Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
This resource provides a comprehensive overview of Georgia life and health insurance exams, covering key concepts like activities of daily living (ADLs), assignment, consideration, indemnity, lump sum, minors, NAIC, principal, adverse selection, agents/producers, applicants/proposed insureds, beneficiaries, death benefits, fraud, insurance policies, insureds, insurers (principals), lapses, life insurance, policyowners, premiums, earned income, FIFO (first in, first out), gross income, LIFO (last in, first out), nonprofit organizations, policy endowments, pre-tax contributions, rollovers, surrenders, vesting, tax deductibility, taxable income, tax deferral, attained age, cash value, face amount, deferred insurance, endowment insurance, level premiums, estate liquidation, nonforfeiture values, policy maturity, securities, authorized insurers, cease and desist orders, commissions, commissioners, disclosures, home offices, insolvency, Lloyd's associations, moral turpitude, promulgation, re
Typology: Exams
1 / 14
a person's essential activities that include bathing, dressing, eating, transferring, toileting, continence - ANSWER>>Activities of daily living (ADLs)
transfer of rights of policy ownership - ANSWER>>Assignment
something of value that each party gives to the other (binding force in any contract) - ANSWER>>Consideration
a principle of reimbursement on which insurance is based; in the event of loss, an insurer reimburses the insureds or beneficiaries for the loss - ANSWER>>Indemnity
payment of the entire benefit in one sum; a payout method that pays the beneficiary the entire benefit in one payment - ANSWER>>Lump sum
a person under legal age - ANSWER>>Minor
National Association of Insurance Commissioners, an organization composed of insurance Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues - ANSWER>>NAIC
the face value of the policy; the original amount invested before the earnings - ANSWER>>Principal
insuring of risks that are more prone to losses than the average risk - ANSWER>>Adverse selection
a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer - ANSWER>>Agent/Producer
a person applying for insurance - ANSWER>>Applicant or proposed insured
a person who receives the benefits of an insurance policy - ANSWER>>Beneficiary
the amount paid upon the death of the insured in a life insurance policy - ANSWER>>Death benefit
intentional misrepresentation or deceit with the intent to induce a person to part with something of value - ANSWER>>Fraud
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events - ANSWER>>Insurance policy
person covered by the insurance policy; may or may not be the policyowner - ANSWER>>Insured
the company who issues an insurance policy - ANSWER>>Insurer (principal)
policy termination due to nonpayment of premium - ANSWER>>Lapse
coverage on human lives - ANSWER>>Life insurance
the person entitled to exercise the rights and privileges in the policy - ANSWER>>Policyowner
the money paid to the insurance company for the insurance policy - ANSWER>>Premium
salary, wages, or commissions; but not income from investments, unemployment benefits, and similar sources of income - ANSWER>>Earned income
principle under which it is assumed that the funds paid into the policy first will be paid out first - ANSWER>>FIFO (First In, First Out)
a person's income before taxes or other deductions - ANSWER>>Gross income
principle applied to asset management in life insurance products, under which it is assumed that the funds paid into the policy last will be paid out first - ANSWER>>LIFO (Last In, First Out)
an organization that uses its surplus to fulfill its purpose instead of distributing the surplus to its owners or members - ANSWER>>Nonprofit organization
maturity date - ANSWER>>Policy endowment
contribution made before federal and/or state taxes are deducted from earnings - ANSWER>>Pretax contribution
withdrawal of the money from one qualified plan and placing it into another plan - ANSWER>>Rollover
early termination of a policy by the policyowner - ANSWER>>Surrender
the right of a participant in a retirement plan to retain part or all of the benefits
a reduction of taxable income, resulting in lower tax liability; a qualified expense that mav reduce the amount of income subject to taxation - ANSWER>>Tax deductible
subject to taxation; payable to state and federal government - ANSWER>>Taxable
taxes on investments or gains (such as interest or dividends) are paid at a future date instead of in the period in which they are incurred tax - ANSWER>>Tax deferred
the insured's age at the time the policy is issued or renewed - ANSWER>>Attained age
a policy's savings element or living benefit - ANSWER>>Cash value
the amount of benefit stated in the life insurance policy - ANSWER>>Face amount
withheld or postponed until a specified time or event in the future - ANSWER>>Deferred
the cash value of a whole life policy has reached the contractual face amount - ANSWER>>Endow
the premium that does not change throughout the life of a policy - ANSWER>>Level premium
converting a person's net worth into a cash flow - ANSWER>>Liquidation of an estate
benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses - ANSWER>>Nonforfeiture values
in life policies, the time when the face value is paid out - ANSWER>>Policy maturity
financial instruments that may trade for value (for example, stocks, bonds, options) - ANSWER>>Securities
insurer who has received a Certificate of Authority from the department of insurance to transact insurance in this state - ANSWER>>Authorized insurer
to stop or discontinue - ANSWER>>Cease and desist
payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium - ANSWER>>Commission
the head of the State Department of Insurance - ANSWER>>Commissioner
revealed information to help someone make an intelligent and educated decision - ANSWER>>Disclosure
insurer's headquarters, principal place of business Inducement - an offer that attempts to influence the other party - ANSWER>>Home office
unable to meet financial obligations - ANSWER>>Insolvent
operate an insurance mechanism, in which members are liable only for their portion of risk (not an insurance company) - ANSWER>>Lloyd's Associations
conduct that is contrary to community standards of justice, honesty or good morals - ANSWER>>Moral turpitude
to make public, to put into action (e.g., laws or court decrees) - ANSWER>>Promulgate
a mutual interchange of rights and privileges - ANSWER>>Reciprocity
a formal written law enacted by legislature; insurance statutes can be found in the state Insurance Code - ANSWER>>Statute
insurance not available from authorized insurers; placed with nonadmitted insurers who specialize in offering insurance to the high-risk market - ANSWER>>Surplus lines
gross income (all income from whatever sources) minus adjustments to income
a federal law that mandates increased preventive, educational, and community- based health care services, and that established the Health Insurance Marketplace to make health coverage available to any uninsured individuals - ANSWER>>Affordable Care Act (ACA or PPACA)
a person's net worth - ANSWER>>Estate
insurance that exceeds in amount the actual value of the person or property insured or insurance in a greater amount than the insured can afford - ANSWER>>Overinsurance
a period of time during which benefits are paid under the policy - ANSWER>>Benefit period
a person enrolled in a health insurance plan. an insured (doesn't include dependents of the insured) - ANSWER>>Enrollee
existing conditions - conditions for which the insured has received diagnosis, advice, care, or treatment during a specific time period prior to the application for health coverage - ANSWER>>Pre
the money paid to the insurance company for the insurance coverage - ANSWER>>Premium
fully insured or currently insured, depending on the number of coverage credits earned - ANSWER>>Social Security Disability Insured Status
a period of time that must pass after a loss occurs before the insurer start paying policy benefits - ANSWER>>Waiting period
a policy that is written on a noncancellable basis with the right to renew guaranteed - ANSWER>>Guaranteed renewable
a beneficiary who has a vested interest in the policy and therefore, the policyowner may not exercise certain rights without the consent of the beneficiary - ANSWER>>Irrevocable beneficiary
National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 5 U.S. territories, formed to resolve insurance regulatory issues - ANSWER>>NAIC
inability of the insured to perform any occupation for which the insured is reasonably suited by education, training or experience - ANSWER>>Total disability
relinquishment of a right or interest - ANSWER>>Waiver
an unforeseen and unintended injury that resulted from an accident rather than a sickness - ANSWER>>Accidental bodily injury
type of employee benefit plan that allows insureds to choose between different types of benefits - ANSWER>>Cafeteria plan
termination of an in-force insurance policy, by either the insured or the insurer, prior to the expiration date shown in the policy - ANSWER>>Cancellation
health insurance that provides coverage for most types of medical expenses - ANSWER>>Comprehensive coverage
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits - ANSWER>>Deductible
termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy - ANSWER>>Nonrenewal
added to the basic insurance policy to add, modify or delete policy provisions - ANSWER>>Riders
an illness, which first manifests itself while the policy is in force - ANSWER>>Sickness
not subject to taxation - ANSWER>>Tax exempt
risk selection and classification process - ANSWER>>Underwriting
a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer - ANSWER>>Agent/Producer
a person applying for insurance - ANSWER>>Applicant or proposed insured
permission to do something - ANSWER>>Consent
the policyowner facing the possibility of losing something of value in the event of loss - ANSWER>>Insurable interest
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events - ANSWER>>Insurance policy
person covered by the insurance policy; may or may not be the policyowner - ANSWER>>Insured
the company who issues an insurance policy - ANSWER>>Insurer (principal)
the person entitled to exercise the rights and privileges in the policy - ANSWER>>Policyowner
the money paid to the insurance company for the insurance policy - ANSWER>>Premium
Transfers the risk of loss from an individual to an insurer; Based on the principle of indemnity; Based on the spreading of risk (risk pooling) and the law of large numbers - ANSWER>>Insurance
Must exist at the time of application; Insuring one's own life, family member, or a business partner - ANSWER>>Insurable Interest
Agreement, Consideration, Competent parties, legal purpose - ANSWER>>Elements of a Legal Contract (Insurance Contract Selection)
offer and acceptance - ANSWER>>Agreement
premiums and representations on the part of the insured; payment of claims on the part of the insurer - ANSWER>>Consideration
of legal age, sound mental capacity, and not under the influence of drugs or alcohol - ANSWER>>Competent parties
not against public policy - ANSWER>>Legal purpose
Adhesion, Aleatory, Conditional, Unilateral - ANSWER>>Contract Characteristics (Insurance contract Section)
