LIFE ACCIDENT INSURANCE LATEST EXAM WITH
COMPLETE SOLUTION
401(k) Plan - answerCODA plan in which plan participants make contributions via salary
reductions, cash bonuses or thrift plans.
403(b) Tax-sheltered Annuity - answer401(k) plan for employees of nonprofit organizations and
public schools.
408(k) Plan - answerQualified plans for small employers. A mix of an IRA and profit-sharing plan.
More commonly referred to as a SEP.
Absolute - answerAn absolute assignment occurs when the policyowner assigns all rights
including cash values to another person or entity. Synonymous with voluntary assignment.
Absolute Value - answerA medical expense plan that pays a fixed maximum dollar amount for a
procedure.
Accelerated Benefit Rider - answerLife insurance rider which allows the insured to receive a
portion of the death benefit prior to death if the insured has a terminal illness.
Accidental Bodily Injury - answerDefinition of accident in which the injury is unintentional and
unexpected. Policies using this definition cover all injuries except self-inflicted injuries.
Accidental Death and Dismemberment (AD&D) - answerStandalone accident-only policy which
only pays benefits if an insured dies or has a dismembered body part as a result of an accident.
Accidental Death and Dismemberment (AD&D) Rider - answerPays a lump-sum benefit for death,
loss of limbs, or blindness. Identical to the standalone AD&D policy.
,Accidental Death and Dismemberment Rider - answerLife insurance rider which pays an
additional sum, termed the principal sum, to the beneficiary if the insured dies due to an accident.
Also applies to accidental death and dismemberment policies in which the policy will pay double
or triple the benefit based on dismemberment or death. Synonymous with multiple indemnity
rider.
Accidental Injury - answerAn unforeseen and unintentional bodily injury resulting from an
accident.
Accidental Means - answerRestrictive definition of accident in which the cause of the accident
must be unintentional and unexpected.
Accumulation at Interest - answerDividend option in which the insurer retains the dividend to be
invested.
Accumulation Period - answerThe pay-in period of an annuity during which the contract owner
pays premiums. Synonymous with accumulation phase.
Accumulation Phase - answerThe pay-in period of an annuity during which the contract owner
pays premiums. Synonymous with accumulation period.
Accumulation Units - answerA variable annuity contract owner's interest in the separate account
prior to annuitization.
Activities of Daily Living (ADLs) - answerFunctions of everyday life allowing an individual to
maintain independence. ADLs include bathing, dressing, eating, mobility, transferring, personal
hygiene, toileting, and continence.
Actual Charge - answerA physician's or medical provider's actual bill for services rendered
(Medicare).
,Actuaries - answerMathematicians employed by insurers to collect and analyze risk data.
Additional Monthly Benefit (AMB) - answerDisability income policy rider that pays disability
income benefits during the Social Security waiting period.
Adjustable Life - answerMix of whole and term insurance. The policyowner can modify the
premium, face amount, coverage period, and premium-paying period.
Adjusters - answerInvestigate losses and determine payment of claims.
Administrative Services Only - answerIn group health insurance, a group policy is self-funded and
the insurer is subcontracted only to process claims.
Admitted Insurers - answerInsurers authorized to transact insurance by holding a certificate of
authority in a particular state, district or commonwealth; synonymous with authorized insurers.
Adult Day Care - answerCare provided to an individual who does not need 24-hour care. Adult day
care may be provided in the home or at an adult day care facility.
Advance Beneficiary Notice - answerProvided to individuals by their medical providers stating
which medical services Medicare will not or probably will not cover.
Adverse Selection - answerTendency for poorer than average risks to seek insurance.
Age Discrimination in Employment Act (ADEA) - answerInsurance distribution system that uses
producers to transact insurance.
Agent Report - answerPart III of the application, also referred to as the producer's report. The
, agent report is used to underwrite coverage, but does not become part of the policy.
Agents - answerInsurance producers who represent the insurer, not the insured.
Aggregate Claim Amount - answerThe claim frequency rate and average cost per claim multiplied
together. This is one of the primary factors in establishing health insurance rates.
Agreement (Offer and Acceptance) - answerAn offer is made when the applicant submits an
application for insurance with initial premium to the insurer. The offer is accepted after it has
been approved by the insurer's underwriter. The agreement is one of the four elements required in
a contract.
Aleatory Contract - answerUnequal exchanges because payment of benefits is contingent upon the
occurrence of an uncertain loss.
Alien Insurer - answerAny insurer that conducts business in a country in which it wasn't
incorporated.
American with Disabilities Act (ADA) - answerLegislation enacted to prohibit employer
discrimination based on disability.
Ancillary Benefit - answerMiscellaneous expenses covered under a basic hospital expense plan.
Annual Renewable Term - answerLevel term insurance which has a level face amount and
increasing premiums.
Annuitant - answerThe individual whose life the annuity has been issued, and the person who
receives annuity payments.
