Washington Life/Health Insurance Exam
Additional insured term rider - Whole life to insured, convertible term life riders on family
members, or business partners
Automatic premium loan rider - if the policy owner
does not pay the premium and the grace period expires, the
company will automatically make a loan against the cash value to
pay the premium.
Additional paid-up insurance dividend option (Paid-up additions dividend option) - Dividend used
as a single net premium payment on a miniature paid up whole life policy. This is the automatic dividend
option when no other option is selected.
a contract is to be
valid, its purpose must be legal - only people who
are capable of understanding the terms of a contract and who are
not under duress may become parties to a contract
absolute assignment - Owner transfers the owner's entire interest in the policy to the assignee
Accelerated Death Benefit Rider - requires the Insurer to pay out part of the death benefit
(usually 50%) if the Insured has a diagnosis of a particular illness
likely to cause death within 12 months
Accident only polocies - Helps pay the health care costs that result from an accident
Accumulate at interest dividend option - The dividends are left in a sales account to accumulate
interest at a set amount specified in the policy. Dividends are not taxable, but the interest is.
,actuary - A person who tracks the lifespan and chance of illness or accident based on specific
factors
AD&D Rider - Accidental death and dismemberment (Add-ons), Accidental loss of life, limb or
vision, pays benefits in a lump sum only when medical problems are direct result of an accident (not
sickness), death within 90 days of accident or policy won't pay, if accident is triggered by illness - no
payout, value policy not indemnity policy, at least one hand, one foot or vision in one eye will pay capital
sum (100%), if two hands, two feet or vision in both eyes, policy will pay full amount, when attached to
life or health policy, the rider pays over and above overriding policy
Additional Children coverage - Covered from the moment of birth until 31 days. Adopted children
are treated just like newborns.
Adjustable life - Components of the policy are adjustable to meet the needs of the policy holder. If
the insured wants to increase the death benefit, proof of insurability is required.
Adult dependent children - A continuation privilege allows adult children up to the limiting age to
be covered as long as they are full-time students.
Adult disabled children can be covered their whole lives as long as they are incapable of supporting
themselves and dependent upon the parents. An adult standard premium may be charged at age 18.
Proof of incapacity or dependency is necessary within 31 days of reaching their 18th birthday. Annual
proof of handicap may be required to continue dependent coverage.
Adverse selection - people who need
insurance the most are the ones most likely to buy it - and buy
more of it causing more loss claims
Adverse selection - the tendency for high
risk people to be more likely to apply for insurance than low risk
people.
,Agent responsibilities - Explain the underwriting process to the applicant and
provide disclosures as required by law.
• If the applicant does not complete a portion of the appli-
cation, the applicant must personally make the changes
and sign or initial them.
• If the agent makes a mistake on the agent's portion
of the application, the agent should correct the change
and sign or initial the correction.
• Remember, if an incomplete application gets by the agent
and the underwriters, and a policy is issued and delivered,
the company is bound by the policy under the concept of
waiver.
• Make certain that premium checks are filled out correctly,
signed, and made payable to the company, not to the agent.
• If a check is mistakenly made payable to the agent, the
agent should ask the client to destroy it and write a new
check.
• If a check is unsigned, the agent must return it to the
client for signature.
• If a check is invalid, the agent should explain that the
conditional receipt will not be valid until proper payment is
received.
• If an agent collects a premium check while out of the
office, the agent should give the client a temporary hand-
written receipt and then mail or a deliver an official receipt.
• Many companies require the agent to deliver a policy in
person. The reason for this is to explain the terms of the
policy and, if a policy is rated, to explain the reason why.
• Unless a conditional receipt is used, the agent should
, explain that the Insured will not be covered until the policy
is delivered, no matter how many good faith delivery
attempts are made by the agent.
agent/producer - acts as a legal representative
of the insurance company
Agreement = - offer + acceptance
Aleatory - When one party or another has the potential to recieve dramatically different level of
benefits relative to the cost of receiving those benifits
Annual stop-loss limit - A measure that limits the maximum amount for which the insurance can
be responsible for in a stated time period.
401 (k) - Portion of pre-tax salaries into investment accounts where it grows tax deferred.
Matching from employer is common. Investment choice directed by employee. Cap on contributions.
Annually renewable term - After the level term policy can extend coverage without providing
proof of insurability. The premium will go up each year, due to higher attained age and no proof of
insurability. Max age of 65.
Reentry term - Two premium levels for renewal for people who can prove insurability and for folks who
cant
Annuity certain options - Either the time period payments will be received or the amount of each
payment, to be decided by the annuitant.
