Life and Health Insurance - Ohio Licensing Exam Multiple Choices Questions With Correct Detailed Answers Guaranteed Pass.

Absolute Assignment - Correct Answers The assignment by the policy owner of all control and rights to a third party. This differs from collateral assignment, which allows all the rights and control to revert to the owner once a loan is paid off Accident - Correct AnswersA fortuitous event; unforeseen and unintended Accidental Death Insurance - Correct Answers A form of health insurance that provides payment if death of the insured results from accident. Accidental death insurance is often combined with dismemberment insurance in a form called accidental death and dismemberment (AD&D) Accident and Sickness - Correct Answers Insurance against bodily injury, disability, or death by accident or accidental means, or expense thereof, or against disability or expense resulting from sickness and the insurance relating thereto Accident means - Correct AnswersThe unexpected cause of an accidental bodily injury. Under an accidental means definition, the mishap itself must be accidental. If a person does something to contribute to the accident, the claim would not be paid under this restrictive definition Accelerated benefit - Correct Answers Available only if the benefits are available during the insured's lifetime, benefit amounts are fixed when accelerated, and the benefits, when paid, reduces the death benefit Accumulation at interest option - Correct AnswersA dividend option under which the policy owner allows dividends to accumulate at interest with the company. Only the interest on the dividends is taxable as income (participating policies only). Actuary - Correct AnswersOnce concerned with the application of probability and statistical theory to insurance. This person sets expenses, and interest assumptions. ADB - Correct AnswersAccidental death benefit, also known as double indemnity. There is another variation called triple indemnity. AD&D - Correct AnswersAccidental death and dismemberment insurance. Administrator - Correct AnswersThe person appointed by a court to settle a deceased's estate, sometimes called and executor. Adverse selection - Correct AnswersSelection against the insurance company. The tendency of poorer risks to want insurance more often than standard risks. Agent - Correct AnswersThe individual appointed by an insurance company to solicit, negotiate, effect, or countersign insurance contracts on its behalf. Aleatory - Correct AnswersSomething that depends upon chance or is random. It is derived from the Latin idea of "rolling the dice." Aleatory contract - Correct AnswersA contract in which both parties know that one or the other may receive more than paid in. This payment is dependent upon a fortuitous event. For example. a person pays the premium for a term policy for many years and does not die, thus, a claim is never filed. Alien company - Correct AnswersAn insured organized and domiciled in a country other than the United States Annuitant - Correct AnswersThe one receiving the Annuity and on whose life expectancy the rates are figured. Annuity - Correct Answers1. An amount of money, payable monthly or yearly, which liquidates a financial asset. 2. An agreement by an insurer to make periodic payments that continue during the survival of the annuitant(s) or for a specified period. Annuities are also accumulations vehicles that function much like savings accounts. Applicant - Correct AnswersThe party making application to the insurance company for the policy Application - Correct AnswersA form on which the prospective insured states facts requested by the insurer and on the basis of which the insurer decides whether to accept the risk, modify the coverage offered, or decline the risk. Assignee - Correct AnswersThe person to whom policy rights are assigned in whole or in part by the policy owner. Assignment - Correct AnswersThe transfer of rights in a policy to someone other than the policy owner. Attained age - Correct AnswersThe present age of the insured. This is a factor when a person converts term insurance to whole life insurance or buys added disability under a GIR provision Attorney-in-fact - Correct AnswersA person to whom authorization is given by an individual to exchange insurance with other persons. Always present in a reciprocal insurance company. Authorized company - Correct AnswersAn insurer permitted to sell insurance within a state, evidenced by a certificate of authority from the insurance commissioner, also called ADMITTED Automatic premium loan - Correct AnswersA provision in a life policy authorizing the insurance company to use the loan value to pay premiums not paid by the end of the grace period. May be present in whole life or other traditional cash value policies only, but never in term policies Aviation clause - Correct AnswersLimits or excludes coverage when the insured is participating in specified types of air travel, cush as private planes. Coverage is usually fully in force for people on regularly scheduled commercial flights. The limit or exclusion often applies to student pilots Beneficiary - Correct AnswersA person who may become eligible to receive, or is receiving, benefits