Washington Life
Washington Life/Health Insurance
Exam Questions and Answers
2025
policy owner - Correct Ans-usually, but not always the person covered by the policy
beneficiary - Correct Ans-the person who is paid when a claim
is submitted
agent/producer - Correct Ans-acts as a legal representative
of the insurance company
broker - Correct Ans-representative of the Insured, not the insurance company
risk - Correct Ans-The chance or uncertainty of loss
Pure risk - Correct Ans-the chance of experiencing a loss (without the possibility of
gain). Only downside, no upside.
Speculative risk - Correct Ans-s the chance of loss one accepts in the hope of realizing
a gain
Risk avoidance - Correct Ans-staying away from risky activities altogether
Risk reduction - Correct Ans-reduce the chance of something bad happening
Risk shifting - Correct Ans-Get someone else to accept the risk
Buying insurance - Correct Ans-transfer a portion of your risk to the Insurer
Risk Retention - Correct Ans-the individual or business that opts not to buy insurance
retains the entire risk
Indemnification - Correct Ans-an insurance concept that states that some portions of the
insurance industry prefer that we be made only whole after a loss rather than coming
out ahead (Only getting back what you are owed, not getting more than what you had to
start with)
Subrogation - Correct Ans-the transfer to the Insurer of the Insured's rights to recover
damages from a responsible third party
1|Page
Washington Life
,Washington Life
Peril - Correct Ans-the cause of loss
Law of Large numbers - Correct Ans-the mathematical concept that makes it easier to
predict losses if we have a large number of Insureds
Insurable losses are... - Correct Ans-Economic, Predictable, Accidental, Measurable,
Non-Catastrophic
non-participating companies - Correct Ans-Stock companies that exist for the sole
purpose of generating profits
for their stockholders
participating companies - Correct Ans-A company owned by its policy holders where the
profits are distributed among policy holders
Social Security act - Correct Ans-a guarantee that government
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) - Correct Ans-Old Age, Survivors, and Disability
Insurance...Federal Government law
FICA - Correct Ans-Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the self-employed.
Not covered by social security - Correct Ans-payroll taxes levied on employees,
employers,
and the self-employed.
FICA Fully Insured - Correct Ans-(Worked for 10 years) payroll taxes levied on
employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Survivor Benefits.
Currently Insured - Correct Ans-Worked less than ten years. Only eligeable for Survivor
Benefits
Average Indexed Monthly
Earnings - Correct Ans-Averages earnings over time period. Either way, the more a
worker
has paid into Social Security, the more the worker (or dependents)
will get out of it. (What you get at age 65)
2|Page
Washington Life
, Washington Life
Primary Insurance Amount (PIA). - Correct Ans-Full retirement benefit someone is
entitled to at age 65 (some cases, 66-67)
elimination period (Disability) - Correct Ans-the person must be
disabled for 5 months before starting to receive Disability
Benefits
underwriting - Correct Ans-the selection and classification of risks.
actuary - Correct Ans-A person who tracks the lifespan and chance of illness or
accident based on specific factors
Mortality table - Correct Ans-predict the age at which
people in a given group are likely to die (Used by life insurers)
Morbidity table - Correct Ans-predict how often
people in a given group are likely to get sick or have an
accident. (Used by health insurers)
field underwriters - Correct Ans-Insurance agents
declined risks - Correct Ans-Applicants who are too risky are declined
Adverse selection - Correct Ans-the tendency for high
risk people to be more likely to apply for insurance than low risk
people.
Premium = - Correct Ans-Risk + Expenses - Interest
Premium mode - Correct Ans-how frequently an Insured will pay the premium
Accelerated Death Benefit Rider - Correct Ans-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
Viatical Settlements - Correct Ans-sell the policy to an investment company that will
continue to make the premium payments and collect the death benefit when the Insured
dies. The Insured will sell only if an investment company will pay more than the current
cash surrender value.
Group Policies share
these three characteristics - Correct Ans-Reduced Cost;
Reduced Adverse Selection; and
Fixed Benefits.
