NYS Insurance Licensing Exam Latest
2023 Graded A
insurance transfers ✔✔the risk of an loss for an individual or business to an insurance company
which spreads out the costs to many individuals
agency contract ✔✔a contract that is held between insurer and an agent/producer containing the
expressed authority given to the agent/producer, and the duties/responsibilities to the principal,
any agent in violation of the agency contract may be held personally liable to the insurer
agent ✔✔legal representative of a an insurance company that acts for another person or entity
known as the principal with regard to contractual arrangements
beneficiary ✔✔receives benefits from the insurance
death benefit ✔✔the amount paid when a claim is issued against policy of insurance
insurance policy ✔✔a contact b/w insured and insurance company that agrees to pay the insured
in the event of unforseen events caused by specific events
risk ✔✔is the uncertainty or chance of loss occurring only two types of risks exist which are
speculative and pure and only one is insurable
pure risk ✔✔is the the certainty that loss or no change will occur with no financial gain to be
sought only this type of risk is insurable
speculative ✔✔the type that may either lead to loss or gain. example gambling. these are NOT
insurable
exposure ✔✔the unit of measure used to determine the premiums for insurance coverage
hazards ✔✔broken into 2 subtypes (physical, moral, morale); conditions that increase the
probability of the insured to experience a loss
physical hazard ✔✔hazards arising from material, structural, and operational features
moral hazard ✔✔hazards to applicants that may lie or provide fraudulent information to
insurance companies
NY state insurance license practice
exam questions/answers with verified
solutions
Under what circumstance does an accident and health insurer have the right to request an
autopsy?
- When the claim exceeds an amount specified in the policy
- When 2 days have passed after death
- When not prohibited by state law
- When consent is given by the beneficiary ✔✔3. When not prohibited by state law
Which of the following accurately describes the “time limit on certain defenses”? - After a stated period of time, claims cannot be denied due to material misrepresentation on the
application - All claims can be disputed after two years
- An insured cannot file a lawsuit within 90 days of the claim being filed
- The right to return an accident and health policy must be within 10 days of policy delivery
✔✔1. After a stated period of time, claims cannot be denied due to material misrepresentation on
the application
Patrick purchased a long-term care policy. He has a health condition for which medical treatment
was recommended by a physician within 6 months prior to the policy’s effective date. This
condition is called a(n) - antecedent condition
- pre-existing condition
- hazardous condition
- grandfathered condition ✔✔2. pre-existing condition
Which of the following describes coverage for the Medicare Part B coinsurance?
- Only a Long-term care policy will cover Medicare Part B coinsurance
- A Medicare Supplement optional benefit
- A Medicare Supplement core benefit
- Medicare Part B does not require a coinsurance so no additional coverage is needed ✔✔3. A
Medicare Supplement core benefit
Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year
deductible and an 80/20 coinsurance provision. If Larry’s family files four claims of $400, $800,
$100, and $700 in one year, how much will the insurance company pay? - $500
- $800
- $1,000
- $1,200 ✔✔2. $800
(($400 + $800 + $100 + $700 = $2,000. The insurance company pays 80% of $1,000
(outstanding balance after deductible is paid), or $800.))
Long-term care policies issued in New York must provide benefits for at least - 6 months
- 12 months
- 18 months
- 24 months ✔✔2. 12 months
Insurance License NY Questions and
Answers Graded A
New home buyer S called his agent and told him that he wanted the broadest coverage available
for his new home. Which policy would the agent be most likely to recommend?
A) HO-3
B) HO-5
C) HO-2
D) HO-8 ✔✔B
Which of the following best defines a hazard?
A) It eliminates the chance of loss
B) It increases the chance of loss
C) It is a cause of loss
D) It increases the amount of loss ✔✔B
Under the Homeowners Forms, Coverage C includes which type of coverage?
