Insurance Exam FX Flashcards

Insurance Terms and Definitions

• Accelerated benefits: Riders on life insurance allowing use of death benefits for nursing or convalescent care expenses.
• Accident: An unexpected event occurring suddenly at an unspecified location.
• Accidental Death and Dismemberment (AD&D): Policy that pays a specified amount if the insured dies or loses sight/limbs due to an accident.
• Accidental death benefits: A rider that assesses the cause of death to see if it aligns with policy definitions of accidental death.
• Accumulation period: Duration where an annuitant makes payments into an annuity, earning interest tax-deferred.
• Actual cash value: Amount necessary to cover damages or losses for property claims.
• Actual charge: The actual billed amount by a physician or supplier for services rendered.
• Actuary: A professional trained in insurance mathematics, calculating loss probabilities.
• Adhesion: A "take it or leave it" contract offered by an insurer, where insureds have limited options.
• Adjustable life insurance: Policy allowing changes in face amount, premium, coverage period, and payment duration.
• Adjuster: Insurance company representative who investigates and negotiates claim amounts.
• Administrator: Court-appointed individual managing the financial affairs of a deceased person’s estate.
• Adverse selection: Higher-risk individuals more likely to purchase insurance than lower-risk individuals.
• Agent: Licensed individual authorized to sell and negotiate insurance contracts for insurers.
• Aleatory contract: A contract involving unequal exchanges between parties.
• Alien insurer: An insurance company established outside the United States.
• Ancillary services: Additional hospital services like x-rays, excluding room and board costs.
• Annuity: A contract guaranteeing income for a specified term or lifetime.
• Apparent authority: Assumed authority based on the principal's actions or circumstances they created.
• Application: Document containing information necessary for underwriting processes in insurance.
• Approved amount: Reasonable payment set by Medicare for services under Part B coverage.
• Assignment (life): Transfer of ownership rights in a life insurance policy from one person to another.
• Assignment (health): Authorization for direct payment to medical providers from Medicare.
• Avoidance: Risk management strategy involving keeping away from potential risk.
• Back end load: Fee charged on withdrawal, sale, or transfer from an annuity or policy.
• Basic illustration: A proposal showing guaranteed and non-guaranteed elements of a life insurance policy.
• Beneficiary: Individual designated to receive policy proceeds upon the insured's death.
• Benefit period: Timeframe during which insurance benefits are available for specific conditions or stays.
• Binder: Temporary contract that activates an insurance policy prior to premium payment.
• Blanket medical insurance: Comprehensive policy covering all medical expenses.
• Broker: An individual representing clients in insurance matters, offering expert guidance and access to multiple insurers.