LOMA 280 EXAM QUESTIONS
WITH 100% CORRECT DETAILED
ANSWERS
policy reserves, legal reserves, statutory reserves - Answer-Liabilities that represent the
amount an insurer estimates it needs to pay future benefits. (4)
policy rider, endorsement - Answer-An amendment to an insurance policy that becomes
part of the insurance contract and either expands or limits the benefits payable under
the contract. (5)
policy term - Answer-The specified period of time during which a term life insurance
policy provides coverage. (5)
policy withdrawal provision, partial surrender provision - Answer-A universal life
insurance policy provision that permits the policyowner to reduce the amount of the
policy's cash value by withdrawing up to the amount of the cash value in cash. (8)
portability provision - Answer-A provision in a group insurance policy that allows a group
insured whose coverage terminates for certain reasons to continue her coverage under
the group plan, typically without presenting evidence of insurability. (12)
portable coverage - Answer-Group insurance coverage that can be continued if an
insured employee leaves the group (12)
preference beneficiary clause, succession beneficiary clause - Answer-A policy
provision included in some life insurance policies which states that if the policy owner
does not name a beneficiary, then the insurer will pay the policy proceeds in a stated
order o preference. (9)
preferred premium rate - Answer-A lower than standard premium rate charge insureds
who are classified as preferred risks (1)
preferred provider organization (PPO) - Answer-A health care benefit arrangement that
provides incentives for plan members to use network providers, but also provides at
least some coverage for services rendered by non network providers. (13)
preferred risk - Answer-A proposed insured who presents a significantly lower than
average likelihood of loss. (1)
,premium - Answer-A specified amount of money an insurer charges in exchange for
agreeing to pay a policy benefit when a specified loss occurs. (1)
premium payment mode - Answer-The frequency at which insurance policy renewal
premiums are payable. (9)
premium rate - Answer-The amount an insurer charges per unit of insurance coverage.
(4)
premium reduction dividend option - Answer-A policy dividend option under which the
insurer applies policy dividends toward the payment of renewal premiums. (9)
prescription drug coverage - Answer-Medical expense insurance coverage that provides
benefits for the purchase of drugs and medicines that are prescribed by a physician and
are not available over the counter. (13)
presumptive disability - Answer-A stated condition that, if present, automatically causes
the insured to be considered totally disabled. (13)
primary beneficiary, first beneficiary - Answer-The party designated to receive the policy
proceeds following the death of the insured. (9)
primary care provider (PCP), primary care physician - Answer-In a managed care plan,
a network member who coordinates plan members' medical care and treatment.
principal - Answer-The sum of money originally invested, loaded, or borrowed. (4)
probability - Answer-The likelihood that a given event will occur in the future. (1)
probationary period - Answer-The length of time, typically, from one to six months, that
a new group member must wait before becoming eligible to enroll in a group insurance
plan. (11)
profit - Answer-The money or revenue that a business receives for its products or
services minus the costs it incurs to produce the goods or deliver the services. (2)
profit sharing plan - Answer-A retirement savings plan that is funded primarily by cash
contributions payable from the employer's profits. (12)
property - Answer-A bundle of rights a person has with respect to something. (9)
property/casualty (R&C) insurance company (property and liability insurer - Answer-An
insurer that issues and sells insurance policies that cover property damage risk and
liability risk.(1)
,pure risk - Answer-A risk that involves no possibility of gain; either a loss occurs or no
loss occurs. (1)
rate of return - Answer-The investment earnings expressed as a percentage relative to
the principal. (4)
real property - Answer-Land and whatever is growing on or attached to the land. (9)
reduced paid up insurance nonforfeiture option - Answer-a cash value life insurance
policy nonforfeiture option under which the policyowner discontinues paying premiums
and uses the policy's net cash surrender values a net single premium to purchase paid
up life insurance of the same plan as the original policy. (8)
reimbursement method - Answer-A method of determining the amount of benefits
payable under a long term care insurance policy under which the insurer pays the
insured the amount of covered LTC expenses per day up to the stated maximum daily
benefit amount. (13)
reinstatement - Answer-The process by which an insurer puts back into force a life
insurance policy that either has been terminated because of nonpayment of renewal
premiums or has been continued under the extended term or reduced paid up insurance
nonforfeiture option
reinstatement provision - Answer-An individual life insurance policy provision that
describes the conditions that the policyowner must meet to put back into force a life
insurance policy that either has been terminated because of nonpayment of renewal
premiums or has been continued under the extended term or reduced paid up insurance
nonforfeiture option. (8)
reinsurance - Answer-Insurance that one insurance company, known as the direct writer
or ceding company, purchases from another insurance company, known as the
reinsurer or assuming company, to transfer all or part of the risk on insurance policies
that the direct writer issued. (1)
reinsurer, assuming company - Answer-An insurance company that accepts risk
transferred from another insurer in a reinsurance transaction. (1)
renewable term insurance policy - Answer-A term life insurance policy that gives the
policyowner the option to continue the coverage at the end of the specified term without
presenting evidence of insurability. (5)
renewal premium - Answer-An insurance policy premium payable after the initial
premium. (3)
, renewal provision - Answer-The provision in a renewable term insurance policy that
gives the insured the right to continue coverage without presenting evidence of
insurability. (5)
return of premium (ROP) term insurance - Answer-A form of term life insurance that
provides a death benefit if the insured dies during the policy term and promises a return
of premiums if the insured does not die during the the policy term. (5)
revocable beneficiary - Answer-A life insurance beneficiary who has no right to the
policy proceeds during the insured's lifetime because the policyowner has the
unrestricted right to change the designation during the life of the insured. (9)
right of revocation - Answer-The life insurance policyowner's right to change the
beneficiary designation. (9)
risk - Answer-The chance or possibility of an unexpected result, either a gain or a loss.
