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WEBCE Life And Health (281 Questions) With 100% Correct Verified Answers
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Representations and Warranties - Correct Answer-Representations are statements theapplicant makes on an application
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that are deemed to be true to the applicant's best knowledge. Warranties are statements the insurer makes in the
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contract.
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Underwriting vs. Actuarial Departments - Correct Answer-Two related insurance company functions. Through the
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process of , applications are assessed forinsurability
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and to assign premium rates. The department analyzes data to help
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estimate future losses and to produce rate tables.
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Managerial System vs. General Agency System - Correct Answer-Two variations of thecareer agency system in which
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producers represent a single company. One is headed by a company employee called a general manager (GM), the other
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by an independent contractor called a general agent (GA).
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Fraternal Insurance Company - Correct Answer-A non-profit form of insurance providersponsored by an organization of
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people who share a common ethnic, religious, or vocational affiliation.
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Sp
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Peril and Hazard - Correct Answer-Two related general insurance terms: Peril is the immediate cause of a
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loss (and the event that is insured against).Hazard is any condition that increases the risk of incurring a
loss.
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sh
Sp
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Contract of adhesion - Correct Answer-A type of contract in which one party (the offeror)drafts the terms that must be
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accepted as-is by the offeree. Insurance policies are this type.
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Sp
Mutual Insurance Company - Correct Answer-A form of insurance company that isowned by policyowners. May
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distribute policy dividends (non-taxable) through participating policies.
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Independent Agency System - Correct Answer-An insurance distribution system in which the manager and
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producers are fully independent and not affiliated with anysingle insurer.
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Buyer's Guide and Policy Summary - Correct Answer-Two related disclosure documentsthat are required by most states to
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be presented to life and health insurance applicants at some point during the buying process.
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Sp
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Risk - Correct Answer-A basic insurance term referring to the possibility of incurring aloss.
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Sp
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Law of Large Numbers - Correct Answer-A mathematical principle that is the basis forpredicting the odds of a loss
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occurring in a certain population in any given year.
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Sp
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Social Security (OASDI) - Correct Answer-A federal insurance program that providesdisability, death, and retirement
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benefits to covered workers and their qualifying beneficiaries.
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sh
Sp
Agents vs. Brokers - Correct Answer-Two basic types of insurance producer: an
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represents a single insurer and a sells policies from multiple insurers.
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Reinsurance - Correct Answer-The process through which insurance companies spreadlarge risks among other insurers.
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Sp
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Domestic, Foreign, and Alien Insurers - Correct Answer-Insurers can be categorized by
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their state of domicile. There are three categories, known as , , and .
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Stock Insurance Company - Correct Answer-A form of insurance company that is owned by stockholders who may or may
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not also be policyowners. May distribute stockdividends (taxable).
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Admitted Insurer - Correct Answer-An insurer that has a certificate of authority in agiven state is said to be an
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insurer in that state.
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Express, Implied, and Apparent Authority - Correct Answer-Express authority—The rightto sign an application as an agent
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for the insurer.
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Implied authority—Using a computer program to identify insurance needs and torecommend solutions.
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Apparent authority—Advising the applicant to not disclose on the application anyimportant health facts that might
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reduce his or her insurability.
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Sp
Indemnity vs. Valued Contract - Correct Answer-Two forms of insurance contract. An indemnity contract bases policy
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benefits on reimbursement of actual losses. A valued contract bases benefits on a stated amount without regard for the
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value of the loss.
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Loss - Correct Answer-An unplanned reduction in economic value resulting from theoccurrence of a covered peril.
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Medicare - Correct Answer-A federal insurance program that provides medical carebenefits to covered workers
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(retirees).
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Sp
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Underwriting - Correct Answer-The process by which an insurance company assessesan application to determine if it
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represents an insurable risk.
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sh
Sp
Risk Management - Correct Answer-The natural process by which people contend withthe perils faced daily, of which
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there are five common techniques.
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Sp
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The five basic elements of a valid contract - Correct Answer-Offer, acceptance,consideration, competent
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parties, and legal purpose
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Sp
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Concealment - Correct Answer-The willful nondisclosure of material facts on anapplication for the purpose of
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obtaining insurance.
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sh
Sp
Insurable Risk (5 Criteria) - Correct Answer-Loss must be definable and measurable.The covered peril must be
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accidental or outside the insured's control.
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The risk must be shared by a large group of similar risks.The loss must not be
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catastrophic.
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Sp
The risk must not be generally excluded from coverage.