under an insurance plan, other than as a participant. Blanket Insurance Contract - Correct AnswersA contract of Health Insurance that covers all of a class of persons not individually identified. No certificates are issued and people covered may not be aware that the coverage is in place. Blue Plan - Correct AnswersThe generic term for those insurers (usually on a service rather than a reimbursement bases) who are authorized to use the designation Blue Cross or Blue Shield and the insignia of either. Broker - Correct AnswersOne who represents an insured in the solicitation, negotiation, or procurement of contracts of insurance, functions. This person is also called an independent agent. Business Insurance - Correct AnswersLife or Health insurance written to vober business situations, such as key person, sole proprietor, partnership, corporations, ect. Cancelable - Correct AnswersA contract of Insurance that may be terminated by the insurance company or insured at any time. Virtually every form of insurance is cancelable except Life insurance and those health policies designated as guaranteed renewable, or non-cancelable and guaranteed renewable. Cancellation - Correct AnswersThe termination of a contract of insurance in force by voluntary act of the insurance company or insured, effected in accordance with provisions in the contract or by mutual agreement. Capital Sum - Correct AnswersThe maximum amount payable in one sum in the event of accidental dismemberment. It is typically half of the face amount of principal sum. Cash Surrender Value - Correct AnswersThe value reposing in a policy that is the legal property of the policy owner and that may be expected should the policy be surrendered for cash. Synonymous with cash value. Certificate - Correct AnswersA statement Evidencing that a policy has been written and stating the coverage in general. Often used with group coverage. Claim - Correct AnswersA demand for payment under the insurance policy. Classification - Correct AnswersThe grouping of persons for the purpose of determining an underwriting or rating group into which a particular risk must be placed. Co-Insurance - Correct AnswersIn Health Insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. Collateral Assignment - Correct AnswersThe assignment of part of the proceeds of an insurance policy to a bank as collateral to settle the loan balance that may exist at the insured's death. This agreement is temporary. Common Disaster Provision - Correct AnswersA provision that can be included in a Life contrat that pvoides that the primary beneficiary must outlive the insured by a specified period of time in order to receive the proceeds. If not, the contingent beneficiary receives that proceeds. The provision is designed to protect the rights of the contingent beneficiary in the event of simultaneous death of the insured and the primary beneficiary. The time limit is up to 90 days, depending on state law. Comprehensive Health or Major Medical Insurance - Correct AnswersA form of Health insurance that combines the coverage of major medical and basic medical exspenses crontracts into one broad contract that provides coverage for almost all types of medical expense with few internal limits. Usually subject to a corridor deductible for expenses after the first dollar base plan limits are exceeded, and to a co-insurance clause applicable to all or some of the remaining covered expenses. Concealment - Correct AnswersThe withholding of facts by an applicant for insurance that materially affect an insurance risk or loss. Conditional Receipt - Correct AnswersA provision that, if premium settlement accompanies the application, coverage shall be in for from the date of application, provided the insurance company would have issued the coverage on the basis of facts as revealed by the application and other usual sources of underwriting information. A physical does not have to be completed for the company to make this judgment Conditionally Renewable - Correct AnswersA contract of Health Insurance that provides that the insured may renew the contract to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions defined in the contract. Conditions - Correct AnswersThe part of an insurance contract setting out the responsibilities of both the insured and the insurer Consideration - Correct AnswersThe exchange of value on which a contract is based. In life and health insurance, the consideration is the premium plus the statements in the application. Consideration Clause - Correct AnswersA clause in a Life policy specifying the premium due for the insurance protection and the frequency of payment. Also called mode. Contingent Beneficiary - Correct AnswersThe person or persons named to receive benefits if the primary beneficiary is not alive. Contract - Correct AnswersA legal agreement between two parties for the consideration, such as an insurance policy. Contributory Group - Correct AnswersGroup insurance for which the employees pay part of the premium. Controlled Business - Correct AnswersLife insurance coverage written on the agent's own life and on the lives of such persons as the agent's relatives and business associates, or employees of a company in