A
Other Structures
B
Additional Living Expense
C
Special Damages
D
Contents and Personal Property ✔✔D
Under Coverage A of a Dwelling Policy, all of the following are covered, except:
A
Fire or lightning damage to outdoor television antennas
B
Land, including the land on which the dwelling is located
C
Materials for repairing the dwelling, located on the described location
D
Outdoor equipment on the location used to service the dwelling ✔✔B
Which of the following definitions is NOT amended by the Miscellaneous Type Vehicle – New
York PP 03 29 Endorsement?
A
Newly Acquired Auto
B
Insured
C
Miscellaneous Type Vehicle
D
Physical Damage ✔✔D
Which federal entity administers the Terrorism Insurance Program created by TRIA?
A
Department of Homeland Security
B
Department of the Treasury
C
NAIC
D
Department of Defense ✔✔B
Which of the following is part of the legal responsibility of maintaining an insurance license?
A
An agent must inform the Superintendent of any change in address within 10 days
B
An agent must inform the Superintendent of any change in address within 60 days
C
An agent must inform the Superintendent of any change in address within 30 days
D
An agent must inform the Superintendent of any change in address within ✔✔C
NYS Life, accident, and health insurance
Exam Already Passed
Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-
year mortgage in the event of the insured’s death? ✔✔30-year decreasing term.
How many days notice does the ACA require insurers to give before rescinding coverage? ✔✔30
A signed good health statement may be requested by a life producer at the time of ✔✔Policy
Delivery
Carol purchases a whole life policy that provides a choice of dividend options. This policy is
required to include a statement that the dividends are ✔✔Not Guaranteeed
Tim is confined to a nursing home but doesn’t have a terminal illness. Which life insurance rider
is designed to help pay for this type of expense? ✔✔Long-term care benefit rider
An insured is covered under a group long-term disability policy. Under this type of policy, the
definition of disability based on any occupation typically applies ✔✔After two years of
disability
Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further
payments are permitted and the income stream begins in 15 years. This contract is a(n)
✔✔Single premium deferred annuity
Which of these is NOT a factor that influences group health insurance underwriting?
✔✔Physical exams of group members
What is the grace period required for an individual accident and health insurance policy with
monthly premiums? ✔✔10 days
In regards to technology and the ACA, which of the following statements is correct? ✔✔States
which operate with an Exchange must offer an internet-based portal
Insurable interest involves what assumption? ✔✔One person benefits from another person’s
continued life
Which of these policies is considered a whole life policy? ✔✔Single premium life
Which of the following would be considered an unfair claims settlement practice?
✔✔Misrepresenting pertinent policy provisions relating to coverage after a loss
A policyowner is permitted to take out a policy loan on a whole life policy at what point?
✔✔When the policy has a cash value
Which of these is NOT a factor during the health insurance underwriting process? ✔✔Former
residence
New York workers compensation laws exclude benefits for disabilities caused by ✔✔Intentional,
self-inflicted injuries occurring on the job
When premiums are determined, one factor would be the expenses of the ✔✔Insurer
Scott has a life insurance policy in which the dividends are left with the insurance company. This
particular policy may be paid up when the cash value plus accumulated dividends ✔✔equal the
net single premium for the same face amount at the insured’s attained age
During open enrollment for Medicare Supplement coverage, an applicant MUST be at least
✔✔There is no minimum age requirement
What happens to the cash value of a market value adjusted annuity if it’s surrendered prior to the
end of the stated guarantee period? ✔✔Subject to market value adjustment
Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest
rate, and death benefits equal to the cash value? ✔✔Flexible premium fixed annuity
Tonya has been diagnosed with kidney failure and has group accident and health insurance
through her large employer. Which of these accident and health plans will be primary during the
months following her diagnosis? ✔✔Her employer’s group accident and health plan
Which statement regarding the certificate of insurance is accurate? ✔✔It indicates evidence of an
employee’s insurance coverage
According to the ACA, the proportion of premium revenues spent on clinical services and
quality improvements is called the ✔✔Medical loss ratio
New York State Property and Casualty
Licensing Exam Questions and Answers
Graded A+
Pro Rata Liability Clause is included in an insurance policy to deal with the problem of
✔✔Duplicate insurance policies
The purpose of this clause is to illustrate the method to determine each insurer’s liability in case
of a loss. Each insurer pays its fair share determined by the percentage that the carrier’s limit
bears to the total coverage carried.
pro rata liability ✔✔If a loss occurs that is covered by more than 1 insurance policy that was
purchased by the insured, then each policy pays a portion of the loss that is proportional to the
amount of that policy over the total amount of all policies for the loss—each policy pays its pro
rata share.
