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. Risk - Standard
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
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.
A provision that allows an insurer - at its own expense - to have an insured physically examined when a claim is pending or to have an autopsy performed where not prohibited by law.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.


2. Parol
A fee or commission charged at the time of purchase of an annuity or a security.
Intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A form changing the provisions of and attached to a life insurance policy (also known as a rider).
Legal term that distinguishes oral statements from written statements.


3. Agency
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 statement (or booklet) that confirms that a policy has been written and that describes the coverage in general.
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
An insurance sales office or company.


4. Peril
Canceling the policy with a less than proportionate return of premium.
A unit of measure used to determine rates charged for insurance coverage.
A combination of a flexible premium and adjustable life insurance.
The cause of a possible loss.


5. Whole Life Insurance

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6. Accident
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 applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
An unplanned - unforeseen event which occurs suddenly and at an unspecified place.
An optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.


7. Terminally Ill
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level - guaranteed death benefit.
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
A patient who is expected to die within an amount of time specified in the policy.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).


8. Unilateral Contract
A contract that legally binds only one party to contractual obligations after the premium is paid.
The authority granted to an agent by means of the agent's written contract.
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.
A statement usually obtained from the applicant's doctor.


9. Right to Return (aka Free Look)
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 act that stipulates federal standards for private pension plans.
An insurance company that is incorporated in another 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


10. Flexible Spending Account (FSA)
An entity that indemnifies against losses - provides benefits - or renders services (also known as "company" or "insurance company").
The first page of a policy.
Choices available to the insured/owner for distribution of insurance proceeds.
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.


11. Custodial Car
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
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.
Care that is rendered to help an insured complete his/her activities of daily living.


12. Mortality Table
Any life insurance written on the life of a minor.
A person making application for - or offering him/herself or another to be insured under an insurance contract.
A table showing the probability of death at specified ages.
Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses.


13. Joint Life
The individual's age when a policy is issued.
A single policy that is designed to insure two or more lives.
The person who has possession of the policy - usually the insured.
An organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee.


14. Capital Amount
The amount to which a policyowner is entitled if the policy is surrendered before maturity.
Those guaranteed values in a life insurance policy that cannot be taken from the insured - even if he or she ceases to pay premiums.
A fee charged at the time of a sale - transfer or withdrawal from an annuity or a life insurance policy.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.


15. Exposure
A unit of measure used to determine rates charged for insurance coverage.
A contract that provides income for a specified period of years - or for life.
A combination of a flexible premium and adjustable life insurance.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.


16. Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986

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17. Notice of Claim

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18. Co-Pay
An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
Type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability - but is still not able to perform at the same level as before becoming disabled.
A basic principle of insurance under which the risk of financial loss is assigned to another party.
An entity that obtains and possesses a license solely for the purpose of writing business on the owner - immediate family - relatives - employer and employees.


19. Rider
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.
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.
Canceling the policy with a less than proportionate return of premium.
Insurance that pays over and above or in addition to basic policy limits.


20. Permanent Life Insurance
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
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 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 percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.


21. Rescission
An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
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 type of insurance that covers a group of individuals against loss of pay due to accident or sickness.


22. Standard Risk
The effect of a person's reputation - character - living habits - etc. on his/her insurability.
An applicant or insured who is considered to have an average probability of a loss based on health - vocation and lifestyle.
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.


23. Superintendent (Commissioner - Director)
A specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease.
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.
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.
The head of the state department of insurance.


24. Waiting Period
Time between the beginning of a disability and the start of disability insurance benefits.
The full face value of a policy.
A policy that may be exchanged for another type of policy by contractual provision - at the option of the policyowner - and without evidence of insurability (i.e. term life changed to a form of permanent life).
A demand of a person to stop committing an action that is in violation of a provision.


25. Coinsurance
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
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.
Insurance that pays over and above or in addition to basic policy limits.
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.


