FX LIFE INSURANCE UPDATED EXAMS SCRIPT
QUESTIONS AND ANSWERS SURE A+
✔✔Cash Value - ✔✔The amount to which a policyowner is entitled if the policy is
surrendered before maturity.
✔✔Certificate - ✔✔A statement or booklet that confirms that a policy has been written
and that describes the coverage in general.
✔✔Certificate of Authority - ✔✔A document that authorizes a company to start
conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
✔✔Certificate of Insurance - ✔✔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.
✔✔Coercion - ✔✔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.
✔✔Commingling - ✔✔A practice in which a person in a fiduciary capacity illegally mixes
his/her personal funds with funds he/she is holding in trust.
✔✔Commission - ✔✔The payment made by insurers to agents or brokers for the sale
and service of policies.
✔✔Commissioner - ✔✔The chief executive and administrative officer of a state
insurance department (in some states, known as Director or Superintendent).
✔✔Concealment - ✔✔The withholding of known facts that, 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.
✔✔Consideration - ✔✔The binding force in a contract that requires something of value
to be exchanged for the transfer of risk. The consideration on the part of the insured is
the representations made in the application and the payment of premium; the
consideration on the part of the insurer is the promise to pay in the event of loss.
✔✔Consumer Report - ✔✔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.
✔✔Controlled Business - ✔✔An entity that obtains and possesses a license solely for
the purpose of writing business on the owner, immediate family, relatives, employer and
employees.
✔✔Convertible - ✔✔A policy that may be exchanged for another type of policy by
contractual provision, at the option of the policyowner, and without evidence of
insurability (i.e. term life changed to a form of permanent life).
✔✔Countersignature - ✔✔The act of signing an insurance policy by a licensed resident
agent.
, ✔✔Coverage - ✔✔The inclusion of causes of loss (perils) which are covered within a
scope of a policy.
✔✔Credit Life Insurance - ✔✔A special type of coverage written to pay off the balance
of a loan in the event of the death of the debtor.
✔✔Death Benefit - ✔✔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.
✔✔Defamation - ✔✔An unfair trade practice in which one agent or insurer makes an
injurious statement about another with the intent of harming the person's or company's
reputation.
✔✔Dependent - ✔✔A person who relies on another for support and maintenance.
✔✔Director - ✔✔The chief executive and administrative officer of the Insurance
Department (in some states, known as Commissioner or Superintendent).
✔✔Disclosure - ✔✔An act of identifying the name of the producer, representative or
firm, limited insurance representative, or temporary insurance producer on any policy
solicitation.
✔✔Domestic Insurer - ✔✔An insurance company that conducts business in the state of
incorporation.
✔✔Domicile of Insurer - ✔✔Insurer's location of incorporation and the legal ability to
write business in a state.
✔✔Earned Premium - ✔✔The amount of the premium for which the policy protection
has been given.
✔✔Effective Date - ✔✔The date when an insurance policy begins (also known as the
inception date).
✔✔Employee Retirement Income Security Act (ERISA) - ✔✔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).
QUESTIONS AND ANSWERS SURE A+
✔✔Cash Value - ✔✔The amount to which a policyowner is entitled if the policy is
surrendered before maturity.
✔✔Certificate - ✔✔A statement or booklet that confirms that a policy has been written
and that describes the coverage in general.
✔✔Certificate of Authority - ✔✔A document that authorizes a company to start
conducting business and specifies the kind(s) of insurance a company can transact. It is
illegal for an insurance company to transact insurance without this certificate.
✔✔Certificate of Insurance - ✔✔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.
✔✔Coercion - ✔✔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.
✔✔Commingling - ✔✔A practice in which a person in a fiduciary capacity illegally mixes
his/her personal funds with funds he/she is holding in trust.
✔✔Commission - ✔✔The payment made by insurers to agents or brokers for the sale
and service of policies.
✔✔Commissioner - ✔✔The chief executive and administrative officer of a state
insurance department (in some states, known as Director or Superintendent).
✔✔Concealment - ✔✔The withholding of known facts that, 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.
✔✔Consideration - ✔✔The binding force in a contract that requires something of value
to be exchanged for the transfer of risk. The consideration on the part of the insured is
the representations made in the application and the payment of premium; the
consideration on the part of the insurer is the promise to pay in the event of loss.
✔✔Consumer Report - ✔✔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.
✔✔Controlled Business - ✔✔An entity that obtains and possesses a license solely for
the purpose of writing business on the owner, immediate family, relatives, employer and
employees.
✔✔Convertible - ✔✔A policy that may be exchanged for another type of policy by
contractual provision, at the option of the policyowner, and without evidence of
insurability (i.e. term life changed to a form of permanent life).
✔✔Countersignature - ✔✔The act of signing an insurance policy by a licensed resident
agent.
, ✔✔Coverage - ✔✔The inclusion of causes of loss (perils) which are covered within a
scope of a policy.
✔✔Credit Life Insurance - ✔✔A special type of coverage written to pay off the balance
of a loan in the event of the death of the debtor.
✔✔Death Benefit - ✔✔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.
✔✔Defamation - ✔✔An unfair trade practice in which one agent or insurer makes an
injurious statement about another with the intent of harming the person's or company's
reputation.
✔✔Dependent - ✔✔A person who relies on another for support and maintenance.
✔✔Director - ✔✔The chief executive and administrative officer of the Insurance
Department (in some states, known as Commissioner or Superintendent).
✔✔Disclosure - ✔✔An act of identifying the name of the producer, representative or
firm, limited insurance representative, or temporary insurance producer on any policy
solicitation.
✔✔Domestic Insurer - ✔✔An insurance company that conducts business in the state of
incorporation.
✔✔Domicile of Insurer - ✔✔Insurer's location of incorporation and the legal ability to
write business in a state.
✔✔Earned Premium - ✔✔The amount of the premium for which the policy protection
has been given.
✔✔Effective Date - ✔✔The date when an insurance policy begins (also known as the
inception date).
✔✔Employee Retirement Income Security Act (ERISA) - ✔✔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).
