TENNESSEE LIFE AND HEALTH INSURANCE EXAM CORE 2025
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔cognitive impairment - ✔✔Involves the loss of memory and deductive or abstract
reasoning due to an organic mental illness, including Alzheimer's disease and senile
dementia. Also includes impairment due to traumatic brain injury, such as a stroke or
blunt-force trauma. Impairment in any of the ADLs is not required under this
classification.
✔✔Fixed Annuity - ✔✔guaranteed fixed interest rate during accumulation period, level
fixed benefit amount during annuitization
✔✔Applicant - ✔✔A person making application for himself/herself or another to be
insured under an insurance contract. The applicant may be the insured, the owner or
both.
✔✔Stranger-Originated Life Insurance (STOLI) - ✔✔an agreement initiated at or prior to
the issuance of a policy that includes:
the purchase of a policy benefiting a person, who at time of issue, has no insurable
interest in the person to be insured
the transfer at any time of the legal ownership/benefits, including assumption or
forgiveness of a loan to fund premiums
✔✔Community Rating - ✔✔Determines premiums by examining a particular geographic
region of all insureds in a group.
✔✔Variable Universal Life - ✔✔A flexible premium and face amount policy with cash
value fluctuations reflecting the investment performance of the underlying separate
account.
✔✔Decreasing Term - ✔✔The death benefit decreases, but premiums remain level for
the policy term.
The premiums paid for decreasing term are lower than the premiums payable for level
term since the benefit decreases throughout the term of the policy.
✔✔Investor Originated Life Insurance (IOLI) - ✔✔Investors, producers, or brokers with
absolutely no personal or business connection with a person, who induce a purchase of
a life insurance policy with the sole intent of selling that policy to institutional investors
for an amount less than the death benefit, but greater than the policy's cash value.
Essentially, the insured is "selling" their mortality.
,✔✔Group Insurance Market - ✔✔Group life insures a group of people under a single
contract.
✔✔Competent Parties - ✔✔All parties to a contract; Insurer and Insured must have
legal capacity to enter into a contract
✔✔Consequences of Incomplete Applications - ✔✔It is the producer's responsibility to
make certain the application is filled out completely, correctly, and to the best of the
applicant's knowledge.
The underwriter will most likely return an incomplete application to the producer for
completion by the applicant. If a policy is issued based on an incomplete application, it
is assumed the information is not material to the issuance and the insurer waives the
right to challenge a claim based on the incomplete application.
✔✔Fee for Service vs. Prepaid Plan - ✔✔Fee for Service — Pay benefits based on
actual services provided.
Prepaid Plan — Provide benefits based on a designated fee (capitation fee), regardless
of any services provided.
✔✔Level Term - ✔✔premiums and death benefits stay the same for the life of the policy
✔✔Incontestability Clause - ✔✔After a policy has been in force for a specified period of
years, the insurer cannot contest the insured's application statements (including errors,
misstatements or even fraud)
✔✔Absolute Assignment v. Collateral Assignment - ✔✔Absolute: A permanent and
irrevocable transfer
of rights and/or benefits by the policyowner.
Collateral: A temporary and/or revocable transfer
of benefits by the policyowner.
✔✔Recurrent Disability - ✔✔When a second disability is suffered due to the same
cause within a certain period of time (usually 6 months), the elimination period will not
apply and the disability will be considered continuous.
✔✔Vision Care - ✔✔Provides for 1 routine annual examination (refraction). It may
provide payment for the cost of lenses, frames, contact lenses, but not the cost to
replace lost or broken frames or lenses. Coverage does not pay for medical expenses
incurred from disease or injuries to the eye.
✔✔Substandard Risks (Higher Risk Exposure) - ✔✔Individuals who are not acceptable
at standard rates because of poor health, bad habits or occupational hazards.
✔✔Grace Period - ✔✔Period of time before a policy lapses after missed premium
payment
, ✔✔Cash Accumulation - ✔✔An amount of cash accessible to the policyowner from
within permanent life insurance policies
✔✔Payor Benefit (Waiver of Payors Premium) - ✔✔If the payor (policyowner) dies or
becomes disabled and is unable to make the premium payments, the insurer will waive
the premiums payments for a specified period of time.
✔✔Basic Surgical Expense - ✔✔Pays surgeon and anesthesiologist fees for the cost of
a surgical procedure.
✔✔Liquidity - ✔✔Immediate funds available upon death to pay creditors, taxes and final
expenses as well as cash values available for policy loans, withdrawals, and full
surrenders.
✔✔Mental Health Care - ✔✔Medicare Part A will cover inpatient mental health care on
the same basis as inpatient hospital care.
Medicare Part B will cover mental health services on an outpatient basis when provided
by a health care provider who accepts Medicare Payment
✔✔Prospective Review - ✔✔A utilization review conducted prior to the delivery of the
requested medical service. Prospective reviews include the initial review conducted
before treatment starts, and the initial review for treatment to a different body part.
✔✔Changes in the Application - ✔✔Whenever an answer to a question needs to be
corrected, the applicant or producer makes the correction and the applicant initials the
change, or the producer can complete a new application
✔✔Mutual Insurance Company - ✔✔A type of insurance company owned by its
policyholders.
✔✔Medical Information Bureau (MIB) - ✔✔An information database that stores the
health histories of individuals who have applied for insurance in the past. Most
insurance companies subscribe to this database for underwriting purposes.
✔✔Benefit Triggers - ✔✔Conditions that initiate or trigger the benefits to be paid under
a Long-Term Care policy.
✔✔Health Maintenance Organization (HMO) - ✔✔a managed health care provider
offering a comprehensive array of medical services on a prepaid basis to subscribers
living within a specific service area
✔✔probationary period - ✔✔The period of time between the effective date of a health
insurance policy and the date coverage for all or certain conditions begins.