Annuity settlement option - ...
Additional insured term rider - Whole life to insured, convertible term life riders on family
members, or business partners
Automatic premium loan rider - if the policy owner
does not pay the premium and the grace period expires, the
company will automatically make a loan against the cash value to
pay the premium.
Additional paid-up insurance dividend option (Paid-up additions dividend option) - Dividend used
as a single net premium payment on a miniature paid up whole life policy. This is the automatic dividend
option when no other option is selected.
a contract is to be
valid, its purpose must be legal - only people who
are capable of understanding the terms of a contract and who are
not under duress may become parties to a contract
absolute assignment - Owner transfers the owner's entire interest in the policy to the assignee
Accelerated Death Benefit Rider - requires the Insurer to pay out part of the death benefit
(usually 50%) if the Insured has a diagnosis of a particular illness
likely to cause death within 12 months
Accident only polocies - Helps pay the health care costs that result from an accident
Accumulate at interest dividend option - The dividends are left in a sales account to accumulate
interest at a set amount specified in the policy. Dividends are not taxable, but the interest is.
,actuary - A person who tracks the lifespan and chance of illness or accident based on specific
factors
AD&D Rider - Accidental death and dismemberment (Add-ons), Accidental loss of life, limb or
vision, pays benefits in a lump sum only when medical problems are direct result of an accident (not
sickness), death within 90 days of accident or policy won't pay, if accident is triggered by illness - no
payout, value policy not indemnity policy, at least one hand, one foot or vision in one eye will pay capital
sum (100%), if two hands, two feet or vision in both eyes, policy will pay full amount, when attached to
life or health policy, the rider pays over and above overriding policy
Additional Children coverage - Covered from the moment of birth until 31 days. Adopted children
are treated just like newborns.
Adjustable life - Components of the policy are adjustable to meet the needs of the policy holder. If
the insured wants to increase the death benefit, proof of insurability is required.
Adult dependent children - A continuation privilege allows adult children up to the limiting age to
be covered as long as they are full-time students.
Adult disabled children can be covered their whole lives as long as they are incapable of supporting
themselves and dependent upon the parents. An adult standard premium may be charged at age 18.
Proof of incapacity or dependency is necessary within 31 days of reaching their 18th birthday. Annual
proof of handicap may be required to continue dependent coverage.
Adverse selection - people who need
insurance the most are the ones most likely to buy it - and buy
more of it causing more loss claims
Adverse selection - the tendency for high
risk people to be more likely to apply for insurance than low risk
people.
,Agent responsibilities - Explain the underwriting process to the applicant and
provide disclosures as required by law.
• If the applicant does not complete a portion of the appli-
cation, the applicant must personally make the changes
and sign or initial them.
• If the agent makes a mistake on the agent's portion
of the application, the agent should correct the change
and sign or initial the correction.
• Remember, if an incomplete application gets by the agent
and the underwriters, and a policy is issued and delivered,
the company is bound by the policy under the concept of
waiver.
• Make certain that premium checks are filled out correctly,
signed, and made payable to the company, not to the agent.
• If a check is mistakenly made payable to the agent, the
agent should ask the client to destroy it and write a new
check.
• If a check is unsigned, the agent must return it to the
client for signature.
• If a check is invalid, the agent should explain that the
conditional receipt will not be valid until proper payment is
received.
• If an agent collects a premium check while out of the
office, the agent should give the client a temporary hand-
written receipt and then mail or a deliver an official receipt.
• Many companies require the agent to deliver a policy in
person. The reason for this is to explain the terms of the
policy and, if a policy is rated, to explain the reason why.
• Unless a conditional receipt is used, the agent should
, explain that the Insured will not be covered until the policy
is delivered, no matter how many good faith delivery
attempts are made by the agent.
agent/producer - acts as a legal representative
of the insurance company
Agreement = - offer + acceptance
Aleatory - When one party or another has the potential to recieve dramatically different level of
benefits relative to the cost of receiving those benifits
Annual stop-loss limit - A measure that limits the maximum amount for which the insurance can
be responsible for in a stated time period.
401 (k) - Portion of pre-tax salaries into investment accounts where it grows tax deferred.
Matching from employer is common. Investment choice directed by employee. Cap on contributions.
Annually renewable term - After the level term policy can extend coverage without providing
proof of insurability. The premium will go up each year, due to higher attained age and no proof of
insurability. Max age of 65.
Reentry term - Two premium levels for renewal for people who can prove insurability and for folks who
cant
Annuity certain options - Either the time period payments will be received or the amount of each
payment, to be decided by the annuitant.
Annuity settlement option - ...
