Idaho Life Insurance Exam |208
Questions and Answers
Accelerated Benefits - -Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses.
- Accidental Death Benefits - -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 - -An insurance policy that provides payment if
the insured's death is the result of the accident.
- Accumulation Period - -The time before an annuitant's retirement during
which the annuitant is making payments or investments in an annuity.
- Acquired Immunodeficiency Syndrome (AIDS) - -An infections and
incurable disease caused by the human immunodeficiency virus (HIV).
- Actual Cash Value (ACV) - -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 - -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 - -Life insurance that permits changed in the face amount,
premium amount, period of protection, and the duration of the premium
payment period.
- Adjuster - -A representative of an insurance company who investigates
and acts on behalf of the company to obtain agreements for the amount of
the insurance claim.
- Administrator - -An individual appointed by a court as a fiduciary to settle
the financial affairs and estate of a deceased person.
- Admitted (Authorized) Insurer - -An insurance company authorized and
licensed to transact business in a particular state.
- Adult Day Care - -A program for impaired adults that attempts to meet
their health, social, and functional needs in a setting away from their homes.
, - Adverse Selection - -The tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present
lower probability.
- Agency - -An insurance sales office or company.
- Agent - -An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
- Agent Appointment - -The authorization of an agent to act for or represent
an insurer.
- Agent's Authority - -Special powers granted to an agent by his or her
agency contract.
- Aleatory - -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.
- Alien Insurer - -An insurance company that is incorporated outside the
United States.
- Annual Statement - -A detailed financial report that an insurance company
must submit every year to the insurance department of state in which it
conducts business.
- Annuity - -A contract that provides income for a specified period of years,
or for life.
- Apparent Authority - -The appearance of the assumption of authority
based on the actions, words, or deeds of the principal or because of
circumstances of the principal created.
- Applicant - -A person making applications for, or offering himself, herself
or another to be insured under an insurance contract.
- Appication - -A document that provides information for underwriting
purposes. After the policy is issued, any unanswered questions are
considered waived by the insurer.
- Assignment - -The transfer of ownership rights of a life insurance policy
from one person to another.
- Attained Age - -The age of the insured at a determined date.
, - Attending Physician's Statement (APS) - -A statement usually obtained
from the applicant's doctor.
- Authorized (Admitted) Insurer - -An insurance company authorized and
licensed to transact business in a particular state.
- Avoidance - -A method of dealing with risk by deliberately keeping away
from it (ex. if a person wanted to avoid risk of being killed in airplane crash
they may never fly)
- Basic Illustration - -A ledger or proposal used in the sale of a life insurance
policy that shows both guaranteed and non-guaranteed elements.
- Beneficiary - -The person who receives the proceeds from the policy when
the insured dies.
- Binder (Binding Receipt) - -A temporary contract that puts an insurance
policy into force before the premium has been paid.
- Birthday Rule - -The method of determining primary coverage for a
dependent child, under which the plan of the parent whose birthday occurs
first in the calendar year is designated as primary.
- Broker - -An individual who represents an insured in the process of
purchasing and negotiating a contract of insurance.
- Buy-Sell Agreement - -A legal contract that determines what will be done
with a business in the event that an owner dies or becomes disabled.
- Buyer's Guide - -A booklet that describes insurance policies and concepts,
and provides general information to help an applicant make an informed
decision.
- Cash Value - -The amount to which a policyowner is entitled if the policy is
surrendered before maturity.
- Certificate - -A statement or booklet that confirms that a policy has been
written and that describes the coverage in general.
- Certificate of Authority - -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.
Questions and Answers
Accelerated Benefits - -Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses.
- Accidental Death Benefits - -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 - -An insurance policy that provides payment if
the insured's death is the result of the accident.
- Accumulation Period - -The time before an annuitant's retirement during
which the annuitant is making payments or investments in an annuity.
- Acquired Immunodeficiency Syndrome (AIDS) - -An infections and
incurable disease caused by the human immunodeficiency virus (HIV).
- Actual Cash Value (ACV) - -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 - -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 - -Life insurance that permits changed in the face amount,
premium amount, period of protection, and the duration of the premium
payment period.
- Adjuster - -A representative of an insurance company who investigates
and acts on behalf of the company to obtain agreements for the amount of
the insurance claim.
- Administrator - -An individual appointed by a court as a fiduciary to settle
the financial affairs and estate of a deceased person.
- Admitted (Authorized) Insurer - -An insurance company authorized and
licensed to transact business in a particular state.
- Adult Day Care - -A program for impaired adults that attempts to meet
their health, social, and functional needs in a setting away from their homes.
, - Adverse Selection - -The tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present
lower probability.
- Agency - -An insurance sales office or company.
- Agent - -An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
- Agent Appointment - -The authorization of an agent to act for or represent
an insurer.
- Agent's Authority - -Special powers granted to an agent by his or her
agency contract.
- Aleatory - -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.
- Alien Insurer - -An insurance company that is incorporated outside the
United States.
- Annual Statement - -A detailed financial report that an insurance company
must submit every year to the insurance department of state in which it
conducts business.
- Annuity - -A contract that provides income for a specified period of years,
or for life.
- Apparent Authority - -The appearance of the assumption of authority
based on the actions, words, or deeds of the principal or because of
circumstances of the principal created.
- Applicant - -A person making applications for, or offering himself, herself
or another to be insured under an insurance contract.
- Appication - -A document that provides information for underwriting
purposes. After the policy is issued, any unanswered questions are
considered waived by the insurer.
- Assignment - -The transfer of ownership rights of a life insurance policy
from one person to another.
- Attained Age - -The age of the insured at a determined date.
, - Attending Physician's Statement (APS) - -A statement usually obtained
from the applicant's doctor.
- Authorized (Admitted) Insurer - -An insurance company authorized and
licensed to transact business in a particular state.
- Avoidance - -A method of dealing with risk by deliberately keeping away
from it (ex. if a person wanted to avoid risk of being killed in airplane crash
they may never fly)
- Basic Illustration - -A ledger or proposal used in the sale of a life insurance
policy that shows both guaranteed and non-guaranteed elements.
- Beneficiary - -The person who receives the proceeds from the policy when
the insured dies.
- Binder (Binding Receipt) - -A temporary contract that puts an insurance
policy into force before the premium has been paid.
- Birthday Rule - -The method of determining primary coverage for a
dependent child, under which the plan of the parent whose birthday occurs
first in the calendar year is designated as primary.
- Broker - -An individual who represents an insured in the process of
purchasing and negotiating a contract of insurance.
- Buy-Sell Agreement - -A legal contract that determines what will be done
with a business in the event that an owner dies or becomes disabled.
- Buyer's Guide - -A booklet that describes insurance policies and concepts,
and provides general information to help an applicant make an informed
decision.
- Cash Value - -The amount to which a policyowner is entitled if the policy is
surrendered before maturity.
- Certificate - -A statement or booklet that confirms that a policy has been
written and that describes the coverage in general.
- Certificate of Authority - -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.