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Needs Approach - Correct Answer-The needs approach to determining life insuranceneeds is based on a detailed
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review of a person's specific situation. It examines personal and family income, liabilities, and assets, as well as future
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Sp
financial goals, tocalculate the right amount of life insurance.
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Bring-Back Rule - Correct Answer-In estate planning, this rule requires life insurance policies transferred from the
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insured within 3 years before death to be returned to thedecedent's estate for valuation purposes.
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Sp
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Life Insurance "Living Benefits" - Correct Answer-Living benefits are made possible bythe policy's cash value, which is
la
always available to the policyowner through policy loans, withdrawals, and partial surrenders. The funds may be used for
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any purpose.
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Sp
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Key Person Life Insurance - Correct Answer-If a key employee ends his or her employment, the employer can continue
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the policy in force. However, many employerschoose to:
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sell the policy to the insured for an amount equal to its cash valuesurrender the policy or
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Sp
change insureds if allowed by the insurance company and applicable state law
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la
Annuity - Correct Answer-An insurance contract between a person and an insurer to distribute an accumulated sum of
money over a certain period, including the person'slifetime.
tz
sh
Sp
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Annuities come in many forms, but they all have two common purposes:to accumulate money on a tax-
la
deferred basis
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to distribute the accumulated money as income in a guaranteed amount for aguaranteed period (including the
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annuitant's life)
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la
Decreasing Term Life Insurance - Correct Answer-This form of term life features a deathbenefit that diminishes over time
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and premium that remains level for the term of the policy.
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Sp
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la
tz
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Sp
ne
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Sp
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Sp
, ne
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Fully Insured Status (Social Security) - Correct Answer-To be considered fully insured, aworker must have 40 quarters of
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coverage. A fully insured worker is eligible for disability, retirement, and death benefits.
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sh
Sp
Cross-Purchase Buy-Sell Agreement - Correct Answer-A type of buy-sell agreement inwhich each owner purchases a life
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insurance policy on each of the other owners.
la
tz
ERISA - Correct Answer-The Employee Retirement Income Security Act of 1974 (ERISA) protects the rights of employees
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Sp
covered under an employer-sponsored planby stipulating minimum participation, vesting, and funding requirements.
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Irrevocable Beneficiary - Correct Answer-This beneficiary designation cannot bechanged by the policyowner without
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that beneficiary's permission.
sh
Sp
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Guaranteed Insurability Rider - Correct Answer-This life policy rider guarantees that additional coverage can be added to
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a whole life policy even if the insured has becomeuninsurable.
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Sp
Annuity Beneficiary - Correct Answer-The person the annuity owner chooses to receivethe annuity contract's values if
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either the owner or the annuitant dies before annuitization.
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Whole Life Insurance - Correct Answer-Whole life insurance features a guaranteed cashvalue, a fixed guaranteed death
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Sp
benefit, level premiums, and coverage that can remain in effect as long as the insured lives (up to age 120). Its most basic
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form is called straight (or ordinary) whole life insurance.
la
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Buy-Sell Agreement - Correct Answer-A legal agreement through which two or more owners of a business arrange for
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Sp
the disposition of each owner's share of the businessupon death.
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Expense Charge (Load Factor) - Correct Answer-The load factor reflects the costs theinsurer expects to incur on the
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policy. In determining its load factor, an insurer is generally guided by three objectives:
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to cover total operating coststo provide
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a safety margin
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to contribute to profits or surplus
tz
sh
Sp
Term Life Insurance - Correct Answer-This basic form of life insurance provides temporary protection and does not
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include a cash value while the insured is alive.
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Insurable Interest - Correct Answer-The financial interest a policyowner has in a personor property being insured,
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Sp
justifying the purchase of insurance.
ne
la
Annuitization - Correct Answer-The process through which a sum of money is convertedinto periodic payments through an
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annuity contract.
