State Farm REAL EXAM UPDATED VERSION
2022 2023 GUARANTEED A+
90 days - Ans In the proof of los provision, the insured must submit written proof of loss within this timeframe.
Absolute Assignment - Ans Policy assignment when assignee receives full control over the policy and full rights to its benefits.
Accelerated benefits rider - Ans Life insurance rider that allow for early payment of some portion of policy's face amount, should the insured suffer from terminal illness/injury.
accidental death and dismemberment (AD&D) - Ans Insurance providing payment if the insurance death results from an accident or if the insured accidentally severs a limb above the wrist or ankle joints or permanent blindness.
accidental death benefit rider - Ans Life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means.
accidental means provision - Ans Accident policies require that claims must result from an accident, rather than illness. For example, a dismemberment policy will not pay for amputation of a deceased limb.
adhesion - Ans Contract must be accepted by the insured exactly as it is written by the insurer. Terms of contract cannot be negotiated. Contract is offered on a take it or leave it basis.
adjustable life - Ans Policy allows the policymaker to adjust the policy's face amount, premium, and type of protection without having to complete a new application or any additional underwriting.
admitted insurer - Ans An insurance company that has been approved to operate within a given jurisdiction.
adverse selection - Ans Selection against the company. Tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, tendency of policy owners to take advantage of favorable options in insurance contracts.
agency - Ans Situation wherein one party has the power to act for another in dealing with third parties.
agents (producer) report - Ans Section of an insurance application where the agent, details personal observations about the applicant.
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aleatory - Ans Insurance premiums will always be unequal to the benefits received.Benefits will usually be larger than the premium.
annually renewable term (ART) - Ans A form of renewable term insurance that provides coverage for one year and allows policyowner to renew coverage each year, without evidence of insurability.
annuitant - Ans One to whom an annuity is payable, or a person upon the continuance of whose life further payment depends.
any occupation - Ans A definition of total disability. The insured must be unable to perform any job for which he is "reasonably suited by reason of education, training, or experience." It is more difficult for the insured to collect benefits under this definition.
apparent authority - Ans The insured believes the agent has authority to act based on actions, words or deeds of the agent. Even though the agent may not have been granted such authority by the insurer, they will be held liable for the actions of the agent.
assignment of benefits - Ans The policyowner allows a healthcare provider to bill the insurer and receive benefits on the policy owners behalf.
attained age - Ans With reference to an insured, the current insurance age.
automatic premium loan provision - Ans Authorizes the insurer to automatically pay any premium in default at the end of the grace period. The premium owed plus interest charged is deducted from the policy's cash value.
aviation exclusion - Ans The insurer will not pay a claim if the insured dies as a result of flying an aircraft or acting as a member of a flight crew. In most cases, the insurer will offer the applicant the opportunity to purchase a rider offsetting the exclusion.
basic medical expense policy - Ans Health insurance policy that provides first dollar coverage for specified health care, such as hospitalization, surgery, or physician services. Characterized by a limited benefit periods and relatively low coverage limits.
beneficiary - Ans Person to whom the proceeds of a life or accident policy are payable when the insured dies.
blackout period - Ans Social Security pays a benefit to a surviving spouse left to care for a child under the age of 16. That benefit stops when the child turns 16 and will not resume until the surviving spouse is at least 60.
blanket policy - Ans Covers a number of individuals who are exposed to the same hazards, such as members of an athletic team, company officials who are passengers in the same company plane, and so forth.
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business overhead expense insurance - Ans If a business owner becomes disabled, this policy will not replace the owner's income, but will instead help pay the expenses of operating the business such as rent, utilities and wages.
Buy-sell agreement - Ans Agreement that a deceased businessowner's interest will be sold and purchased at a predetermined price or at a price according to a predetermined formula.
buyers guide - Ans A generic publication that explains life insurance in a way that an average consumer can understand. It does not contain specific product or policy information
buyers guides - Ans Informational consumer guide books that explain insurance policies and insurance concepts, and many states, they are required to be given to applicants when certain types of coverage are being considered.
capital sum - Ans Maximum benefit payable for the accidental loss of vision in one or both eyes, or the loss of a limb at or above the wrist or ankle.
Cash Value - Ans The equity amount or savings accumulation in a permanent life policy.
change of occupation provision - Ans The provision is found in health insurance stating if the insured changes to a more hazardous occupation, benefits are reduced, if changing to a less hazardous occupation, premiums are reduced.
Churning - Ans Replacing one life contract with another within the same company without demonstrating a benefit to the client.
COBRA - Ans Extends group health coverage to an employee who loses her job for reasons other than gross misconduct. Coverage may also be extended for family members to lose coverage for various reasons such as death or divorce.
coinsurance - Ans The insurer and the insured share any expenses above the deductible amount. This is applied after the insured has satisfied his deductible requirement.
Collateral assignment - Ans Assignment of a policy to a creditor as a security for a debt. At the insured death, the creditor is entitled to be reimbursed out of policy proceeds for the amount owed and any excess will go to the beneficiary.
common disaster provision - Ans This policy provision provides an alternative beneficiary in the event that the insured and the original beneficiary die as the result of a common accident.
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