Illinois Life & Health Insurance Exam
Questions and Answers
Accelerated Benefits - ANSWER-Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses
Accidental death benefits - ANSWER-a policy rider that states that the cause of death
will be analyzed to determine if it complies with the policy description of accidental
death
accidental death insurance - ANSWER-an insurance policy that provides payment if the
insureds death is the result of an accident
accumulation period - ANSWER-the time before an annuitants retirement during which
the annuitant is making payments or investments in the annuity
actual cash value (acv) - ANSWER-the required amount to pay damages or for property
loss. This amount is calculated based on the properties current replacement value
minus depreciation
adhesion - ANSWER-a contract offered on a take it or leave it basis by an insurer, in
which the insureds only option is to either accept or reject the contract. Any ambiguities
in the contract will be settled in favor of the insured
adjustable life - ANSWER-life insurance that permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period
adjuster - ANSWER-a representative of an insurance company who investigates and
acts not he behalf of the company to obtain agreements for the amount of the insurance
claim
administrator - ANSWER-an individual appointed by a court as a fiduciary to settle the
financial affairs and estate of a deceased person
admitted (authorized) insurer - ANSWER-an insurance company authorized and
licensed to transact business in a particular state
adverse selection - ANSWER-the tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present lower
probability
, agency - ANSWER-an insurance sales office or company
agent - ANSWER-an individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer
agent appointment - ANSWER-the authorization of an agent to act for or represent and
insurer
agents authority - ANSWER-special powers granted to an agent by his or her agency
contract
aleatory - ANSWER-a contract in which participating parties exchange unequal
amounts. insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss
alien insurer - ANSWER-an insurance company that is incorporated outside the united
states
annual statement - ANSWER-a detailed financial report that an insurance company
must submit every year to the insurance department of states in which it conducts
business
annuity - ANSWER-a contract that provides income for a specified period of years or life
apparent authority - ANSWER-the appearance or the assumption of authority based on
the actions, words, or deeds of the principal or because of circumstances the principal
created
applicant - ANSWER-a person making application for, or offering himself, herself or
another to be insured under an insurance contract
application - ANSWER-a document that provides information for underwriting purposes.
after the policy is issued, any unanswered questions are considered waived by the
insurer
assignment - ANSWER-the transfer of ownership rights of a life insurance policy from
one person to another
attained age - ANSWER-the age of the insured at a determined date
attending physicians statement (aps) - ANSWER-a statement usually obtained from the
applicants doctor
authorized (admitted) insurer - ANSWER-an insurance company authorized and
licensed to transact business in a particular state
Questions and Answers
Accelerated Benefits - ANSWER-Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses
Accidental death benefits - ANSWER-a policy rider that states that the cause of death
will be analyzed to determine if it complies with the policy description of accidental
death
accidental death insurance - ANSWER-an insurance policy that provides payment if the
insureds death is the result of an accident
accumulation period - ANSWER-the time before an annuitants retirement during which
the annuitant is making payments or investments in the annuity
actual cash value (acv) - ANSWER-the required amount to pay damages or for property
loss. This amount is calculated based on the properties current replacement value
minus depreciation
adhesion - ANSWER-a contract offered on a take it or leave it basis by an insurer, in
which the insureds only option is to either accept or reject the contract. Any ambiguities
in the contract will be settled in favor of the insured
adjustable life - ANSWER-life insurance that permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period
adjuster - ANSWER-a representative of an insurance company who investigates and
acts not he behalf of the company to obtain agreements for the amount of the insurance
claim
administrator - ANSWER-an individual appointed by a court as a fiduciary to settle the
financial affairs and estate of a deceased person
admitted (authorized) insurer - ANSWER-an insurance company authorized and
licensed to transact business in a particular state
adverse selection - ANSWER-the tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present lower
probability
, agency - ANSWER-an insurance sales office or company
agent - ANSWER-an individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer
agent appointment - ANSWER-the authorization of an agent to act for or represent and
insurer
agents authority - ANSWER-special powers granted to an agent by his or her agency
contract
aleatory - ANSWER-a contract in which participating parties exchange unequal
amounts. insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss
alien insurer - ANSWER-an insurance company that is incorporated outside the united
states
annual statement - ANSWER-a detailed financial report that an insurance company
must submit every year to the insurance department of states in which it conducts
business
annuity - ANSWER-a contract that provides income for a specified period of years or life
apparent authority - ANSWER-the appearance or the assumption of authority based on
the actions, words, or deeds of the principal or because of circumstances the principal
created
applicant - ANSWER-a person making application for, or offering himself, herself or
another to be insured under an insurance contract
application - ANSWER-a document that provides information for underwriting purposes.
after the policy is issued, any unanswered questions are considered waived by the
insurer
assignment - ANSWER-the transfer of ownership rights of a life insurance policy from
one person to another
attained age - ANSWER-the age of the insured at a determined date
attending physicians statement (aps) - ANSWER-a statement usually obtained from the
applicants doctor
authorized (admitted) insurer - ANSWER-an insurance company authorized and
licensed to transact business in a particular state
