Life and Health Insurance - Ohio Licensing Exam Questions
and Answers.
Absolute Assignment - answer the assignment by the policy owner of all control and
rights to a third party. This differs from collateral assignment, which allows all the rights
and control to revert to the owner once a loan is paid off
Accident - answer A fortuitous event; unforeseen and unintended
Accidental Death Insurance - answer A form of health insurance that provides payment
if death of the insured results from accident. Accidental death insurance is often
combined with dismemberment insurance in a form called accidental death and
dismemberment (AD&D)
Accident and Sickness - answer Insurance against bodily injury, disability, or death by
accident or accidental means, or expense thereof, or against disability or expense
resulting from sickness and the insurance relating thereto
Accident means - answer the unexpected cause of an accidental bodily injury. Under an
accidental means definition, the mishap itself must be accidental. If a person does
something to contribute to the accident, the claim would not be paid under this
restrictive definition
Accelerated benefit - answer Available only if the benefits are available during the
insured's lifetime, benefit amounts are fixed when accelerated, and the benefits, when
paid, reduces the death benefit
Accumulation at interest option - answer a dividend option under which the policy owner
allows dividends to accumulate at interest with the company. Only the interest on the
dividends is taxable as income (participating policies only).
Actuary - answer once concerned with the application of probability and statistical
theory to insurance. This person sets expenses, and interest assumptions.
ADB - answer Accidental death benefit, also known as double indemnity. There is
another variation called triple indemnity.
AD&D - answer Accidental death and dismemberment insurance.
Administrator - answer the person appointed by a court to settle a deceased's estate,
sometimes called and executor.
Adverse selection - answer Selection against the insurance company. The tendency of
poorer risks to want insurance more often than standard risks.
,Agent - answer the individual appointed by an insurance company to solicit, negotiate,
effect, or countersign insurance contracts on its behalf.
Lavatory - answer something that depends upon chance or is random. It is derived from
the Latin idea of "rolling the dice."
Lavatory contract - answer A contract in which both parties know that one or the other
may receive more than paid in. This payment is dependent upon a fortuitous event. For
example. A person pays the premium for a term policy for many years and does not die,
thus, a claim is never filed.
Alien company - answer an insured organized and domiciled in a country other than the
United States
Annuitant - answer the one receiving the Annuity and on whose life expectancy the
rates are figured.
Annuity - answer 1. An amount of money, payable monthly or yearly, which liquidates a
financial asset. 2. An agreement by an insurer to make periodic payments that continue
during the survival of the annuitant(s) or for a specified period. Annuities are also
accumulations vehicles that function much like savings accounts.
Applicant - answer the party making application to the insurance company for the policy
Application - answer a form on which the prospective insured states facts requested by
the insurer and on the basis of which the insurer decides whether to accept the risk,
modify the coverage offered, or decline the risk.
Assignee - answer the person to whom policy rights are assigned in whole or in part by
the policy owner.
Assignment - answer the transfer of rights in a policy to someone other than the policy
owner.
Attained age - answer the present age of the insured. This is a factor when a person
converts term insurance to whole life insurance or buys added disability under a GIR
provision
Attorney-in-fact - answer a person to whom authorization is given by an individual to
exchange insurance with other persons. Always present in a reciprocal insurance
company.
Authorized company - answer an insurer permitted to sell insurance within a state,
evidenced by a certificate of authority from the insurance commissioner, also called
ADMITTED
, Automatic premium loan - answer A provision in a life policy authorizing the insurance
company to use the loan value to pay premiums not paid by the end of the grace period.
May be present in whole life or other traditional cash value policies only, but never in
term policies
Aviation clause - answer Limits or excludes coverage when the insured is participating
in specified types of air travel, Cush as private planes. Coverage is usually fully in force
for people on regularly scheduled commercial flights. The limit or exclusion often applies
to student pilots
Beneficiary - answer A person who may become eligible to receive, or is receiving,
benefits under an insurance plan, other than as a participant.
Blanket Insurance Contract - answer a contract of Health Insurance that covers all of a
class of persons not individually identified. No certificates are issued and people
covered may not be aware that the coverage is in place.
Blue Plan - answer the generic term for those insurers (usually on a service rather than
a reimbursement bases) who are authorized to use the designation Blue Cross or Blue
Shield and the insignia of either.
Broker - answer one who represents an insured in the solicitation, negotiation, or
procurement of contracts of insurance, functions. This person is also called an
independent agent.
Business Insurance - answer Life or Health insurance written to voter business
situations, such as key person, sole proprietor, partnership, corporations, and act.
Cancelable - answer a contract of Insurance that may be terminated by the insurance
company or insured at any time. Virtually every form of insurance is cancelable except
Life insurance and those health policies designated as guaranteed renewable, or non-
cancelable and guaranteed renewable.
Cancellation - answer the termination of a contract of insurance in force by voluntary act
of the insurance company or insured, effected in accordance with provisions in the
contract or by mutual agreement.
Capital Sum - answer the maximum amount payable in one sum in the event of
accidental dismemberment. It is typically half of the face amount of principal sum.
Cash Surrender Value - answer the value reposing in a policy that is the legal property
of the policy owner and that may be expected should the policy be surrendered for
cash. Synonymous with cash value.
Certificate - answer a statement evidencing that a policy has been written and stating
the coverage in general. Often used with group coverage.
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