Cigna Terms Exam Questions with
Correct Answers
Insurer - Answer-An entity which provides insurance.
Insured - Answer-A person who buys insurance. Also known as a policyholder or a
subscriber.
Contract - Answer-Called the insurance policy. Details conditions and circumstances
under which the insurer will compensate he insured.
Premium - Answer-The amount of money charged by the insurer to the insured for
coverage.
Name the 4 Core Insurance Principles - Answer-Pooling of Losses, Spread of Risk,
Fortuitous Loss, Adverse Selection.
Pooling of losses - Answer-"law of large numbers" The larger the population the easier it
is to predict future losses. It helps to create more precise premium rates.
Spread of Risk - Answer-as the group gets bigger the insurer can more accurately
predict future losses within a group.
Fortuitous Loss - Answer-a loss that is unforeseen and unexpected.
Adverse Selection - Answer-the social phenomenon where persons with higher than
average risk seek greater insurance than those with less risk. Must be mitigated by
underwriting.
Eligibility - Answer-describes the employee population that is permitted to elect or
decline coverage. Full time= 30+ hours p/w
Subscriber - Answer-The primary policy holder
Customers - Answer-all covered employees and their dependents.
Dependents - Answer-coverage will generally be offered to an employee's legal spouse
and dependent children up to the age of 26 (PPACA)
Employee Status: Active - Answer-and subscriber that is currently enrolled in coverage.
Employee Status: Waiting periods - Answer-the period time which must pass before
some or all healthcare coverage can begin. ACA says it has to be less than 90 days.
Correct Answers
Insurer - Answer-An entity which provides insurance.
Insured - Answer-A person who buys insurance. Also known as a policyholder or a
subscriber.
Contract - Answer-Called the insurance policy. Details conditions and circumstances
under which the insurer will compensate he insured.
Premium - Answer-The amount of money charged by the insurer to the insured for
coverage.
Name the 4 Core Insurance Principles - Answer-Pooling of Losses, Spread of Risk,
Fortuitous Loss, Adverse Selection.
Pooling of losses - Answer-"law of large numbers" The larger the population the easier it
is to predict future losses. It helps to create more precise premium rates.
Spread of Risk - Answer-as the group gets bigger the insurer can more accurately
predict future losses within a group.
Fortuitous Loss - Answer-a loss that is unforeseen and unexpected.
Adverse Selection - Answer-the social phenomenon where persons with higher than
average risk seek greater insurance than those with less risk. Must be mitigated by
underwriting.
Eligibility - Answer-describes the employee population that is permitted to elect or
decline coverage. Full time= 30+ hours p/w
Subscriber - Answer-The primary policy holder
Customers - Answer-all covered employees and their dependents.
Dependents - Answer-coverage will generally be offered to an employee's legal spouse
and dependent children up to the age of 26 (PPACA)
Employee Status: Active - Answer-and subscriber that is currently enrolled in coverage.
Employee Status: Waiting periods - Answer-the period time which must pass before
some or all healthcare coverage can begin. ACA says it has to be less than 90 days.
