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Health & Life Insurance > Chapters 1-4 > Flashcards

Chapters 1-4 Flashcards

1
Q

One party’s agreement to the offer of another party. Usually takes place when the policy is issued.

A

Acceptance

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2
Q

An unforeseen, unexpected, and unintended event that results in bodily injury

A

Accident

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3
Q

An Insurance Policy under which benefits are payable in case of illness or accident

A

Accident and Health Insurance

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4
Q

A policy that provides payment if the insured dies from an accident, accidentally severs a limb, or accidentally and permanently loses eyesight

A

Accidental Death and Dismemberment (AD&D)

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5
Q

Mathematician hired by an insurance company to apply probabilities and statistical analysis to risks and premiums

A

Actuary

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6
Q

An insurance company rep who seeks to determine the extent of the company’s liability when a claim is submitted

A

Adjuster

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7
Q

The tendency of insureds who present a higher probability of loss to purchase or renew insurance more often than those who present a lower probability of loss

A

Adverse Selection

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8
Q

A person licensed by the state insurance authority to sell insurance products.

A

Agent

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9
Q

When one party’s offer is accepted by another party

A

Agreement

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10
Q

A contract condition where only one party may obtain greater value under the agreement than the other party

A

Aleatory

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11
Q

An insurance company organized and incorporated outside of the US, that is, organized under laws of foreign nation.

A

Alien Insurer

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12
Q

A person apply for a policy

A

Applicant

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13
Q

The legal transfer of a policyowner’s rights in an insurance policy to another party

A

Assignment

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14
Q

Current or present age of insured

A

Attained Age

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15
Q

A type of policy assignment under which the assignee receives full control over the policy and also full rights to its benefits. It is also called permanent assignment.

A

Absolute Assignment

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16
Q

To give up a right or privilege

A

Waiver

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17
Q

A statement that one guarantees to be materially and substantially true

A

Warranty

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18
Q

The process through which the underwriter evaluates risk and
determines premium category.

A

Underwriting

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19
Q

An insurance company employee who has been trained to evaluate prospective applicants for insurance policies.

A

Underwriter

20
Q

A person who is considered a higher risk due to medical condition, occupation, or dangerous habits/hobbies.

A

Substandard Risk

21
Q

An insurance company owned by stockholders

A

Stock Insurer

22
Q

A person who is considered average risk

A

Standard risk

23
Q

Applicants who cannot qualify for standard insurance rates due to existing health impairments. Policies are issued with rated-up premiums or exclusions riders.

A

Special Risk Class

24
Q

Uncertainty of loss

A

Risk

25
Q

The responsibility of the underwriter to determine which risks are insurable and acceptable to the insurance company

A

Risk Selection

26
Q

A statement that one believes to be materially and substantially to be true

A

Representation

27
Q

Stipulations and conditions in the policy that state both the insurance company’s and policyowner’s rights and obligations

A

Provisions

28
Q

A person licensed by the state authority to sell insurance products.

A

Producer

29
Q

The cost of insurance

A

Premium

30
Q

A person who is entitled to a lower premium rate due to an indication of longevity or unimpaired life; such as excellent physical condition or low risk occupation.

A

Preferred

31
Q

A company owned by policyholders

A

Mutual Insurer

32
Q

Calculated by an actuary using two factors – (1) risk minus (2)
investment income. Loading is not a factor.

A

Net premium

33
Q

The incidence or extent of illness, injury, or disability in a defined population

A

Morbidity

34
Q

The incidence or extent of death in a defined population.

A

Mortality

35
Q

A listing of mortality experience of individuals by age. It permits an actuary to calculate how long a male or female of a given age group may be expected to live.

A

Mortality Table

36
Q

Insurance company: deliberate or false representation of the policy, including terms and benefits.
Applicant: a deliberate false representation of the health or other condition of the insured

A

Misrepresentaion

37
Q

Nonprofit organization that collects medical data for life and health insurance companies

A

Medical Information Bureau (MIB)

38
Q

A mathematical principle of probability stating that actual losses in a given category of inurance will come closer to a predictable number as the number of policies issued increases.

A

Law of Large Numbers

39
Q

A fundamental insurance concept in which the insured should not profit, but be restored in part, by payment, repair, or replacement.

A

Indemnity

40
Q

A federal law that allows credit for coverage of a preexisting condition when changing from one group plan to another

A

Health Insurance Portability and Accountability Act (HIPAA)

41
Q

Social insurance programs such as medicare & medicaid, provided by the state or federal government

A

Government Insurer

42
Q

An insurance company organized and incorporated in a state and selling policies to residents of other states.

A

Foreign Insurer

43
Q

To deliberately attempt to deceive another for financial gain

A

Fraud

44
Q

An insurance company organized and incorporated in a state and selling policies of residents of that state.

A

Domestic Insurer

45
Q

A policy owner’s share of divisible surplus paid by a participating policy

A

Dividend

46
Q

Extra money resulting from the insurance company’s savings in mortality, interest earnings, and/or reductions in operational expenses which can be divided equitably among the company’s policyholders or stockholders

A

Divisible Surplus

Health & Life Insurance (6 decks)

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