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔cognitive impairment - ✔✔Involves the loss of memory and deductive or abstract
reasoning due to an organic mental illness, including Alzheimer's disease and senile
dementia. Also includes impairment due to traumatic brain injury, such as a stroke or
blunt-force trauma. Impairment in any of the ADLs is not required under this
classification.
✔✔Fixed Annuity - ✔✔guaranteed fixed interest rate during accumulation period, level
fixed benefit amount during annuitization
✔✔Applicant - ✔✔A person making application for himself/herself or another to be
insured under an insurance contract. The applicant may be the insured, the owner or
both.
✔✔Stranger-Originated Life Insurance (STOLI) - ✔✔an agreement initiated at or prior to
the issuance of a policy that includes:
the purchase of a policy benefiting a person, who at time of issue, has no insurable
interest in the person to be insured
the transfer at any time of the legal ownership/benefits, including assumption or
forgiveness of a loan to fund premiums
✔✔Community Rating - ✔✔Determines premiums by examining a particular geographic
region of all insureds in a group.
✔✔Variable Universal Life - ✔✔A flexible premium and face amount policy with cash
value fluctuations reflecting the investment performance of the underlying separate
account.
✔✔Decreasing Term - ✔✔The death benefit decreases, but premiums remain level for
the policy term.
The premiums paid for decreasing term are lower than the premiums payable for level
term since the benefit decreases throughout the term of the policy.
✔✔Investor Originated Life Insurance (IOLI) - ✔✔Investors, producers, or brokers with
absolutely no personal or business connection with a person, who induce a purchase of
a life insurance policy with the sole intent of selling that policy to institutional investors
for an amount less than the death benefit, but greater than the policy's cash value.
Essentially, the insured is "selling" their mortality.
,✔✔Group Insurance Market - ✔✔Group life insures a group of people under a single
contract.
✔✔Competent Parties - ✔✔All parties to a contract; Insurer and Insured must have
legal capacity to enter into a contract
✔✔Consequences of Incomplete Applications - ✔✔It is the producer's responsibility to
make certain the application is filled out completely, correctly, and to the best of the
applicant's knowledge.
The underwriter will most likely return an incomplete application to the producer for
completion by the applicant. If a policy is issued based on an incomplete application, it
is assumed the information is not material to the issuance and the insurer waives the
right to challenge a claim based on the incomplete application.
✔✔Fee for Service vs. Prepaid Plan - ✔✔Fee for Service — Pay benefits based on
actual services provided.
Prepaid Plan — Provide benefits based on a designated fee (capitation fee), regardless
of any services provided.
✔✔Level Term - ✔✔premiums and death benefits stay the same for the life of the policy
✔✔Incontestability Clause - ✔✔After a policy has been in force for a specified period of
years, the insurer cannot contest the insured's application statements (including errors,
misstatements or even fraud)
✔✔Absolute Assignment v. Collateral Assignment - ✔✔Absolute: A permanent and
irrevocable transfer
of rights and/or benefits by the policyowner.
Collateral: A temporary and/or revocable transfer
of benefits by the policyowner.
✔✔Recurrent Disability - ✔✔When a second disability is suffered due to the same
cause within a certain period of time (usually 6 months), the elimination period will not
apply and the disability will be considered continuous.
✔✔Vision Care - ✔✔Provides for 1 routine annual examination (refraction). It may
provide payment for the cost of lenses, frames, contact lenses, but not the cost to
replace lost or broken frames or lenses. Coverage does not pay for medical expenses
incurred from disease or injuries to the eye.
✔✔Substandard Risks (Higher Risk Exposure) - ✔✔Individuals who are not acceptable
at standard rates because of poor health, bad habits or occupational hazards.
✔✔Grace Period - ✔✔Period of time before a policy lapses after missed premium
payment
, ✔✔Cash Accumulation - ✔✔An amount of cash accessible to the policyowner from
within permanent life insurance policies
✔✔Payor Benefit (Waiver of Payors Premium) - ✔✔If the payor (policyowner) dies or
becomes disabled and is unable to make the premium payments, the insurer will waive
the premiums payments for a specified period of time.
✔✔Basic Surgical Expense - ✔✔Pays surgeon and anesthesiologist fees for the cost of
a surgical procedure.
✔✔Liquidity - ✔✔Immediate funds available upon death to pay creditors, taxes and final
expenses as well as cash values available for policy loans, withdrawals, and full
surrenders.
✔✔Mental Health Care - ✔✔Medicare Part A will cover inpatient mental health care on
the same basis as inpatient hospital care.
Medicare Part B will cover mental health services on an outpatient basis when provided
by a health care provider who accepts Medicare Payment
✔✔Prospective Review - ✔✔A utilization review conducted prior to the delivery of the
requested medical service. Prospective reviews include the initial review conducted
before treatment starts, and the initial review for treatment to a different body part.
✔✔Changes in the Application - ✔✔Whenever an answer to a question needs to be
corrected, the applicant or producer makes the correction and the applicant initials the
change, or the producer can complete a new application
✔✔Mutual Insurance Company - ✔✔A type of insurance company owned by its
policyholders.
✔✔Medical Information Bureau (MIB) - ✔✔An information database that stores the
health histories of individuals who have applied for insurance in the past. Most
insurance companies subscribe to this database for underwriting purposes.
✔✔Benefit Triggers - ✔✔Conditions that initiate or trigger the benefits to be paid under
a Long-Term Care policy.
✔✔Health Maintenance Organization (HMO) - ✔✔a managed health care provider
offering a comprehensive array of medical services on a prepaid basis to subscribers
living within a specific service area
✔✔probationary period - ✔✔The period of time between the effective date of a health
insurance policy and the date coverage for all or certain conditions begins.
