Flashcards
A federal law that may allow an individual to temporarily keep health coverage after their employment ends, they lose coverage as a dependent of the covered employee, or another qualifying event. When a person chooses COBRA coverage, they pay 100% of the premiums, including the share the employer used to pay, plus a small administrative fee.
A period of up to two years during which a life insurance company may deny payment of a claim because of suicide or a material misrepresentation on an application.
Another party or parties who will receive the life insurance proceeds if the primary beneficiary should predecease the person whose life is insured.
In most cases, an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder.
Life insurance is a contract of adhesion, where one party (the insurer) states the provisions of the contract while the other party (the insured) is not involved in its drafting, but whose participation is in either agreeing with it or declining it.
In a contributory group life plan the employee pays part of the premium. The participation percentage for a contributory life policy is 75%. 75% of the eligible employees must participate.
The ability, in some states, to switch from job-based coverage to an individual policy when a person loses eligibility for job-based coverage. Family members not covered under a job-based policy may also be able to convert to an individual policy if they lose dependent status (for example, after a divorce).
The right to change (convert) insurance coverage from one type of policy to another. For example, the right to change from an individual term insurance policy to an individual whole life insurance policy.
A convertible term insurance policy may be converted to whole life insurance regardless of the insured’s health. The premium on the whole life insurance policy will be based on the insured’s current (attained) age.
Helps to reinforce the principle of indemnity when a person has more than one health insurance policy. One policy will be primary coverage, and the other will be excess (secondary). Ensures that there is nonduplication of coverage.
A fixed amount ($20, for example) a person pays for a covered health care service after they have paid the deductible. Copayments can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.
A rider that is available for an additional premium that provides for an automatic increase in benefits. The increase may be a set percentage as stated in the policy or may be tied to the Consumer Price Index (CPI), offsetting the effect of inflation.
Credit disability insurance protects the balance of a debt. If the borrower becomes unable to work due to illness or injury the policy helps pay off loan payments.
A type of group term life insurance that can pay off or reduce the balance of a consumer loan or a loan for the purchase of consumer goods in the event of the insured’s death. Credit life is decreasing term insurance, meaning that over time the death benefit amount tracks with the loan balance due. If the borrower dies with the loan outstanding the credit life policy will pay the balance due.
Health insurance coverage under any of the following: a group health plan; individual health insurance; student health insurance; Medicare; Medicaid; CHAMPUS and TRICARE; the Federal Employees Health Benefits Program; Indian Health Service; the Peace Corps; Public Health Plan (any plan established or maintained by a State, the U.S. government, a foreign country); Children’s Health Insurance Program (CHIP); or, a state health insurance high-risk pool. When a person has prior creditable coverage, it reduces the length of a pre-existing condition exclusion period under new job-based coverage.
Amount paid to the beneficiary upon the death of the insured.
Term life insurance with a face amount that goes down over time. Decreasing term has a level premium.
The amount the insured pays for covered health care services before the insurance plan starts to pay. After the deductible, there is usually a copayment or coinsurance for covered services. The insurance company pays the rest. Many plans pay for certain services, like an annual exam or disease management programs, before the deductible has been met. All Marketplace health plans pay the full cost of certain preventive benefits before the deductible applies. Some plans have separate deductibles for certain services, like prescription drugs. Family plans often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members.
Defamation is being false or maliciously critical of an insurer’s financial condition.
An annuity under which the annuity payment period is scheduled to begin at some future date. May be purchased with a level, flexible, or single premium.
The deferral of an employee’s compensation to some future age or date. Deferred compensation is a non-qualified plan. It is discriminatory and set up in favor of higher-paid workers. The employer does not fund a non-qualified plan. If the employer should go broke the employee will not get paid.
A type of qualified retirement plan (pension plan) in which benefits are determined using a specific benefit formula.
A type of qualified retirement plan in which annual contributions are determined by a formula set forth in the plan.
Benefits that help pay for the cost of visits to a dentist for basic or preventive services, like teeth cleaning, X-rays, and fillings.
