. Insurable Interest
An entity certified by the insured's health plan that provides health care services under contract.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
Organizations that process claims and pay benefits in an insurance policy
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.


8. Hazard - Physical
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 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 patient who is expected to die within an amount of time specified in the policy.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.


9. Applicant
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.
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.
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
A person making application for - or offering him/herself or another to be insured under an insurance contract.


10. Permanent Life Insurance
Health insurance policies that cover only specific accidents or diseases.
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.
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.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.


11. Reciprocity

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12. Spendthrift Clause
Plans designed to help individuals save for qualified health expenses.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
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 medical benefits program jointly administered by the individual states and the federal government.


13. Principal Amount
The full face value of a policy.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
A basic principle of insurance under which the risk of financial loss is assigned to another party.


14. Risk - Substandard
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 insurance company authorized and licensed to transact business in a particular state.
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.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.


15. Multiple-Employer Trust (MET)
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
An insurance sales office or company.
A group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
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.


16. Enrollment Period
A type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.
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.
The amount of time an employee has to sign up for a contributory group health plan.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.


17. Living Benefits Rider
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 group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
An entity certified by the insured's health plan that provides health care services under contract.
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.


18. Adjuster
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.
Special powers granted to an agent by his or her agency contract.
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.
A single policy that is designed to insure two or more lives.


19. Valued Contract
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
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 contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
The person who has possession of the policy - usually the insured.


20. Excess Insurance
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
Insurance that pays over and above or in addition to basic policy limits.
The third in line to receive the benefits of a life insurance policy.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.


21. Non-participating Policies (Non-par)
Insurance that does not pay dividends.
Insurance that pays over and above or in addition to basic policy limits.
The amount payable upon the death of the person whose life is insured.
A request for payment of the benefits provided by an insurance contract.


22. Substandard Risk
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.
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.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
Requirements approved by state law that must appear in all insurance policies.


23. Insuring Clause
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
A facility which is licensed by the state to provide 24 hour nursing care.
A termination of a policy by an insurer on the anniversary or renewal date.
A periodic payment to the insurance company to keep the policy in force.


24. Insurer
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).
An entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
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


25. Agent
Ability to perform some - but not all - of the duties of the insured's occupation as a result of injury or sickness.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
The chief executive and administrative officer of a state insurance department.


26. Intermediaries
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
Requirements approved by state law that must appear in all insurance policies.
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.


27. Sharing
A federal law which extends the minimum COBRA continuation of group health care coverage from 18 to 29 months for qualified beneficiaries who are disabled at the time of qualification.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
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.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.


28. Coinsurance Clause
Any life insurance written on the life of a minor.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
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.


29. Liquidation
Termination of a policy because the premium has not been paid by the end of the grace period.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.
Selling assets as a method of raising capital.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.


30. Retention

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31. Insured
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
The person or organization that is protected by insurance; the party to be indemnified.
The head of the state department of insurance.
A life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time - lump sum payment.


32. Indemnify
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
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.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
Requirements approved by state law that must appear in all insurance policies.


33. Home Health Services
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
Termination of a policy because the premium has not been paid by the end of the grace period.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.


34. Renewability Clause

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35. Contract
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
An agreement between two or more parties enforceable by law.
An injury or disease which occurs suddenly and requires treatment within 24 hours.
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


36. Reinsurance
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.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
Legal term that distinguishes oral statements from written statements.
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.


37. Cafeteria Plan
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
A table showing the probability of death at specified ages.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
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.


38. Integrated LTC Rider

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39. Risk
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.
Uncertainty as to the outcome of an event when two or more possibilities exist.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.


40. Subrogation
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.
Any group or individual who provides health care services.
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 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.


41. Alzheimer's Disease
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.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
Protection against loss due to sickness or bodily injury.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.


42. Term Insurance
Insurance that provides protection for a specific period of time.
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
The person who receives the proceeds from the policy when the insured dies.
An agreement between two or more parties enforceable by law.


43. Disclosure
A fee or commission charged at the time of purchase of an annuity or a security.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
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


44. Limiting Charge
A medical benefits program jointly administered by the individual states and the federal government.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
The process of reviewing - accepting or rejecting applications for insurance.
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.


45. Noncancelable
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
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.
Unplanned - unforeseen traumatic injury to the body.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.


46. Rate Service Organization
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.
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.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.


47. Misrepresentation
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 false statement or lie that can render the contract void.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.


48. Underwriting
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 type of insurance that protects the insured against loss due to accidental bodily injury.
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
The process of reviewing - accepting or rejecting applications for insurance.


49. Limited-Pay Whole Life

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50. Renewable Term
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
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 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
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.