ILLINOIS LIFE & HEALTH INSURANCE EXAM
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QUESTIONS, CORRECT ANSWERS AND
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Updated 2026 Questions and Answers
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,adverse selection the tendency of risks with higher probability of loss to purchase and maintain insurance
more often than the risks who present lower probability
agency an insurance sales office or company
agent an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of
the insurer
agent appointment the authorization of an agent to act for or represent and insurer
agents authority special powers granted to an agent by his or her agency contract
aleatory 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 an insurance company that is incorporated outside the united states
annual statement a detailed financial report that an insurance company must submit every year to the
insurance department of states in which it conducts business
annuity a contract that provides income for a specified period of years or life
apparent authority 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 a person making application for, or offering himself, herself or another to be insured
under an insurance contract
application a document that provides information for underwriting purposes. after the policy is
issued, any unanswered questions are considered waived by the insurer
assignment the transfer of ownership rights of a life insurance policy from one person to another
attained age the age of the insured at a determined date
attending physicians statement (aps) a statement usually obtained from the applicants doctor
, authorized (admitted) insurer an insurance company authorized and licensed to transact business in a particular state
avoidance a method of dealing with risk by deliberately keeping away form it (ex. if a person wanted
to avoid the risk of being killed in an airplane crash, he or she might choose to never fly
in a plane)
basic illustration a ledger or proposal used in the sale of a life insurance policy that shows both
guaranteed and nonguarenteed elements
beneficiary the person who receives the proceeds from the policy when the insured dies
birthday rule the method of determining primary coverage for a dependent child, under which the
plan of the parent whose birthday occurs first in the calendar year is designated as
primary
broker an individual who represents an insured in the process of purchasing and negotiating a
contract of insurance
buy sell agreement a legal contract that determines what will be done with a business in the event that an
owner dies or becomes disabled
buyers guide a booklet that describes insurance policies and concepts, and provides general
information to help an applicant make an informed decision
cash value the amount to which a policy owner 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
kinds 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
| COMPREHENSIVE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,adverse selection the tendency of risks with higher probability of loss to purchase and maintain insurance
more often than the risks who present lower probability
agency an insurance sales office or company
agent an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of
the insurer
agent appointment the authorization of an agent to act for or represent and insurer
agents authority special powers granted to an agent by his or her agency contract
aleatory 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 an insurance company that is incorporated outside the united states
annual statement a detailed financial report that an insurance company must submit every year to the
insurance department of states in which it conducts business
annuity a contract that provides income for a specified period of years or life
apparent authority 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 a person making application for, or offering himself, herself or another to be insured
under an insurance contract
application a document that provides information for underwriting purposes. after the policy is
issued, any unanswered questions are considered waived by the insurer
assignment the transfer of ownership rights of a life insurance policy from one person to another
attained age the age of the insured at a determined date
attending physicians statement (aps) a statement usually obtained from the applicants doctor
, authorized (admitted) insurer an insurance company authorized and licensed to transact business in a particular state
avoidance a method of dealing with risk by deliberately keeping away form it (ex. if a person wanted
to avoid the risk of being killed in an airplane crash, he or she might choose to never fly
in a plane)
basic illustration a ledger or proposal used in the sale of a life insurance policy that shows both
guaranteed and nonguarenteed elements
beneficiary the person who receives the proceeds from the policy when the insured dies
birthday rule the method of determining primary coverage for a dependent child, under which the
plan of the parent whose birthday occurs first in the calendar year is designated as
primary
broker an individual who represents an insured in the process of purchasing and negotiating a
contract of insurance
buy sell agreement a legal contract that determines what will be done with a business in the event that an
owner dies or becomes disabled
buyers guide a booklet that describes insurance policies and concepts, and provides general
information to help an applicant make an informed decision
cash value the amount to which a policy owner 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
kinds 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