which an agent has an interest. Convertible term insurance - Correct AnswersA term policy that can be converted to a permanent type of coverage without proof of insurability Corridor Deductible - Correct AnswersA deductible used only in comprehensive major medical that applies between benefits paid by the basic plan and the start of the major medical benefits Credit Insurance - Correct AnswersInsurance on a debtor in favor of a lender, intended to pay off a loan or the balance due if the insured dies or is disabled. Death Benefit - Correct AnswersThe policy proceeds to be paid on the death of the insured. Deductible - Correct AnswersDollars or percentage of expense that will not be reimbursed by the insurer. Decreasing term insurance - Correct AnswersTerm insurance whose amount of coverage starts out at the full amount, then gradually decreases until the expeiration date of the policy. Deferred annuity - Correct AnswersAn annuity on which payments to the annuitant are delayed until a specified future date. Direct Writer - Correct AnswersAn insurance company that sells its policies through licensed agents who represent the insurer exclusively, rather than through independent local agents who represent several insurance companies. Disability income insurance - Correct AnswersA form of health insurance that provides periodic payments to replace income, actually or presumptively lost, when the insured is unable to work as a result of sickness or injury. Dismemberment benefits - Correct AnswersBenefits paid for the loss of eyesight or limbs. Dividend - Correct AnswersThe return of part of the premium paid for a participating policy Dividend options - Correct AnswersWays an insured may receive policy dividends. Domestic insurance company - Correct AnswersAn insurance company formed under the laws of the state in which the insurance is written. Double indemnity - Correct AnswersPayment of twice the basic benefit in the event of loss resulting from specified cause or under specific circumstances. Dread Disease Policy - Correct AnswersA policy, usually offering blanket coverage up to a very high maximum, for certain specified diseases only, such as cancer. Earned premium - Correct AnswersThe portion of the premium for which policy protection has already been given during the non-expired portion of the policy term. Effective Date - Correct AnswersThe date on which an insurance policy or bond goes into effect and from which protection is furnished. Eligibility Period - Correct AnswersThe period following the probationary period, during which the employee is eligible to obtain non-medical coverage under the group life plan. Embedded Deductible - Correct AnswersEmbedded deductible will only cover a family member in a high deductible health insurance plan after the individual's personal deductible has already been met. Employer mandate - Correct AnswersA requirement under the affordable care act that businesses that employ 50 or more people and do not offer health insurance will pay a tax penalty beginning 2015 Endorsment - Correct AnswersA form attached to an insurance contract changing part of the contract. Sometimes called a rider. Essential Health Benefits (EHB) - Correct AnswersThe minimum coverage requirements for health insurance under the affordable care act. the qualified plans must be guarantee issue with a no pre-existing conditions and no lifetime benefit maxiumums Estoppel - Correct AnswersThis concept is related to waiver. Once a person or company waives a known right, the waiver cannot be reversed. Exclusions - Correct AnswersCauses, conditions, or property listed in the policy that are not covered and for which no benefits. Experience - Correct AnswersThe loss record of an insured, a class of coverage, or an insurance company. Extended term option - Correct AnswersA life insurance non-forfeiture option, under which the insured uses the policy's cash value accumulation to purchase single-premium term insurance in an amount equal to the original policy face amount Face Amount - Correct AnswersThe amount indicated on the face of the policy that will be paid at death or when the policy matures. Fee-for-service plan - Correct AnswersReimburses the insured or the provider for the covered services costs and has a limited choice of providers. Fiduciary - Correct AnswersA person who occupies a position of special trust and confidence. Fixed amount option - Correct AnswersA settlement option under which the beneficiary receives a fixed amount for an unspecified period of time. Payments continue until the principal and interest depleted. Fixed period option - Correct AnswersA settlement option under which the beneficiary receives a regular income for a specified period of time. At the end of the period, all principal and interest have been paid out. Foreign company - Correct AnswersAn insurer organized under laws of a state other than the state in which the insurance is written. Fraud - Correct AnswersAn intentional misrepresentation made by a person with intent to take advantage of another. General Agent - Correct AnswersAn individual appointed by an insurer to administer its business in a given territory. Grace period - Correct AnswersA period of time