3|Page
Washington Life
Washington Life/Health Insurance
Exam Questions and Answers
2025
policy owner - Correct Ans-usually, but not always the person covered by the policy
beneficiary - Correct Ans-the person who is paid when a claim
is submitted
agent/producer - Correct Ans-acts as a legal representative
of the insurance company
broker - Correct Ans-representative of the Insured, not the insurance company
risk - Correct Ans-The chance or uncertainty of loss
Pure risk - Correct Ans-the chance of experiencing a loss (without the possibility of
gain). Only downside, no upside.
Speculative risk - Correct Ans-s the chance of loss one accepts in the hope of realizing
a gain
Risk avoidance - Correct Ans-staying away from risky activities altogether
Risk reduction - Correct Ans-reduce the chance of something bad happening
Risk shifting - Correct Ans-Get someone else to accept the risk
Buying insurance - Correct Ans-transfer a portion of your risk to the Insurer
Risk Retention - Correct Ans-the individual or business that opts not to buy insurance
retains the entire risk
Indemnification - Correct Ans-an insurance concept that states that some portions of the
insurance industry prefer that we be made only whole after a loss rather than coming
out ahead (Only getting back what you are owed, not getting more than what you had to
start with)
Subrogation - Correct Ans-the transfer to the Insurer of the Insured's rights to recover
damages from a responsible third party
1|Page
Washington Life
,Washington Life
Peril - Correct Ans-the cause of loss
Law of Large numbers - Correct Ans-the mathematical concept that makes it easier to
predict losses if we have a large number of Insureds
Insurable losses are... - Correct Ans-Economic, Predictable, Accidental, Measurable,
Non-Catastrophic
non-participating companies - Correct Ans-Stock companies that exist for the sole
purpose of generating profits
for their stockholders
participating companies - Correct Ans-A company owned by its policy holders where the
profits are distributed among policy holders
Social Security act - Correct Ans-a guarantee that government
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) - Correct Ans-Old Age, Survivors, and Disability
Insurance...Federal Government law
FICA - Correct Ans-Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the self-employed.
Not covered by social security - Correct Ans-payroll taxes levied on employees,
employers,
and the self-employed.
FICA Fully Insured - Correct Ans-(Worked for 10 years) payroll taxes levied on
employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Survivor Benefits.
Currently Insured - Correct Ans-Worked less than ten years. Only eligeable for Survivor
Benefits
Average Indexed Monthly
Earnings - Correct Ans-Averages earnings over time period. Either way, the more a
worker
has paid into Social Security, the more the worker (or dependents)
will get out of it. (What you get at age 65)
2|Page
Washington Life
, Washington Life
Primary Insurance Amount (PIA). - Correct Ans-Full retirement benefit someone is
entitled to at age 65 (some cases, 66-67)
elimination period (Disability) - Correct Ans-the person must be
disabled for 5 months before starting to receive Disability
Benefits
underwriting - Correct Ans-the selection and classification of risks.
actuary - Correct Ans-A person who tracks the lifespan and chance of illness or
accident based on specific factors
Mortality table - Correct Ans-predict the age at which
people in a given group are likely to die (Used by life insurers)
Morbidity table - Correct Ans-predict how often
people in a given group are likely to get sick or have an
accident. (Used by health insurers)
field underwriters - Correct Ans-Insurance agents
declined risks - Correct Ans-Applicants who are too risky are declined
Adverse selection - Correct Ans-the tendency for high
risk people to be more likely to apply for insurance than low risk
people.
Premium = - Correct Ans-Risk + Expenses - Interest
Premium mode - Correct Ans-how frequently an Insured will pay the premium
Accelerated Death Benefit Rider - Correct Ans-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
Viatical Settlements - Correct Ans-sell the policy to an investment company that will
continue to make the premium payments and collect the death benefit when the Insured
dies. The Insured will sell only if an investment company will pay more than the current
cash surrender value.
Group Policies share
these three characteristics - Correct Ans-Reduced Cost;
Reduced Adverse Selection; and
Fixed Benefits.
3|Page
Washington Life
