LIFE HEALTH INSURANCE GLOSSARY TERMS EXAM

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QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Hazard

Answer:

A circumstance that increases the likelihood of a loss.

Question 2: Front-End Load

Answer:

a fee or commission charged at the time of purchase of an annuity or a security.

Question 3: Hazard, Physical

Answer:

A type of hazard that arises from the physical characteristics of an individual, such as a physical disability due to either current circumstance or a condition present at birth.

Question 4: Accelerated Benefits

Answer:

Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.

Question 5: Coercion

Answer:

An unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance.Coinsurance Clause - 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.

Question 6: Concealment

Answer:

The withholding of known facts which, if material, can void a contract.Conditional Contract - A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.

Question 7: Foreign Insurer

Answer:

An insurance company that is incorporated in another state.Fraternal Benefit Societies - 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.

Question 8: Executory Contract

Answer:

A contract which has not yet been fulfilled by one or both parties that promises action in the event of a specified future occurrence.

Question 9: Free Look

Answer:

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 any reason.

Question 10: Avoidance

Answer:

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).

Question 11: CSO Table

Answer:

(The Commissioner's Standard Ordinary Table) A mortality table used in life insurance that mathematically predicts the likelihood of death.Custodial Care - Care that is rendered to help an insured complete his/her activities of daily living.

Question 12: Grace Period

Answer:

Period of time after the premium due date during which premiums may still be paid, and the policy and its riders remain in force.

Question 13: Attained Age

Answer:

The age of the insured at a determined date.

Question 14: Disability Income Insurance

Answer:

Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.

Question 15: Basic Illustration

Answer:

A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.

Question 16: Accumulation Period

Answer:

The time before an annuitant's retirement during which the annuitant is making payments or investments in an annuity.

Question 17: Employee Retirement Income Security Act (ERISA)

Answer:

The act that stipulates federal standards for private pension plans.Endorsement - A form changing the provisions of and attached to a life insurance policy (also known as a rider).

Question 18: Level Premium

Answer:

A policy premium that remains the same over the period of time premiums are paid.

Question 19: Broker

Answer:

An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.

Question 20: Consumer Report

Answer:

A written and /or oral statement regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.Contract - An agreement between two or more parties enforceable by law.Contributory - A group insurance plan that requires the employees to pay part of the premium.

Question 21: Birthday Rule

Answer:

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.

Question 22: Death Benefit

Answer:

The amount payable upon the death of the person whose life is insured.Decreasing Term - A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.

Question 23: Fair Credit Reporting Act

Answer:

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.

Question 24: Certificate of Insurance

Answer:

A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.Claim - A request for payment of the benefits provided by an insurance contract.