Health & Life Insurance Terminology Study Guide
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt Play1/56
Earn XP
Description and Tags
Comprehensive practice questions and answers covering health and life insurance terminology, policy types, riders, and legal definitions.
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai |
|---|
No analytics yet
Send a link to your students to track their progress
57 Terms
What is an Adhesion Contract in insurance?
A take-it-or-leave-it contract where the insured cannot negotiate terms.
How is an Aleatory Contract defined?
An unequal exchange where one side may pay a small premium and receive a much larger benefit if a loss occurs.
What is the definition of Consideration in an insurance contract?
Something of value exchanged; the insurer promises coverage while the insured pays premiums and gives truthful information.
What characterizes a Conditional Contract?
A contract where coverage applies only if policy conditions are met.
What is the purpose of Indemnity?
To restore the insured financially after a loss without profit.
What is Insurable Interest?
A financial or emotional interest in someone or something being insured.
What is a Premium?
The payment made to keep insurance active.
Who is the Beneficiary of an insurance policy?
The person or entity receiving benefits after the insured dies.
What are the rights of a Policyowner?
The person who owns and controls the policy.
What is a Rider?
An add-on used to customize a policy, such as a child rider or waiver of premium rider.
What does an Accelerated Benefit Rider allow?
It lets a terminally ill insured access part of the death benefit early.
What is the function of a Waiver of Premium Rider?
It waives premiums if the insured becomes disabled.
What is the Grace Period?
Extra time allowed after a missed premium to keep coverage active.
What is Reinstatement?
Restoring a lapsed policy after meeting certain requirements.
What happens during a Free Look Period?
The insured has time to review and cancel a policy for a refund.
Why would someone use Backdating on a policy?
To date a policy earlier to reduce premiums based on age.
What is Term Life Insurance?
Coverage provided for a set period of time.
What defines Whole Life Insurance?
Permanent coverage featuring fixed premiums and cash value.
What is Universal Life Insurance?
Flexible permanent insurance with adjustable premiums and death benefits.
What defines Variable Life Insurance?
Life insurance that includes investments which affect the cash value.
What is Single Premium Whole Life?
A permanent policy paid for with one large payment.
How does Decreasing Term insurance work?
It is term insurance where the death benefit decreases over time.
What is Level Term insurance?
Term insurance where the death benefit remains the same throughout the term.
What is a Renewable Term policy?
A policy that can be renewed without proving insurability.
What is a Convertible Term policy?
A policy that can be changed to permanent insurance without proof of insurability.
What is Cash Value?
The savings portion found in permanent policies.
What is the Face Amount of a policy?
The death benefit amount.
What is an Annuity?
A product that provides income, usually during retirement.
What occurs during the Accumulation Phase of an annuity?
Money is paid into the annuity and grows.
What is the Annuitization Phase?
The phase when the annuity pays out income.
How does Coinsurance work in medical costs?
The insured shares medical costs with the insurer after the deductible is met.
What is a Copayment?
A fixed amount paid for a specific medical service.
What is a Deductible?
The amount the insured must pay before the insurance company starts paying.
What is an Out-of-Pocket Maximum?
The most the insured pays in a single year for covered services.
What are the requirements of an HMO health plan?
It requires a provider network and referrals from a Primary Care Physician (PCP).
What characterizes a PPO health plan?
A health plan that offers more provider flexibility.
What is a POS health plan?
A mix of HMO and PPO features.
What is Major Medical insurance?
Broad coverage intended for serious illness or injury.
What is Disability Income Insurance?
Insurance that pays income if the insured is unable to work due to illness or injury.
What does Long-Term Care Insurance cover?
Care such as nursing homes or home care.
Who is eligible for Medicare?
A federal health program for individuals age 65+ and some people with disabilities.
What is Medicaid?
State and federal assistance for individuals with low income.
What is COBRA?
A program that lets workers temporarily keep employer coverage after leaving a job.
What is Open Enrollment?
The period when health coverage can be changed.
What is a Preexisting Condition?
A health condition present before coverage began.
What is a Producer or Agent?
A licensed person who sells insurance.
What must occur during a Replacement?
The agent must follow specific rules and disclosures when replacing one policy with another.
What is Misrepresentation?
A false statement that affects the issuance of a policy.
What is Fraud in insurance?
Intentional deception for financial gain.
What is the purpose of Underwriting?
To evaluate risk before issuing insurance.
What is Mortality?
The likelihood of death within a group.
What is Morbidity?
The likelihood of sickness or disability.
How is a Per Stirpes beneficiary distribution handled?
Distribution is made through descendants.
What is a Per Capita beneficiary distribution?
An equal distribution among living beneficiaries.
What is a Revocable Beneficiary?
A beneficiary that can be changed at any time.
What is an Irrevocable Beneficiary?
A beneficiary that cannot be changed without their permission.
What are the three Nonforfeiture Options?
Cash surrender, reduced paid-up, and extended term.