Life & Health Insurance Exam Questions AND Correct Answers
accidental death and dismemberment (AD&D) insurance -
✔✔pays a lump sum of money in the event of the insured's
accidental death or dismemberment; pure accident policies
that pay benefits only in the event of accidental losses; dies,
loses one or more a limbs, or loses eyesight or hearing (total
deafness)
accidental means - ✔✔require that both the cause and the
result of an accident arise by chance.
accidental results - ✔✔require only that the death or injury
must be accidental.
Annually Renewable Term Life Rider - ✔✔Many insurance
companies permit DI applicants to add a life insurance rider
to the policy. Its purpose is to provide a death benefit in the
event of the insured's death. It is not necessary for the
insured to have been disabled at the time of death for the
death benefit to be payable. If available, this rider is typically
provided in the form of annually renewable term life
insurance.
any occupation - ✔✔requires that the insured be unable to
engage in any occupation for pay or profit for which he or she
is reasonably suited through education, training, or
experience. Disability products marketed to blue-collar
,workers generally use an any occupation definition of total
disability.
any provider coverage - ✔✔Owners of medical expense
indemnity policies are free to choose any medical care
provider for their medical care need
automatic increase option - ✔✔raises benefit amounts by a
specified amount. Increases are generally defined as a
percentage increase of the current benefit amount. Increases
may be made as frequently as annually but may also be
scheduled over longer time periods (for example, every five
years).
Basic hospital expense policies - ✔✔cover only hospital costs
Basic physician expense policies - ✔✔initially developed to
pay for doctors' visits to an insured while he or she was
hospitalized. Over time, coverage was expanded to provide
coverage for: routine doctor's office visits, charges for
diagnostic x-rays, laboratory charges
Basic surgical expense policies - ✔✔designed to cover
surgeons' fees and related costs associated with surgery.
,benefit period - ✔✔the duration of time during which
benefits will be paid. It begins at the end of the waiting
period and is usually expressed in the contract as the
maximum period of time benefits will be paid for a single
disability.
benefit schedule - ✔✔the insurer assigns a "price," or a dollar
amount or unit value, to each specific medical cost,
procedure, charge, or aspect of coverage. The amount the
insurer then pays to the insured is some percentage of this
assigned price (such as 80 percent). Or, the insurer may pay
the full amount.
Blanket Health Insurance - ✔✔an accident-only policy issued
to an organization to protect a group of individuals engaged in
a specified group activity
Blue Cross/Blue Shield - ✔✔These were the first of the
prepaid managed care health plans that enrolled members or
subscribers: Blue Cross provides coverage for hospital care.
Blue Shield provides coverage for medical and surgical care.
Business overhead expense (BOE) insurance - ✔✔designed for
the small business owner who is concerned about covering
the overhead expenses of keeping the business running
should he or she become disabled. A BOE policy covers
scheduled overhead costs, such as rent, utility bills,
insurance, and taxes that can destroy a small business if the
, owner becomes disabled and unable to run it. Even the
salaries of the owner's employees can be covered. Only the
owner's salary cannot be covered with a BOE policy; the
owner would need his or her own DI policy for that purpose.
Buyer's Guide - ✔✔explains the applicant's rights and
responsibilities with regard to the type of insurance coverage
being applied for.
cancellable - ✔✔allows the insurer to cancel or end the policy
at any time simply by providing written notification. The
insurer must also refund any advance premiums paid before
canceling the policy. Cancellable policies also allow for
premium increases.
cancellation provision - ✔✔enabled an insurer to cancel the
policy at any time with 45 days' notice. The 45-day notice is
also required if the insurer decides not to renew the policy or
to change the premium rate. If the insured did not pay the
premium and the insurer canceled the policy as a result, then
the insurer must give ten days' notice to the insured.
capital sum - ✔✔benefit payable in the event of accidental
dismemberment; Typically a percentage of the principal sum,
the capital sum varies (within a single policy) depending on
the type of dismemberment
accidental death and dismemberment (AD&D) insurance -
✔✔pays a lump sum of money in the event of the insured's
accidental death or dismemberment; pure accident policies
that pay benefits only in the event of accidental losses; dies,
loses one or more a limbs, or loses eyesight or hearing (total
deafness)
accidental means - ✔✔require that both the cause and the
result of an accident arise by chance.
accidental results - ✔✔require only that the death or injury
must be accidental.
