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MISSISSIPPI LIFE AND HEALTH
INSURANCE EXAM 2025| BRAND NEW
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Absolute assignment - Correct Answer-Policy assignment under which the assignee (person to whom the policy is assigned) receives full control over the policy and also full rights to its benefits. Generally, when a policy is assigned to secure a debt, the owner retains all rights in the policy in excess of the debt, even though the assignment is absolute in form. (See assignment) Accelerated benefits rider - Correct Answer-A life insurance rider that allows for the early payment of some portion of the policies face amount should the insured suffers from a terminal i l l n e s s or injury. Acceptance - Correct Answer-(See offer and acceptance) Accidental bodily injury provision - Correct Answer-Disability income or accident policy provision that requires that the injury be accidental in order for benefits to be payable. Accidental death and dismemberment (AD&D) - Correct Answer-Insurance providing payment if the insured's death results
from an accident, if the insured accidentally severs a limb above the wrist or ankle joints, or totally and irreversibly Accidental death benefit rider - Correct Answer-A life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means. Accidental dismemberment - Correct Answer-Often defined as "the severance of limbs at or above the wrists or ankle joints, or the entire irrevocable loss of sight." Loss of use in itself may or not be considered dismemberment. Accidental means provision - Correct Answer-Unforeseen, unexpected, unintended cause of an accident. Requirement of an accident-based policy that the cause of the mishap must be accidental for any claim to be payable. Accident and health insurance - Correct Answer-Under which benefits are payable in case of disease, accidental injury, or accidental death. Also called health insurance, personal health insurance, and sickness and accident insurance. Accumulation unit - Correct Answer-Premiums an annuitant pays into annuities are credited as accumulation units. At the end of the accumulation period, accumulation units are converted to annuity units. Acquired immune deficiency syndrome (AIDS) - Correct Answer-A life- threatening condition brought on by the human
Adult day care - Correct Answer-Type of care (usually custodial) designed for individuals who require assistance with various activities of daily living, while their primary caregivers are absent. Offered in care centers. Adverse selection - Correct Answer-Selection "against the company." Tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, tendency of policy owners to take advantage of favorable options in insurance contracts. Advertising Code - Correct Answer-Rules established by the National Association of Insurance Commissioners (NAIC) to regulate insurance advertising. Agency - Correct Answer-Situation wherein one party (an agent) has the power to act for another (the principal) i n dealing with third parties. Agent - Correct Answer-Anyone not a duly licensed broker who solicits insurance or aids in placing risks, delivering policies, or collecting premiums on behalf of an insurance company. Agent's report - Correct Answer-The section of an insurance application where the agent reports personal observations about the applicant.
Aleatory - Correct Answer-Feature of insurance contracts in that there is an element of chance for both parties and that the dollar given by the policyholder (premiums) and the insurer (benefits) may not be equal. Alien Insurer - Correct Answer-Company incorporated or organized under the laws of any foreign nation, providence, or territory. Ambulatory surgery - Correct Answer-Surgery performed on an outpatient basis Amount at risk - Correct Answer-Difference between the face amount of the policy and the reserve or policy value at a given time. In other words, the dollar amount over what the policy owner has contributed of cash value toward payment of the policyowner's own claim. Because the cash value increases every year, the net amount at risk naturally decreases until it finally reaches zero when the cash value or reserve become the face amount. Annually renewable term (ART - Correct Answer-A form of renewable term insurance that provides coverage for one year and allows the policy owner to renew coverage each year without evidence of insurability. Also called yearly renewable term (YRT) Annuitant - Correct Answer-One to whom an annuity is payable, or a person upon the continuance of whose life further payment depends.
