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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. Pro Rata Cancellation
The act that stipulates federal standards for private pension plans.
To reach the maturity date or time at which the face amount equals cash values.
Termination of an insurance policy - with an adjustment of the premium charge in proportion to the exact coverage that has been in force.
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.

2. Permanent Disability
Disability from which the insured does not recover.
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.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
A single policy that is designed to insure two or more lives.

3. Unilateral Contract
A contract that legally binds only one party to contractual obligations after the premium is paid.
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
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 table showing the incidence of sickness at specified ages.

4. Adverse Selection
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.
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.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.

5. Mutual Companies
To reach the maturity date or time at which the face amount equals cash values.
The full face value of a policy.
Insurance organizations that have no capital stock - but are owned by the policyholders.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.

6. Credit Life Insurance
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.

7. Morbidity Rate
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.
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.
The cause of a possible loss.
A unit of measure used to determine rates charged for insurance coverage.

8. Benefit Period
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.
The first page of a policy.
An insurance company authorized and licensed to transact business in a particular state.
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.

9. Nonqualified Pla
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 period of time between the effective date of a health insurance policy and the date coverage for all or certain conditions begins.
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.
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.

10. Hazard - Morale

11. Rate Service Organization
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.
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
A mortality table used in life insurance that mathematically predicts the likelihood of death.

12. Legal Reserve

13. Endodontics
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
Choices available to the insured/owner for distribution of insurance proceeds.
A type of health insurance that usually carries a large deductible and pays covered expenses up to a high limit whether the insured is in or out of the hospital.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.

14. Free Look
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 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.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

15. Earned Premium
The amount of the premium for which the policy protection has been given.
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.
An insurance company that is incorporated outside the United States.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.

16. Commission
The person who is named as first to receive benefits from a policy.
A statement that outlines what services were rendered - how much the insurer paid - and how much the insured was billed.
The payment made by insurers to agents or brokers for the sale and service of policies.
Disability from which the insured does not recover.

17. Flexible Spending Account (FSA)
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
The amount payable upon the death of the person whose life is insured.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
An insurance company authorized and licensed to transact business in a particular state.

18. Medigap
A special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
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.

19. Countersignature
An insurance company authorized and licensed to transact business in a particular state.
The act of signing an insurance policy by a licensed resident agent.
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.
An optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.

20. Insurance
A type of health insurance that usually carries a large deductible and pays covered expenses up to a high limit whether the insured is in or out of the hospital.
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 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 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.

21. Comprehensive Policy
The age of the insured at a determined date.
A plan that provides a package of health care services - including preventive care - routine physicals - immunization - outpatient services and hospitalization.
A clause that defines the insurance company's and the insured's right to cancel or renew coverage.
A condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness.

22. Home Health Services
An agreement between two or more parties enforceable by law.
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
An agent licensed in a state in which he or she is not a resident.
Coverage for doctor visits - x-rays - lab tests - and emergency room visits; benefits - however - are limited to specified dollar amounts.

23. Principal Amount
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.
The full face value of a policy.
The legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss.
A circumstance that increases the likelihood of a loss.

24. Alzheimer's Disease
The portion of premium for which policy protection has not yet been given.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
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
Lessening the possibility or severity of a loss.

25. Reserve
An arrangement that allows someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds when and where they are most needed - before death.
An 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 amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
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.

26. Activities of Daily Living (ADLs)
A selection of health care benefits from which an employee may choose the ones that he/she needs.
Activities individuals must do every day such as moving about - getting dressed - eating - bathing - etc.
An insurance company that is incorporated in another state.
The amount payable upon the death of the person whose life is insured.

27. Annuity
Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.
The method of determining primary coverage for a dependent child - under which the plan of the parent whose birthday occurs first in the calendar year is designated as primary.
A contract that provides income for a specified period of years - or for life.
A type of health insurance that usually carries a large deductible and pays covered expenses up to a high limit whether the insured is in or out of the hospital.

28. Certificate of Insurance
A temporary contract that puts an insurance policy into force before the premium has been paid.
Causes of loss - exposures - conditions - etc. listed in the policy for which the benefits will not be paid.
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
The amount payable by the insurance company - usually in at the insured's death or when the policy matures.

29. Term Insurance
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.
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 group insurance plan that requires the employees to pay part of the premium.
Insurance that provides protection for a specific period of time.

30. Avoidance
A rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.
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'
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).
A type of insurance that pays benefits for medical - surgical - and hospital costs.

31. Waiver of Cost
The amount of time an employee has to sign up for a contributory group health plan.
The date when the face amount of the life insurance becomes payable.
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 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.

32. Agent
Any inducement offered in the sale of insurance products that is not specified in the policy.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
An individual who is licensed to sell - negotiate - or effect insurance contracts on behalf of an insurer.
A mortality table used in life insurance that mathematically predicts the likelihood of death.

33. Mortality Table
A table showing the probability of death at specified ages.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
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.
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.

34. Insurable Interest
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
Insurance furnished by nongovernmental insuring organizations.
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 provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.

35. Fiduciary

36. Permanent Life Insurance
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 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 circumstance that increases the likelihood 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.

37. Policyowner
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
The date when the face amount of the life insurance becomes payable.
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
The amount of the premium for which the policy protection has been given.

38. Maturity Date
A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against a loss by a specified future contingency or peril in return for payment of a premium.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
The date when the face amount of the life insurance becomes payable.
Insurance that pays over and above or in addition to basic policy limits.

39. Consumer Reports

40. Insolvent organization
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.
An insurance company authorized and licensed to transact business in a particular state.
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.
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

41. Home Health Agency

42. Transfer
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 basic principle of insurance under which the risk of financial loss is assigned to another party.
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 legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.

43. Nonadmitted (Nonauthorized)
The cause of a possible loss.
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.
An insurance policy that provides payment if the insured's death is the result of an accident.
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

44. Accidental Bodily Injury
Unplanned - unforeseen traumatic injury to the body.
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 physical or mental impairment - either congenital or resulting from an injury or sickness.
Life insurance which permits changes in the face amount - premium amount - period of protection - and the duration of the premium payment period.

45. Juvenile Life
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.
Any life insurance written on the life of a minor.
A provision that specifies to whom claims payments are to be made.
An agreement between two or more parties enforceable by law.

46. Qualified Plan
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
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.
A statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

47. Right to Return (aka Free Look)
An insurance company authorized and licensed to transact business in a particular state.
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.
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
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.

48. Fraternal Benefit Societies
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.
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
An insurance company that is incorporated outside the United States.
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.

49. Underwriting
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 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 process of reviewing - accepting or rejecting applications for insurance.
An insurance policy that provides payment if the insured's death is the result of an accident.

50. Defamation