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. Acquired Immunodeficiency Syndrome (AIDS)
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
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
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.


2. Benefit Period
An insurance sales office or company.
The length of time over which the insurance benefits will be paid for each illness - disability or hospital stay.
An act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
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


3. Presumptive Disability
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.
Unplanned - unforeseen traumatic injury to the body.
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
A provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.


4. Fraud
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
A fee or commission charged at the time of purchase of an annuity or a security.
A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.


5. Disability
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 patient who is expected to die within an amount of time specified in the policy.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
Type of care in which part-time nursing or home health aide services - speech therapy - physical or occupational therapy services are given in the home of the insured.


6. Employee RetirementIncome Security Act (ERISA)
A choice of ways of receiving policy dividends - nonforfeiture values - death benefits - or cash values.
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 periodic payment to the insurance company to keep the policy in force.
The act that stipulates federal standards for private pension plans.


7. Pre-Existing Condition
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.
A physical condition that existed before the effective date of the policy - usually excluded from coverage.
A policy premium that remains the same over the period of time premiums are paid.
The act that stipulates federal standards for private pension plans.


8. Waiver
The voluntary abandonment of a known or legal right or advantage.
A claim to a provider or medical supplier to receive payments directly from Medicare.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness.


9. Retention

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10. Contributory
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 material stipulation in the policy that if breached may void coverage.
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A group insurance plan that requires the employees to pay part of the premium.


11. Residual Disability
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.
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.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.


12. Errors and Omissions Policy (E&O)
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
A professional liability insurance that protects the insurer from claims by the insured for errors or oversights on the part of the insurer.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
A life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination.


13. Actuary
A person trained in the technical aspects of insurance and related fields - particularly in the mathematics of insurance; a person who - on behalf of the company - determines the mathematical probability of loss.
A request for payment of the benefits provided by an insurance contract.
An insurance contract that the insured has a right to continue in force by payment of premiums that remain the same for a substantial period of time.
The effect of a person's reputation - character - living habits - etc. on his/her insurability.


14. Hazard - Morale

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15. Custodial Car
Legal term that distinguishes oral statements from written statements.
Care that is rendered to help an insured complete his/her activities of daily living.
Selling assets as a method of raising capital.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.


16. Death Benefit
Any inducement offered in the sale of insurance products that is not specified in the policy.
The amount payable upon the death of the person whose life is insured.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.


17. Birthday Rule
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
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
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.
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.


18. Grace Period
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
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.
Choices available to the insured/owner for distribution of insurance proceeds.
Period of time after the premium due date during which premiums may still be paid - and the policy and its riders remain in force.


19. Executory Contract
A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.
Companies owned by the stockholders whose investments provide the capital necessary to establish and operate the insurance company.
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
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.


20. Adult Day Care
Insurance that provides protection for a specific period of time.
An insurance classification for applicants who have a lower expectation of incurring loss - and who - therefore - are covered at a reduced rate.
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
A program for impaired adults that attempts to meet their health - social - and functional needs in a setting away from their homes.


21. Primary Beneficiary
The process of reviewing - accepting or rejecting applications for insurance.
The person who is named as first to receive benefits from a policy.
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 practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.


22. Terminally Ill
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
Statements made by the applicant on the insurance application that are believed to be true - but are not guaranteed to be true.
A patient who is expected to die within an amount of time specified in the policy.
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.


23. Loan Value
The amount of time an employee has to sign up for a contributory group health plan.
A provision that specifies to whom claims payments are to be made.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.


24. Nonadmitted (Nonauthorized)
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
The payment made by insurers to agents or brokers for the sale and service of policies.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
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.


25. Twisting

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26. Certificate
A type of insurance that pays benefits for medical - surgical - and hospital costs.
A statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
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.
The person who is named as first to receive benefits from a policy.


27. Decreasing Term
Lessening the possibility or severity of a loss.
A temporary contract that puts an insurance policy into force before the premium has been paid.
An unincorporated group of individuals who mutually insure one another - each separately assuming a share of each risk.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.