What is meant by Res Ipsa Loquitur? ✔✔Res ipsa loquitur means, roughly, “the thing speaks for
itself.” Courts developed the concept of Res Ipsa Loquitur to deal with cases in which the actual
negligent act cannot be proved, but it is clear that the injury was caused by negligence.
What territories are covered by commercial auto insurance? ✔✔The coverage territory granted in
commercial auto insurance is the United States, its territories and possessions, Puerto Rico and
Canada.
What does automobile insurance Supplementary Payments refer to? ✔✔Payment of defense and
other expenses by the insurance company beyond the limits of liability..
Any expense the insurance company wishes to incur in the processing of a claim is outside the
limits of coverage. The insured is not penalized.
Medical Payments coverage under a Homeowner policy are available for expenses resulting from
an injury to: ✔✔A residence employee..
This could be someone who mows the lawn. However, if a residence employee is covered under
Workers Compensation Coverage then the Medical Payments Coverage would not apply.
Coverage does not apply to the insured or member of the household. Roomers, boarders and
tenants are not covered as well
what does Homeowners – Coverage C exclude? ✔✔The Homeowners forms exclude certain
types of property. Pets are not covered for loss by an insured peril. The policy also excludes
coverage for property that is more specifically insured. Property of tenants is also excluded.
New York Adjuster Exam Questions and
Answers Already Passed
Offering any return of premium, valuable consideration or inducement when purchasing an
insurance policy is an example of: ✔✔I. Illegal Inducement
II. Rebating
Under a watercraft or yacht policy how claims are settled: ✔✔Actual cash value
When may an insured sue an insurance company? ✔✔Not until the insured has complied with all
policy provisions and within the time limit specified in the state laws
What is the definition of a non-resident agent? ✔✔Someone licensed in their state and obtains a
license in another state to solicit insurance business in that state. is correct.
The court awards a judgment against the insured for $300,000 plus $10,000 of accrued interest
and the legal fees amount to an additional $35,000. Our insured has a $300,000 liability limit on
the policy. How much will be paid by the policy? ✔✔The correct answer is: $345,000.
Explanation:
The $10,000 of accrued pre judgment interest and the $35,000 cost of the defense are all payable
as additional coverage on the policy. These amounts have no affect on the limit of liability
available in a judgment against the insured. So the entire amount of $345,000 is payable in this
case.
The minimum coverage required in New York for uninsured motorists bodily injury is: ✔✔The
correct answer is: $25,000 per person, $50,000 per accident. .
Explanation:
New York state law established the minimum coverage limits of $25,000 per person, $50,000 per
accident and up to $50,000 per person, and $100,000 per accident for death.
If an insured wishes to cover the mobile home while it is being transported from one location to
another would: ✔✔Purchase the Mobile Home Transportation Coverage Endorsement on the
homeowner policy
The workers compensation policy language is written by the: ✔✔National Council on
Compensation Insurance (NCCI)
When a homeowners policy has been in effect for 60 days in New York, an insurer can cancel at
anytime for any of the following reasons, EXCEPT: ✔✔A large loss has occurred
NY Independent General Adjuster Exam –
Series 17-70 Questions and Answers
100% Pass
Dram Shop Liability refers to: ✔✔Liquor Law Liability.
The insured has suffered a covered loss under his DP-3 dwelling form. He fails to protect the
property from further loss. The additional loss that occurs as a result of his inactions may be
denied because of what clause in the policy? ✔✔Neglect.
To be eligible for the New York assigned risk auto plan a person must: ✔✔Hold a valid driver’s
license.
