Mississippi Life and Health Insurance Exam
Questions And Answers. Verified and
Updated.
Absolute assignment - 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 - 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 - answer✔✔(See offer and acceptance)
Accidental bodily injury provision - 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) - 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 - answer✔✔A life insurance policy rider providing for payment of
an additional benefit
when death occurs by accidental means.
Accidental dismemberment - answer✔✔Often defined as "the severance of limbs at or above the
wrists or ankle
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,joints, or the entire irrevocable loss of sight." Loss of use in itself may or not be considered
dismemberment.
Accidental means provision - 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 - 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 - 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) - answer✔✔A life-threatening condition brought
on by the human
immunodeficiency virus; insurers must adhere to strict underwriting and claims guidelines in
regard to AIDS risks
and AIDS-related conditions.
Acute illness - answer✔✔A serious condition, such as pneumonia, from which the body can
fully recover with proper
medical attention.
Adhesion - answer✔✔A life insurance policy is a contract of adhesion because buyers must
adhere to the terms of the
contract already in existence. They have no opportunity to negotiate terms, rates, values, and so
on.
Adjustable life insurance - answer✔✔Combines features of both term and whole life coverage
with the length of coverage
and amount of accumulated cash value as the adjustable factors. Premiums may be increased or
decreased to fit the
specific needs. Such adjustments are not retroactive and apply only to the future.
Administrative-services-only (ASO) Plan - answer✔✔Arrangement under which an insurance
company or an
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,independent organization, for a fee, handles the administration of claims, benefits, and other
administrative
functionsfor a self-insured group.
Admitted insurer - answer✔✔An insurance company that has met the legal and financial
requirements for operation within
a given state.
Adult day care - 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 - 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 - answer✔✔Rules established by the National Association of Insurance
Commissioners (NAIC) to
regulate insurance advertising.
Agency - answer✔✔Situation wherein one party (an agent) has the power to act for another (the
principal) i n dealing
with third parties.
Agent - 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 - answer✔✔The section of an insurance application where the agent reports
personal observations about the
applicant.
Aleatory - 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 - answer✔✔Company incorporated or organized under the laws of any foreign
nation, providence, or territory.
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, Ambulatory surgery - answer✔✔Surgery performed on an outpatient basis
Amount at risk - 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 - 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 - answer✔✔One to whom an annuity is payable, or a person upon the continuance of
whose life further
payment depends.
Annuity - answer✔✔A contract that provides a stipulated sum payable at certain regular
intervals during the lifetime of one
or more persons, or payable for a specified period only.
Annuity unit - answer✔✔The number of annuity units denotes the share of the funds an
annuitant will receive from a
variable annuity account after the accumulation period ends and benefits begin. A formula is
used to convert
accumulation units to annuity units.
Any occupation - answer✔✔A definition of total disability that requires that for disability
income benefits to be payable,
the insured must be unable to perform any job for which the insured is "reasonably suited by
reason of education,
training, or experience."
Apparent authority - answer✔✔The authority an agent appears to have, based on the principal's
(the insurer's) actions,
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