28. Long-Term Disability Insurance
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
Organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk.
A material stipulation in the policy that if breached may void coverage.
A type of individual or group insurance that provides coverage for illness until the insured reaches age 65 and for life in the case of an accident.


29. Right to Return (aka Free Look)
A model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals.
A request for payment of the benefits provided by an insurance contract.
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 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


30. Domestic Insurer
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.
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 agent or broker.
An insurance company that conducts business in the state of incorporation.


31. Health Reimburse
A contract that provides income for a specified period of years - or for life.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.
Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.
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.


32. Skilled Nursing Care
Insurance furnished by nongovernmental insuring organizations.
Protection against loss due to sickness or bodily injury.
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 contract that pays a stated amount in the event of a loss (disability insurance/life insurance).


33. Extension of Benefits

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34. Consumer Reports

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35. Natural Premium
The reduction - decrease - or disappearance of value of the person or property insured in a policy - by a peril insured against.
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'
An insurance sales office or company.
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.


36. Life Expectancy
The portion of premium for which policy protection has not yet been given.
Average number of years remaining for a person of a given age to live - as shown on the mortality table.
A basic - fundamental insurance policy which pays first with respect to other outstanding policies.
The age of the insured at a determined date.


37. Medicare Supplement Insurance
A type of individual or group insurance that fills the gaps in the protection provided by Medicare - but that cannot duplicate any Medicare benefits.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
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.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.


38. Policyholder
The person who has possession of the policy - usually the insured.
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 act of identifying the name of the producer - representative or firm - limited insurance representative - or temporary insurance producer on any policy solicitation.
Choices available to the insured/owner for distribution of insurance proceeds.


39. Express Authority

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40. Cafeteria Plan
A selection of health care benefits from which an employee may choose the ones that he/she needs.
The process of reviewing - accepting or rejecting applications for insurance.
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 legal impediment to denying a fact or restoring a right that has been previously waived.


41. Risk
Uncertainty as to the outcome of an event when two or more possibilities exist.
A demand of a person to stop committing an action that is in violation of a provision.
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
Time between the beginning of a disability and the start of disability insurance benefits.


42. Medical Information Bureau (MIB)
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.
Selling assets as a method of raising capital.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
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


43. Medicaid
An agent/broker who handles insurer's funds in a trust capacity.
The full face value of a policy.
A physical or mental impairment - either congenital or resulting from an injury or sickness.
A medical benefits program jointly administered by the individual states and the federal government.


44. Medicare
An applicant or insured who has a higher than normal probability of loss - and who may be subject to an increased premium.
The United States federal government plan for paying certain hospital and medical expenses for persons who qualify.
The full face value of a policy.
A disease that causes the victim to become dysfunctional due to degeneration of brain cells causing severe memory loss.


45. Accumulation Period
The time over which the annuitant makes paymenrs or investments in an annuity - and when those payments earn interest tax deferred.
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.
Insurer's location of incorporation and the legal ability to write business in a state.
The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.


46. Director (Commissioner - Superintendent)
The person who is entitled to exercise the rights and privileges in the policy. This person may or may not be the insured.
Protection against loss due to sickness or bodily injury.
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).
The head of the state department of insurance.


47. Living Benefits Rider
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
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 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 rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits.


48. Endodontics
The person who receives the proceeds from the policy when the insured dies.
An area of dentistry that deals with diagnosis - prevention and treatment of the dental pulp within natural teeth at the root canal.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
A person making application for - or offering him/herself or another to be insured under an insurance contract.


49. Ancillary
A periodic payment to the insurance company to keep the policy in force.
The cause of a possible loss.
Type of care in which part-time nursing or home health aide services - speech therapy - physical or occupational therapy services are given in the home of the insured.
Additional - miscellaneous services provided by a hospital - such as x-rays - anesthesia - and lab work - but not hospital room and board expenses.


50. Controlled Business
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.
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.
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 practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.