Annuities - answerA contract which protects against the risk or living longer than expected.
COMPLETE SOLUTION
401(k) Plan - answerCODA plan in which plan participants make contributions via salary
reductions, cash bonuses or thrift plans.
403(b) Tax-sheltered Annuity - answer401(k) plan for employees of nonprofit organizations and
public schools.
408(k) Plan - answerQualified plans for small employers. A mix of an IRA and profit-sharing plan.
More commonly referred to as a SEP.
Absolute - answerAn absolute assignment occurs when the policyowner assigns all rights
including cash values to another person or entity. Synonymous with voluntary assignment.
Absolute Value - answerA medical expense plan that pays a fixed maximum dollar amount for a
procedure.
Accelerated Benefit Rider - answerLife insurance rider which allows the insured to receive a
portion of the death benefit prior to death if the insured has a terminal illness.
Accidental Bodily Injury - answerDefinition of accident in which the injury is unintentional and
unexpected. Policies using this definition cover all injuries except self-inflicted injuries.
Accidental Death and Dismemberment (AD&D) - answerStandalone accident-only policy which
only pays benefits if an insured dies or has a dismembered body part as a result of an accident.
Accidental Death and Dismemberment (AD&D) Rider - answerPays a lump-sum benefit for death,
loss of limbs, or blindness. Identical to the standalone AD&D policy.
,Accidental Death and Dismemberment Rider - answerLife insurance rider which pays an
additional sum, termed the principal sum, to the beneficiary if the insured dies due to an accident.
Also applies to accidental death and dismemberment policies in which the policy will pay double
or triple the benefit based on dismemberment or death. Synonymous with multiple indemnity
rider.
Accidental Injury - answerAn unforeseen and unintentional bodily injury resulting from an
accident.
Accidental Means - answerRestrictive definition of accident in which the cause of the accident
must be unintentional and unexpected.
Accumulation at Interest - answerDividend option in which the insurer retains the dividend to be
invested.
Accumulation Period - answerThe pay-in period of an annuity during which the contract owner
pays premiums. Synonymous with accumulation phase.
Accumulation Phase - answerThe pay-in period of an annuity during which the contract owner
pays premiums. Synonymous with accumulation period.
Accumulation Units - answerA variable annuity contract owner's interest in the separate account
prior to annuitization.
Activities of Daily Living (ADLs) - answerFunctions of everyday life allowing an individual to
maintain independence. ADLs include bathing, dressing, eating, mobility, transferring, personal
hygiene, toileting, and continence.
Actual Charge - answerA physician's or medical provider's actual bill for services rendered
(Medicare).
,Actuaries - answerMathematicians employed by insurers to collect and analyze risk data.
Additional Monthly Benefit (AMB) - answerDisability income policy rider that pays disability
income benefits during the Social Security waiting period.
Adjustable Life - answerMix of whole and term insurance. The policyowner can modify the
premium, face amount, coverage period, and premium-paying period.
Adjusters - answerInvestigate losses and determine payment of claims.
Administrative Services Only - answerIn group health insurance, a group policy is self-funded and
the insurer is subcontracted only to process claims.
Admitted Insurers - answerInsurers authorized to transact insurance by holding a certificate of
authority in a particular state, district or commonwealth; synonymous with authorized insurers.
Adult Day Care - answerCare provided to an individual who does not need 24-hour care. Adult day
care may be provided in the home or at an adult day care facility.
Advance Beneficiary Notice - answerProvided to individuals by their medical providers stating
which medical services Medicare will not or probably will not cover.
Adverse Selection - answerTendency for poorer than average risks to seek insurance.
Age Discrimination in Employment Act (ADEA) - answerInsurance distribution system that uses
producers to transact insurance.
Agent Report - answerPart III of the application, also referred to as the producer's report. The
, agent report is used to underwrite coverage, but does not become part of the policy.
Agents - answerInsurance producers who represent the insurer, not the insured.
Aggregate Claim Amount - answerThe claim frequency rate and average cost per claim multiplied
together. This is one of the primary factors in establishing health insurance rates.
Agreement (Offer and Acceptance) - answerAn offer is made when the applicant submits an
application for insurance with initial premium to the insurer. The offer is accepted after it has
been approved by the insurer's underwriter. The agreement is one of the four elements required in
a contract.
Aleatory Contract - answerUnequal exchanges because payment of benefits is contingent upon the
occurrence of an uncertain loss.
Alien Insurer - answerAny insurer that conducts business in a country in which it wasn't
incorporated.
American with Disabilities Act (ADA) - answerLegislation enacted to prohibit employer
discrimination based on disability.
Ancillary Benefit - answerMiscellaneous expenses covered under a basic hospital expense plan.
Annual Renewable Term - answerLevel term insurance which has a level face amount and
increasing premiums.
Annuitant - answerThe individual whose life the annuity has been issued, and the person who
receives annuity payments.
Annuities - answerA contract which protects against the risk or living longer than expected.
