Life And Health Insurance

Question 0

Accelerated benefits rider

Answer 0

A life insurance rider that allows for the early payment of some portion of the policies face amount should be insured suffer from a terminal illness or injury.

Question 1

Absolute assignment

Answer 1

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 form. (See assignment)

Question 2

Accident and health insurance

Answer 2

Insurance under which benefits are payable in case of disease, accidental injury, or accidental health. Also called health insurance, personal health insurance, and sickness and accident insurance.

Question 3

Accidental bodily injury provision

Answer 3

Disability income or accident policy provision that requires that the injury be accidental in order for the benefits to be payable

Question 4

Accidental death and dismemberment (AD&D)

Answer 4

Insurance providing payment if the insured’s death results from an accident or if the insurer accidentally severs a limb above the wrist or ankle joints or totally and irreversibly loses eyesight.

Question 5

Accidental death benefit rider

Answer 5

Life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means.

Question 6

Accidental dismemberment

Answer 6

Often defined as quotation “the severance of limbs at or above the wrists or ankle joints, or the entire irrevocable loss of sight.”

Question 7

Accidental means provision

Answer 7

Unforscene, 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.

Question 8

Accumulation unit

Answer 8

Premiums and annuitant pays into a variable annuity are credited as accumulation units. At the end of the accumulation period, accumulation units are covered converted to annuity units.

Question 9

Acquired immune deficiency syndrome (AIDS)

Answer 9

A life threatening condition brought on by the human immunodeficiency virus, insurers must adhere to strict underwriting and claims guidelines in regards to AIDS risks and AIDS-related conditions

Question 10

Acute illness

Answer 10

A serious condition, such as pneumonia, from which the body can fully recover with proper medical attention.

Question 11

Adhesion

Answer 11

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.

Question 12

Adjustable life insurance

Answer 12

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.

Question 13

Administrative-services-only (ASO) plan

Answer 13

Arrangement under which an insurance company or an independent organization, for a fee, handles the administration of claims, benefits, and other administrative functions for a self-insured group.

Question 14

Admitted insurer

Answer 14

An insurance company that has met the legal and financial requirements for an operation within a given state.

Question 15

Adult daycare

Answer 15

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.

Question 16

Adverse selection

Answer 16

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.

Question 17

Agency

Answer 17

Situation wherein one party “an agent” has the power to act for another “the principal” in dealing with third parties.

Question 18

Agent

Answer 18

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.

Question 19

Agent’s report

Answer 19

The section of insurance application where the agent reports personal observations about the applicant.

Question 20

Aleatory

Answer 20

Feature of an 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.

Question 21

Alien insurer

Answer 21

Company Incorporated or organized under the laws of any foreign nation, Providence, or territory.

Question 22

Ambulatory surgery

Answer 22

Surgery preformed on an outpatient basis.

Question 23

Annually renewable term (ART)

Answer 23

A form of renewable term insurance that provides coverage for one year and allows the policy owner to renew the coverage each year, without evidence of insurability. Also called yearly renewable term. (YRT)

Question 24

Annuitant

Answer 24

One to whom an annuity is payable, or a person upon the continuance of whose life further payment depends.

Question 25

Annuity

Answer 25

A contract that provides a stipulated sum payable at certain regular intervals during the lifetime of one or more persons, or payable for a specified period only.

Question 26

Annuity unit

Answer 26

The number of annuity units denotes the share of the funds and annuitant will receive from a variable annuity account after the accumulation period ends and benefits begin. A formula is used to convert accumulation units to annuity units.

Question 27

Any occupation

Answer 27

A definition of total disability that requires that for disability income benefits to be payable, the insured must be unable to preform any job for which the insured is “reasonably suited by reason of education, training, or experience”

Question 28

Apparent authority

Answer 28

The authority of an agent appears to have, based on the principle’s (the insurer’s) actions, words, deeds or because of circumstances the principal (the insurer) created.

Question 29

Application

Answer 29

Form supplied by the insurance company, usually filled in by the agent and medical examiner (if applicable) on the basis of information received from the applicant. It is signed by the applicant and is part of the insurance policy if it is issued. It gives information to the home office underwriting department so it may consider whether insurance policy will be issued and, if so, in what classification and at what premium rate.

Question 30

Appointment

Answer 30

The authorization or certification of an agent to act for or represent an insurance company.

Question 31

Approval receipt

Answer 31

Rarely used today, type of conditional receipt that provides the coverage that is effective as of the date the application is approved (before the policies delivered).

Question 32

Assessment insurance

Answer 32

Plan by which either the amount of insurance is variable or the number and amount of assessments are variable. It is offered by assessment associations, either pure or advance.

Question 33

Assignee

Answer 33

Person (including corporation, partnership, or other organization) to whom a right or rights under a policy are transferred by means of an assignment.

Question 34

Assignment

Answer 34

Signed transfer of benefits of a policy by an insured to another party. The company does not guarantee the validity of an assignment.

Question 35

Assignment provision (Health contracts)

Answer 35

Commercial health policy provisions that allows the policyholder to assign benefit payment from the insured directly to the healthcare provider.

Question 36

Assignor

Answer 36

Person (including corporation, partnership, or other organization or entity) who transfers a right or rights under insurance policy to another by means of an assignment.

Question 37

Attained age

Answer 37

With reference to insured, the current insurance age.

Question 38

Authority

Answer 38

The actions and deeds and agent is authorized to conduct on behalf of an insurance company, as specified in the agents contract.

Question 39

Automatic premium loan provision

Answer 39

Authorizes insurers to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan.

Question 40

Average indexed monthly earnings (AIME)

Answer 40

The amount basis used for calculating the primary insurance amount (PIA) for Social Security benefits.

Question 41

Aviation exclusion

Answer 41

Either attached by rider or included in standard policy language excepting from coverage certain deaths or disabilities due to aviation, such as “other then a fair pain passenger.”

Question 42

Backdating

Answer 42

The practice of making a policy effective at an earlier date than the present.

Question 43

Basic medical expense policy

Answer 43

Health insurance policy that provides “first dollar” benefits for specified (and limited) healthcare, such as hospitalization, surgery, or physician services. Characterized by limited benefit. And Brett relatively low coverage limits.

Question 44

Beneficiary

Answer 44

Person to whom the proceeds of a life or accident policy are payable when the insured dies. The various types of beneficiaries are primary beneficiaries (those first entitled proceeds), secondary beneficiaries (those entitled to proceeds if no primary beneficiary is living when the insured dies), and tertiary beneficiaries (those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies).

Question 45

Benefit

Answer 45

May be either money or a right to the policyholder upon the happening of the conditions set out in the policy.

Question 46

Binding receipt

Answer 46

Given by a company upon applicants first premium payment. The policy, if approved, becomes effective from the date of the receipt.