4/11/25, 9:22
PM
WEBCE LIFE AND HEALTH EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
5.0 (1 review)
Save
Terms in this set (281)
Representations are statements the applicant makes on an application that are
Representations and Warranties deemed to be true to the applicant's best knowledge. Warranties are statements
the insurer makes in the contract.
Two related insurance company functions. Through the process of_______,
applications are assessed for insurability and to assign premium rates. The ________
Underwriting vs. Actuarial Departments
department analyzes data to help estimate future losses and to produce
rate
tables.
Two variations of the career agency system in which producers represent a
Managerial System vs. General Agency
single company. One is headed by a company employee called a general
System
manager (GM), the other by an independent contractor called a general
agent (GA).
A non-profit form of insurance provider sponsored by an organization of people
Fraternal Insurance Company
who share a common ethnic, religious, or vocational affiliation.
Two related general insurance terms:
Peril and Hazard Peril is the immediate cause of a loss (and the event that is insured against).
Hazard is any condition that increases the risk of incurring a loss.
A type of contract in which one party (the offeror) drafts the terms that must be
Contract of adhesion
accepted as-is by the offeree. Insurance policies are this type.
A form of insurance company that is owned by policyowners. May distribute
Mutual Insurance Company
policy dividends (non-taxable) through participating policies.
An insurance distribution system in which the manager and producers are fully
Independent Agency System
independent and not affiliated with any single insurer.
Two related disclosure documents that are required by most states to be
Buyer's Guide and Policy Summary presented to life and health insurance applicants at some point during the
buying process.
Risk A basic insurance term referring to the possibility of incurring a loss.
A mathematical principle that is the basis for predicting the odds of a loss
Law of Large Numbers
occurring in a certain population in any given year.
A federal insurance program that provides disability, death, and retirement
Social Security (OASDI)
benefits to covered workers and their qualifying beneficiaries.
1/
9
, 4/11/25, 9:22
PM
Two basic types of insurance producer: an_____represents a single insurer and a
Agents vs. Brokers
____sells policies from multiple insurers.
The process through which insurance companies spread large risks among other
Reinsurance
insurers.
Insurers can be categorized by their state of domicile. There are three
Domestic, Foreign, and Alien Insurers
categories, known as _____, _____, and _.
A form of insurance company that is owned by stockholders who may or may
Stock Insurance Company
not also be policyowners. May distribute stock dividends (taxable).
An insurer that has a certificate of authority in a given state is said to be an___________
Admitted Insurer
insurer in that state.
Express authority—The right to sign an application as an agent for the insurer.
Implied authority—Using a computer program to identify insurance needs and to
Express, Implied, and Apparent Authority recommend solutions.
Apparent authority—Advising the applicant to not disclose on the application any
important health facts that might reduce his or her insurability.
Two forms of insurance contract. An indemnity contract bases policy benefits on
Indemnity vs. Valued Contract reimbursement of actual losses. A valued contract bases benefits on a
stated
amount without regard for the value of the loss.
An unplanned reduction in economic value resulting from the occurrence of a
Loss
covered peril.
A federal insurance program that provides medical care benefits to covered
Medicare
workers (retirees).
The process by which an insurance company assesses an application to
Underwriting
determine if it represents an insurable risk.
The natural process by which people contend with the perils faced daily, of which
Risk Management
there are five common techniques.
The five basic elements of a valid contract Offer, acceptance, consideration, competent parties, and legal purpose
The willful nondisclosure of material facts on an application for the purpose of
Concealment
obtaining insurance.
Loss must be definable and measurable.
The covered peril must be accidental or outside the insured's control.
Insurable Risk (5 Criteria) The risk must be shared by a large group of similar risks.
The loss must not be catastrophic.
The risk must not be generally excluded from coverage.
The needs approach to determining life insurance needs is based on a detailed
review of a person's specific situation. It examines personal and family income,
Needs Approach
liabilities, and assets, as well as future financial goals, to calculate the right amount
of life insurance.
In estate planning, this rule requires life insurance policies transferred from
Bring-Back Rule the insured within 3 years before death to be returned to the decedent's
estate for valuation purposes.
Living benefits are made possible by the policy's cash value, which is always
Life Insurance "Living Benefits" available to the policyowner through policy loans, withdrawals, and partial
surrenders. The funds may be used for any purpose.
