NY Life and Health Insurance License Exam Prep

What organization regulates the insurance industry in the state of New York, and is in charge of licensing, behavior, and solvency of insurance companies that fall within its purview?

NYSDFS

What does DFS stand for?

Department of Financial Services

The DFS is essential in preserving the integrity and stability of the insurance market because it:

• Upholds strict __________ requirements

• Guarantees consumer __________

• Fosters fair __________ in the market

Legal, safety, competition

The DFS is in charge of:

• Granting __________ to insurance experts

• __________ insurance plans and _____

• Looking into __________ from customers

• Pursuing __________ action against organizations that break state rules and laws

Licenses, examining, costs, complaints, legal

__________ is the ability of a company to meet its long-term debts and financial obligations

Solvency

Solvency is the ability of a company to meet its long-term __________ and financial __________.

Debts, obligations

_____ is the possibility that something may happen that could result in a loss, like a disease, an accident, a death, or property damage.

Risk

What is the process of shifting risk from a person or business to an insurance firm in return for a premium?

Insurance

Insurance is the process of shifting _____ from a person or business to an insurance firm in return for a __________.

Risk, premium

Insurers are able to __________ the cost of possible _____ and offer policyholders financial __________ by __________ the _____ of numerous policyholders

Distribute, losses, security, combining, risks

What is the process of recognizing, evaluating, and reducing risks in order to lessen their influence on a person or an organization?

Risk Management

Risk management is the process of __________, __________, and __________ risks in order to lessen their influence on a person or an organization.

Recognizing, evaluating, reducing

Insurance is an important instrument in risk __________ because it enables people and organizations to guard against unanticipated circumstances that can endanger their financial __________.

Management, security

An ____________________ is a legally binding agreement outlining the terms and conditions of insurance coverage between an insurance company and a policyholder.

Insurance contract

An insurance contract is a legally __________ agreement outlining the _____ and __________ of insurance __________ between an insurance company and a policyholder.

Binding, terms, conditions, coverage

An insurance contract is predicated on the idea of the highest __________, which calls on both parties to behave honorably and divulge all pertinent facts to the __________.

Good faith, underwriters

The ____________________ delineates the extent of coverage that the insurance policy offers. It details the insured risks, the kinds of losses that qualify for payment, and applicable exclusions or limitations

Insuring Agreement

The _______________ is the length of the insurance coverage, usually stated as a fixed time frame (e.g., a year) or until a predetermined event (e.g., disability or death) takes place.

Policy Term

The Policy Term is the __________ of the insurance coverage, usually stated as a _____ time frame (e.g., a year) or until a predetermined _____ (e.g., disability or death) takes place.

Length, fixed, event

The __________ is the sum of money that the policyholder pays the insurer in exchange for insurance coverage.

Premium

The premium is the sum of money that the __________ pays the __________ in exchange for insurance __________.

Policyholder, insurer, coverage

A _____ amount or __________ payments may be made for premiums, based on the specifics of the policy.

Lump, periodic

__________ are guidelines and directives that control the terms of the insurance contract.

Conditions

It is the policyholder’s responsibility to inform the insurer of any modifications to the _____ or situations that could impact __________.

Risk, coverage

__________ are certain risks or occurrences that the insurance policy may not cover.

Exclusions

Exclusions are certain _____ or __________ that the insurance policy may not cover.

Risks, occurrences

__________ and __________ are extra clauses that can be added to an insurance policy in order to change or expand coverage in accordance with the needs of the policyholder.

Riders, endorsements

Riders and endorsements are extra clauses that can be added to an insurance policy in order to change or expand __________ in accordance with the __________ of the policyholder.

Coverage, needs

In the event of the policyholder’s death, _______________ protects their beneficiaries financially. It can assist in paying for charges such as burial services, unpaid bills, and continuing living expenses for dependents.

Life insurance

In the event of the policyholder’s death, life insurance protects their __________ financially. It can assist in paying for charges such as _____ services, unpaid _____, and continuing _____ expenses for dependents.

Beneficiaries, burial, bills, living

_______________ pays for hospital stays, doctor visits, prescription drugs, and services related to preventative care that the covered person incurs. It facilitates access to vital medical care and helps people and families manage the high expenditures of healthcare.

Health insurance

Health insurance pays for __________ stays, _____ visits, __________ drugs, and services related to __________ care that the covered person incurs. It facilitates access to vital __________ care and helps people and families manage the _____ expenditures of healthcare.

Hospital, doctor, prescription, preventative, medical, high

_____ insurance guards against both property damage and legal responsibility for the harm or losses of third parties. This covers liability insurance for businesses as well as auto, renters, and homeowners insurance.

P&C

P&C insurance guards against both __________ damage and _____ responsibility for the harm or losses of __________. This covers _____ insurance for businesses as well as _____, _____, and __________ insurance.

Property, legal, third parties, liability, auto, renters, homeowners

What does P&C stand for?

Property and Casualty

People who are unable to work because of illness or injury can get income replacement benefits from _______________.

Disability insurance

People who are unable to _____ because of _____ or _____ can get _____ replacement benefits from disability insurance.

Work, illness, injury, income

_______________ pays for LTC services, including in-home care, assisted living facilities, and nursing facility care, for people who need help with everyday life activities because they are elderly or disabled.

