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Washington Life Health Insurance Exam 303 Questions with Verified Answers,100% CORRECT
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Washington Life Health Insurance Exam 303 Questions with Verified Answers
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Washington Life Health Insurance Exam 303 Questions withVerified Answers
Policy owner - CORRECT ANSWER usually, but not always the person covered by
the policy
Beneficiary - CORRECT ANSWER the person who is paid when a claim
is submitted
agent/producer - CORRECT ANSWER acts as a legal representative
of the insurance company
broker - CORRECT ANSWER representative of the Insured, not the insurance
company
risk - CORRECT ANSWER The chance or uncertainty of loss
Pure risk - CORRECT ANSWER the chance of experiencing a loss (without the
possibility of gain). Only downside, no upside.
Speculative risk - CORRECT ANSWER s the chance of loss one accepts in the hope
of realizing a gain
Risk avoidance - CORRECT ANSWER staying away from risky activities altogether
Risk reduction - CORRECT ANSWER reduce the chance of something bad
happening
Risk shifting - CORRECT ANSWER Get someone else to accept the risk
Buying insurance - CORRECT ANSWER transfer a portion of your risk to the Insurer
Risk Retention - CORRECT ANSWER the individual or business that opts not to buy
insurance retains the entire risk
,Indemnification - CORRECT ANSWER an insurance concept that states that some
portions of the insurance industry prefer that we be made only whole after a loss
rather than coming out ahead (Only getting back what you are owed, not getting
more than what you had to start with)
Subrogation - CORRECT ANSWER the transfer to the Insurer of the Insured's rights
to recover damages from a responsible third party
Peril - CORRECT ANSWER the cause of loss
Law of Large numbers - CORRECT ANSWER the mathematical concept that makes
it easier to predict losses if we have a large number of Insureds
Insurable losses are... - CORRECT ANSWER Economic, Predictable, Accidental,
Measurable, Non-Catastrophic
non-participating companies - CORRECT ANSWER Stock companies that exist for
the sole purpose of generating profits
for their stockholders
participating companies - CORRECT ANSWER A company owned by its policy
holders where the profits are distributed among policy holders
Social Security act - CORRECT ANSWER a guarantee that government
would never again allow workers (and their families) to become
destitute
OASDI (Social Security) - CORRECT ANSWER Old Age, Survivors, and Disability
Insurance...Federal Government law
FICA - CORRECT ANSWER Federal Insurance Contributions Act
or FICA, payroll taxes levied on employees, employers, and the self-employed.
Not covered by social security - CORRECT ANSWER payroll taxes levied on
employees, employers,
and the self-employed.
,FICA Fully Insured - CORRECT ANSWER (Worked for 10 years) payroll taxes levied
on employees, employers,
and the self-employed.
Retirement Benefits;
Disability Income Benefits; and
Survivor Benefits.
Currently Insured - CORRECT ANSWER Worked less than ten years. Only eligeable
for Survivor Benefits
Average Indexed Monthly
Earnings - CORRECT ANSWER Averages earnings over time period. Either way, the
more a worker
has paid into Social Security, the more the worker (or dependents)
will get out of it. (What you get at age 65)
Primary Insurance Amount (PIA). - CORRECT ANSWER Full retirement benefit
someone is entitled to at age 65 (some cases, 66-67)
elimination period (Disability) - CORRECT ANSWER the person must be
disabled for 5 months before starting to receive Disability
Benefits
underwriting - CORRECT ANSWER the selection and classification of risks.
actuary - CORRECT ANSWER A person who tracks the lifespan and chance of
illness or accident based on specific factors
Mortality table - CORRECT ANSWER predict the age at which
people in a given group are likely to die (Used by life insurers)
Morbidity table - CORRECT ANSWER predict how often
people in a given group are likely to get sick or have an
accident. (Used by health insurers)
field underwriters - CORRECT ANSWER Insurance agents
, declined risks - CORRECT ANSWER Applicants who are too risky are declined
Adverse selection - CORRECT ANSWER the tendency for high
risk people to be more likely to apply for insurance than low risk
people.
Premium = - CORRECT ANSWER Risk + Expenses - Interest
Premium mode - CORRECT ANSWER how frequently an Insured will pay the
premium
Accelerated Death Benefit Rider - CORRECT ANSWER requires the Insurer to pay
out part of the death benefit
(usually 50%) if the Insured has a diagnosis of a particular illness
likely to cause death within 12 months
Viatical Settlements - CORRECT ANSWER sell the policy to an investment company
that will continue to make the premium payments and collect the death benefit
when the Insured dies. The Insured will sell only if an investment company will
pay more than the current cash surrender value.
Group Policies share
these three characteristics - CORRECT ANSWER Reduced Cost;
Reduced Adverse Selection; and
Fixed Benefits.
Adverse selection - CORRECT ANSWER people who need
insurance the most are the ones most likely to buy it - and buy
more of it causing more loss claims
experience rating - CORRECT ANSWER looks at the claims
history for this particular group.
Experience rating puts the burden for
high premiums (and the credit for low
ones) squarely on the shoulders of
the group, because of the particular
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