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CA LIFE AND HEALTH INSURANCE EXAM 2
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CA LIFE AND HEALTH INSURANCE EXAM 2
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XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE
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CA LIFE AND HEALTH INSURANCE EXAM 2 LATESTVERSIONS (VERSION A AND B) ACTUAL EXAM 250
QUESTIONS AND CORRECT DETAILED ANS
absolute assignment - ANSWER: Policy assignment where the assignee gets full
control over policy and benefits
Actual Cash Value - ANSWER: An amount equivalent to the fair market value of the
stolen or damaged property immediately preceding the loss.
Admitted Company - ANSWER: An insurance company authorized to do business in
California.
accelerated benefits rider - ANSWER: Life ins rider that allows for early payment of
some portion of the policy's face amount if terminally ill or injured
Accidental Death & Dismemberment - ANSWER: Insurance providing payment if the
insureds death results from accident loses limb/eyesight
adhesion - ANSWER: life insurance policy is a contract odsn beause e mutdheeto te
trs
broker - ANSWER: A licensed person or organization paid by you to look for
insurance on your behalf.
Cancellation - ANSWER: The termination of insurance coverage during the policy
period. Flat cancellation is the cancellation of a policy as of its effective date, without
any premium charge.
Deductible - ANSWER: The amount of the loss which the insured is responsible to
pay before benefits from the insurance company are payable. You may choose a
higher deductible to lower your premium.
adverse selection - ANSWER: tendency of less favorable risks to seek or continue
insurance
aleatory - ANSWER: feature of insurance contracts in that there is an element of
chance for both parties and that the dollar value given by policyowner and insurer
may not be equal
Annually Renewable Term - ANSWER: Renewable term insurance that provides
coverage for 1 year and allows the policy owner to renew coverage each year
without E of I
,Disability Insurance - ANSWER: Health insurance that provides income payments to
the insured wage earner when income is interrupted or terminated because of
illness, sickness, or accident.
Endorsement - ANSWER: Amendment to the policy used to add or delete coverage.
Also referred to as a "rider."
beneficiary - ANSWER: the recipient of funds or other benefits
Face Amount - ANSWER: The dollar amount to be paid to the beneficiary when the
insured dies. It does not include other amounts that may be paid from insurance
purchased with dividends or any policy riders.
Grace Period - ANSWER: A specified period immediately following the premium due
date during which a payment can be made to continue a policy in force without
interruption. This applies only to Life and Health policies.
Incontestable Clause - ANSWER: A policy provision in which the company agrees not
to contest the validity of the contract after it has been in force for a certain period of
time, usually two years.
Premium - ANSWER: The amount of money an insurance company charges for
insurance coverage.
Premium Financing - ANSWER: a policyholder contracts with a lender to pay the
insurance premium on his/her behalf. The policyholder agrees to repay the lender
for the cost of the premium, plus interest and fees.
Pro-Rata Cancellation - ANSWER: When the policy is terminated midterm by the
insurance company, the earned premium is calculated only for the period coverage
was provided.
Reinstatement - ANSWER: The restoring of a lapsed policy to full force and effect.
The reinstatement may be effective after the cancellation date, creating a lapse of
coverage. Some companies require evidence of insurability and payment of past due
premiums plus interest.
Surrender - ANSWER: To terminate or cancel a life insurance policy before the
maturity date. In the case of a cash value policy, the policyholder may exercise one
of the non-forfeiture options at the time of surrender.
Underwriting - ANSWER: The process of selecting applicants for insurance and
classifying them according to their degrees of insurability so that the appropriate
premium rates may be charged. The process includes rejection of unacceptable risks.
Primary beneficiary - ANSWER: first entitled to life insurance benefits
, Ca Life Ins Guaranty Assoc - ANSWER: non-profit assoc of life insurance and annuity
companies that serves to protect policyowners from low due to insurer impairment
cash surrender option - ANSWER: a nonforfeiture option that allows whole life ins
policy owner to get a payout of cash values
Activities of Daily Living (ADL) - ANSWER: Everyday living functions and activities
performed by individuals without
assistance. These functions
include mobility, bathing, dressing,
personal hygiene, and eating.
Alien Insurer - ANSWER: An insurer organized and domiciled
in a country other than the United
States.
Capital Conservation - ANSWER: A life insurance calculation method
that factors in only interest earned
on principal to generate income for a
policyowner after benefits are distributed.
Coinsurance - ANSWER: In health insurance, an arrangement
whereby the insurer and the insured
share payment of covered losses in
agreed proportions, often 80% for
the insurer and 20% for the insured.
Also called percentage participation.
Capital Liquidation - ANSWER: A life insurance calculation method
that factors in both interest and principal
to generate income for a policyowner
after benefits are distributed.
Capitation - ANSWER: A system, under Health
Maintenance Organization (HMO)
forms of health benefits, whereby
physicians receive a monthly payment
from the HMO for every
member of the HMO without
regard to actual services the physician
provides.
Collateral Assignment - ANSWER: Assignment of a life or health insurance
policy as security for a loan or
debt, with the creditor to receive the
proceeds or values to the extent of
the interest assigned.
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