Maryland Life Insurance Exam- Terms
UPDATED Study Guide QUESTIONS
AND CORRECT ANSWERS
Accelerated Benefits - CORRECT ANSWERS Riders attached to life
insurance policies that allow death benefits to be used to cover nursing or
convalescent home expenses.
Accidental Death Benefits - CORRECT ANSWERS A policy rider that
states that the cause of death will be analyzed to determine if it complies with
the policy description of accidental death.
Accidental Death Insurance - CORRECT ANSWERS An insurance
policy that provides payment if the insured's death is the result of an accident.
Accumulation Period - CORRECT ANSWERS The time before an
annuitant's retirement during which the annuitant is making payments or
investments in an annuity.
Actual Cash Value (ACV) - CORRECT ANSWERS The required amount
to pay damages or for property loss. This amount is calculated based on the
property's current replacement value minus depreciation.
Adhesion - CORRECT ANSWERS A contract offered on a "take-it-or
leave-it" basis by an insurer, in which the insured's only option is to either
accept or reject the contract. Any ambiguities in the contract will be settled in
favor of the insured.
Adjustable Life - CORRECT ANSWERS Life insurance that permits
changes in the face amount, premium amount, period of protection, and the
duration of the premium payment period.
,Admitted (Authorized) Insurer - CORRECT ANSWERS An insurance
company authorized and licensed to transact business in a particular state.
Adverse Selection - CORRECT ANSWERS The tendency of risks with
higher probability of loss to purchase and maintain insurance more often than
the risks who present lower probability.
Agency - CORRECT ANSWERS An insurance sales office or company.
Agent - CORRECT ANSWERS An individual who is licensed to sell,
negotiate, or effect insurance contracts on behalf of the insurer.
Agent Appointment - CORRECT ANSWERS The authorization of an
agent to act for or represent an insurer
Agent's Authority - CORRECT ANSWERS Special powers granted to an
agent by his or her agency contract.
Aleatory - CORRECT ANSWERS 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 - CORRECT ANSWERS An insurance company that is
incorporated outside the United States.
Annual Statement - CORRECT ANSWERS A detailed financial report
that an insurance company must submit every year to the insurance department
of state(s) in which it conducts business.
, Annuity - CORRECT ANSWERS A contract that provides income for a
specified period of years, or for life.
Apparent Authority - CORRECT ANSWERS 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 - CORRECT ANSWERS A person making application for, or
offering himself, herself or another to be insured under an insurance contract.
Application - CORRECT ANSWERS A document that provides
information for underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer.
Assignment - CORRECT ANSWERS The transfer of ownership rights of
a life insurance policy from one person to another.
Attained Age - CORRECT ANSWERS The age of the insured at a
determined date.
Attending Physician's Statement (APS) - CORRECT ANSWERS A
statement usually obtained from the applicant's doctor.
Authorized (Admitted) Insurer - CORRECT ANSWERS An insurance
company authorized and licensed to transact business in a particular state.
Avoidance - CORRECT ANSWERS A method of dealing with risk by
deliberately keeping away from it (e.g. 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).
UPDATED Study Guide QUESTIONS
AND CORRECT ANSWERS
Accelerated Benefits - CORRECT ANSWERS Riders attached to life
insurance policies that allow death benefits to be used to cover nursing or
convalescent home expenses.
Accidental Death Benefits - CORRECT ANSWERS A policy rider that
states that the cause of death will be analyzed to determine if it complies with
the policy description of accidental death.
Accidental Death Insurance - CORRECT ANSWERS An insurance
policy that provides payment if the insured's death is the result of an accident.
Accumulation Period - CORRECT ANSWERS The time before an
annuitant's retirement during which the annuitant is making payments or
investments in an annuity.
Actual Cash Value (ACV) - CORRECT ANSWERS The required amount
to pay damages or for property loss. This amount is calculated based on the
property's current replacement value minus depreciation.
Adhesion - CORRECT ANSWERS A contract offered on a "take-it-or
leave-it" basis by an insurer, in which the insured's only option is to either
accept or reject the contract. Any ambiguities in the contract will be settled in
favor of the insured.
Adjustable Life - CORRECT ANSWERS Life insurance that permits
changes in the face amount, premium amount, period of protection, and the
duration of the premium payment period.
,Admitted (Authorized) Insurer - CORRECT ANSWERS An insurance
company authorized and licensed to transact business in a particular state.
Adverse Selection - CORRECT ANSWERS The tendency of risks with
higher probability of loss to purchase and maintain insurance more often than
the risks who present lower probability.
Agency - CORRECT ANSWERS An insurance sales office or company.
Agent - CORRECT ANSWERS An individual who is licensed to sell,
negotiate, or effect insurance contracts on behalf of the insurer.
Agent Appointment - CORRECT ANSWERS The authorization of an
agent to act for or represent an insurer
Agent's Authority - CORRECT ANSWERS Special powers granted to an
agent by his or her agency contract.
Aleatory - CORRECT ANSWERS 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 - CORRECT ANSWERS An insurance company that is
incorporated outside the United States.
Annual Statement - CORRECT ANSWERS A detailed financial report
that an insurance company must submit every year to the insurance department
of state(s) in which it conducts business.
, Annuity - CORRECT ANSWERS A contract that provides income for a
specified period of years, or for life.
Apparent Authority - CORRECT ANSWERS 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 - CORRECT ANSWERS A person making application for, or
offering himself, herself or another to be insured under an insurance contract.
Application - CORRECT ANSWERS A document that provides
information for underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer.
Assignment - CORRECT ANSWERS The transfer of ownership rights of
a life insurance policy from one person to another.
Attained Age - CORRECT ANSWERS The age of the insured at a
determined date.
Attending Physician's Statement (APS) - CORRECT ANSWERS A
statement usually obtained from the applicant's doctor.
Authorized (Admitted) Insurer - CORRECT ANSWERS An insurance
company authorized and licensed to transact business in a particular state.
Avoidance - CORRECT ANSWERS A method of dealing with risk by
deliberately keeping away from it (e.g. 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).
