Idaho Life Insurance Exam
- ANS-Participating Policies (Par)
A basic policy that charges a level annual premium for the lifetime of the insured and provides a
level, guaranteed death benefit. - ANS-Straight Life
A basic principle of insurance under which the risk of financial loss is assigned to another party.
- ANS-Transfer
A basic, fundamental insurance policy which pays first with respect to other outstanding policies.
- ANS-Primary Policy
A booklet that describes insurance policies and concepts, and provides general information to
help an applicant make an informed decision. - ANS-Buyer's Guide
A choice of ways of receiving policy dividends, nonforfeiture values, death benefits, or cash
values. - ANS-Option
A circumstance that increases the likelihood of a loss. - ANS-Hazard
A clause that defines the insurance company's and the insured's right to cancel or renew
coverage. - ANS-Renewability Clause
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she
receives them. - ANS-Spendthrift Clause
A combination of Annual Renewable term and a cash account invested in the general fund of
the insurance company. - ANS-Universal Life
A condition which does not allow a person to perform the duties of any occupation for payment
as a result of injury or sickness. - ANS-Total Disability
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 the the amount the
insurer will pay in the event of a loss. - ANS-Aleatory
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. - ANS-Adhesion
, A contract that legally binds only one party to contractual obligations after the premium is paid. -
ANS-Unilateral Contract
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance). -
ANS-Valued Contract
A contract that provides income for a specified period of years, or for life. - ANS-Annuity
A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured)
agains a loss by a specified future contingency or peril in return for payment of a premium. -
ANS-Insurance
A detailed financial report that an insurance company must submit every year to the insurance
department of state in which it conducts business. - ANS-Annual Statement
A disability rider, found in Universal Life Insurance, that waives the cost of the insurance but
does not waive the cost of premiums necessary to accumulate cash values. - ANS-Waiver of
Cost
A document that authorizes a company to start conducting business and specifies the kind(s) of
insurance a company can transact. It is illegal for an insurance company to transact insurance
without this certificate. - ANS-Certificate of Authority
A document that provides information for underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer. - ANS-Appication
A entity that obtains and possesses a license solely for the purpose of writing business on the
owner, immediate family, relatives, employer or employees. - ANS-Controlled Business
A false statement or lie that can render the contract void. - ANS-Misrepresentation
A federal law that established procedures consumer-reporting agencies must follow in order to
ensure that records are confidential, accurate, relevant, and properly used. - ANS-Fair Credit
Reporting Act
A financial interest in the life of another person; a possibility of losing something of value if the
insured should die. In life insurance, insurable interest must exist at the time of policy
application or policy issue. - ANS-Insurable Interest
A form changing the provisions of and attached to a life insurance policy (aka a rider). -
ANS-Endorsement
- ANS-Participating Policies (Par)
A basic policy that charges a level annual premium for the lifetime of the insured and provides a
level, guaranteed death benefit. - ANS-Straight Life
A basic principle of insurance under which the risk of financial loss is assigned to another party.
- ANS-Transfer
A basic, fundamental insurance policy which pays first with respect to other outstanding policies.
- ANS-Primary Policy
A booklet that describes insurance policies and concepts, and provides general information to
help an applicant make an informed decision. - ANS-Buyer's Guide
A choice of ways of receiving policy dividends, nonforfeiture values, death benefits, or cash
values. - ANS-Option
A circumstance that increases the likelihood of a loss. - ANS-Hazard
A clause that defines the insurance company's and the insured's right to cancel or renew
coverage. - ANS-Renewability Clause
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she
receives them. - ANS-Spendthrift Clause
A combination of Annual Renewable term and a cash account invested in the general fund of
the insurance company. - ANS-Universal Life
A condition which does not allow a person to perform the duties of any occupation for payment
as a result of injury or sickness. - ANS-Total Disability
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 the the amount the
insurer will pay in the event of a loss. - ANS-Aleatory
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. - ANS-Adhesion
, A contract that legally binds only one party to contractual obligations after the premium is paid. -
ANS-Unilateral Contract
A contract that pays a stated amount in the event of a loss (disability insurance/life insurance). -
ANS-Valued Contract
A contract that provides income for a specified period of years, or for life. - ANS-Annuity
A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured)
agains a loss by a specified future contingency or peril in return for payment of a premium. -
ANS-Insurance
A detailed financial report that an insurance company must submit every year to the insurance
department of state in which it conducts business. - ANS-Annual Statement
A disability rider, found in Universal Life Insurance, that waives the cost of the insurance but
does not waive the cost of premiums necessary to accumulate cash values. - ANS-Waiver of
Cost
A document that authorizes a company to start conducting business and specifies the kind(s) of
insurance a company can transact. It is illegal for an insurance company to transact insurance
without this certificate. - ANS-Certificate of Authority
A document that provides information for underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer. - ANS-Appication
A entity that obtains and possesses a license solely for the purpose of writing business on the
owner, immediate family, relatives, employer or employees. - ANS-Controlled Business
A false statement or lie that can render the contract void. - ANS-Misrepresentation
A federal law that established procedures consumer-reporting agencies must follow in order to
ensure that records are confidential, accurate, relevant, and properly used. - ANS-Fair Credit
Reporting Act
A financial interest in the life of another person; a possibility of losing something of value if the
insured should die. In life insurance, insurable interest must exist at the time of policy
application or policy issue. - ANS-Insurable Interest
A form changing the provisions of and attached to a life insurance policy (aka a rider). -
ANS-Endorsement