one party prepares the contract: the other party must accept it as is - ANSWER>>Adhesion
exchange of unequal amounts - ANSWER>>Aleatory
certain conditions must be met - ANSWER>>Conditional
only one of the parties to the contract is legally bound to do anything - ANSWER>>Unilateral
Field underwriting (By agent); Company Underwriting - ANSWER>>Underwriting (Process of issuing a life insurance policy)
Application, Agent's report, Premiums with application and conditional receipts
completed and signed - ANSWER>>Application
agent's observations about the applicant that can assist in underwriting - ANSWER>>Agent's report
Multiple Sources of Information: Application, consumer reports, MIB; Risk Classification - ANSWER>>Company Underwriting
In classifying a risk, the Home Office underwriting department will look at the applicant's past medical history, present physical condition, occupation, habits and morals. If the applicant is acceptable, the underwriter must then determine
the risk or rating classification to be used in deciding whether or not the applicant should pay a higher or lower premium. - ANSWER>>Risk Classification
Standard, Substandard, Preferred - ANSWER>>The Three Types of Risk
are persons who, according to a company's underwriting standards, are entitled to insurance protection without extra rating or special restrictions. Standard risks are representative of the majority of people at their age and with similar lifestyles. They are the average risk. - ANSWER>>Standard Risk
Preferred risks are those individuals who meet certain requirements and qualify for lower premiums than the standard risk. These applicants have a superior physical condition, lifestyle, and habits. - ANSWER>>Preferred Risk
applicants that are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits. - ANSWER>>Substandard Risk
up, resulting in a higher premium. - ANSWER>>These policies are also referred to as "rated" because they could be issued with the premium rated
3 key factors for life insurance: mortality, interest, and expense; Mode - ANSWER>>Premium Determination (Process of issuing a Life Insurance Policy)
the more frequently premium is paid, the higher the premium - ANSWER>>Mode
Effective date of coverage - ANSWER>>Policy Issue and Delivery (Process of issuing a life insurance policy)
if the premium is not paid with the application, the agent must obtain the premium and a statement of continued good health at the time of policy delivery - ANSWER>>Effective date of coverage
Protects consumers against circulation of inaccurate or obsolete personal financial information - ANSWER>>Fair Credit Reporting Act (Federal Regulations)
Leach-Billey Act (Federal Regulations) - Prohibits insurers from disclosing nonpublic personal information to nonaffiliated third parties - ANSWER>>Gramm
Helps address social, economic, and global initiatives to fight and prevent terrorist activities; Anti-money laundering (AML) standards; Suspicious Activity Report (SAR) for any transactions of $5,000 or more if they raise red flags for suspicious activity - ANSWER>>USA PATRIOT Act (Federal Regulations)
rules state that procedures and plans must be in place and designed to identify activity that one would deem suspicious of money laundering, terrorist financing and/or other illegal activities. - ANSWER>>Suspicious Activity Report (SAR) rules
Money Laundering (AML) standards - requires the monitoring of all financial transactions and reporting of any suspicious activity to the government, along with prohibiting correspondent accounts with foreign shell banks. - ANSWER>>Anti
Pure protection, Lasts for specific term, No cash value - ANSWER>>General Characteristics (Term Life)
Level death Benefit and level premium - ANSWER>>Level premium term (Term Life)
Renews each year without proof of insurability, Premiums increase due to attained age - ANSWER>>Annually renewable term (Term Life)
Coverage gradually decreases at predetermined times; best used when the need for protection declines from year to year - ANSWER>>Decreasing term (Term Life)
Renewable; Convertible - ANSWER>>Features of term policies (Term Life)
renew the policy without evidence of insurability - ANSWER>>Renewable
right to convert a term policy to a permanent policy without evidence of insurability - ANSWER>>Convertible
Permanent protection, Guaranteed elements (face amount, premium, and cash value) until death or age 100, Level premium, Cash value and other living benefits - ANSWER>>General characteristics (Whole Life)
Basic policy, Level death benefit, Insured pays premiums for life or until age 100
Premiums paid until a certain time; coverage in effect to age 100 - ANSWER>>Limited Payment (Whole Life)
Premiums paid in one lump sum; coverage continues to age 100 - ANSWER>>Single Premium (Whole Life)
Cash Refund, Installment refund - ANSWER>>The Two Types of refund life Annuities
when the annuitant dies, the beneficiary receives a lump-sum refund of the principal minus benefit payments already made to the annuitant. Cash refund option does not guarantee to pay any interest. - ANSWER>>Cash refund
when the annuitant dies, the beneficiary will continue to receive guaranteed installments until the entire principal amount has been paid out. - ANSWER>>Installment refund
Minimum Premium; Target Premium - ANSWER>>The Two Types of Premiums
the amount needed to keep the policy in force for the current year. Paying the minimum premium will make the policy perform as an annually renewable term product. - ANSWER>>Minimum Premium
The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime. - ANSWER>>Target Premium