Any insurance adjuster whose license has been revoked for cause will not be entitled to apply for
any other insurance license in New York until at least: ✔✔One Year.
A typical benefit design for a long term care policy does not include a: ✔✔Conditionally or
optionally renewability feature.
In New York the workers compensation program is administered by the Workers Compensation
Board which establishes guidelines for the program. Notice of injury or death to a worker is
required to be submitted to the employer within what period of time? ✔✔30 Days.
A common carrier is not held liable for the loss of a shipper’s goods when the loss results from:
✔✔An Act of God.
If one is found guilty of federal insurance fraud, who can permit the guilty individual to return to
the insurance business? ✔✔Only an insurance regulatory official.
When is a passenger first covered under an aircraft policy? ✔✔When Entering the Aircraft.
If an insured takes precautionary measures to protect property from flood damage such as
creating a retaining wall of sand bags, how much coverage if any, will be provided by a flood
policy? ✔✔$1,000 if the flood is imminent and the property is in danger of flooding.
Which Commercial Forms would cover sinkhole collapse? ✔✔Basic, Broad, and Special.
__ is a movement allowed by certain joints of the skeleton that decreases the angle between
two adjoining bones. ✔✔Flexion
The listing of the perils covered is found in which part of a homeowner policy? ✔✔Insuring
Agreement.
If a dog owned by a customer is injured in the parking lot of a store, is that considered bodily
injury under liability coverage? ✔✔No. The dog is property and would be consider property
damage.
The Superintendent of Insurance may approve the employment, appointment or participation of
any person whose license has been revoked. Karen Jones had her license revoked and filed an
application for relicensing and has waited over 120 days without a response from the Insurance
Department. What should or can she do? ✔✔Assume the relicensing is approved.
Mr. Vickers was in a hurry to catch a plane. He parks his car in the parking garage at the airport
and leaves the keys in the ignition. When he returns he finds that his car has been stolen. Later
the car was discovered with severe collision damage. The airport carries Garagekeeper’s Legal
Liability coverage and Mr. Vickers carries Liability and Comprehensive coverage on his auto.
What coverage would apply? ✔✔Mr. Vickers comprehensive coverage.
An automobile is polluting the environment. What engine component could be the primary
cause? ✔✔Catalytic Converter Malfunction.
Under the dwelling policy, DP2 or D3, what is the maximum amount of Coverage A that would
be paid for additional living expenses? ✔✔20%
Workers compensation policies also include employer’s liability coverage. If any employer fails
to maintain the equipment and an employee is injured, would it be covered under this coverage?
✔✔Yes.
Fidelity bonds are typically written to be effective for a: ✔✔Continuous term without an
expiration date.
One purpose of a deductible is to: ✔✔Eliminate small claims.
If the insured has failed to pay the premium for a worker compensation policy issued in New
York, how many days notice of cancellation must be sent to the insured? ✔✔A 10 day notice.
NY License Exam – New York General
Insurance Laws Questions and Answers
Rated A
The Superintendent is the head of the Department of Insurance in New York. The
appoints the Superintendent to a four-year term. ✔✔governor
If the Superintendent requests information during an examination or investigation and a person
does not respond within days, he or she may impose a penalty of up to $500 per day (not more than $10,000 total) for each day the person fails to respond. ✔✔15 If the Superintendent imposes five separate penalties against a person within five years for failing to respond to his or her inquiries, the Superintendent may levy an additional penalty of up to __. ✔✔$50,000
To qualify for a certificate of authority, a mutual insurer must show that it: ✔✔(1) maintains the
required surplus to fulfill its obligations to policyholders;
(2) has the required number of applications for insurance;
(3) has a genuine membership list; and
(4) has received premiums from members and will issue policies within 60 days after receiving a
certificate of authority.
A producer’s appointment of an agent remains in effect until ✔✔(1) terminated by the insurer;
(2) the producer’s license is suspended or revoked; or
(3) the producer’s license expires and is not renewed.