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Sp
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tz
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Sp
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sh
ne
WEBCE Life And Health (281 Questions) With 100% Correct Verified Answers
la
tz
GRADED A
sh
Sp
ne
la
tz
sh
Sp
ne
la
tz
sh
Sp
ne
Representations and Warranties - Correct Answer-Representations are statements theapplicant makes on an application
la
that are deemed to be true to the applicant's best knowledge. Warranties are statements the insurer makes in the
tz
contract.
sh
Sp
ne
Underwriting vs. Actuarial Departments - Correct Answer-Two related insurance company functions. Through the
la
process of , applications are assessed forinsurability
tz
and to assign premium rates. The department analyzes data to help
sh
Sp
estimate future losses and to produce rate tables.
ne
la
Managerial System vs. General Agency System - Correct Answer-Two variations of thecareer agency system in which
tz
producers represent a single company. One is headed by a company employee called a general manager (GM), the other
sh
Sp
by an independent contractor called a general agent (GA).
ne
la
Fraternal Insurance Company - Correct Answer-A non-profit form of insurance providersponsored by an organization of
tz
people who share a common ethnic, religious, or vocational affiliation.
sh
Sp
ne
Peril and Hazard - Correct Answer-Two related general insurance terms: Peril is the immediate cause of a
la
loss (and the event that is insured against).Hazard is any condition that increases the risk of incurring a
loss.
tz
sh
Sp
ne
Contract of adhesion - Correct Answer-A type of contract in which one party (the offeror)drafts the terms that must be
la
accepted as-is by the offeree. Insurance policies are this type.
tz
sh
Sp
Mutual Insurance Company - Correct Answer-A form of insurance company that isowned by policyowners. May
ne
distribute policy dividends (non-taxable) through participating policies.
la
tz
Independent Agency System - Correct Answer-An insurance distribution system in which the manager and
sh
Sp
producers are fully independent and not affiliated with anysingle insurer.
ne
la
Buyer's Guide and Policy Summary - Correct Answer-Two related disclosure documentsthat are required by most states to
tz
be presented to life and health insurance applicants at some point during the buying process.
sh
Sp
ne
Risk - Correct Answer-A basic insurance term referring to the possibility of incurring aloss.
la
sh
Sp
la
Sp
, ne
tz
sh
ne
la
Law of Large Numbers - Correct Answer-A mathematical principle that is the basis forpredicting the odds of a loss
tz
occurring in a certain population in any given year.
sh
Sp
ne
Social Security (OASDI) - Correct Answer-A federal insurance program that providesdisability, death, and retirement
la
benefits to covered workers and their qualifying beneficiaries.
tz
sh
Sp
Agents vs. Brokers - Correct Answer-Two basic types of insurance producer: an
ne
represents a single insurer and a sells policies from multiple insurers.
la
tz
Reinsurance - Correct Answer-The process through which insurance companies spreadlarge risks among other insurers.
sh
Sp
ne
Domestic, Foreign, and Alien Insurers - Correct Answer-Insurers can be categorized by
la
their state of domicile. There are three categories, known as , , and .
tz
sh
Sp
Stock Insurance Company - Correct Answer-A form of insurance company that is owned by stockholders who may or may
ne
not also be policyowners. May distribute stockdividends (taxable).
la
tz
Admitted Insurer - Correct Answer-An insurer that has a certificate of authority in agiven state is said to be an
sh
Sp
insurer in that state.
ne
Express, Implied, and Apparent Authority - Correct Answer-Express authority—The rightto sign an application as an agent
la
tz
for the insurer.
sh
Sp
Implied authority—Using a computer program to identify insurance needs and torecommend solutions.
ne
Apparent authority—Advising the applicant to not disclose on the application anyimportant health facts that might
la
reduce his or her insurability.
tz
sh
Sp
Indemnity vs. Valued Contract - Correct Answer-Two forms of insurance contract. An indemnity contract bases policy
ne
benefits on reimbursement of actual losses. A valued contract bases benefits on a stated amount without regard for the
la
value of the loss.
tz
sh
Sp
Loss - Correct Answer-An unplanned reduction in economic value resulting from theoccurrence of a covered peril.
ne
la
Medicare - Correct Answer-A federal insurance program that provides medical carebenefits to covered workers
tz
(retirees).
sh
Sp
ne
Underwriting - Correct Answer-The process by which an insurance company assessesan application to determine if it
la
represents an insurable risk.
tz
sh
Sp
Risk Management - Correct Answer-The natural process by which people contend withthe perils faced daily, of which
ne
there are five common techniques.
la
tz
sh
Sp
ne
la
sh
Sp
la
Sp
, ne
tz
sh
ne
la
The five basic elements of a valid contract - Correct Answer-Offer, acceptance,consideration, competent
tz
parties, and legal purpose
sh
Sp
ne
Concealment - Correct Answer-The willful nondisclosure of material facts on anapplication for the purpose of
la
obtaining insurance.
tz
sh
Sp
Insurable Risk (5 Criteria) - Correct Answer-Loss must be definable and measurable.The covered peril must be
ne
accidental or outside the insured's control.
