Life and Health Insurance - Ohio
Licensing Exam
Absolute Assignment CORRECT ANS: The assignment by the policy owner of all control and rights to a
third party. This differs from collateral assignment, which allows all the rights and control to revert to
the owner once a loan is paid off
Accident CORRECT ANS: A fortuitous event; unforeseen and unintended
Accidental Death Insurance CORRECT ANS: A form of health insurance that provides payment if death of
the insured results from accident. Accidental death insurance is often combined with dismemberment
insurance in a form called accidental death and dismemberment (AD&D)
Accident and Sickness CORRECT ANS: Insurance against bodily injury, disability, or death by accident or
accidental means, or expense thereof, or against disability or expense resulting from sickness and the
insurance relating thereto
Accident means CORRECT ANS: The unexpected cause of an accidental bodily injury. Under an
accidental means definition, the mishap itself must be accidental. If a person does something to
contribute to the accident, the claim would not be paid under this restrictive definition
Accelerated benefit CORRECT ANS: Available only if the benefits are available during the insured's
lifetime, benefit amounts are fixed when accelerated, and the benefits, when paid, reduces the death
benefit
Accumulation at interest option CORRECT ANS: A dividend option under which the policy owner allows
dividends to accumulate at interest with the company. Only the interest on the dividends is taxable as
income (participating policies only).
Actuary CORRECT ANS: Once concerned with the application of probability and statistical theory to
insurance. This person sets expenses, and interest assumptions.
,ADB CORRECT ANS: Accidental death benefit, also known as double indemnity. There is another
variation called triple indemnity.
AD&D CORRECT ANS: Accidental death and dismemberment insurance.
Administrator CORRECT ANS: The person appointed by a court to settle a deceased's estate, sometimes
called and executor.
Adverse selection CORRECT ANS: Selection against the insurance company. The tendency of poorer risks
to want insurance more often than standard risks.
Agent CORRECT ANS: The individual appointed by an insurance company to solicit, negotiate, effect, or
countersign insurance contracts on its behalf.
Aleatory CORRECT ANS: Something that depends upon chance or is random. It is derived from the Latin
idea of "rolling the dice."
Aleatory contract CORRECT ANS: A contract in which both parties know that one or the other may
receive more than paid in. This payment is dependent upon a fortuitous event. For example. a person
pays the premium for a term policy for many years and does not die, thus, a claim is never filed.
Alien company CORRECT ANS: An insured organized and domiciled in a country other than the United
States
Annuitant CORRECT ANS: The one receiving the Annuity and on whose life expectancy the rates are
figured.
,Annuity CORRECT ANS: 1. An amount of money, payable monthly or yearly, which liquidates a financial
asset. 2. An agreement by an insurer to make periodic payments that continue during the survival of the
annuitant(s) or for a specified period. Annuities are also accumulations vehicles that function much like
savings accounts.
Applicant CORRECT ANS: The party making application to the insurance company for the policy
Application CORRECT ANS: A form on which the prospective insured states facts requested by the
insurer and on the basis of which the insurer decides whether to accept the risk, modify the coverage
offered, or decline the risk.
Assignee CORRECT ANS: The person to whom policy rights are assigned in whole or in part by the policy
owner.
Assignment CORRECT ANS: The transfer of rights in a policy to someone other than the policy owner.
Attained age CORRECT ANS: The present age of the insured. This is a factor when a person converts
term insurance to whole life insurance or buys added disability under a GIR provision
Attorney-in-fact CORRECT ANS: A person to whom authorization is given by an individual to exchange
insurance with other persons. Always present in a reciprocal insurance company.
Authorized company CORRECT ANS: An insurer permitted to sell insurance within a state, evidenced by
a certificate of authority from the insurance commissioner, also called ADMITTED
Automatic premium loan CORRECT ANS: A provision in a life policy authorizing the insurance company
to use the loan value to pay premiums not paid by the end of the grace period. May be present in whole
life or other traditional cash value policies only, but never in term policies
, Aviation clause CORRECT ANS: Limits or excludes coverage when the insured is participating in specified
types of air travel, cush as private planes. Coverage is usually fully in force for people on regularly
scheduled commercial flights. The limit or exclusion often applies to student pilots
Beneficiary CORRECT ANS: A person who may become eligible to receive, or is receiving, benefits under
an insurance plan, other than as a participant.
Blanket Insurance Contract CORRECT ANS: A contract of Health Insurance that covers all of a class of
persons not individually identified. No certificates are issued and people covered may not be aware that
the coverage is in place.
Blue Plan CORRECT ANS: The generic term for those insurers (usually on a service rather than a
reimbursement bases) who are authorized to use the designation Blue Cross or Blue Shield and the
insignia of either.
Broker CORRECT ANS: One who represents an insured in the solicitation, negotiation, or procurement of
contracts of insurance, functions. This person is also called an independent agent.
Business Insurance CORRECT ANS: Life or Health insurance written to vober business situations, such as
key person, sole proprietor, partnership, corporations, ect.
Cancelable CORRECT ANS: A contract of Insurance that may be terminated by the insurance company or
insured at any time. Virtually every form of insurance is cancelable except Life insurance and those
health policies designated as guaranteed renewable, or non-cancelable and guaranteed renewable.
Cancellation CORRECT ANS: The termination of a contract of insurance in force by voluntary act of the
insurance company or insured, effected in accordance with provisions in the contract or by mutual
agreement.
Capital Sum CORRECT ANS: The maximum amount payable in one sum in the event of accidental
dismemberment. It is typically half of the face amount of principal sum.