Controlled business ✔✔insurance that is written primarily on the lives, property, or risks of the
licensee or of the licensee’s family members, employer, or business associates.
Agents and brokers must maintain records showing receipts and disbursements for each premium
account. These records must identify: ✔✔(1) the date and amount of each transaction
(2) the name of the insured and insurer
(3) the policy binder number
(4) the type of risk involved
Insurers must keep records of: ✔✔(1) insurance policies, for six years after the date a policy is
no longer is in force or until the next examination report, whichever period is longer
(2) applications when a policy is not issued, for six years or until the next examination report,
whichever period is longer
(3) claim files, for six years after a claim is resolved or until the next examination report,
whichever period is longer
An insurer’s records retention plan must describe: ✔✔(1) the types of records retained
(2) the retention method used
(3) the safeguards established to prevent the alteration of records
NY Life, Accident, and Health Insurance
Agent/Broker Exam Series 17-55 Already
Passed
Process 2103 (d-i) ✔✔1. The Superintendent may issue a license to any person, firm or
corporation who has complied with the requirements of the Insurance Code, authorizing the
licensee to act as agent of any authorized insurer. Every individual applicant for a license under
this section and every proposed sub-licensee must be 18 years of age or older at the time of
issuance of such license. The person must submit to and pass a written examination required by
the Superintendent.
Producer Definition (2101(k)) ✔✔An insurance producer means an insurance agent, insurance
broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed
under the insurance laws of this state to sell, solicit or negotiate insurance.
Who Should be Licensed (2101(k)(1)) ✔✔1. The term “insurance producer” does not include:
An officer, director or employee of a licensed insurer, fraternal benefit society or health
maintenance organization or of a licensed insurance producer, provided that the officer, director
or employee does not receive any commission on policies written or sold to insure risks residing,
located or to be performed in this state and:
(a) the officer, director or employee’s activities are executive, administrative, managerial, clerical
or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of
insurance;
(b) the officer, director or employee’s function relates to underwriting, loss control, Inspection or
the processing, adjusting, investigating or settling of a claim on a contract of Insurance; or (c) the
officer, director or employee is acting in the capacity of a special agent or agency supervisor
assisting licensed insurance producers where the person’s activities are limited to providing
technical advice and assistance to licensed insurance producers and do not include the sale,
solicitation or negotiation of insurance.
Home State (2101(l)) ✔✔Home state means the District of Columbia or any state or territory of
the United States in which an insurance producer maintains his, her or its principal place of
residence or principal place of business and is licensed to act as an insurance producer.
Negotiate (2101(m)) ✔✔Negotiate or negotiation means the act of conferring directly with or
offering advice directly to a purchaser or prospective purchaser of a particular contract of
insurance concerning any of the substantive benefits, terms or conditions of the contract,
provided that the person engaged in that act either sells insurance or obtains insurance from
licensed insurers, fraternal benefit societies or health maintenance organizations for purchasers.
Sell (2101(n)) ✔✔Sell or sale means to exchange a contract of insurance by any means, for
money or its equivalent, on behalf of a licensed insurer, fraternal benefit society or health
maintenance organization.
Solicit (2101(o)) – ✔✔Solicit or solicitation means attempting to sell insurance or asking or
urging a person to apply for a particular kind of insurance from a particular licensed insurer,
fraternal benefit society or health maintenance organization.
Agent 2101(a) ✔✔In this section, insurance agent means any authorized or acknowledged agent
of an insurer, fraternal benefit society or health maintenance organization issued a certificate of
authority pursuant to the public health law, and any sub-agent or other representative of such an
agent, who acts as such in the solicitation of, negotiation for, or sale of, an insurance, health
maintenance organization or annuity contract, other than as a licensed insurance broker.
Agent 2101(k) ✔✔insurance producer means an insurance agent, insurance broker, reinsurance
intermediary, excess lines broker, or any other person required to be licensed under the insurance
laws of this state to sell, solicit or negotiate insurance.
The applicant must be at least 18 years of age at the time of license issuance.