after the premium due date during which a policy remains in force without penalty, even though the premium due has not been paid. Grievance - Correct AnswersA written or oral complaint involving an urgent care request in which the covered person complained during a utilization review, claims payment, handling, or reimbursement, or the contractual relationship with the carrier. Group Contract - Correct AnswersA contract of insurance made with an employer or other entity that covers a group of people identified as individuals by reference to their relationship to the entity. A group contract may be life insurance, health insurance, or an annuity. Group Life Insurance - Correct AnswersLife insurance that a person is eligible to purchase through membership in a group. The group may not be formed just to buy insurance. Guaranty Association - Correct AnswersA state association that takes control of an insolvent insurance company and provides the funds to pay for claims that the company is unable to pay. Guaranteed Insurability - Correct AnswersA rider in life and health insurance contracts that permits the insured to buy addition prescribed amounts of insurance, at prescribed intervals, without evidence of insurablility. Guaranteed Renewable - Correct AnswersA contract that gives the insured continued coverage in return for the timely payment of premiums for a substantial period of time. During that period of time, the insurer has no right to make any change in any provision of the contract other than a change in the premium rate for all insureds in the same class. Hazard - Correct AnswersAny factor tending to make a policy owner a less desirable risk for the insuring company. May be physical or moral (health, occupation, dangerous sports, criminality, or immorality) Health Insurance - Correct AnswersBroadly, coverage to provide benefits on the occurrence of disabling sickness or accident or accidental death or dismemberment, or loss of income due to disability. Health insurance association - Correct AnswersA state fund that provides health insurance to residents who have been denied coverage, and the fund is maintained by assessments of the authorized health insurers in the state. Health Insuring Corporation (HIC) - Correct AnswersAn organization of health providers: this is the Ohio term for an HMO. Each member pays a premium for which he receives medical care when desired. The emphasis is on preventive medicine. High Deductible Health Insurance Plan (HDHP) - Correct AnswersA required type of high deductible health insurance plan for employers who want to provide a health savings account to their employees. Health Savings Account (HSA) - Correct AnswersAn account established by an employer for employees. Both the employer and employee can make pre-tax contributions that will cover certain qualified medical expenses and other allowable expenses Hospital Expense or Income policy - Correct AnswersA policy that pays a stated amount per week or month while the insured is hospitalized, without reference to expenses actually incurred. It might be viewed as a disability income policy with disability defined as hospitalization. This policy pays in addition to other policies. Hospitalization Expense Policy - Correct AnswersA policy that covers daily hospital room and board charges and also covers miscellaneous hospital expenses (such as X-Rays). It also often covers emergency treatment charges and many times will also include a surgical benefit. This is a basic plan Individual Mandate - Correct AnswersThe requirement that all individuals with a few exceptions are covered by an approved health plan containing at least the essential health benefits provided by the Affordable Care Act. Immediate Annuity - Correct AnswersA lump-sum annuity on which the income payments to the annuitant begin at once In-person Assister - Correct AnswersAny person, other than a navigator, who receives any funding form, or who is selected or designated by, an exhange, the state, or the federal government to perform any of the activities and duties identified above those on an insurance navigator. Incontestable Clause - Correct AnswersProvides that, after the policy has been in force a certain length of time, the company can no longer contest or void it, except for nonpayment of premiums or the insurer proving fraud. The time period is usually two years. Indemnify - Correct AnswersTo restore the victim of a loss, in whole or in part, by payment, repair, or replacement. Indemnity - Correct AnswersInsurance is designed to restore the policy owner to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only: the insured should not profit from a loss situation. Individual Contract - Correct AnswersA contract of life or health insurance made with an individual that covers him, and in certain instances (like health policies), Specified members of the househould Industrial Life - Correct AnswersLife insurance generally with a face amount of less that $1,000, with premiums collected monthly or more frequently by the agent in person. The grace period for this type of insurance is 28 days. Premiums were traditionally collected at the factory or workplace. Inpatient - Correct AnswersA patient admitted