If a key employee ends his or her employment, the employer can continue the
policy in force. However, many employers choose to:
Key Person Life Insurance sell the policy to the insured for an amount equal to its cash value
surrender the policy or
change insureds if allowed by the insurance company and applicable state law
2/
9
PM
WEBCE LIFE AND HEALTH EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS
5.0 (1 review)
Save
Terms in this set (281)
Representations are statements the applicant makes on an application that are
Representations and Warranties deemed to be true to the applicant's best knowledge. Warranties are statements
the insurer makes in the contract.
Two related insurance company functions. Through the process of_______,
applications are assessed for insurability and to assign premium rates. The ________
Underwriting vs. Actuarial Departments
department analyzes data to help estimate future losses and to produce
rate
tables.
Two variations of the career agency system in which producers represent a
Managerial System vs. General Agency
single company. One is headed by a company employee called a general
System
manager (GM), the other by an independent contractor called a general
agent (GA).
A non-profit form of insurance provider sponsored by an organization of people
Fraternal Insurance Company
who share a common ethnic, religious, or vocational affiliation.
Two related general insurance terms:
Peril and Hazard Peril is the immediate cause of a loss (and the event that is insured against).
Hazard is any condition that increases the risk of incurring a loss.
A type of contract in which one party (the offeror) drafts the terms that must be
Contract of adhesion
accepted as-is by the offeree. Insurance policies are this type.
A form of insurance company that is owned by policyowners. May distribute
Mutual Insurance Company
policy dividends (non-taxable) through participating policies.
An insurance distribution system in which the manager and producers are fully
Independent Agency System
independent and not affiliated with any single insurer.
Two related disclosure documents that are required by most states to be
Buyer's Guide and Policy Summary presented to life and health insurance applicants at some point during the
buying process.
Risk A basic insurance term referring to the possibility of incurring a loss.
A mathematical principle that is the basis for predicting the odds of a loss
Law of Large Numbers
occurring in a certain population in any given year.
A federal insurance program that provides disability, death, and retirement
Social Security (OASDI)
benefits to covered workers and their qualifying beneficiaries.
1/
9
, 4/11/25, 9:22
PM
Two basic types of insurance producer: an_____represents a single insurer and a
Agents vs. Brokers
____sells policies from multiple insurers.
The process through which insurance companies spread large risks among other
Reinsurance
insurers.
Insurers can be categorized by their state of domicile. There are three
Domestic, Foreign, and Alien Insurers
categories, known as _____, _____, and _.
A form of insurance company that is owned by stockholders who may or may
Stock Insurance Company
not also be policyowners. May distribute stock dividends (taxable).
An insurer that has a certificate of authority in a given state is said to be an___________
Admitted Insurer
insurer in that state.
Express authority—The right to sign an application as an agent for the insurer.
Implied authority—Using a computer program to identify insurance needs and to
Express, Implied, and Apparent Authority recommend solutions.
Apparent authority—Advising the applicant to not disclose on the application any
important health facts that might reduce his or her insurability.
Two forms of insurance contract. An indemnity contract bases policy benefits on
Indemnity vs. Valued Contract reimbursement of actual losses. A valued contract bases benefits on a
stated
amount without regard for the value of the loss.
An unplanned reduction in economic value resulting from the occurrence of a
Loss
covered peril.
A federal insurance program that provides medical care benefits to covered
Medicare
workers (retirees).
The process by which an insurance company assesses an application to
Underwriting
determine if it represents an insurable risk.
The natural process by which people contend with the perils faced daily, of which
Risk Management
there are five common techniques.
The five basic elements of a valid contract Offer, acceptance, consideration, competent parties, and legal purpose
The willful nondisclosure of material facts on an application for the purpose of
Concealment
obtaining insurance.
Loss must be definable and measurable.
The covered peril must be accidental or outside the insured's control.
Insurable Risk (5 Criteria) The risk must be shared by a large group of similar risks.
The loss must not be catastrophic.
The risk must not be generally excluded from coverage.
The needs approach to determining life insurance needs is based on a detailed
review of a person's specific situation. It examines personal and family income,
Needs Approach
liabilities, and assets, as well as future financial goals, to calculate the right amount
of life insurance.
In estate planning, this rule requires life insurance policies transferred from
Bring-Back Rule the insured within 3 years before death to be returned to the decedent's
estate for valuation purposes.
Living benefits are made possible by the policy's cash value, which is always
Life Insurance "Living Benefits" available to the policyowner through policy loans, withdrawals, and partial
surrenders. The funds may be used for any purpose.
If a key employee ends his or her employment, the employer can continue the
policy in force. However, many employers choose to:
Key Person Life Insurance sell the policy to the insured for an amount equal to its cash value
surrender the policy or
change insureds if allowed by the insurance company and applicable state law
2/
9