LTC insurance

LTC insurance pays for long-term care services, including __________ care, _______________ facilities, and __________ facility care, for people who need help with everyday life __________ because they are __________ or __________.

In-home, assisted living, nursing, activities, elderly, disabled

The person who pays the premiums and is the owner of the life insurance policy

Policyholder

The individual whose life is protected by the policy.

Insured

T/F: The policyholder is always the same as the insured

F

The individual or organization assigned to get the death benefit in the event that the insured person passes away

Beneficiary

The sum of money given to the beneficiary in the event that the insured person passes away

Death Benefit

The amount that the policyholder pays the insurance provider on a regular basis in order to keep their coverage in place

Premium

Face Amount

The initial coverage amount offered by the policy

The face amount is also referred to as what term?

Death Benefit

The savings portion that the policyholder can access that builds up over time in some types of life insurance contracts

Cash Value

A loan obtained by the policyholder against the life insurance policy’s cash value

Policy Loan

An optional supplement to a life insurance policy that offers further benefits or coverage

Rider

The two primary categories of life insurance plans are __________ life insurance and __________ life insurance.

Term, permanent

Term life insurance offers protection for a __________ amount of time.

Predetermined

__________ life insurance policies are a desirable choice for inexpensive protection or short-term coverage.

Term

Unlike permanent life insurance policies, term life insurance policies do not accrue __________ and their coverage __________ at the end of the term.

Cash value, terminates

As opposed to term life insurance providing short-term coverage, permanent life insurance offers __________ protection as long as the __________ are paid.

Lifetime, premiums

Permanent life insurance consists of a __________ component for savings that builds up over time and collects __________ on a tax-deferred basis.

Cash value, interest

__________ life insurance consists of a cash value component for savings that builds up over time and collects interest on a tax-deferred basis.

Permanent

More flexibility is provided by __________ life insurance policies

Permanent

In the event that the insured is incapacitated and unable to work for a predetermined amount of time, this rider waives their premium payments.

Waiver of Premium Rider

In the event that an insured person is found to have a terminal disease or other specific medical condition, this rider enables them to receive a portion of the death benefit ahead of time.

Accelerated Death Benefit Rider

This rider supplements the standard death benefit in the event that the insured passes away due to an accident.

Accidental Death Benefit Rider

This rider spares the insured from having to go through medical underwriting in order to obtain additional coverage at predetermined intervals.

Guaranteed Insurability Rider

This rider offers cheaper coverage than buying separate policies for the insured’s children for a predetermined amount of time, usually until they reach maturity.

Child Term Rider

(Health Insurance) The amount that the policyholder has to pay out-of-pocket before the insurance provider starts to pay claims.

Deductible

(Health Insurance) Lower rates are usually the consequence of ____________________

Higher deductibles

(Health Insurance) ____________________ are usually the consequence of higher deductibles

Lower rates

(Health Insurance) The portion of medical costs that the policyholder bears financial responsibility for after the deductible is satisfied.

Coinsurance

Coinsurance is usually expressed as a __________ of the total cost of the service

Percentage

A set sum of money that the insured must pay for certain services, including prescription drugs or doctor appointments.

Copayment

Copayments are usually due at the ____________________.

Time of service

Copayments can change according on the kind of __________.

Service

The total amount of deductibles, coinsurance, and copayments that the policyholder must pay throughout the course of the coverage. 100% of eligible costs are paid for by the insurance company once the maximum is met.

Out-of-pocket Maximum

What does HMO stand for?

Health Maintenance Organization

What does PCP stand for?

Primary Care Physician

A common feature of an HMO is that it requires __________ to see specialists.

Referrals

What does PPO stand for?

Preferred Provider Organizations

T/F: PPOs give policyholders the choice to receive care from both in-network and out-of-network providers

T

What does EPO stand for?

Exclusive Provider Organization

T/F: HMOs offer coverage for out-of-network providers.

F

When covered under an HMO, you are required to have a _____.

PCP

When covered under an _____, you are required to have a PCP.

HMO

One advantage of HMOs is that there is lower monthly __________ and __________ costs at in-network providers.

Premiums, out-of-pocket

One disadvantage of HMOs is that _______________ care is not covered.

Out-of-network

PPO plans offer the greatest __________, but tend to have higher __________ than other types of plans.

Flexibility, premiums

T/F: PPO members are required to have a PCP.

F

T/F: PPO members need referrals to see specialists

F

HMOs cover out-of-network care only in the case of an __________.

Emergency

T/F: With an EPO, members have both in-network and out-of-network coverage.

F

T/F: EPO members need to select a PCP.

F

T/F: EPO members need referrals to see specialists.

F

PPO members may use out-of-network providers but at higher _______________ costs.

Out-of-pocket

What does POS stand for?

Point of Service

T/F: A POS plan requires a PCP

T

T/F: A POS requires referrals for specialists

T

T/F: A POS plan only covers in-network services

F

A POS plan will pay more toward an out-of-network service if the PCP makes a __________.

Referral

A disadvantage of POS plans is that ____________________ tend to be high.

Out-of-network deductibles

A patient who never uses a POS plan’s out-of-network services probably would be better off with an _____ because of its lower __________.

HMO, premiums

What does HDHP stand for?

High-Deductible Health Plan

HDHPs have greater __________ and lower __________

Deductibles, premiums