Mississippi Life and Health Insurance Exam
Absolute assignment CORRECT ANSWERS Policy assignment under which the
assignee (person to whom the policy is assigned)
receives full control over the policy and also full rights to its benefits. Generally, when a
policy is assigned to secure
a debt, the owner retains all rights in the policy in excess of the debt, even though the
assignment is absolute in
form. (See assignment)
Accelerated benefits rider CORRECT ANSWERS A life insurance rider that allows for
the early payment of some portion of the
policies face amount should the insured suffers from a terminal i l l n e s s or injury.
Acceptance CORRECT ANSWERS (See offer and acceptance)
Accidental bodily injury provision CORRECT ANSWERS Disability income or accident
policy provision that requires that the injury
be accidental in order for benefits to be payable.
Accidental death and dismemberment (AD&D) CORRECT ANSWERS Insurance
providing payment if the insured’s death results
from an accident, if the insured accidentally severs a limb above the wrist or ankle
joints, or totally and irreversibly
Accidental death benefit rider CORRECT ANSWERS A life insurance policy rider
providing for payment of an additional benefit
when death occurs by accidental means.
Accidental dismemberment CORRECT ANSWERS Often defined as “the severance of
limbs at or above the wrists or ankle
joints, or the entire irrevocable loss of sight.” Loss of use in itself may or not be
considered dismemberment.
Accidental means provision CORRECT ANSWERS Unforeseen, unexpected,
unintended cause of an accident. Requirement of an
accident-based policy that the cause of the mishap must be accidental for any claim to
be payable.
Accident and health insurance CORRECT ANSWERS Under which benefits are
payable in case of disease, accidental injury, or
accidental death. Also called health insurance, personal health insurance, and sickness
and accident insurance.
Accumulation unit CORRECT ANSWERS Premiums an annuitant pays into annuities
are credited as accumulation units. At the end of
the accumulation period, accumulation units are converted to annuity units.
Acquired immune deficiency syndrome (AIDS) CORRECT ANSWERS A life-threatening
condition brought on by the human
immunodeficiency virus; insurers must adhere to strict underwriting and claims
guidelines in regard to AIDS risks
and AIDS-related conditions.
Acute illness CORRECT ANSWERS A serious condition, such as pneumonia, from
which the body can fully recover with proper
medical attention.
Adhesion CORRECT ANSWERS A life insurance policy is a contract of adhesion
because buyers must adhere to the terms of the
contract already in existence. They have no opportunity to negotiate terms, rates,
values, and so on.
Adjustable life insurance CORRECT ANSWERS Combines features of both term and
whole life coverage with the length of coverage
and amount of accumulated cash value as the adjustable factors. Premiums may be
increased or decreased to fit the
specific needs. Such adjustments are not retroactive and apply only to the future.
Administrative-services-only (ASO) Plan CORRECT ANSWERS Arrangement under
which an insurance company or an
independent organization, for a fee, handles the administration of claims, benefits, and
other administrative
functionsfor a self-insured group.
Admitted insurer CORRECT ANSWERS An insurance company that has met the legal
and financial requirements for operation within
a given state.
Adult day care CORRECT ANSWERS Type of care (usually custodial) designed for
individuals who require assistance with various
activities of daily living, while their primary caregivers are absent. Offered in care
centers.
Adverse selection CORRECT ANSWERS Selection “against the company.” Tendency
of less favorable insurance risks to seek or
continue insurance to a greater extent than others. Also, tendency of policy owners to
take advantage of favorable
options in insurance contracts.
Advertising Code CORRECT ANSWERS Rules established by the National Association
of Insurance Commissioners (NAIC) to
regulate insurance advertising.
Agency CORRECT ANSWERS Situation wherein one party (an agent) has the power to
act for another (the principal) i n dealing
with third parties.
Agent CORRECT ANSWERS Anyone not a duly licensed broker who solicits insurance
or aids in placing risks, delivering policies, or
collecting premiums on behalf of an insurance company.
Agent’s report CORRECT ANSWERS The section of an insurance application where
the agent reports personal observations about the
applicant.
Aleatory CORRECT ANSWERS Feature of insurance contracts in that there is an
element of chance for both parties and that the dollar
given by the policyholder (premiums) and the insurer (benefits) may not be equal.
Alien Insurer CORRECT ANSWERS Company incorporated or organized under the
laws of any foreign nation, providence, or territory.
Ambulatory surgery CORRECT ANSWERS Surgery performed on an outpatient basis
Amount at risk CORRECT ANSWERS Difference between the face amount of the policy
and the reserve or policy value at a given
time. In other words, the dollar amount over what the policy owner has contributed of
cash value toward payment of
the policyowner’s own claim. Because the cash value increases every year, the net
amount at risk naturally
decreases until it finally reaches zero when the cash value or reserve become the face
amount.
Annually renewable term (ART CORRECT ANSWERS A form of renewable term
insurance that provides coverage for one year and
allows the policy owner to renew coverage each year without evidence of insurability.
Also called yearly renewable
term (YRT)
Annuitant CORRECT ANSWERS One to whom an annuity is payable, or a person upon
the continuance of whose life further
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