An examination is required for each applicant, except where noted for applicants with a change
in residency moving to New York (see code 2103 below).
Brokers 2101(c) ✔✔a licensed insurance representative who does not represent a specific
insurance company, but places business among various companies. Legally, the broker is usually
regarded as a representative of the insured rather than the insuring company.
Brokers 2101(h) ✔✔any licensed attorney at law of this state.
Consultants (2107) ✔✔The Superintendent may issue an insurance consultant’s license to any
person, firm, association or corporation who or which has complied with the requirements of this
chapter with respect to either: life insurance, meaning all of those kinds of insurance authorized.
Any such license issued to a firm or association shall authorize only the members of such firm or
association named in such license as sub-licensees to act individually as consultants there under,
and any such license issued to a corporation shall authorize only the officers and directors
thereof named in such license as sub-licensees to act individually as consultants there under.
Adjuster 2101(g) ✔✔The Superintendent may, in his discretion require an applicant for a license
under this section to present evidence, in such form as he prescribes, that such applicant has been
employed, for a period which he deems reasonable, by an insurer, an independent adjuster or a
public adjuster, in the performance of duties which in his opinion would provide the applicant
with a satisfactory preliminary training for the duties and responsibilities which would evolve
upon him as a licensee under this section. The term independent adjuster means any person, firm,
New York Insurance Laws Questions and
Answers Rated A
The time limit on certain defenses under individual health policies in New York is:
A
20 days
B
3 years
C
90 days
D
2 years ✔✔D
2 years
The Superintendent may examine the books and records of any insurer based on the:
A
Permission of a producer
B
Authority granted by the state
C
Authority granted by the Secretary of State
D
Permission of the insurer ✔✔B
Authority granted by the state
If a licensee uses an assumed name, the name must be approved by the Superintendent:
A
Before the licensee may use it to transact insurance in New York
B
Within 30 days of using the assumed name
C
Only if they change their legal name
D
Upon license renewal ✔✔A
Before the licensee may use it to transact insurance in New York
In New York, basic hospital insurance must provide coverage for any continuous hospital
confinement per insured for a period of at least:
A
20 days
B
30 days
C
60 days
D
10 days ✔✔C
60 days
If two individuals are licensed in the same line with two different companies join together to sell
a policy, the commission can be:
A
Shared between the two agents and the insured
B
Paid only to the agent who initiated the sale
C
New York Accident & Health Insurance
Adjuster Latest 2023 Graded A+
The New York Superintendent of Insurance is ✔✔Appointed by the governor of New York
The primary responsibility of the Superintendent of Insurance is ✔✔Enforcing the state
insurance laws and regulations.
An independent adjuster ✔✔A person who acts on behalf of an insurer in investigating and
adjusting claims and/ or performing any duties required by the insurer.
A public adjuster ✔✔A person who acts on behalf of an insured in negotiating the settlement of
certain claims for loss or damage to property.
The qualifications for obtaining a New York Accident & Health Adjuster license are: ✔✔Must
be 18, submit to finger printing, and must be approved by at least five reputable citizens of the
community
Following the occurrence of a legitimate, within what period of time can an insured bring legal
action against the insurer for failure to promptly and properly settle the claim? ✔✔Within two
years after the inception of the loss
Failing to acknowledge reasonable communication with respect to claims arising out of policies
is an example of: ✔✔Unfair claims practices
New York residents securing any type of insurance adjuster license must meet the following
qualifications: ✔✔Pass the state licensing examination, maintain a $1,000.00 surety bond.
A policy holder must give notice of a claim within _ or as soon as reasonably possible.
✔✔20 days
New York independent adjuster ✔✔acts on behalf of an insurer
New York public adjuster ✔✔acts on behalf of the insured
The amount of bond required to be filed by an adjuster with the state of New York is:
✔✔$1,000.00
NY Series 17-52 Questions and Answers
100% Pass
How many eligible employees must be included in a contributory health insurance plan?