26. Twisting

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27. Nonmedical

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28. Actuary
A selection of health care benefits from which an employee may choose the ones that he/she needs.
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.
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
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'


29. Rollover
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
Withdrawing the money from a qualified plan and placing it into another qualified plan.
To reach the maturity date or time at which the face amount equals cash values.
A booklet that describes insurance policies and concepts - and provides general information to help an applicant make an informed decision.


30. Short-Rate Cancellation
The amount payable upon the death of the person whose life is insured.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
Insurance furnished by nongovernmental insuring organizations.
Canceling the policy with a less than proportionate return of premium.


31. Administrator
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
Protection against loss due to sickness or bodily injury.
The withholding of known facts which - if material - can void a contract.
The required amount to pay damages or for property loss - which is calculated based on the property's current replacement value minus depreciation.


32. Multiple Employer Welfare Association (MEWA)
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.
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.
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.
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.


33. Morbidity Rate
The cause of a possible loss.
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.
An act of giving up a life policy - in which the insurer will pay the insured the cash value the policy has built up.
Any life insurance written on the life of a minor.


34. Boycott
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
An injury or disease which occurs suddenly and requires treatment within 24 hours.
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).


35. Blanket Medical Insurance
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.
Requirements approved by state law that must appear in all insurance policies.
A policy that provides benefits for all medical costs - including doctor visits - hospitalization - and drugs.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.


36. Non-participating Policies (Non-par)
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
The head of the state department of insurance.
Insurance that does not pay dividends.
The head of the state department of insurance.


37. Orthodontics
Insurance that provides protection for a specific period of time.
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 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 special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances.


38. Service Plans
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 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.
The individual's age when a policy is issued.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.


39. Short-Term Disability Insurance
A combination of basic coverage and major medical coverage that features low deductibles - high maximum benefits - and coinsurance.
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.
Requirements approved by state law that must appear in all insurance policies.
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.


40. Single Premium Whole Life (SPWL)

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41. Insured
A provision that allows an insurer - at its own expense - to have an insured physically examined when a claim is pending or to have an autopsy performed where not prohibited by law.
The person or organization that is protected by insurance; the party to be indemnified.
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
The transfer of ownership rights of a life insurance policy from one person to another.


42. Indemnify
To restore the insured to the same condition as prior to loss with no intent of loss or gain.
The law that provides for the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer eligible - and for the insured's dependents for up to 36 months in cases of loss of eligibili
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.


43. Basic Hospital Expense Insurance
Coverage that provides benefits for room - board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
The head of the state department of insurance.
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).
Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.


44. Flexible Premium
A type of insurance that covers a group of individuals against loss of pay due to accident or sickness.
A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.
A table showing the probability of death at specified ages.
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.


45. Reduction
Lessening the possibility or severity of a loss.
A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses.
Life or health insurance companies formed to provide insurance for members of an affiliated lodge - religious organization - or fraternal organization with a representative form of government.
An insurance company that is incorporated outside the United States.


46. Convertible
A policy that may be exchanged for another type of policy by contractual provision - at the option of the policyowner - and without evidence of insurability (i.e. term life changed to a form of permanent life).
A legal document that indicates that an insurance policy has been issued - and that states both the amounts and types of insurance provided.
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.
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.


47. Assignment (Life)
A claim form that a claimant must submit after a loss occurs.
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.
The transfer of ownership rights of a life insurance policy from one person to another.
The amount to which a policyowner is entitled if the policy is surrendered before maturity.


48. Persistency
A document that provides information for underwriting purposes. After the policy is issued - any unanswered questions are considered waived by the insurer.
The inclusion of causes of loss (perils) which are covered within a scope of a policy.
The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer.
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.


49. Liquidation
Selling assets as a method of raising capital.
Insurance plans where the health care services rendered are the benefits instead of monetary benefits.
An insurance policy that provides payment if the insured's death is the result of an accident.
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.


50. Front-End Load
An entity certified by the insured's health plan that provides health care services under contract.
Insurance whereby premiums are paid for protection in the event of death or disability - not for cash value accumulation.
The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.
A fee or commission charged at the time of purchase of an annuity or a security.