Annually Renewable Term Life Rider - ✔✔Many insurance
companies permit DI applicants to add a life insurance rider
to the policy. Its purpose is to provide a death benefit in the
event of the insured's death. It is not necessary for the
insured to have been disabled at the time of death for the
death benefit to be payable. If available, this rider is typically
provided in the form of annually renewable term life
insurance.
any occupation - ✔✔requires that the insured be unable to
engage in any occupation for pay or profit for which he or she
is reasonably suited through education, training, or
experience. Disability products marketed to blue-collar
,workers generally use an any occupation definition of total
disability.
any provider coverage - ✔✔Owners of medical expense
indemnity policies are free to choose any medical care
provider for their medical care need
automatic increase option - ✔✔raises benefit amounts by a
specified amount. Increases are generally defined as a
percentage increase of the current benefit amount. Increases
may be made as frequently as annually but may also be
scheduled over longer time periods (for example, every five
years).
Basic hospital expense policies - ✔✔cover only hospital costs
Basic physician expense policies - ✔✔initially developed to
pay for doctors' visits to an insured while he or she was
hospitalized. Over time, coverage was expanded to provide
coverage for: routine doctor's office visits, charges for
diagnostic x-rays, laboratory charges
Basic surgical expense policies - ✔✔designed to cover
surgeons' fees and related costs associated with surgery.
,benefit period - ✔✔the duration of time during which
benefits will be paid. It begins at the end of the waiting
period and is usually expressed in the contract as the
maximum period of time benefits will be paid for a single
disability.
benefit schedule - ✔✔the insurer assigns a "price," or a dollar
amount or unit value, to each specific medical cost,
procedure, charge, or aspect of coverage. The amount the
insurer then pays to the insured is some percentage of this
assigned price (such as 80 percent). Or, the insurer may pay
the full amount.
Blanket Health Insurance - ✔✔an accident-only policy issued
to an organization to protect a group of individuals engaged in
a specified group activity
Blue Cross/Blue Shield - ✔✔These were the first of the
prepaid managed care health plans that enrolled members or
subscribers: Blue Cross provides coverage for hospital care.
Blue Shield provides coverage for medical and surgical care.
Business overhead expense (BOE) insurance - ✔✔designed for
the small business owner who is concerned about covering
the overhead expenses of keeping the business running
should he or she become disabled. A BOE policy covers
scheduled overhead costs, such as rent, utility bills,
insurance, and taxes that can destroy a small business if the
, owner becomes disabled and unable to run it. Even the
salaries of the owner's employees can be covered. Only the
owner's salary cannot be covered with a BOE policy; the
owner would need his or her own DI policy for that purpose.
Buyer's Guide - ✔✔explains the applicant's rights and
responsibilities with regard to the type of insurance coverage
being applied for.
cancellable - ✔✔allows the insurer to cancel or end the policy
at any time simply by providing written notification. The
insurer must also refund any advance premiums paid before
canceling the policy. Cancellable policies also allow for
premium increases.
cancellation provision - ✔✔enabled an insurer to cancel the
policy at any time with 45 days' notice. The 45-day notice is
also required if the insurer decides not to renew the policy or
to change the premium rate. If the insured did not pay the
premium and the insurer canceled the policy as a result, then
the insurer must give ten days' notice to the insured.
capital sum - ✔✔benefit payable in the event of accidental
dismemberment; Typically a percentage of the principal sum,
the capital sum varies (within a single policy) depending on
the type of dismemberment