(1)
risk class - Answer-A grouping of insureds who represent a similar level of risk to the
insurer. (1)
risk management - Answer-The process by which individuals and businesses identify
and assess the risks they face and take measures to eliminate or reduce their exposure
to those risks. (1)
401K Plan - Answer-In the United States, a type of savings plan that allows employees
to make contributions on a pre tax basis. (12)
absolute assignment - Answer-An assignment of a life insurance policy under which the
policy owner transfers all of his policy ownership rights to the assignee. Contrast with
collateral assignment. (9)
accelerated death benefit - Answer-A supplemental life insurance policy benefit which
provides that a policy owner may elect to receive all or part of the policy's death benefit
before the insured's death if certain conditions are met. Also known as a living benefit
(7)
acceptance - Answer-The offeree's unqualified agreement to be bound to the terms of
the offer (3)
accidental death and dismemberment (AD&D) benefit - Answer-A supplemental life
insurance policy benefit that provides an accidental death benefit and provides a
dismemberment benefit payable if an accident causes the insured to lose any two limbs
or sight in both eyes (7)
WITH 100% CORRECT DETAILED
ANSWERS
policy reserves, legal reserves, statutory reserves - Answer-Liabilities that represent the
amount an insurer estimates it needs to pay future benefits. (4)
policy rider, endorsement - Answer-An amendment to an insurance policy that becomes
part of the insurance contract and either expands or limits the benefits payable under
the contract. (5)
policy term - Answer-The specified period of time during which a term life insurance
policy provides coverage. (5)
policy withdrawal provision, partial surrender provision - Answer-A universal life
insurance policy provision that permits the policyowner to reduce the amount of the
policy's cash value by withdrawing up to the amount of the cash value in cash. (8)
portability provision - Answer-A provision in a group insurance policy that allows a group
insured whose coverage terminates for certain reasons to continue her coverage under
the group plan, typically without presenting evidence of insurability. (12)
portable coverage - Answer-Group insurance coverage that can be continued if an
insured employee leaves the group (12)
preference beneficiary clause, succession beneficiary clause - Answer-A policy
provision included in some life insurance policies which states that if the policy owner
does not name a beneficiary, then the insurer will pay the policy proceeds in a stated
order o preference. (9)
preferred premium rate - Answer-A lower than standard premium rate charge insureds
who are classified as preferred risks (1)
preferred provider organization (PPO) - Answer-A health care benefit arrangement that
provides incentives for plan members to use network providers, but also provides at
least some coverage for services rendered by non network providers. (13)
preferred risk - Answer-A proposed insured who presents a significantly lower than
average likelihood of loss. (1)
,premium - Answer-A specified amount of money an insurer charges in exchange for
agreeing to pay a policy benefit when a specified loss occurs. (1)
premium payment mode - Answer-The frequency at which insurance policy renewal
premiums are payable. (9)
premium rate - Answer-The amount an insurer charges per unit of insurance coverage.
