Illinois Life & Health Insurance Exam 100% VERIFIED ANSWERS 2024/2025 CORRECT STUDY, Exams of Organization and Business Administration

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Illinois Life & Health

Insurance Exam 100%

VERIFIED ANSWERS

2024/2025 CORRECT STUDY

SET

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 rider 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 depreciation adhesion

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 probability agency 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

the age of the insured at a determined date attending physicians statement (aps) a statement usually obtained from the applicants doctor authorized (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 insurance buy 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 provided claim 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

an entity that obtains and possesses a license soley for the purpose of writing business on the owner, immediate family, relatives, employer or employees convertible 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 reputation dependent 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

life or health insurance companies formed to provide insurance form members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government fraud intentional misrepresentation or deceit with the intent to induce a person to part with something of value free look a period of time, usually required by law, during which a policy owner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for any reason group life life insurance provided for members of a group hazard a circumstance that increases the likelihood of a loss hazard (moral) the effect of a persons reputation, character, living habits, etc on his/her insurability hazard (morale) the effect of a persons indifference concerning loss has on the risk to be insured hazard (physical) a type of hazard that arises form the physical characteristics of an individual, such as a physical disability due to either current circumstance or a condition present at birth implied authority 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

to restore the insured to the same condition as prior to loss with no intent of loss or gain insolvent organization a member organization which is unable to pay its contractual obligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction insurability the acceptability of an applicant who meets an insurance company underwriting requirements for insurance insurable interest a financial interest in the life of another person; a possibility of losing something of value if the insured should die. in life insurance, insurable interest must exist at the time of policy application or policy issue insurance a contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against a loss by a specified future contingency or peril in return for payment of a premium insured the person or organization that is protected by insurance; the party is to be indemnified insurer an entity that indemnifies against losses, provides benefits, or renders services (aka company or insurance company) insuring clause a general statement that identifies the basic agreement between the insurance company and the insured, usually located on the first page of the policy intentional injury an act that is intended to cause injury. self inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered

a variation of whole life insurance that charges a level annual premium and provides a level, guaranteed death benefit to the insureds age 100 and will endow for the face amount if the insured lives to age 100. limited pay life is designed so that the premiums for coverage will be completely paid up well before age 100 liquidation selling assets as a method of raising capital living benefits rider a rider attached to a life insurance policy that provides LTC benefits or benefits for the terminally ill by using available life insurance benefits lloyds associations organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk loan value the amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral loss the reduction, decrease or disappearance of value of the person or property insured in a policy, by a peril insured against lump sum settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than installments market value adjusted annuity a single premium deferred annuity that allows a contract owner to lock in a guaranteed interest rate over a specified maturity period maturity date

the date when the face amount of the life insurance becomes payable Medical information bureau (MIB) an information database that stores the health histories of individuals who have applied for insurance in the past. most insurance companies subscribe to this database for underwriting purposes misrepresentation a false statement or lie that can render the contract void mode of payment the method of premium payment, whether annually, semiannually, quarterly or monthly mortality table a table showing the probability of death at specified ages mutual companies insurance organizations that have no capital stock, but are owned by the policy holders nonadmitted/nonauthorized an insurance company that has not applied for, or has applied and been denied a certificate of authority and may not transact insurance in a particular state noncancellable an insurance contract that the insured has a right to continue in force by payment of premiums that remain the same for a substantial period of time nonforfeiture values those guaranteed values in a life insurance policy that cannot be taken from the insured, even if he or she ceases to pay premiums nonmedical

peril the cause of a possible loss permanent life insurance a general term used to refer to various forms of whole life insurance policies that remain in effect to age 100 so long as the premium is paid persistency the tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer personal contract an agreement between an insurance company and an individual that states that insurance polices cover the individuals insurable interest physical exam and autopsy a provision that allows and insurer, at its own expense, to have an insured physically examined when a claim is pending or to have an autopsy performed where not prohibited by law policy loan a nonfofeiture value in which an insurer loans a part or all of the cash value of the policy assigned as security for the loan to the policy owner policy holder the person who has possession of the policy, usually the insured policy owner the person who is entitled to exercise the rights and privileges of the policy. this person may or may not be the insured preferred risk

an insurance classification for applicants who have a lower expectation of incurring loss, and who, therefore, are covered at a reduced rate premium a periodic payment to the insurance company to keep the policy in force primary beneficiary the person who is named as first to receive benefits from a policy primary policy a basic, fundamental insurance policy which pays first with respect to other outstanding policies principal amount the full face value of a policy private insurance insurance furnished by a nongovernmental insuring organizations pro rata cancellation termination of an insurance policy, with an adjustment of the premium charge in proportion to the exact coverage that has been in force proceeds the amount payable by the insurance company, usually in at the insureds death or when the policy matures producer insurance agent or broker pure protection insurance whereby premiums are paid for protection in the event of death or disability, not for cash value accumulation

insurance which can, at the election of the policy owner, be renewed at the end of a term without evidence of insurability representations statements made by the applicant on the insurance application that are believed to be true, but not guaranteed to be true rescission the termination of an insurance contract due either to material misrepresentation by the insured or by fraud, misrepresentation, or duress on the part of the agent/insurer retention a method of dealing with risk by intentionally or unintentionally keeping a portion of it for the insureds account; the amount of responsibility assumed but not reinsured by the insurance company rider 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 uncertainty as to the outcome of an event when two or more possibilities exist risk (pure) the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change risk retention group a liability insurance company owned by its members, which are exposed to similar liability risks by virtue of being in he same business or industry risk (speculative) the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain

risk (standard) an applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle risk (substandard) an applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium rollover withdrawing the money from a qualified plan and lacing it into another qualified plan secondary beneficiary the person who is named to receive benefits upon the death of the insured if the primary beneficiary is no longer alive or does not collect all the benefits due to his/her own death settlement options choices available to the insured/owner for distribution of insurance proceeds sharing a method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss who share the losses that occur within that group single premium whole life (SPWL) a life insurance policy designed to provide a level death benefit to the insureds age 100 for a one time, lump sum payment spendthrift clause a clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them standard provisions requirements approved by state law that must appear in all insurance policies