Appointment - Correct Answer-Authorization or certification of an agent to act for or represent an insurance company Approval receipt - Correct Answer-Rarely used today, a type of conditional receipt that provides that coverage is effective as of the date the application is approved (before the policy is delivered). Assessment mutual insurer - Correct Answer-An insurance company characterized by member-insureds who are assessed an individual portion of each loss that occurs. No premium payment is payable in advance. Assignee - Correct Answer-Person (including corporation, partnership, or other organization) to whom a right or rights under a policy are transferred by means of an assignment Assignment provision (health contracts) - Correct Answer-Commercial health policy provision that allows the policy owner to assign benefit payments from the insurer directly to the health care provider. Assignment - Correct Answer-Signed transfer of benefits of a policy by an insured to another party. The company does not guarantee the validity of an assignment.
Assignor - Correct Answer-Person (including corporation, partnership, or other organization or entity) who transfers a right or rights under an insurance policy to another by means of an assignment. Authority - Correct Answer-The actions and deeds an agent is authorized to conduct on behalf of an insurance company, as specified in the agent's contract. Attained age - Correct Answer-With reference to an insured, the current insurance age Authorized company - Correct Answer-Company duly authorized by the insurance department to operate in the state. Automatic premium loan provision - Correct Answer-Authorizes insurer to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan Average Indexed Monthly Earnings (AIME) - Correct Answer-The basis used for calculating the primary insurance amount (PIA) for Social Security benefits. Average Monthly Wage (AMW) - Correct Answer-The average wage base for computing virtually all Social Security benefits prior to
hospital stay. Best's Insurance Report - Correct Answer-A guide, published by A.M. Best, Inc., that rates insurers' financial integrity and managerial and operational strengths. Binding receipt - Correct Answer-Given by a company upon an applicant's first premium payment.The policy, if approved, becomes effective from the date of the receipt. Blackout period - Correct Answer-Period following the death of a family breadwinner during which no Social Security benefits are available to the surviving spouse. Blanket policy - Correct Answer-Covers a number of individuals who are exposed to the same hazards, such as members of an athletic team, company officials who are passengers in the same company plane, and so on. Broker - Correct Answer-Licensed insurance representative who does not represent a specific company, but places business among various companies. Legally, the broker is usually regarded as a representative of the insured rather than the company Business continuation plan - Correct Answer-Arrangements between the business owners that provide that the shares owned
by any one of them who dies or becomes disabled shall be sold to and purchased by the other co-owners or by the business Business overhead expense insurance - Correct Answer-A form of disability income coverage designed to pay necessary business overhead expenses, such as rent, should the insured business owner become disabled Buyer's guides - Correct Answer-Informational consumer guide books that explain insurance policies and insurance concepts; in many states, they are required to be given to applicants when certain types of coverages are being considere Buy-sell agreement - Correct Answer-Buy-sell agreement Cafeteria plan - Correct Answer-Employee benefit arrangements in which employees can select from a range of benefits. Cancellable contract - Correct Answer-Health insurance contract that may be terminated by the company or that is renewable at its option. Capital sum - Correct Answer-Amount provided for accidental dismemberment or loss of eyesight. Indemnities for loss of one member or sight of one eye are percentages of the capital sum.
years, it usually equals or closely approximates the reserve value at time ofsurrender. Cash value - Correct Answer-The equity amount or "savings" accumulation in a whole life policy Churning - Correct Answer-The practice by which policy values in an existing life insurance policy or annuity contract are used to purchase another policy or contract with that same insurer for the purpose of earning additional premiums or commissions without an objectively reasonable basis for believing that the new policy will result in an actual and demonstrable benefit. Class designation - Correct Answer-A beneficiary designation.Rather than specifying one or more beneficiaries by name, the policy owner designates a class or group of beneficiaries. For example, "my children." Classification - Correct Answer-Occupational category of a risk. Cleft lip - Correct Answer-A congenital furrow or groove in the upper lip that results from incomplete embryonic development. This condition may be associated with a cleft palate. Also called a hare lip. Cleft palate - Correct Answer-A congenital furrow or groove in the roof of the mouth that results from incomplete embryonic development.This condition may be associated with a cleft lip.
