Indiana Life & Health Insurance Exam / Key Quizzes
with 100% Correct Answers.
Terms in this set (89)
Participating Insurance may pay dividends to the policyowner
Policy
Material Misrepresentation misstatement to a question asked in the application process;
death benefit claim will likely be denied
Law of Large Numbers the larger a group becomes, the easier it is to predict
losses; used to predict certain types of losses and set
appropriate premiums
Substandard Risk results in higher premium
Standard Risk results in standard premium
Preferred Risk results in lower premium
Expense Loading combined with premiums to spread the operating costs of a
business to all insureds
Net Premium premiums without expense loading
Concealment occurs when a person withholds a material fact that is crucial to
making a decision; in insurance, this involves withholding
information that would be crucial to underwriting decisions
Warranty a statement guaranteed to be true
Representation a statement true to the best of an applicant's knowledge
3 Basic Types of Term Life level, increasing, and decreasing
Insurance
, Level Term death benefit doesn't change throughout the life of the
policy
Annually Renewable Term premium increases annually according to attained age;
(ART) policy may be guaranteed to be renewable each without
proof of insurability
Re-entry Option the insured, upon the end of a term policy with guaranteed
renewable option, may qualify for a discounted premium rate
with proof of insurability
Decreasing Term death benefit decreases each year over duration of the
policy term; typically used when the amount of needed
protection is time sensitive, or decreases over time
Increasing Term death benefit increases each year over duration of the policy
term (usually by specific amount or percentage of original
amount); often used by insurance companies to fund certain
riders that provide a refund of premiums of a gradual
increase in total coverage, such as the cost of living or return
of premium riders
Convertible Term provides the policy owner with the right to convert the
policy to a permanent insurance policy without evidence of
insurability; premium will be based on the insured's
attained age at the time of conversion
Continuous Premium basic whole life policy; will typically have the lowest annual
(Straight Life or Ordinary premium
Life)
Limited Payment premiums for coverage paid-up before age 100; higher
premium and cash value builds up faster; 20pay life, life
paid-up at 65 (LP-65);
provides level death benefit to the insured's age 100 for a
Single Premium Whole Life
one-time, lump-sum payment; policy completely paid-up
(SPWL) after one premium and generates immediate cash
with 100% Correct Answers.
Terms in this set (89)
Participating Insurance may pay dividends to the policyowner
Policy
Material Misrepresentation misstatement to a question asked in the application process;
death benefit claim will likely be denied
Law of Large Numbers the larger a group becomes, the easier it is to predict
losses; used to predict certain types of losses and set
appropriate premiums
Substandard Risk results in higher premium
Standard Risk results in standard premium
Preferred Risk results in lower premium
Expense Loading combined with premiums to spread the operating costs of a
business to all insureds
Net Premium premiums without expense loading
Concealment occurs when a person withholds a material fact that is crucial to
making a decision; in insurance, this involves withholding
information that would be crucial to underwriting decisions
Warranty a statement guaranteed to be true
Representation a statement true to the best of an applicant's knowledge
3 Basic Types of Term Life level, increasing, and decreasing
Insurance
, Level Term death benefit doesn't change throughout the life of the
policy
Annually Renewable Term premium increases annually according to attained age;
(ART) policy may be guaranteed to be renewable each without
proof of insurability
Re-entry Option the insured, upon the end of a term policy with guaranteed
renewable option, may qualify for a discounted premium rate
with proof of insurability
Decreasing Term death benefit decreases each year over duration of the
policy term; typically used when the amount of needed
protection is time sensitive, or decreases over time
Increasing Term death benefit increases each year over duration of the policy
term (usually by specific amount or percentage of original
amount); often used by insurance companies to fund certain
riders that provide a refund of premiums of a gradual
increase in total coverage, such as the cost of living or return
of premium riders
Convertible Term provides the policy owner with the right to convert the
policy to a permanent insurance policy without evidence of
insurability; premium will be based on the insured's
attained age at the time of conversion
Continuous Premium basic whole life policy; will typically have the lowest annual
(Straight Life or Ordinary premium
Life)
Limited Payment premiums for coverage paid-up before age 100; higher
premium and cash value builds up faster; 20pay life, life
paid-up at 65 (LP-65);
provides level death benefit to the insured's age 100 for a
Single Premium Whole Life
one-time, lump-sum payment; policy completely paid-up
(SPWL) after one premium and generates immediate cash
