Exam Fx Life and Health Key Terms
Questions and answers
Accelerated Benefits - -Riders attached to life insurance policies which allow
death benefits to be used to cover nursing or convalescent home expenses.
- Accident - -An unplanned, unforeseen event which occurs suddenly and at
an unspecified place.
- Accident Insurance - -A type of insurance that protects the insured against
loss due to accidental bodily injury. Accidental Bodily Injury - Unplanned,
unforeseen traumatic injury to the body.
- Accidental Death and Dismemberment (AD&D) - -An insurance policy
which pays a specified amount or a specified multiple of the insured's benefit
if the insured dies, loses his/her sight, or loses two limbs due to an accident.
- 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 an accident.
- Accumulation Period - -The time over which the annuitant makes
payments or investments in an annuity, and when those payments earn
interest tax deferred.
- Acquired Immunodeficiency Syndrome (AIDS) - -An infectious and
incurable disease caused by the human immunodeficiency virus (HIV).
- Activities of Daily Living (ADLs) - -Activities individuals must do every day
such as moving about, getting dressed, eating, bathing, etc.
- Actual Cash Value (ACV) - -The required amount to pay damages or for
property loss, which is calculated based on the property's current
replacement value minus depreciation.
- Actual Charge - -The amount a physician or supplier actually bills for a
particular service or supply.
- Actuary - -A person trained in the technical aspects of insurance and
related fields, particularly in the mathematics of insurance; a person who, on
behalf of the company, determines the mathematical probability of loss.
, - Adhesion - -A contract offered on a "take-it-or-leave-it" basis by an insurer,
in which the insured's only option is to accept or reject the contract. Any
ambiguities in the contract will be settled in favor of the insured.
- Adjustable Life - -Life insurance which permits changes 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 the 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 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 to the amount the insurer will pay in the
event of a loss.
- Alien Insurer - -An insurance company that is incorporated outside the
United States.
- Alzheimer's Disease - -A disease that causes the victim to become
dysfunctional due to degeneration of brain cells causing severe memory loss.
, - Ancillary - -Additional, miscellaneous services provided by a hospital, such
as x-rays, anesthesia, and lab work, but not hospital room and board
expenses.
- Annual Statement - -A detailed financial report that an insurance company
must submit every year to the insurance department of state(s) in which it
conducts business.
- Annuity - -A contract that provides income for a specified period of years,
or for life.
- Apparent Authority - -The appearance or the assumption of authority
based on the actions, words, or deeds of the principal or because of
circumstances the principal created.
- Applicant - -A person making application for, or offering him/herself or
another to be insured under an insurance contract.
- Application - -A document that provides information for underwriting
purposes. After the policy is issued, any unanswered questions are
considered waived by the insurer.
- Approved Amount - -The amount Medicare determines to be reasonable
for a service that is covered under part B of Medicare.
- Assignment (Life) - -The transfer of ownership rights of a life insurance
policy from one person to another.
- Assignment (Health) - -A claim to a provider or medical supplier to receive
payments directly from Medicare.
- 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 (e.g. if a person wanted to avoid the risk of being killed in an airplane
crash, he/she might choose never to fly in a plane).
- Back-End Load - -a fee charged at the time of a sale, transfer or
withdrawal from an annuity or a life insurance policy. Basic Hospital Expense
Insurance Coverage that provides benefits for room, board and
Questions and answers
Accelerated Benefits - -Riders attached to life insurance policies which allow
death benefits to be used to cover nursing or convalescent home expenses.
- Accident - -An unplanned, unforeseen event which occurs suddenly and at
an unspecified place.
- Accident Insurance - -A type of insurance that protects the insured against
loss due to accidental bodily injury. Accidental Bodily Injury - Unplanned,
unforeseen traumatic injury to the body.
- Accidental Death and Dismemberment (AD&D) - -An insurance policy
which pays a specified amount or a specified multiple of the insured's benefit
if the insured dies, loses his/her sight, or loses two limbs due to an accident.
- 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 an accident.
- Accumulation Period - -The time over which the annuitant makes
payments or investments in an annuity, and when those payments earn
interest tax deferred.
- Acquired Immunodeficiency Syndrome (AIDS) - -An infectious and
incurable disease caused by the human immunodeficiency virus (HIV).
- Activities of Daily Living (ADLs) - -Activities individuals must do every day
such as moving about, getting dressed, eating, bathing, etc.
- Actual Cash Value (ACV) - -The required amount to pay damages or for
property loss, which is calculated based on the property's current
replacement value minus depreciation.
- Actual Charge - -The amount a physician or supplier actually bills for a
particular service or supply.
- Actuary - -A person trained in the technical aspects of insurance and
related fields, particularly in the mathematics of insurance; a person who, on
behalf of the company, determines the mathematical probability of loss.
, - Adhesion - -A contract offered on a "take-it-or-leave-it" basis by an insurer,
in which the insured's only option is to accept or reject the contract. Any
ambiguities in the contract will be settled in favor of the insured.
- Adjustable Life - -Life insurance which permits changes 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 the 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 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 to the amount the insurer will pay in the
event of a loss.
- Alien Insurer - -An insurance company that is incorporated outside the
United States.
- Alzheimer's Disease - -A disease that causes the victim to become
dysfunctional due to degeneration of brain cells causing severe memory loss.
, - Ancillary - -Additional, miscellaneous services provided by a hospital, such
as x-rays, anesthesia, and lab work, but not hospital room and board
expenses.
- Annual Statement - -A detailed financial report that an insurance company
must submit every year to the insurance department of state(s) in which it
conducts business.
- Annuity - -A contract that provides income for a specified period of years,
or for life.
- Apparent Authority - -The appearance or the assumption of authority
based on the actions, words, or deeds of the principal or because of
circumstances the principal created.
- Applicant - -A person making application for, or offering him/herself or
another to be insured under an insurance contract.
- Application - -A document that provides information for underwriting
purposes. After the policy is issued, any unanswered questions are
considered waived by the insurer.
- Approved Amount - -The amount Medicare determines to be reasonable
for a service that is covered under part B of Medicare.
- Assignment (Life) - -The transfer of ownership rights of a life insurance
policy from one person to another.
- Assignment (Health) - -A claim to a provider or medical supplier to receive
payments directly from Medicare.
- 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 (e.g. if a person wanted to avoid the risk of being killed in an airplane
crash, he/she might choose never to fly in a plane).
- Back-End Load - -a fee charged at the time of a sale, transfer or
withdrawal from an annuity or a life insurance policy. Basic Hospital Expense
Insurance Coverage that provides benefits for room, board and
