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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. Extended Care Facility
A facility which is licensed by the state to provide 24 hour nursing care.
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.
Insurance that pays over and above or in addition to basic policy limits.
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.

2. Single Premium Whole Life (SPWL)

3. Endow
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
To reach the maturity date or time at which the face amount equals cash values.
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.

4. Probationary Period
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance.

5. Joint Life
A clause that defines the insurance company's and the insured's right to cancel or renew coverage.
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death - whenever that may be.
A single policy that is designed to insure two or more lives.

6. Tertiary Beneficiary
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.
The third in line to receive the benefits of a life insurance policy.
The voluntary abandonment of a known or legal right or advantage.
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.

7. Binder (Binding Receipt)
An agreement between two or more parties enforceable by law.
A temporary contract that puts an insurance policy into force before the premium has been paid.
The portion of premium for which policy protection has not yet been given.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.

8. Nonforfeiture Values
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.
A type of insurance that pays benefits for medical - surgical - and hospital costs.
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
The full face value of a policy.

9. Health Maintenance Organization (HMO)
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.
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.

10. Group Health Insurance
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A table showing the probability of death at specified ages.
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.
Health coverage provided to members of a group.

11. Mortality Table
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A table showing the probability of death at specified ages.
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
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.

12. Parol Evidence Rule
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.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
The required amount to pay damages or for property loss - which is calculated based on the property's current replacement value minus depreciation.

13. Controlled Business
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
A general statement that identifies the basic agreement between the insurance company and the insured - usually located on the first page of the policy.
The full face value of a policy.
The effect a person's indifference concerning loss has on the risk to be insured.

14. Concealment
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
The withholding of known facts which - if material - can void a contract.
The cause of a possible loss.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.

15. Oral Surgery
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
Choices available to the insured/owner for distribution of insurance proceeds.
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.
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.

16. Medical Savings Account
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
An insurance company that is incorporated outside the United States.
An employer-funded account linked to a high deductible medical insurance plan.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.

17. Omnibus Budget Reconciliation Act
An organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee.
To reach the maturity date or time at which the face amount equals cash values.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.
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.

18. Juvenile Life
Any life insurance written on the life of a minor.
The date when the face amount of the life insurance becomes payable.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
A contract that provides income for a specified period of years - or for life.

19. Beneficiary
Insurance that pays dividends to policyholders.
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).
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.
The person who receives the proceeds from the policy when the insured dies.

20. Liquidation
Selling assets as a method of raising capital.
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 date specified in the policy as the date of termination.
The process of reviewing - accepting or rejecting applications for insurance.

21. Hazard - Physical
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.
A combination of a flexible premium and adjustable life insurance.
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.
Any group or individual who provides health care services.

22. Attending Physician's Statement (APS)

23. Free Look
Any group or individual who provides health care services.
A period of time - usually required by law - during which a policyowner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for a
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.

24. Basic Medical Expense Insurance
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
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.
Insurance furnished by nongovernmental insuring organizations.

25. Risk Retention Group
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.
Choices available to the insured/owner for distribution of insurance proceeds.
A special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.
A physical or mental impairment - either congenital or resulting from an injury or sickness.

26. Underwriter
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
The period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
A table showing the incidence of sickness at specified ages.
Legal term that distinguishes oral statements from written statements.

27. Secondary Beneficiary
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.
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.
Insurance agent or broker.
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.

28. Short-Rate Cancellation
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
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.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
Canceling the policy with a less than proportionate return of premium.

29. Nonresident Agent
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
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.
An agent licensed in a state in which he or she is not a resident.
Requirements approved by state law that must appear in all insurance policies.

30. Life Expectancy
A provision that specifies to whom claims payments are to be made.
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
The method of premium payment - whether annually - semiannually - quarterly - or monthly.

31. Skilled Nursing Care
An insurance company that conducts business in the state of incorporation.
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.
An insurance company authorized and licensed to transact business in a particular state.
An insurance company that is incorporated in another state.

32. Total Disability
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
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 clause that defines the insurance company's and the insured's right to cancel or renew coverage.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.

33. Expiration
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 date specified in the policy as the date of termination.
Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.

34. Underwriting
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
The process of reviewing - accepting or rejecting applications for insurance.
The person or organization that is protected by insurance; the party to be indemnified.
An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.

35. Consideration Clause
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.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
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 special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.

36. Commingling
Withdrawing the money from a qualified plan and placing it into another qualified plan.
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.
An entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").
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. Periodontics
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.

38. Decreasing Term
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
A 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.

39. Domicile of Insurer

40. Gatekeeper Model

41. Accidental Bodily Injury
Unplanned - unforeseen traumatic injury to the body.
An insurance company authorized and licensed to transact business in a particular state.
Insurance organizations that have no capital stock - but are owned by the policyholders.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.

42. Income Replacement Contracts

43. Warranty
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
A material stipulation in the policy that if breached may void coverage.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
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.

44. Morbidity Table
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
A table showing the incidence of sickness at specified ages.
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 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.

45. Waiting Period
Time between the beginning of a disability and the start of disability insurance benefits.
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
The voluntary abandonment of a known or legal right or advantage.

46. Exposure
A unit of measure used to determine rates charged for insurance coverage.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
An area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

47. Insurability

48. Rollover
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
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 single policy that is designed to insure two or more lives.

49. Law of Large Numbers
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 portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
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.
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.

50. Intentional Injury
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.
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.
Insurance that provides protection for a specific period of time.
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.