Licensing Exam
Absolute Assignment CORRECT ANS: The assignment by the policy owner of all control and rights to a
third party. This differs from collateral assignment, which allows all the rights and control to revert to
the owner once a loan is paid off
Accident CORRECT ANS: A fortuitous event; unforeseen and unintended
Accidental Death Insurance CORRECT ANS: A form of health insurance that provides payment if death of
the insured results from accident. Accidental death insurance is often combined with dismemberment
insurance in a form called accidental death and dismemberment (AD&D)
Accident and Sickness CORRECT ANS: Insurance against bodily injury, disability, or death by accident or
accidental means, or expense thereof, or against disability or expense resulting from sickness and the
insurance relating thereto
Accident means CORRECT ANS: The unexpected cause of an accidental bodily injury. Under an
accidental means definition, the mishap itself must be accidental. If a person does something to
contribute to the accident, the claim would not be paid under this restrictive definition
Accelerated benefit CORRECT ANS: Available only if the benefits are available during the insured's
lifetime, benefit amounts are fixed when accelerated, and the benefits, when paid, reduces the death
benefit
Accumulation at interest option CORRECT ANS: A dividend option under which the policy owner allows
dividends to accumulate at interest with the company. Only the interest on the dividends is taxable as
income (participating policies only).
Actuary CORRECT ANS: Once concerned with the application of probability and statistical theory to
insurance. This person sets expenses, and interest assumptions.
,ADB CORRECT ANS: Accidental death benefit, also known as double indemnity. There is another
variation called triple indemnity.
AD&D CORRECT ANS: Accidental death and dismemberment insurance.
Administrator CORRECT ANS: The person appointed by a court to settle a deceased's estate, sometimes
called and executor.
Adverse selection CORRECT ANS: Selection against the insurance company. The tendency of poorer risks
to want insurance more often than standard risks.
Agent CORRECT ANS: The individual appointed by an insurance company to solicit, negotiate, effect, or
countersign insurance contracts on its behalf.
Aleatory CORRECT ANS: Something that depends upon chance or is random. It is derived from the Latin
idea of "rolling the dice."
Aleatory contract CORRECT ANS: A contract in which both parties know that one or the other may
receive more than paid in. This payment is dependent upon a fortuitous event. For example. a person
pays the premium for a term policy for many years and does not die, thus, a claim is never filed.
Alien company CORRECT ANS: An insured organized and domiciled in a country other than the United
States
Annuitant CORRECT ANS: The one receiving the Annuity and on whose life expectancy the rates are
figured.
,Annuity CORRECT ANS: 1. An amount of money, payable monthly or yearly, which liquidates a financial
asset. 2. An agreement by an insurer to make periodic payments that continue during the survival of the
annuitant(s) or for a specified period. Annuities are also accumulations vehicles that function much like
savings accounts.
Applicant CORRECT ANS: The party making application to the insurance company for the policy
Application CORRECT ANS: A form on which the prospective insured states facts requested by the
insurer and on the basis of which the insurer decides whether to accept the risk, modify the coverage
offered, or decline the risk.
Assignee CORRECT ANS: The person to whom policy rights are assigned in whole or in part by the policy
owner.
Assignment CORRECT ANS: The transfer of rights in a policy to someone other than the policy owner.
Attained age CORRECT ANS: The present age of the insured. This is a factor when a person converts
term insurance to whole life insurance or buys added disability under a GIR provision
Attorney-in-fact CORRECT ANS: A person to whom authorization is given by an individual to exchange
insurance with other persons. Always present in a reciprocal insurance company.
Authorized company CORRECT ANS: An insurer permitted to sell insurance within a state, evidenced by
a certificate of authority from the insurance commissioner, also called ADMITTED
Automatic premium loan CORRECT ANS: A provision in a life policy authorizing the insurance company
to use the loan value to pay premiums not paid by the end of the grace period. May be present in whole
life or other traditional cash value policies only, but never in term policies
, Aviation clause CORRECT ANS: Limits or excludes coverage when the insured is participating in specified
types of air travel, cush as private planes. Coverage is usually fully in force for people on regularly
scheduled commercial flights. The limit or exclusion often applies to student pilots
Beneficiary CORRECT ANS: A person who may become eligible to receive, or is receiving, benefits under
an insurance plan, other than as a participant.
Blanket Insurance Contract CORRECT ANS: A contract of Health Insurance that covers all of a class of
persons not individually identified. No certificates are issued and people covered may not be aware that
the coverage is in place.
Blue Plan CORRECT ANS: The generic term for those insurers (usually on a service rather than a
reimbursement bases) who are authorized to use the designation Blue Cross or Blue Shield and the
insignia of either.
Broker CORRECT ANS: One who represents an insured in the solicitation, negotiation, or procurement of
contracts of insurance, functions. This person is also called an independent agent.
Business Insurance CORRECT ANS: Life or Health insurance written to vober business situations, such as
key person, sole proprietor, partnership, corporations, ect.
Cancelable CORRECT ANS: A contract of Insurance that may be terminated by the insurance company or
insured at any time. Virtually every form of insurance is cancelable except Life insurance and those
health policies designated as guaranteed renewable, or non-cancelable and guaranteed renewable.
Cancellation CORRECT ANS: The termination of a contract of insurance in force by voluntary act of the
insurance company or insured, effected in accordance with provisions in the contract or by mutual
agreement.
Capital Sum CORRECT ANS: The maximum amount payable in one sum in the event of accidental
dismemberment. It is typically half of the face amount of principal sum.
