Insurance Exam Flashcards

A health insurance policy that requires the insured to use network providers except in emergencies is a:

Answer: HMO

HMOs (Health Maintenance Organizations) generally require members to receive care from network providers and have a primary care physician as gatekeeper.

Under an auto policy, which coverage pays for damage to the insured's own vehicle caused by hitting another car?

Answer: Collision

Collision coverage pays for damage to the insured's vehicle resulting from a collision with another vehicle or object.

Which life insurance rider waives premium payments if the insured becomes totally disabled?

Answer: Waiver of premium rider

The waiver of premium rider keeps the life policy in force without premium payments if the insured suffers total disability as defined in the policy.

An insurer's legal right to recover from a negligent third party the amount paid to an insured claimant is called:

Answer: Subrogation

Subrogation allows the insurer to 'step into the shoes' of the insured and sue the responsible party to recover claim payments made.

A long-term care policy that allows unused benefits to be carried forward to extend the benefit period is using which feature?

Answer: Pooled benefits

Pooled benefits allow the total benefit pool to be drawn upon flexibly, so unused daily benefits effectively extend the total coverage period.

An insurance agent who represents multiple insurers and legally represents the policyholder rather than any single insurer is a:

Answer: Insurance broker

A broker represents the buyer/policyholder and can place coverage with multiple insurers, unlike an agent who represents the insurer.

Which type of annuity provides a guaranteed minimum return while also offering growth potential tied to a market index?

Answer: Indexed annuity

An indexed (equity-indexed) annuity credits interest based partly on the performance of a market index while guaranteeing a minimum interest rate.