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level: Level 1

Questions and Answers List

level questions: Level 1

Question	Answer
Permanent assignment by the policy owner of all rights and control to a third party, including ownership of the policy.	Absolute Assignment
An unforeseen and unintended event which results in accidental bodily injury.	Accident
A legal concept (offer & acceptance) by which the contract is concluded and the parties are bound.	Acceptance
A legal principle by which an insured adheres to the insurance contract written by only one party, the insurer.	Adhesion
An insurance company authorized (licensed) to transact insurance business within the state.	Admitted Company
The tendency of less than average risks to purchase or continue to be covered by insurance resulting in increase claims and reduced profitability.	Adverse Selection
The contract between the agent and the insurer which provides the agent with express authority to act on behalf of the insurer.	Agency Agreement
A person or a corporation with written authority from an insurer to solicit insurance, bind coverage and generally represent the insurer in the transaction of insurance business.	Agent
A legal principle which states that equal value is not provided by the parties to a contract.	Aleatory Contract
An insurer whose place of incorporation is outside of the United States.	Alien Insurer
A written report from the personal physical of an insurance applicant which provides information regarding health history and current treatment.	Attending Physician Statement (APS)
A person or entity, named by the policy owner, to receive the proceeds of a life insurance policy upon the death of the insured.	Beneficiary
An insurer's license to transact insurance business.	Certificate of Authority
Intimidation or forcing an individual to purchase insurance.	Coercion
The head of the Insurance Department	Commissioner
The omission of a material fact on the application for insurance or at the time of a claim which can result in the policy being cancelled.	Concealment
A receipt given by the agent for the initial premium paid by the applicant which states that the insured is covered as of the date of the receipt, on the condition that he or she is insurable as a standard risk.	Conditional Receipt
As a legal element of the insurance contract, it is the application and initial policy premium. As a policy provision, it primarily refers to the premium paid for the policy.	Consideration
Life insurance written on an agent's own life, his or her spouse, children or business partners.	Controlled Business
An insurance contract whereby a creditor is indemnified for the indebtedness of a debtor when the debtor is totally disabled.	Credit Disability Insurance
Usually a group decreasing term contract whereby a creditor is indemnified for the indebtedness upon the death of the debtor.	Credit Life Insurance
False or malicious statements designed to do harm to a person or an insurer's reputation and good name.	Defemation
AN insurance company whose place of incorporation is within this state.	Domestic Insurer
The period of time that the insured must be totally disabled before any disability income benefits are payable; also referred to as the waiting period.	Elimination Period
A written change or amendment to a policy.	Endorsement
A policy provision which states that the entire contract of insurance consists of the policy, any amendments and the application.	Entire Contract
One party to a contract is prevented or estopped from asserting a right which would be detrimental to others.	Estoppel
Certain risks or specifically excluded by the insurance contract.	Exclusions
The death benefit stated in the policy.	Face Amount
A federal law which requires that an applicant for insurance be advised that a consumer report may be requested. The Act is designed to protect the privacy of the applicant.	Fair Credit Reporting Act
A person in a position of financial trust to both the client and the insurance company, such as an agent.	Fiduciary
An insurance company whose place of incorporation is outside of this state.	Foreign Insurer
A social organization characterized by a lodge system which sells insurance to its members.	Fraternal Society
Provides for a period of time (usually 10 days) during which the policy owner may examine the policy and if not satisfied return it for a full refund of premium.	Free Look Provision