Category#3: Terms To Know

Front 1

May or may not be the insured person, but the one with the rights to make
changes, etc.

Back 1

Policy Owner

Front 2

Person or entity to which the benefits are paid

Back 2

Beneficiary

Front 3

The frequency of a payment; monthly, quarterly, semi-annually or annually.

Back 3

Premium Mode

Front 4

3 Types – Preferred, Standard & Substandard

Back 4

Risk

Front 5

Cause of Loss

Back 5

Peril

Front 6

Statistical chances of dying by using specific populations, diseases, ages, etc.

Back 6

Mortality

Front 7

4 Types –Physical, Moral, Morale and Legal

Back 7

Hazard

Front 8

The larger the pool of information gathered, the more reliable it
becomes.

Back 8

Law of Large Numbers

Front 9

Degree to which a person or property is at risk.
Par – Participating (Mutual)
Non-Par, non-participating (Stock) in paying dividends to an insured.

Back 9

Loss Exposure

Front 10

2 areas – Accidental, creates a financial hardship

Back 10

Ideally Insurable Risk

Front 11

Tendency of those who need insurance to buy it.

The tendency of people with greater than average exposure to loss to purchase insurance.

Back 11

Adverse Selection

Front 12

Transfer or pool the risk.

Back 12

Spread of Risk

Front 13

Deliberately providing false information for gain/profit.

Back 13

Fraud

Front 14

Hiding material information.

Back 14

Concealment

Front 15

2 Types – Expressed or Implied.

Are contained in the policy, signed by the insured, and made part of that contract

Back 15

Warranty

Front 16

Important facts to the contract.

Back 16

Materiality

Front 17

Oral or written expression of information.

statements made to the best of one's knowledge.

Back 17

Representation

Front 18

False information about a contract.

Back 18

Misrepresentation

Front 19

2 Types – Expressed and Implied

Back 19

Authority

Front 20

4 areas – Execution, Negotiation, Solicitation of the contract or any other transaction
resulting in these.

The negotiations leading up to the final execution of a policy

Back 20

Transacting Insurance

Front 21

Must be in a prominent place in your office.

Back 21

Display of License

Front 22

Available in 30 days upon request; all policy information must be accessible
in 30 days notice and on file for 2 years.

Back 22

Record Keeping

Front 23

Must be printed on ALL material to the public; fines are for
each offense and are $200 1st, $500 2nd, $1000 ea offense after that.


Anything that acts as an advertisement must include________

Back 23

Printing License # and Fines

Front 24

Must be disclosed.

Back 24

Broker Fees

Front 25

Every licensee must have one on file with the DOI to be actively
licensed.

Back 25

Notice of Appointment

Front 26

Commissioner doesn’t create the code, only determines how to
implement it, etc.

Back 26

Code Administration

Front 27

1st attempt at restoring an insurance company that is close to insolvency.

Back 27

Conservation

Front 28

LESLI

Back 28

List of Eligible Surplus Lines Insurers

Front 29

Unbroken chain of events that results in damage or injury due to
negligence.

Back 29

Proximate Cause

Front 30

Broadening coverage without any extra charge during a policy period.

Back 30

Liberalization Clause

Front 31

Reduction of the quantity, quality or value of something do to a covered
loss/ Consequential losses as a result of the covered loss.

Back 31

Direct/Indirect Loss

Front 32

Incurred losses + loss adjusted expenses and earned premium = Loss Ratio

Back 32

Combined Ratio

Front 33

Cancellation made by an insured prior to it’s expiration date and surcharged by
the Company.

Back 33

Short rate

Front 34

Cancellation made prior to the expiration date and NOT surcharged by the
Company.

Back 34

Pro Rata

Front 35

Cancellation of a policy back to its inception date with all premiums 100%
refunded.

Back 35

Flat Rate

Front 36

Cease coverage/ Company not continue beyond expiration
date/Cancels due to non-pay.

Back 36

Cancel/Non-renew/Lapse

Front 37

Money the company owes an insured for the unused portion of time
already paid for.

Back 37

Unearned Premium

Front 38

Money owed to the company for a coverage period provided but not yet
paid for.

Back 38

Earned Premium

Front 39

Just because I expect to own something in the future will not
allow me to buy coverage for it now.

Back 39

Contingent/Expectant Interest

Front 40

Provisions that apply to indiv health and disabil products

Back 40

Uniform Policy Law

Front 41

change to more hazardous job, benifit reduced.
change to less haz, rate/premium reduced

Back 41

Change of Occupation

Front 42

We owe the insurance $5,000 medical expense during grace period, $500 quarterly premium. what did we send them?

Back 42

$4,500
unpaid premiums

Front 43

More insurance is in the forced for the insured or risk then the potential for loss. Moral hazrad

Back 43

Overinsurance

Front 44

The ______ has agreed to pay for services with a prearranged price depending on the type of service

Back 44

Preferred Provider Organization (PPO)

Front 45

HMO concept that pays doctors a predetermined monthly fee

An agent who has signed an exclusive contract with one or more companies

Back 45

Capitation

Front 46

the policy owner the right to receive dividends. These dividends are not guaranteed

Back 46

participating policy

Front 47

means taking the cash value and using it as a single premium payment to buy a paid up policy with the same face amount for a specified length of time

Back 47

extended term option

Front 48

This clause of life insurance policies states that the use of evidence is limited to the contract and the attached application in determining the policy's validity.

Back 48

entire contract" clause

Front 49

If a court were to decide your insurance policy was written in an ambiguous or unclear fashion the
special characteristic of an insurance policy that will prompt the court to rule in your favor is

Back 49

Adhesion

Front 50

Use their dividends for purchasing other products

Back 50

non-participating policies

Front 51

of disabilities because of sicknesses or accidents

Back 51

morbidity