Close corporation - Correct Answer-A corporation owned by a small group of stockholders, each of whom usually has a voice in operating the business. COBRA (Consolidated Omnibus Budget Reconciliation Act) - Correct Answer-Extends group health coverage to terminated employees and their families Coinsurance (percentage participation) - Correct Answer-Principle under which the company insures only part of the potential loss, the policyowners paying the other part. For instance, in a major medical policy, the company may agree to pay % of the insured expenses, with the insured to pay the other %. Collateral assignment - Correct Answer-Assignment of a policy to a creditor as security for a debt. The creditor is entitled to be reimbursed out of policy proceeds for the amount owed. The beneficiary is entitled to any excess of policy proceeds over the amount due the creditor in the event of the insured's death. Combination company - Correct Answer-Company whose agents sell both weekly premium life and health insurance and ordinary life insurance. Also called a multi-line company.
high maximum benefits Concealment - Correct Answer-Failure of the insured to disclose to the company a fact material to the acceptance of the risk at the time application is made. Conditional contract - Correct Answer-Characteristic of an insurance contract in that the payment of benefits is dependent on or a condition of the occurrence of the risk insured against. Conditionally renewable contract - Correct Answer-Health insurance policy providing that the insured may renew the contract from period to period, or continue it to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions defined in the contract. Conditional receipt - Correct Answer-Given to the policy owners when they pay a premium at time of application.Such receipts bind the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt. Consideration clause - Correct Answer-The part of an insurance contract setting forth the amount of initial and renewal premiums and frequency of future payments. , Consideration - Correct Answer-Element of a binding contract; acceptance by the company of payment of the premium and
statements made by the prospective insured in the application. Contestable period - Correct Answer-Period during which the company may contest a claim on a policy because of misleading or incomplete information in the application. Contingent beneficiary - Correct Answer-Person(s) named to receive proceeds in case the original beneficiary is not alive. Also referred to as secondary Continuing care - Correct Answer-Type of health or medical care designed to provide a benefit for elderly individuals who live in a retirement community; addresses full- time needs, both social and medical. Also known as residential care. Contract - Correct Answer-An agreement enforceable by law whereby one party binds itself to certain promises or deeds. Contract of agency - Correct Answer-A legal document containing the terms of the contract between the agent and company, signed by both parties. Also called agency agreement. Contributory plan - Correct Answer-Group insurance plan issued to an employer under which both the employer and employees contribute to the cost of the plan. Generally, % of the eligible employees must be insured. (See noncontributory plan)
benefits (typically tied to the Consumer Price Index), offsetting the effects of inflation. Coverage requirement - Correct Answer-Standards of coverage that prevent retirement plans from discriminating in favor of highly compensated employees. A plan must pass an IRS coverage test to be considered qualified Credit accident and health insurance - Correct Answer-If the insured debtor becomes totally disabled due to an accident or sickness, the policy premiums are paid during the period of disability or the loan is paid off. May be individual or group policy Credit life insurance - Correct Answer-Usually written as decreasing term on a relatively small decreasing balance installment loan that may reflect direct borrowing or a balance due for merchandise purchased. If borrower dies, benefits pay balance due. May be individual or group policy. Credit report - Correct Answer-A summary of an insurance applicant's credit history, made by an independent organization that has investigated the applicant's credit standing. Cross-purchase plan - Correct Answer-An agreement that providesthat upon a business owner's death, surviving owners will purchase the deceased'sinterest, often with fundsfrom life insurance policies owned by each principal on the lives of all other principals.
Currently insured - Correct Answer-Under Social Security, a status of limited eligibility that provides only death benefits. Custodial care - Correct Answer-Level of health or medical care given to meet daily personal needs, such as dressing, bathing, getting out of bed, and so on. Though it does not require medical training, it must be administered under a physician's order Death rate - Correct Answer-Proportion of persons in each age group who die within a year; usually expressed asso many deaths per thousand persons. (See expected mortality) Debit insurer - Correct Answer-(See home service insurer) Decreasing term insurance - Correct Answer-Term life insurance on which the face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level. The intervals between decreases are usually monthly or annually Deductible - Correct Answer-Amount of expense or lossto be paid by the insured before a health insurance policy starts paying benefits
