Download Insurance Terminology and Concepts: A Glossary of Key Terms for Exams and more Exams Insurance law in PDF only on Docsity!
solutions.
Insurance Exam FX 131 correct
solutions.
Accelerated benefits - ANSWER riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses
accident - ANSWER an unplanned, unforeseen event which occurs suddenly at an unspecified place
Accidental Death and Dismemberment - ANSWER an insurance policy which pays a specified amount or a specified multiple of the insured's benefits if the insured dies, loses sight, or loses two limbs
accidental death benefits - ANSWER a policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death
accumulation period - ANSWER the time over which the annuitant makes payments or investments in an annuity, and when those payments earn interest tax deferred
actual cash value - ANSWER the required amount to pay damages or for property loss
actual charge - ANSWER the amount a physician or supplier actually bills for a particular service or supply
actuary - ANSWER a person trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurance; a person who determines the mathematical probability of loss
adhesion - ANSWER a contract offered on a "take it or leave it" basis by an insurer, in which insured's options are to accept or reject
adjustable life - ANSWER life insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period
solutions.
adjuster - ANSWER a representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim
administrator - ANSWER an individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person
adverse selection - ANSWER the tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability
agent - ANSWER an individual who is licensed to sell, negotiate, or effet insurance contracts on behalf of an insurer
aleatory - ANSWER a contract in which participating parties exchange unequal amounts
alien insurer - ANSWER am insurance company that is incorporated outside of the united states
ancillary - ANSWER additional services provided by a hospital such as x-rays but not hospital room and board expenses
annuity - ANSWER a contract that provides income for a specified period of years, or for life
apparent authority - ANSWER the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created
application - ANSWER a document that provides information for underwriting purposes
approved amount - ANSWER the amount Medicare determines to be reasonable for a service that is covered under part B of Medicare
solutions.
capital amount - ANSWER a percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage
carriers - ANSWER organizations that process claims and pay benefits in an insurance policy
cease and desist order - ANSWER a demand of a person to stop committing an action that is in violation of a provision
certificate - ANSWER a statement that confirms that a policy gas been written and that describes the coverage in general
claim - ANSWER a request for payment of the benefits provided by an insurance contract
coercion - ANSWER an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance
commingling - ANSWER a practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust
commission - ANSWER the payment made by insurers to agents or brokers for the sale and service of policies
concealment - ANSWER the withholding of known facts which can void a contract
consideration - ANSWER the blinding force in a contact that requires something of value to be exchanged for the transfer of risk
COBRA of 1986 - ANSWER the law that provides for the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer available
solutions.
contributory - ANSWER a group insurance plan that requires the employees to pay part of the premium
convertible - ANSWER a policy that may be exchanged for another type of policy by contractual provision and without evidence of insurability
coordination of benefits - ANSWER a provision that helps determine the primary provider in situations where an insured is covered by more than one policy
co-pay - ANSWER an arrangement in which an insured must pay a specified amount "up front" and the provider pays the remainder of the cost
credit life insurance - ANSWER a special type of coverage written to pay off the balance of a loan in the event of the death of the debtor
deductible - ANSWER the portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer
defamation - ANSWER an unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation
disclosure - ANSWER an act of identifying the name of the producer, representative firm, limited insurance representative, or temporary insurance producer on any policy solicitation
domicile of insurer - ANSWER an insurance company that conducts business in the state of incorporation
effective date - ANSWER the date when an insurance policy begins
eligibility period - ANSWER the period of time in which an employee may enroll in a group health care plan without having to provide evidence of insurability
solutions.
group disability insurance - ANSWER a type of insurance that covers a group of individuals against loss of pay due to accident or sickness
hazard, moral - ANSWER the effect of a persons reputation, character, living habits, on his/her insurability
hazard, morale - ANSWER the effect of a person's indifference concerning loss has on the risk to be insured
hazard, physical - ANSWER a type of hazard that arises from the physical characteristics of an individual such as a physical disability due to either current circumstance or a condition present at birth
Heath Maintenance Organization (HMO) - ANSWER a prepaid medical service plan in which specified medical service providers contract with the HMO to provide services
Health Reimbursement Accounts (HRAs) - ANSWER Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses
Health Savings Accounts (HSAs) - ANSWER Plans designed to help individuals save for qualified health expenses
Hospital Confinement Rider - ANSWER an optional disaility income rider that waives the elimination period when an insured is hospitalized as an impatient
implied authority - ANSWER authority that is not expressed or written into the contract but which the agent is assumed to have in order to transact the business of insurance for the principal
indemnify - ANSWER to restore the insured to the same condition as prior to loss with no intent of loss or gain
solutions.
insured - ANSWER the person or organization that is protected by insurance
insurer - ANSWER an entity that indemnifies against losses, provides benefits, or renders services
intermediaries - ANSWER organizations that process inpatient and outpatient claims on individuals by hospitals, skilled nursing facilities, home health agencies, hospices and certain other providers of health services
joint life - ANSWER a single policy that is designed to insure two or more lives
juvenile life - ANSWER any life insurance written on the life of a minor
lapse - ANSWER termination of a policy because the premium has not been paid by the end of the grace period
law of large numbers - ANSWER a principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss
liquidation - ANSWER selling assets as a method of raising capital
lloyds associations - ANSWER organizations that provide support facilities for underwriters or goups of individuals that accept insurance risk
lump sum - ANSWER settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments
maturity date - ANSWER the date when the face amount of the life insurance becomes payable
Medical Information Bureau (MIB) - ANSWER an information database that stores the health histories of individuals who have applied for insurance in the past
solutions.
periodontics - ANSWER a speciality of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease
persistency - ANSWER the tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer
policyowner - ANSWER the person who is entitled to exercise the rights and privileges in the policy
Preferred Provider Organization (PPO) - ANSWER an organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee
premium - ANSWER a periodic payment to the insurance company to keep the policy in force
principal amount - ANSWER the full face value of a policy
pro rata cancellatoin - ANSWER termination of an insurance policy, with an adjustment of the premium charge in proportion to the exact coverage that has been in force
producer - ANSWER insurance agent or broker
prosthodontics - ANSWER a special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures
rebating - ANSWER any inducement offered in the sale of insurance products that is not specified in the policy
reciprocal exchange - ANSWER an unicorporated group of individuals who mutually insure one another each separately assuming a share of each risk
solutions.
reciprocity - ANSWER a situation in which two parties provide the same help or advantages to each other
reserve - ANSWER an amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders
retention - ANSWER a method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insureds account
rider - ANSWER any supplemental agreement attached to and made a part of the policy indicating the policy expansion by additional coverage or a waiver of a coverage or condition
risk, pure - ANSWER the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no charge
risk, speculative - ANSWER the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain
risk, substandard - ANSWER an applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium
single premium whole life - ANSWER a life insurance policy designed to provide a level death benefit to the insured's age 100 for a one-time lump sum payment
spendthrift clause - ANSWER a clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them
standard risk - ANSWER an applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle
solutions.
whole life insurance - ANSWER insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be
workers compensation - ANSWER benefits required by state law to be paid to an employee by an employer in the case of injury, disability, or death as the result of an on-the-job hazard