to a hospital as a resident patient. Insurability - Correct AnswersThe acceptability of an applicant to the insurance company for insurance. Insurable Interest - Correct AnswersAn interest in the case of an individual owning a policy on the life of another by which there will be a loss if the insured dies. The interest may be based on either a family relationship or economic factor. Insurable interest must exist at the time of application, but not at the time of loss. Insurance - Correct AnswersA contract or device for the transfer of pure risk to an insurer, who agrees, for a consideration, to indemnify or pay a specified amount for losses suffered by the insured. Insurance age - Correct Answersan age upon which current premium rates may be established. It is commonly based on age at last birthday, age at next birthday, or age at nearest birthday. Insurance Director - Correct AnswersThe common title for the head of the state deparment of insurance Insurance navigator - Correct AnswersA person or entity selected to perform certain duties identified in the affordable care act and is performing these functions under a grant. Insurance policy - Correct AnswersA contract or legal document that establishes the terms of agreement between the insurer and insured. Insured - Correct AnswersThe party to an insurance arrangement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service. In prepaid hospital service plans, the insured is called the subscriber. Insurer - Correct AnswersThe insurance company assuming risk and agreeing to pay claims or provide services Insuring Clause - Correct AnswersThe clause in a policy that specifies, in brief, the contract's intent and benefits Interest Option - Correct AnswersA settlement option under which the insurer keeps the insurance proceeds and invests them on behalf of the beneficiary. The beneficiary receives the interest from the investment. The proceeds remain the property of the beneficiary. The proceeds are not taxable but the interest is. Irrevocable Beneficiary - Correct AnswersCannot be changed without the named beneficiary's consent, and the irrevocable beneficiary takes over owner-like rights to the policy. Joint and Survivorship Life Annuity - Correct AnswersPayments are made to two annuitants, with the survivor continuing to receive payments after the first annuitant dies. Joint Life Annuity - Correct AnswersPayments continue to two annuitants for only as long as both live. On the death of either one, payments stop. Jumping Juvenile - Correct AnswersJuvenile insurance on which the face amount increases by a multiple, usually five, of the original face amount when the insured reaches 21. Key person Insurance - Correct AnswersLife or health insurance on important employees whose death or disability would cause the employer financial loss. The insurance is usually owned by the payable to the employer. Lapse - Correct AnswersThe termination of a policy because of failure to pay the premium. Law of Large Numbers - Correct AnswersAn insurance company might protect losses on a homogeneous group. Risks are not usually considered insurable unless the insurer has a large enough base of previous loss experience to be able to accurately predict future losses. It is the law of large numbers that makes accurate predictions of similar risks possible. Mortality tables are based on groups of at least 10,000,000 people Legal reserve - Correct AnswersThe amount required as a reserve to pay claims and benefits, using he mortality table and a maximum assumed interest rate prescribed by state law. Level premium insurance - Correct AnswersLife insurance, the premium for which remains at the same level (amount) throughout the life of the policy Level Term Insurance - Correct AnswersThe amount of insurance protection in the term policy remains constant during the policy period. Life Annuity - Correct AnswersAn annuity that provides a periodic income to the annuitant during the annuitant's lifetime. Life annuity with installments certain - Correct AnswersAn annuitant or a beneficiary is guaranteed to receive payments for a specified number of years or for life, whichever is longer. If the annuitant dies before all all guaranteed payments have been made, the beneficiary receives the payments for the rest of the certain period. Life Income Option - Correct AnswersA settlement option that provides for payments during the entire life of the payee. There are four methods: 1. Straight life income - the payee receives a specified income for life, with no refunds upon death. 