A child or other individual for whom a parent, relative, or other person may claim a personal exemption tax deduction. Under the Affordable Care Act, individuals may be able to claim a premium tax credit to help cover the cost of coverage for themselves and their dependents.
Insurance coverage for family members of the policyholder, such as spouses, children, or partners.
Insurance sold directly to the insured by an insurance company through its own employees by mail or over the counter
A limit in a range of major life activities. This includes activities like seeing, hearing, walking, and tasks like thinking and working. Different policies have different disability standards.
Insurance that provides income payments to the insured wage earner when income is interrupted or terminated because of an illness, sickness, or accident. It may include critical illness or accidental death benefits. Policies are available as short-term or long-term coverage.
A life insurance policy addendum providing income payments to the policyholder, and/or waiving premium payments due, when income is interrupted or terminated because of illness or injury.
A return of part of the premium on participating insurance to reflect the difference between the premium charged and the combination of actual mortality, expense, and investment experience. Dividends are not considered to be taxable distributions because they are interpreted as a refund of a portion of the premium paid.
A domestic insurer is one whose home office is in this state. The domestic insurer is doing business in this state.
A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a formulary.
The date on which an insurance policy becomes effective.
There are four elements required to have a legal contract: C – O – A – L. Consideration, offer, acceptance, and legal purpose and capacity.
Not all risks are insurable. Pure risk involves no chance of gain. Pure risk is insurable. Speculative risk, like gambling, involves a chance of gain or chance of loss. Speculative risk is not insurable.
The elimination period, or waiting period, is the amount of time that a person is unable to work before the coverage kicks in. The elimination period begins when the person meets the policy’s definition of totally disabled. The longer the elimination period, the lower the premium.
The entire contract is admissible in court. The entire contract includes the policy and anything else attached at issue, such as the application and any riders. The entire contract clause protects both the insurer and the insured. No changes may be made to the policy after issuance unless both parties agree to the change.
A fixed deferred annuity that combines a minimum guaranteed interest rate with the ability to be credited with additional earnings depending upon the performance of an index.
A type of professional liability insurance that protects an insurance producer from claims arising from services provided (or those not provided). E&O does not cover criminal acts.
A set of 10 categories of services health insurance plans must cover under the Affordable Care Act. These include doctors’ services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health services, and more. Some plans cover more services. All plans must offer dental coverage for children. Dental benefits for adults are optional. Specific services may vary based on each state’s requirements.
The quantity of wealth or property at an individual’s death.
Due within 9 months of a person’s death, estate tax is only owed on the amount over the current year’s estate tax exclusion. When a married person dies their assets pass in their entirety to the surviving spouse. Estate taxes are not due until the death of the second spouse (if owed at all).
A statement or proof of your health, finances, or job, which helps the insurer decide if you are an acceptable risk for life insurance.
Health care services that a health insurance plan doesn’t pay for or cover.
An exclusion is an event (peril, accident, occupation, avocation) that an insurance policy will not cover.
Executive bonus life insurance is a type of group life insurance product offered to individuals in C-suite positions, such as chief executives, operations executives, or chief financial officers. Executive bonus life insurance enables a business to provide life insurance to a given key employee or high-performance employees in a tax-advantaged way. The premium paid by the business for executive bonus life insurance is tax deductible so long as the bonus is considered reasonable compensation. The policy is owned by the executive. The key employee names the beneficiary and can access the policy’s cash value.
Your policy’s share of the company’s operating costs; fees for medical examinations and inspection reports, underwriting, printing costs, commissions, advertising, agency expenses, premium taxes, salaries, rent, etc. Such costs are important in determining dividends and premium rates.
In insurance, exposure is a measure of the potential risk faced by an insurance company as a result of their normal business operations—namely, selling insurance policies. When an insurer sells a policy, they must cover insured losses that fall within the terms and conditions of coverage.
Express authority in insurance refers to the explicit powers and permissions granted to an agent (producer) through a written agreement. It outlines the agent’s scope of authority and activities they are authorized to undertake on behalf of the insurer.