Insurance Terminology Quiz

Questions and Answers

What does a cafeteria plan allow an insured to do?

Cancel their insurance at any time

Choose between different types of benefits (correct)

Limit the policies they can buy

Select the coverage amount for their policy

Which of the following best describes comprehensive coverage?

Coverage for only catastrophic medical events

A coverage that excludes routine check-ups

Coverage for most types of medical expenses (correct)

Insurance for specific types of sickness only

What is a deductible in the context of health insurance?

The total coverage provided by the policy

An amount the insurer pays before coverage starts

A specified amount the insured must pay first (correct)

A premium for policy renewal

What does nonrenewal of an insurance policy mean?

Insurance coverage is terminated at the expiration date Signup and view all the answers

How is 'sickness' defined within insurance terms?

An illness manifesting while the policy is in force Signup and view all the answers

What does underwriting involve in the context of insurance?

Determining risk classification and selection Signup and view all the answers

Study Notes

Definitions of Key Insurance Terms

Accidental Bodily Injury: Refers to unintentional injuries that occur due to an accident, differentiating them from injuries resulting from illness.
Cafeteria Plan: An employee benefit program allowing participants to select from various benefits, catering to individual needs and preferences.
Cancellation: Describes the process wherein an ongoing insurance policy is terminated before its expiration date, initiated by either the policyholder or the insurer.
Comprehensive Coverage: Health insurance offering extensive protection, typically covering a wide range of medical expenses incurred by the insured.
Deductible: The initial out-of-pocket expense that the insured must pay for a claim before the insurance company contributes towards the benefits.
Lump Sum: A payment structure in insurance where the beneficiary receives the total benefit amount in one single payment rather than in installments.
Nonrenewal: Occurs when an insurance policy expires without an option for renewal or replacement, effectively terminating coverage at the end of the policy period.
Riders: Supplemental provisions added to a base insurance policy, allowing customization by modifying existing terms or adding new features.
Sickness: Defined as an illness that begins while the insurance policy is active, affecting the applicability of coverage.
Tax Exempt: Indicates income or benefits that are not liable for taxation under applicable tax laws.
Taxable: Refers to income or benefits that are subject to taxation, impacting the overall financial burden on the recipient.
Underwriting: The critical process of assessing risk factors and categorizing individuals for determining insurance policy terms and pricing.

Description

Test your knowledge of essential insurance terms with this quiz. Explore definitions such as accidental bodily injury, cafeteria plans, and more. Perfect for anyone looking to enhance their understanding of insurance concepts.