llinois Life & Health Insurance Exam Questions and Answers with Verified Solutions

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Accelerated Benefits ✔✔Riders attached to life insurance policies that allow death benefits to be used to cover nursing or convalescent home expenses Accidental death benefits ✔✔a policy rid... er that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death accidental death insurance ✔✔an insurance policy that provides payment if the insureds death is the result of an accident accumulation period ✔✔the time before an annuitants retirement during which the annuitant is making payments or investments in the annuity actual cash value (acv) ✔✔the required amount to pay damages or for property loss. This amount is calculated based on the properties current replacement value minus depreciationadhesion ✔✔a contract offered on a take it or leave it basis by an insurer, in which the insureds only option is to either accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured adjustable life ✔✔life insurance that permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period adjuster ✔✔a representative of an insurance company who investigates and acts not he behalf of the company to obtain agreements for the amount of the insurance claim administrator ✔✔an individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person admitted (authorized) insurer ✔✔an insurance company authorized and licensed to transact business in a particular state adverse selection ✔✔the tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probabilityagency ✔✔an insurance sales office or company agent ✔✔an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer agent appointment ✔✔the authorization of an agent to act for or represent and insurer agents authority ✔✔special powers granted to an agent by his or her agency contract aleatory ✔✔a contract in which participating parties exchange unequal amounts. insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss alien insurer ✔✔an insurance company that is incorporated outside the united states annual statement ✔✔a detailed financial report that an insurance company must submit every year to the insurance department of states in which it conducts businessannuity ✔✔a contract that provides income for a specified period of years or life apparent authority ✔✔the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created applicant ✔✔a person making application for, or offering himself, herself or another to be insured under an insurance contract application ✔✔a document that provides information for underwriting purposes. after the policy is issued, any unanswered questions are considered waived by the insurer assignment ✔✔the transfer of ownership rights of a life insurance policy from one person to another attained age ✔✔the age of the insured at a determined date attending physicians statement (aps) ✔✔a statement usually obtained from the applicants doctorauthorized (admitted) insurer ✔✔an insurance company authorized and licensed to transact business in a particular state avoidance ✔✔a method of dealing with risk by deliberately keeping away form it (ex. if a person wanted to avoid the risk of being killed in an airplane crash, he or she might choose to never fly in a plane) basic illustration ✔✔a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguarenteed elements beneficiary ✔✔the person who receives the proceeds from the policy when the insured dies birthday rule ✔✔the method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calendar year is designated as primary broker ✔✔an individual who represents an insured in the process of purchasing and negotiating a contract of insurancebuy sell agreement ✔✔a legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled buyers guide ✔✔a booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision cash value ✔✔the amount to which a policy owner is entitled if the policy is surrendered before maturity certificate ✔✔a statement or booklet that confirms that a policy has been written and that describes the coverage in general certificate of authority ✔✔a document that authorizes a company to start conducting business and specifies the kinds of insurance a company can transact. it is illegal for an insurance company to transact insurance without this certificate certificate of insurance ✔✔a legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance providedclaim ✔✔a request for payment of the benefits provided by an insurance contract coercion ✔✔an unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance coinsurance clause ✔✔a provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance commingling ✔✔a practice in which person in a fiduciary capacity illegally miss his/her personal funds with funds he/she is holding in trust commission ✔✔the payment made by insurers to agents or brokers for the sale and service of policies commissioner ✔✔the chief executive and administrative officer of a state insurance department (in some states, known as director or superintendent) concealment ✔✔the withholding of known facts that, if material, can void a contractconditional contract ✔✔aa type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable consideration ✔✔the binding force in a contract that requires something of value to be exchanged for the transfer of risk. the consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration no the part of the insurer is the promise to pay in the event of loss consumer report ✔✔a written and or oral statement regarding a consumers credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources contract ✔✔an agreement between two or more parties enforceable by law contributory ✔✔a group insurance plan that requires the employees to pay part of the premium controlled business ✔✔an entity that obtains and possesses a license soley for the purpose of writing business on the owner, immediate family, relatives, employer or employeesconvertible ✔✔a policy that may be exchanged for another type of policy by contractual provision, at the option of the policy owner, and without evidence of insurability (ex. term life changed to a form of permanent life) countersignature ✔✔the act of signing an insurance policy by a licensed resident agent coverage ✔✔the inclusion of causes of loss (perils) which are covered within a scope of a policy credit life insurance ✔✔a special type of coverage written to pay off the balance of a loan in the event of the death of the debtor death benefit ✔✔the amount payable upon the death of the person whose life is insured decreasing term ✔✔a type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy defamation ✔✔an unfair trade practice in which one agent or insurer makes and injurious statement about another with the intent of harming the persons or company reputationdependent ✔✔a person who relies on another for support and maintenance director ✔✔the chief executive and administrative officer of the insurance departments (in some states known as commissioner or superintendent) disclosure ✔✔an act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy situation domestic insurer ✔✔an insurance company that conducts business in the state of incorporation domicile of insurer ✔✔insurers location of incorporation and the legal ability to write business in a state earned premium ✔✔the amount of the premium for which the policy protection has been given effective date ✔✔the date when an insurance policy begins (aka inception date)Employee retirement income security act (ERISA) ✔✔the act that stipulates federal standards for private pension plans endorsement ✔✔a form changing the provisions of and attached to a life insurance policy (aka a rider) endow ✔✔to reach the maturity date or time at which the face amount equals cash value estoppel ✔✔a legal impediment to denying a fact or restoring a right that has been previously waived excess insurance ✔✔insurance that pays over and above or in addition to basic policy limits exclusions ✔✔causes of loss, exposures, conditions, etc listed in the policy for which the benefits will not be paid expiration ✔✔the date specified in the policy as the date of terminati [Show More]

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