(4)
premium reduction dividend option - Answer-A policy dividend option under which the
insurer applies policy dividends toward the payment of renewal premiums. (9)
prescription drug coverage - Answer-Medical expense insurance coverage that provides
benefits for the purchase of drugs and medicines that are prescribed by a physician and
are not available over the counter. (13)
presumptive disability - Answer-A stated condition that, if present, automatically causes
the insured to be considered totally disabled. (13)
primary beneficiary, first beneficiary - Answer-The party designated to receive the policy
proceeds following the death of the insured. (9)
primary care provider (PCP), primary care physician - Answer-In a managed care plan,
a network member who coordinates plan members' medical care and treatment.
principal - Answer-The sum of money originally invested, loaded, or borrowed. (4)
probability - Answer-The likelihood that a given event will occur in the future. (1)
probationary period - Answer-The length of time, typically, from one to six months, that
a new group member must wait before becoming eligible to enroll in a group insurance
plan. (11)
profit - Answer-The money or revenue that a business receives for its products or
services minus the costs it incurs to produce the goods or deliver the services. (2)
profit sharing plan - Answer-A retirement savings plan that is funded primarily by cash
contributions payable from the employer's profits. (12)
property - Answer-A bundle of rights a person has with respect to something. (9)
property/casualty (R&C) insurance company (property and liability insurer - Answer-An
insurer that issues and sells insurance policies that cover property damage risk and
liability risk.(1)
,pure risk - Answer-A risk that involves no possibility of gain; either a loss occurs or no
loss occurs. (1)
rate of return - Answer-The investment earnings expressed as a percentage relative to
the principal. (4)
real property - Answer-Land and whatever is growing on or attached to the land. (9)
reduced paid up insurance nonforfeiture option - Answer-a cash value life insurance
policy nonforfeiture option under which the policyowner discontinues paying premiums
and uses the policy's net cash surrender values a net single premium to purchase paid
up life insurance of the same plan as the original policy. (8)
reimbursement method - Answer-A method of determining the amount of benefits
payable under a long term care insurance policy under which the insurer pays the
insured the amount of covered LTC expenses per day up to the stated maximum daily
benefit amount. (13)
reinstatement - Answer-The process by which an insurer puts back into force a life
insurance policy that either has been terminated because of nonpayment of renewal
premiums or has been continued under the extended term or reduced paid up insurance
nonforfeiture option
reinstatement provision - Answer-An individual life insurance policy provision that
describes the conditions that the policyowner must meet to put back into force a life
insurance policy that either has been terminated because of nonpayment of renewal
premiums or has been continued under the extended term or reduced paid up insurance
nonforfeiture option. (8)
reinsurance - Answer-Insurance that one insurance company, known as the direct writer
or ceding company, purchases from another insurance company, known as the
reinsurer or assuming company, to transfer all or part of the risk on insurance policies
that the direct writer issued. (1)
reinsurer, assuming company - Answer-An insurance company that accepts risk
transferred from another insurer in a reinsurance transaction. (1)
renewable term insurance policy - Answer-A term life insurance policy that gives the
policyowner the option to continue the coverage at the end of the specified term without
presenting evidence of insurability. (5)
renewal premium - Answer-An insurance policy premium payable after the initial
premium. (3)
, renewal provision - Answer-The provision in a renewable term insurance policy that
gives the insured the right to continue coverage without presenting evidence of
insurability. (5)
return of premium (ROP) term insurance - Answer-A form of term life insurance that
provides a death benefit if the insured dies during the policy term and promises a return
of premiums if the insured does not die during the the policy term. (5)
revocable beneficiary - Answer-A life insurance beneficiary who has no right to the
policy proceeds during the insured's lifetime because the policyowner has the
unrestricted right to change the designation during the life of the insured. (9)
right of revocation - Answer-The life insurance policyowner's right to change the
beneficiary designation. (9)
risk - Answer-The chance or possibility of an unexpected result, either a gain or a loss.
(1)
risk class - Answer-A grouping of insureds who represent a similar level of risk to the
insurer. (1)
risk management - Answer-The process by which individuals and businesses identify
and assess the risks they face and take measures to eliminate or reduce their exposure
to those risks. (1)
401K Plan - Answer-In the United States, a type of savings plan that allows employees
to make contributions on a pre tax basis. (12)
absolute assignment - Answer-An assignment of a life insurance policy under which the
policy owner transfers all of his policy ownership rights to the assignee. Contrast with
collateral assignment. (9)
accelerated death benefit - Answer-A supplemental life insurance policy benefit which
provides that a policy owner may elect to receive all or part of the policy's death benefit
before the insured's death if certain conditions are met. Also known as a living benefit
(7)
acceptance - Answer-The offeree's unqualified agreement to be bound to the terms of
the offer (3)
accidental death and dismemberment (AD&D) benefit - Answer-A supplemental life
insurance policy benefit that provides an accidental death benefit and provides a
dismemberment benefit payable if an accident causes the insured to lose any two limbs
or sight in both eyes (7)