✔✔50%
A man works for Company A and his wife works for Company B. The spouses are covered by
health plans through their respective companies that also cover the other spouse. If the husband
files a claim, ✔✔The insurance through his company is primary.
What is the period of coverage for events such as death or divorce under COBRA? ✔✔36
months
Twenty-five days after a health insurance policy is delivered, the policyowner decides that she
would like to return the policy and receive a refund of premium. Which of the following is true?
✔✔The policyowner will not receive a refund because the free-look period is over.
An insured is involved in a car accident. In addition to general, less serious injuries, he
permanently loses the use of his leg and is rendered completely blind. The blindness improves a
month later. To what extent will he receive Presumptive Disability benefits? ✔✔No benefits
For the purpose of insurance, risk is defined as ✔✔The uncertainty or chance of loss.
Which of the following is an example of a producer’s fiduciary duty? ✔✔The trust that a client
places in the producer in regard to handling premiums.
Which of the following is NOT true of basic medical expense plans? ✔✔Coverage for
catastrophic medical expenses
Which of the following is NOT a feature of a noncancellable policy? ✔✔The insurer may
terminate the contract only at renewal for certain conditions.
What is the best way to change an application? ✔✔Start over with a fresh application
On a major medical insurance policy, the amount that an insured must pay on a claim before the
insurer will pay is known as ✔✔Deductible.
Which of the following is correct about a group health insurance policy issued in New York?
✔✔It cannot exclude newborn children from coverage.
New York Life Insurance Questions and
Answers Already Passed
Accelerated Benefits ✔✔Riders attached to life insurance policies which allow death benefits to
be used to cover nursing or convalescent home expenses.
Accidental Death Benefits ✔✔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.
Accidental Death Insurance ✔✔An insurance policy that provides payment if the insured’s death
is the result of an accident.
Accumulation Period ✔✔The time before an annuitant’s retirement during which the annuitant is
making payments or investments in an annuity.
Acquired Immunodeficiency Syndrome (AIDS) – ✔✔An infectious and incurable disease caused
by the human immunodeficiency virus (HIV).
Actual Cash Value (ACV) ✔✔The required amount to pay damages or for property loss. This
amount is calculated based on the property’s current replacement value minus depreciation.
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.
Adhesion ✔✔A contract offered on a “take-it-or leave-it” basis by an insurer, in which the
insured’s only option is to either accept or reject the contract. Any ambiguities in the contract
will be settled in favor of the insured.
Adjustable Life ✔✔Life insurance which permits changes in the face amount, premium amount,
period of protection, and the duration of the premium payment period.
Adjuster ✔✔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.
Administrator ✔✔An individual appointed by a court as a fiduciary to settle the financial affairs
and estate of a deceased person.
Admitted (Authorized) Insurer ✔✔An insurance company authorized and licensed to transact
business in a particular state.
Adult Day Care ✔✔A program for impaired adults that attempts to meet their health, social, and
functional needs in a setting away from their homes.
Adverse Selection ✔✔The tendency of risks with higher probability of loss to purchase and
maintain insurance more often than the risks who present lower probability.
Agency ✔✔An insurance sales office or company.
Agent ✔✔An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf
of the insurer.
Agent’s Authority ✔✔Special powers granted to an agent by his or her agency contract.
Aleatory ✔✔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.
Alien Insurer ✔✔An insurance company that is incorporated outside the United States.
Alzheimer’s Disease ✔✔A disease that causes the victim to become dysfunctional due to
degeneration of brain cells and severe memory loss.
Ancillary ✔✔Additional, miscellaneous services provided by a hospital, such as x-rays,
anesthesia, and lab work, but not hospital room and board expenses.
Annual Statement ✔✔A detailed financial report that an insurance company must submit every
year to the insurance department of state(s) in which it conducts business.
Annuity ✔✔A contract that provides income for a specified period of years, or for life.
Apparent Authority ✔✔The appearance or the assumption of authority based on the actions,
words, or deeds of the principal or because of circumstances the principal created.
Applicant ✔✔A person making application for, or offering him/herself or another to be insured
under an insurance contract.