Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Life Insurance Exam > Life Insurnace Vocabulary > Flashcards

Life Insurnace Vocabulary Flashcards

(81 cards)

Start Studying
1
Q

Adverse selection

A

Insuring of risks that are more prone to losses than the average risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Agent / producer

A

A legal representative of an insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Applicant / proposed insured

A

A person applying for insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Beneficiary

A

A person who receives the benefits of an insurance policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Death benefit

A

The amount paid upon the death of the insured in a life insurance policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Fraud

A

Intentional misrepresentation or deceit with the intent to induce a person to part with something of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Insurance policy

A

A contract between a policy owner and or insured, and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Insured

A

Person covered by the insurance policy; may or may not be the policy owner

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Insurer

A

The company who issues an insurance policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Lapse

A

Policy termination due to nonpayment of premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Life insurance

A

Coverage on human lives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Policy owner

A

The person entitled to exercise the rights and privileges in the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Premium

A

The money paid to the insurance company for the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Contract

A

An agreement between two or more parties enforceable by law

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Aleatory

A

There is an exchange of unequal amounts or values

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Unilateral contract

A

Only one of the parties to the contract is legally bound to do anything

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Conditional contract

A

Requires that certain conditions be met by the policy owner and the company in order for the contract to be executed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Warranty

A

An absolutely true statement upon which the validity of the insurance policy depends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Representations

A

Statements believed to be true to the best of one’s knowledge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Misrepresentations

A

Untrue statements on the application- can void the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Material misrepresentation

A

Statement that if discovered would alter the underwriting decision of the insurance company- if intentional fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Application

A

Starting point and basic source of information used by the insurance company in the selection process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Conditional receipt

A

The most common type of reciept - issues when the applicant submits prepaid application. States the coverage will be effective either on the day of the application or the date of the medical examination (whichever is dated last)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Replacement

A

A practice of terminating an existing policy / letting it lapse and obtaining a new one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Underwriting
The risk selection process
26
Adverse selection
Risks which are more likely to suffer a loss
27
Insurable interest
The policy owner must face the possibility of losing money or something in value in the event of a loss.
28
Investigative consumer report
Covers financial and moral information. General reports of the applicants finances, character, work, hobbies and habits
29
Fair credit reporting act
Law that ensures records are confidential, accurate, relevant, and properly used. Protects consumer against circulation of inaccurate or obsolete personal / financial information
30
MIB medical information bureau
Membership corporation owned by membership insurance companies- nonprofit trade organization with a purpose to collect, maintain and make available to insurance companies important underwriting information
31
Buyers guide
Provides generic information on various types of policies.
32
Policy summary
Provides specific information on the policy being issued
33
Attained age
The insureds age at the time the policy is issued or renewed
34
Cash value
A policy’s savings element or living benefit
35
Face amount
The amount of benefit stated in the life insurance policy
36
Deferred
Withheld or postponed until a specified time or event in the future
37
Endow
The cash value of a whole life policy has reached ilthe contractual face amount
38
Level premium
The premium that does not change throughout the life of a policy
39
Liquidation of estate
Converting a persons net worth into a cash flow
40
Nonforfeiture values
Benefits in a life insurance policy that the policy owner cannot lose even if the policy is surrendered or lapses
41
Policy maturity
In life policies the time when the face value is paid out
42
Securities
Financial investments that may trade for value (stocks/bonds for example)
43
Term insurance
Temporary protection - provides coverage for a specific amount of time, but the greatest amount of coverage for the lowest premium as compared to any other form of protection
44
Level term insurance
The death benefit does not change throughout the policy
45
Annually renewable term insurance
Death benefit remains the same, policy is guaranteed to be renewable each year without proof of insurability, BUT the premium goes up each year
46
Decreasing term insurance
Premium is level (the same) but death benefit decreases annually
47
Increasing term insurance
Return of premium - pays an additional death benefit to the beneficiary in the amount of the premiums paid
48
Permanent life insurance
Various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured or until age 100.most common is whole life
49
Whole life insurance
Provides lifetime protection and includes a savings element or cash value. Premiums are usually higher than term insurance
50
Straight life insurance
Ordinary whole life / basic whole life - the policy owner pays the premium until the insured’s death or age 100
51
Limited pay whole life insurance
Premiums for coverage will be completely paid off before age 100. 20-pay (pay in 20 years) LP65 (paid by age 65)
52
Single premium whole life
Level death benefit for a one time lump sum payment
53
54
55
Adjustable life insurance
The policy owner can make adjustments to the policy - assume the form of either term or permanent insurance
56
Universal life insurance
Flexible premium adjustable life- policy owner has the flexibility to increase the amount of premium paid into the policy and later decrease it again, they can even take a withdrawal out from the cash value. However there may be a charge.
57
Variable whole life
Level fixed premium, investment based product. Fixes premium with a guaranteed death benefit. Cash value fluctuates with the performance of the portfolio in which premiums have been invested in.
58
Variable universal life insurance
A securities version of life insurance. Combines the features of whole life with the flexible premium of universal life and the investment component of variable life. A flexible premium Increasing and decreasing the amount of insurance Cash withdrawals/ policy loans
59
Interest sensitive whole life insurance
Current assumption life - a whole life policy that takes the death benefit to age 100. Benefit of current interest rates may allow for either greater cash value accumulation or a shorter premium paying period.
60
Indexed life insurance
Indexed whole life - cash value is dependent on the performance of the equity index. Although there is a minimum guaranteed interest rate
61
Joint life insurance
A single policy to insure two or more lives . Term or permanent . Premium is less than for the same amount of coverage on individuals. Premium is based on joint average age. Death benefit is payable on the first death only
62
Permanent insurance
Offers applicant cash value element usually whole life
63
ADLS Activities of daily livings
A persons essential activities that include bathing, eating, dressing, transferring, toileting, continence
64
Assignment
Transfer of rights of policy ownership
65
Consideration
Something of value that each party gives to the other (binding force in any contract)
66
Indemnity
A principal of reimbursement on which insurance is based in the event of loss, an insurer reimburses the insureds or beneficiaries for the loss
67
Lump sum
Payment of the entire benefit in one sum
68
Minor
A person under legal age
69
NAIC - national association of Insurance commissioners
An organization composed of insurance commissioners from all states and jurisdictions formed to resolve insurance regulatory issues
70
Principal
The face value of the policy; the original amount invested before the earnings
71
Provisions:
define the characteristics of an insurance contract and are fairly universal from one policy to the other
72
Riders
Added to a policy to modify provisions that already exist
73
Options
Offer insurers and insureds ways to invest or distribute a sum of money available in a life policy
74
Provisions
Defines the characteristics of and insurance contract and are fairly universal from one policy to the next
75
Riders
Added to a policy to modify provisions that already exist
76
Options
Offers insurers and insureds ways to invest or distribute a sum of money available in a life policy
77
Entire contract provision
Policy and copy of application and any riders or amendments- constitutes the entire contract
78
Insuring clause provision
Sets forth the basic agreement between the insurer and the insured. States the insurers promise to pay the death benefit upon the insureds death
79
Free look provision
Allows the policy owner 10 days from receipt to look over the policy and if disatisfied for any reason, return for a full refund of premium paid.
80
Consideration provision
Both parties to a contract must provide some value or consideration in order for the contract to be valid
81
Owners rights provision
Naming and changing the beneficiary, receiving the policy’s living benefits, selecting a benefit payment option, assigning the policy

Life Insurance Exam (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions