MD INSURANCE EXAM - LIFE

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MD INSURANCE EXAM - LIFE

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -49 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Apparent Authority

Answer:

The appearance or the assumption of authoirty based ont eh actions, words, or deeds of the pricipal or because of circumstances the princiapl created

Question 2: Acutal Cash Value (ACV)

Answer:

The required amount to pay damages or for property loss. This amount is calculated based on theproperty's current replacement value minus depreciation

Question 3: Actuary

Answer:

A person trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurnance; a person who, on behalf of the company, determines the mathematical probability of loss

Question 4: Cash Value

Answer:

The amount to which a policy owners is entitled if the policy is surrendered before maturity

Question 5: Agent

Answer:

An insurance sales office or company

Question 6: Agency

Answer:

An insurance sales office or company

Question 7: Application

Answer:

A docuemtn that provides information for underwriting purposes. After the policy is issued, any unanswered questions are considered waived by the insurer

Question 8: Adverse Selection

Answer:

The tendency of risks with highter probablility of loss topurchase and maintain insurance more often than the risks who present lower probability

Question 9: Attained Age

Answer:

The age of the isnured at a determined date

Question 10: Basic Illustration

Answer:

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

Question 11: Coinsurance Clause

Answer:

A provision that states that the insurer and the insured will share the losses covereed by the policy in a proportion agreed upon in advance

Question 12: Commingling

Answer:

A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust

Question 13: Broker

Answer:

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

Question 14: Back-End Load

Answer:

a fee charged at the time of a sale, transfer or withdrawal from an annuity or a life insurance policy

Question 15: Aleatory

Answer:

A contract in which particpating parties exchange unequal amounts. Insurance contracts are aleatory in that the amout the insured will pay in permiums is unequal to the amount the insurer will pay in the event of a loss.

Question 16: Avoidance

Answer:

A method of dealing with risk by deliberately keeping away from it (i.e. if a person wanted to avoide the risk of being killed in an airplan crash, he/she might choose never to fly in a plane

Question 17: Authorized (Admitted) Insurer

Answer:

An insurance company authorized and licensed to transact business ina particular state

Question 18: Adjustable Life

Answer:

Life insurance which permits changes in teh face amount, premium period of protection, and the duration of the premium payment period

Question 19: Assignment

Answer:

The transfer of ownerhip rights of a life insurnace policy from one person to another

Question 20: Ancillary

Answer:

Additional, miscellaneous services provided by a hospital, such as x-rays, anesthesia, and lab work, but not hospital room and board expenses

Question 21: Adult Day Care

Answer:

A program for impaired adults that attempts to meet their health, social, and functional needs to a setting away from their homes

Question 22: Coercion

Answer:

An unfair trade preactice in which an agent uses physcial or mental force with the intent of inducing an applicant to purchase insurance

Question 23: Accidental Death Insurance

Answer:

An insurance policy that provides payment if the insured's death is the result of an accident

Question 24: Beneficiary

Answer:

The person who receives the proceedsfrom the policy when the insured dies

Question 25: Alien Insurer

Answer:

An insurance company that is incorporated outside the US

Question 26: Annuity

Answer:

A contract that provides income for a specified period of years, or for life

Question 27: Attending Physcian's Statement (APS)

Answer:

A statement usually obtained from the applicant's doctor