Test your basic knowledge |

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. Loss of Income Insurance
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.
The voluntary abandonment of a known or legal right or advantage.
Plans designed to help individuals save for qualified health expenses.

2. Medical Information Bureau (MIB)
Written and /or oral statements regarding a consumer's credit - character - reputation - or habits collected by a reporting agency from employment records - credit reports - and other public sources.
An 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
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 program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.

3. Annuity
Insurance agent or broker.
The date specified in the policy as the date of termination.
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 contract that provides income for a specified period of years - or for life.

4. Applicant
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
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
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.

5. Reinsurance
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
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 basic principle of insurance under which the risk of financial loss is assigned to another party.
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.

6. Actual Charge
The amount a physician or supplier actually bills for a particular service or supply.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
An agreement between two or more parties enforceable by law.

7. Nonqualified Pla
The third in line to receive the benefits of a life insurance 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.
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 clause that defines the insurance company's and the insured's right to cancel or renew coverage.

8. Defamation

9. Underwriter
The chief executive and administrative officer of a state insurance department.
The termination of an insurance contract due either to material misrepresentation by the insured or by fraud - misrepresentation - or duress on the part of the agent/insurer.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
A policy premium that remains the same over the period of time premiums are paid.

10. Death Benefit
The amount payable upon the death of the person whose life is insured.
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.
An insurance company that conducts business in the state of incorporation.
Insurance organizations that have no capital stock - but are owned by the policyholders.

11. Multiple-Employer Trust (MET)
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
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 group of small employers who do not qualify for group insurance individually - formed to establish a group health plan or self-funded plan.
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.

12. Buyer's Guide
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
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.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.

13. Nonauthorized (Nonadmitted)
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.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.
The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.

14. Boycott
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
A request for payment of the benefits provided by an insurance contract.
The act of signing an insurance policy by a licensed resident agent.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.

15. Pure Protection
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
The head of the state department of insurance.
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.

16. Consideration Clause
The head of the state department of insurance.
Organizations that process claims and pay benefits in an insurance policy
A patient who is expected to die within an amount of time specified in the policy.
A part of the insurance contract that states that both parties must give something of value for the transfer of risk - and specifies the conditions of the exchange.

17. Orthodontics
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 principle stating that the larger the number of similar exposure units considered - the more closely the losses reported will equal the underlying probability of loss.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.

18. Health Insurance
A basic principle of insurance under which the risk of financial loss is assigned to another party.
Protection against loss due to sickness or bodily injury.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
The authority granted to an agent by means of the agent's written contract.

19. Maturity Date
The date when the face amount of the life insurance becomes payable.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
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 accounting measurement of an insurer's future obligations to pay claims to policyowners.

20. Exposure
Insurance that does not pay dividends.
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 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 unit of measure used to determine rates charged for insurance coverage.

21. Administrator
An insurance company authorized and licensed to transact business in a particular state.
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
Insurance which can - at the election of the policyowner - be renewed at the end of a term without evidence of insurability.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.

22. Agent's Authority
Special powers granted to an agent by his or her agency contract.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
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 amount payable by the insurance company - usually in at the insured's death or when the policy matures.

23. Pre-Existing Condition
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.

24. Reserve
An entity certified by the insured's health plan that provides health care services under contract.
An injury or disease which occurs suddenly and requires treatment within 24 hours.
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.

25. Right to Return (aka Free Look)
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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
Canceling the policy with a less than proportionate return of premium.

26. Gatekeeper Model

27. Primary Beneficiary
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 condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.
The person who is named as first to receive benefits from a policy.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.

28. Viatical Settlement
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness.
The uncertainty or chance of a loss occurring in a situation that involves the opportunity for either 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.

29. Alzheimer's Disease
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
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.
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 member organization which is unable to pay its contractual obligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction.

30. Accelerated Benefits
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
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.

31. Hazard
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.
The authority granted to an agent by means of the agent's written contract.
A circumstance that increases the likelihood of a loss.
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.

32. Natural Premium
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 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.
The required amount to pay damages or for property loss - which is calculated based on the property's current replacement value minus depreciation.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.

33. Approved Amount
A facility which is licensed by the state to provide 24 hour nursing care.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.
The age of the insured at a determined date.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.

34. Hospice
The amount of the premium for which the policy protection has been given.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
The person who is named as first to receive benefits from a policy.
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.

35. Disclosure
Insurance organizations that have no capital stock - but are owned by the policyholders.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
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.

36. Risk - Pure
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.
A temporary contract that puts an insurance policy into force before the premium has been paid.
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.

37. Consumer Reports

38. Hazard - Moral

39. Commissioner (Superintendent - Director)
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.
The chief executive and administrative officer of a state insurance department.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
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

40. Out-of-Pocket Costs
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
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.
Disability from which the insured does not recover.

41. Subrogation
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.
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 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 practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.

42. Risk - Standard
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
A demand of a person to stop committing an action that is in violation of a provision.
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.

43. Medicare Supplement Insurance
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.

44. Accidental Death Insurance

45. Unilateral Contract
An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.
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 contract that legally binds only one party to contractual obligations after the premium is paid.
Written and /or oral statements regarding a consumer's credit - character - reputation - or habits collected by a reporting agency from employment records - credit reports - and other public sources.

46. Morbidity Table
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
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 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 table showing the incidence of sickness at specified ages.

47. Nonresident Agent
An agent licensed in a state in which he or she is not a resident.
Unplanned - unforeseen traumatic injury to the body.
An insurance company authorized and licensed to transact business in a particular state.
The amount of the premium for which the policy protection has been given.

48. Issue Age

49. Medical Savings Account
An insurance company that conducts business in the state of incorporation.
The required amount to pay damages or for property loss - which is calculated based on the property's current replacement value minus depreciation.
An employer-funded account linked to a high deductible medical insurance plan.
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.

50. Universal Life
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
A combination of a flexible premium and adjustable life insurance.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.