2. Refund Annuity - income is paid for the lifetime of the payee and a remainder goes to a second payee in installments or a lump sum if the first dies before receiving the full proceed of the policy; 3. Life income certain - The payee receives installments for life with a second payee receiving the payments if the first dies before the end of the time specified in the certain period; 4. Joint and reduced survivor life income - two payees are recipients of the income for the life of the firs. The surviving payee then receives a lesser amount. Life Insurance - Correct AnswersPays a specified amount on the death of the insured, to his estate or to a beneficiary. Limited Health Policies - Correct AnswersDo not provide the same level of coverage as other health policies and provide fewer types of medical expenses and higher coinsurance, co-payments, and deductibles. Limited Pay Life - Correct AnswersA permanent Life insurance policy on which premiums are paid for a specified number of years or to a specified age of the insured. Protection continues for the entire life of the insured. Policy maturity does not occur until age 120 even though the policy is paid up earlier. LP65 an 20-Pay life are examples Loading - Correct AnswersThe amount added to insurance costs to cover the operation expenses of the insurer. Loan Value - Correct AnswersThe amount of cash value reposing in a policy that may be borrowed by the insured. Long Term Disability - Correct AnswersA disability having duration longer than a short-term disability, which generally pays benefits from 13 weeks, 6 months, or 2 years. A 5-year payout would be called long term. Loss - Correct AnswersAn unpredictable reduction in the quality, quantity, or value of something - for example, bodily injury, disease, property damage, physical disappearance of property, incurred expenses, death, etc. Loss of Income Benefits - Correct AnswersBenefits paid for Inability to work for remuneration because of disability resulting from accidental bodily injury or sickness. The loss of income may be real or presumptive. Loss Ratio - Correct AnswersThe percentage of losses to premiums - usually losses incurred to premiums earned. Lump Sum - Correct AnswersThe proceeds of a policy taken all at once Major Medical Insurance - Correct AnswersA type of health insurance that provides benefits for most types of medical expenses incurred up to a high limit, subject to a deductible. Such contracts may contain a percentage participation clause (sometimes called the co-insurance clause) A major medical policy pays expenses both in and out of the hospital Manual Rates - Correct AnswersInsurance rates according to a company rate manual, which will vary from company to company. Can also refer to rates developed by the application of a recognized rating plan. Often called standard rates. Market Value Annuity - Correct AnswersThe type of fixed annuity that pays a specific rate of interest if held to maturity, but if surrendered before maturity could result in a higher or lower payout, depending upon current interest rates. Master Policy - Correct AnswersThe policy contract issued to the employer under a group insurance plan. Material Misrepresentation - Correct AnswersA misrepresentation that would have been important or essential to the underwriter's decision to issue or rate the policy. Maturity - Correct AnswersA life policy is mature when the face amount is payable. Whole Life Matures at age 100. MEC, Modified Endowment Contract - Correct AnswersA life insurance policy that has excessive premiums paid into it in the first seven years, called the seven-pay test, and once a policy is marked as MEC, it can never be reversed Medicaid - Correct AnswersA medical benefits program administered by states and subsidized by the federal government. Under this plan, various medical expenses will be paid to those who qualify, regardless of age, subject to an income/asset test Medicare Benefits - Correct AnswersBenefits provided by a federal program as part of the social security program. They apply to persons over 65 years of age and certain disabled beneficiaries under the social security disability income program. Medical Examination - Correct AnswersExamination by a physician behalf of an applicant for insurance or in substantiation of a claim Medical Expense Insurance - Correct AnswersA form of health insurance that provides benefits for medical, surgical, and hospital expenses. This term is used to include coverage under the names hospital surgical expense insurance and medical insurance. MIB - Correct AnswersMedical Insurance Bureau. An organization serving as a clearinghouse of medical information on risks reported to it by insurance companies that are members of the service. Information is reported to them as a source of underwriting information on applicants. Miscellaneous Expenses - Correct AnswersUsually hospital charges other than room and board, such as x-rays, drugs, lab fees, ect Misrepresentation - Correct AnswersThe use of written or oral statements of the insured or insurance company misrepresenting the risk, terms, coverage, benefits, privileges, or estimated future dividends of any policy, or the health of the insured. Misstatement of Age Clause - Correct AnswersProvides that, if misstatement of age is discovered after policy issue, the company can, if the insured is currently alive, adjust the premium amount on future premiums and request payment of the additional premium the policy owner should have paid. If the insured has died, the company can adjust the face amount of the policy to fit the premium that was paid at the correct age before paying the claim. Modal Premium - Correct AnswersThe premium paid according to the mode of payment selected by the policy owner Moral hazard - Correct AnswersA condition of morals or habits that increases the probability of loss from peril