la
The risk must be shared by a large group of similar risks.The loss must not be
tz
catastrophic.
sh
Sp
The risk must not be generally excluded from coverage.
ne
la
Needs Approach - Correct Answer-The needs approach to determining life insuranceneeds is based on a detailed
tz
review of a person's specific situation. It examines personal and family income, liabilities, and assets, as well as future
sh
Sp
financial goals, tocalculate the right amount of life insurance.
ne
la
Bring-Back Rule - Correct Answer-In estate planning, this rule requires life insurance policies transferred from the
tz
insured within 3 years before death to be returned to thedecedent's estate for valuation purposes.
sh
Sp
ne
Life Insurance "Living Benefits" - Correct Answer-Living benefits are made possible bythe policy's cash value, which is
la
always available to the policyowner through policy loans, withdrawals, and partial surrenders. The funds may be used for
tz
any purpose.
sh
Sp
ne
Key Person Life Insurance - Correct Answer-If a key employee ends his or her employment, the employer can continue
la
the policy in force. However, many employerschoose to:
tz
sell the policy to the insured for an amount equal to its cash valuesurrender the policy or
sh
Sp
change insureds if allowed by the insurance company and applicable state law
ne
la
Annuity - Correct Answer-An insurance contract between a person and an insurer to distribute an accumulated sum of
money over a certain period, including the person'slifetime.
tz
sh
Sp
ne
Annuities come in many forms, but they all have two common purposes:to accumulate money on a tax-
la
deferred basis
tz
to distribute the accumulated money as income in a guaranteed amount for aguaranteed period (including the
sh
Sp
annuitant's life)
ne
la
Decreasing Term Life Insurance - Correct Answer-This form of term life features a deathbenefit that diminishes over time
tz
and premium that remains level for the term of the policy.
sh
Sp
ne
la
tz
sh
Sp
ne
la
sh
Sp
la
Sp
, ne
tz
sh
ne
Fully Insured Status (Social Security) - Correct Answer-To be considered fully insured, aworker must have 40 quarters of
la
coverage. A fully insured worker is eligible for disability, retirement, and death benefits.
tz
sh
Sp
Cross-Purchase Buy-Sell Agreement - Correct Answer-A type of buy-sell agreement inwhich each owner purchases a life
ne
insurance policy on each of the other owners.
la
tz
ERISA - Correct Answer-The Employee Retirement Income Security Act of 1974 (ERISA) protects the rights of employees
sh
Sp
covered under an employer-sponsored planby stipulating minimum participation, vesting, and funding requirements.
ne
la
Irrevocable Beneficiary - Correct Answer-This beneficiary designation cannot bechanged by the policyowner without
tz
that beneficiary's permission.
sh
Sp
ne
Guaranteed Insurability Rider - Correct Answer-This life policy rider guarantees that additional coverage can be added to
la
a whole life policy even if the insured has becomeuninsurable.
tz
sh
Sp
Annuity Beneficiary - Correct Answer-The person the annuity owner chooses to receivethe annuity contract's values if
ne
either the owner or the annuitant dies before annuitization.
la
tz
Whole Life Insurance - Correct Answer-Whole life insurance features a guaranteed cashvalue, a fixed guaranteed death
sh
Sp
benefit, level premiums, and coverage that can remain in effect as long as the insured lives (up to age 120). Its most basic
ne
form is called straight (or ordinary) whole life insurance.
la
tz
Buy-Sell Agreement - Correct Answer-A legal agreement through which two or more owners of a business arrange for
sh
Sp
the disposition of each owner's share of the businessupon death.
ne
la
Expense Charge (Load Factor) - Correct Answer-The load factor reflects the costs theinsurer expects to incur on the
tz
policy. In determining its load factor, an insurer is generally guided by three objectives:
sh
Sp
to cover total operating coststo provide
ne
a safety margin
la
to contribute to profits or surplus
tz
sh
Sp
Term Life Insurance - Correct Answer-This basic form of life insurance provides temporary protection and does not
ne
include a cash value while the insured is alive.
la
tz
Insurable Interest - Correct Answer-The financial interest a policyowner has in a personor property being insured,
sh
Sp
justifying the purchase of insurance.
ne
la
Annuitization - Correct Answer-The process through which a sum of money is convertedinto periodic payments through an
tz
annuity contract.
sh
Sp
ne
la
tz
sh
Sp
ne
la
sh
Sp
la
Sp
