Texas General Lines - Life, Accident and Health 2023 Questions with Correct Answers Absolute Assignment Correct Answer A transfer by policy holder of all control and rights
to a third party
Accident Correct Answer a sudden event, unforeseen and unintended
Accident and Sickness Correct Answer Insurance against bodily injury, disability or death by accident, or against disability or expense resulting from sickness, and the insurance relating thereto.
Accidental Means Correct Answer The unexpected cause of an accidental bodliy injury. Under an Accidental Means definition, which is very restrictive, if you meant to do whatever caused you injury, there is no coverage. Most health insurance policies cover Accidental Bodily Injury, which is much broader, in that it covers accidents regardless of
the cause.
Actuary Correct Answer One concerned with the application of probability and statistical
theory to insurance, utilizing the law of large numbers.
Accumulation at Interest Option Correct Answer A dividend or settlement option under which the policy holder allows his dividends or policy proceeds to accumulate interest with the company. Although the dividends or proceeds are not generally taxable the interest earned is taxable.
ADB Correct Answer Accidental Death Benefit ( also known as Double Indemnity). A rider added to a Life policy that will pay double the face amount if the insured dies as a result of an accident, generally within 90 days of the accident.
AD&D Correct Answer Accidental Death and Dismemberment insurance. A limited form of Health insurance that covers accident only. It is the only type of Health Insurance which covers death. AD&D policies do not follow the Principal of Indemnity, in that they pay in addition to any other coverage the insured has.
Adverse Selection Correct Answer Selection not in favor of the company. The tendency of poorer risks to want insurance more often than standard risks. For example, a person
who is already sick would like to by health insurance.
Adverse Underwriting Decisions, Consumer Rights Correct Answer Under the Fair Credit Reporting Act, when an adverse underwriting decision is made, the insurer must provide the applicant or policy holder with specific written reasons for the decision, or advise the individual that specific reasons are available upon written request. Upon receipt of written request, the insurer must furnish specific reasons for hte adverse decision and the names / addresses of the sources that provided the information.
Agent / Producer Correct Answer The individual appointed by an insurance company to solicit and negotiate insurance contracts on its behalf. Agents or Producers represent the company not the individual.
Alien Company Correct Answer An insurer organized and domiciled in a country other than the USA.
Annuitant Correct Answer The party recieveing the benefits of an annuity, similar to the insured on an insurance policy. The annuitant usually also owns the annuity, although you can buy an annuity to benefit another party, who would then be the annuitant.
Annuity Correct Answer An agreement by an insurer to make periodic payments that continue during the lifetime of the annuitants or for a specific period. Annuities are considered to be the opposite of life insurance, since annuities pay while you are alive and life insurance pays when you die. Life insurance proceeds create an estate, while annuities are used to liquidate an estate over a period of time. All annuities are insurance products and a life insurance license is required.
Applicant Correct Answer The party making application to the insurance company for the policy. Applicants must provide the insurer with the truth to the best of their knowledge, which is known as "representation".
Application Correct Answer A form on which the prospective insured states facts requested by the insurer and on the basis of which ( together with any information from medical examiners, attending physicians, hospitals, investigators, and the producer) the
insurer decides whether or not to accept the risk, modify the coverage offered, or decline the risk. With Premium, the application is considered to be an offer to buy. If attached to the policy at issue, it becomes part of the Entire Contract.
Assignee Correct Answer The person to whom the policy rights are assigned in whole or in part by the policyholder, who is know as the Assignor. On Life insurance there are 2 types of assignment: Absolute and Collateral.
Assignment Correct Answer Transfer of rights in a policy to another party by the policy holder. For example, if you bought a life insurance policy on a minor child, you are the owner and the child is the insured. When the child reaches age 21, you could assign all rights of ownership in the policy to the child. this is an absolute assignment.
Attained Age Correct Answer The present or current age of the insured. Upon conversion, premiums are based on the current age of the insured. Authorized Company Correct Answer An insurer permitted to sell insurance within a state. Must obtain a certificate of authority from the commissioner or Director of insurance of every state they sell in.
Automatic Premium Loan Correct Answer A rider in a Life Policy authorizing the insurance comapny to use the cash value to pay premiums not paid by the end of the grace period. May be present in Whole Life or Endowment policies only, never Term. This rider is free, but must be selected by the policy owner.
Aviation Clause Correct Answer Limits or excludes coverage when the insured is participating in specified types of air travel. Coverage is usually confined to regularly scheduled flights of commercial airlines. Often applies to student pilots.
Beneficiary Correct Answer A person who may become eligible to receive, or is receiving, benefits under an insurance plan. The beneficiary is selected by the policy owner and may be changed at any time, unless "irrevocable"
Blanket Insurance Contract Correct Answer A contract of Health Insurance that covers all of a class of persons not individually identified. Often written to cover school children or sports team, such as Little League. No certificates are issued, since coverage applies
to everyone that attends or participates.
Blue Plan Correct Answer Generic term for those insurers (Usually on a service rather than reimbursement basis) who are authorized to use the designation "Blue Cross" or "Blue Shield".
All of the following are true about "speculative risk" except: Correct Answer A - involves uncertainty of loss
B - Involves a possibility of gain
C - feature of gambling
D - feature of Insurance ***
An insurer incorporated under the laws of the state in which it is operating is considered to be: Correct Answer A - foreign insurer
B - Alien Insurer
C - Domestic Insurer***
D - Reciprocal Insurer
Which of the following is not one of the available methods for dealing with an exposure to risk: Correct Answer A - Retain the risk
B - Transfer the risk
C - Avoid the risk
D - ascertain the risk ***
