Flashcards

One of the three non-forfeiture options. Extended term may be chosen by the insured. It is the automatic option when a life insurance policy with cash value has lapsed and the insurer has not heard otherwise from the owner. The extended term policy will have the same face amount as the original whole life insurance policy. How long the term is will be a function of how much cash value was there, as well as the age, and gender of the insured.

The amount stated on the face of the policy that will be paid in case of death or at the maturity of the policy. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.

The Act (Title VI of the Consumer Credit Protection Act) protects information collected by consumer reporting agencies such as credit bureaus, medical information companies, and tenant screening services. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the Act.

Misstating an insurance company’s financial position is an unfair trade practice.

False or deceptive advertising is an unfair trade practice.

A fixed annuity promises to pay the annuitant a minimum guaranteed interest rate. Once annuitized a fixed annuity promises to pay a guaranteed income stream for life. Usually purchased to supplement retirement. Most annuities are non-qualified, funded with after-tax dollars.

An arrangement through your employer that lets a person pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices. The money put into an FSA is in pre-tax dollars. It is up to the employer if the money in an FSA must be used that year. The employer may choose to allow an individual an additional 2 ½ months to spend the money after the year’s end or allow a carryforward amount that varies by year.

A foreign insurer is one whose home office is in another state. The foreign 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 drug list.

Insurance fraud occurs when an insurance company, agent, adjuster, or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling, or underwriting insurance.

A certain amount of time provided (usually between 10-30 days) to an insured in order to examine the insurance policy and if not satisfied, to return it to the company for a full refund.

Specific life insurance policies or annuities having a low initial face amount (often $20,000 or less) that are designated by the purchaser for the payment of funeral and burial expenses.

The time during which a policy remains in force after the premium is due but not paid. The policy lapses as of the day the premium was originally due unless the premium is paid before the end of the grace period or the insured dies.

The Gramm-Leach-Bliley Act seeks to protect consumer financial privacy. Its provisions limit when a financial institution may disclose a consumer’s nonpublic personal information to nonaffiliated third parties.

A health plan offered by an employer or employee organization that provides health coverage to employees and their families.

Life insurance provided for employees of a common employer or members of an association provided it is not formed for the purposes of buying insurance. The cost is usually lower than for individual policies, but choices among plans and benefit amounts may be limited. Under a group plan, the insurer issues a single master policy to the employer or association and certificates of insurance are issued to the individual insureds. Most group programs provide coverage on a term basis, but the group plan can be used for most types of life insurance and annuity products.

GIR stands for guaranteed insurability rider. This rider allows the insured to purchase additional amounts of insurance regardless of health, at specific dates. If an option date is missed it is lost and cannot be made up. Additional dates may be added for marriage and/or the birth of a child. When buying additional coverage under the guaranteed insurability rider the premium is based upon the insured’s attained (current) age, not the original age when they purchased the policy.

A health insurance policy that must be issued no matter the applicant’s health.

A policy that must be renewed, up to a certain age or date, so long as the premium is paid. Rates may only be changed by class.

Established at the state level to support insurers and protect consumers in the event of insurer insolvency. Guaranty Associations are funded through assessments charged to admitted insurers.

A hazard is something that increases the risk. Hazards may be physical, moral, or morale hazards.

A policy that will pay for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage. The term health insurance also includes all senior health products.

Health Reimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement. Health Reimbursement Arrangements are sometimes called Health Reimbursement Accounts.

A type of savings account that lets a person set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, a person may be able to lower their out-of-pocket health care costs. HSA funds generally may not be used to pay premiums. A person may contribute to an HSA only if they have an HSA-eligible plan (sometimes called a High Deductible Health Plan (HDHP)) — generally a health plan (including a Marketplace plan) that only covers preventive services before the deductible. An HSA may earn interest or other earnings, which are not taxable. Banks, credit unions, and other financial institutions offer HSAs.

A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but the insured will pay more health care costs themself before the insurance company starts to pay its share (also called the deductible). A high deductible plan can be combined with a health savings account (HSA), for a person to pay for certain medical expenses with money set aside tax-free in an HAS. HDHPs are commonly called an HSA-eligible plan.

The Health Insurance Portability and Accountability Act (HIPAA) lays out three rules for protecting patient health information, namely: the privacy rule, the security rule, and the breach notification rule.

An individual’s status once they have had 18 months of continuous creditable health coverage. To be HIPAA (Health Insurance Portability and Accountability Act) eligible, at least the last day of the creditable coverage must have been under a group health plan; the individual also must have used up any COBRA or state continuation coverage; they must not be eligible for Medicare or Medicaid; they must not have other health insurance; and they must apply for individual health insurance within 63 days of losing the prior creditable coverage. When an individual is buying individual health insurance, HIPAA eligibility gives a person greater protections than they would otherwise have under state law.

Skilled or unskilled care provided in an individual’s home, typically on a part-time basis.

Services to provide comfort and support for persons in the last stages of a terminal illness and their families.

Care in a hospital that usually doesn’t require an overnight stay.

The human life value approach looks at how much income the person is expected to generate over their life and determines a face value based on that amount.

An immediate annuity is funded with a single premium. The monthly payments begin one month after funding.

An impairment rider, also known as an exclusion rider, is an attachment to an insurance policy that excludes or limits coverage for a specific health condition or pre-existing medical condition.

Implied authority refers to the actions of an agent (producer) that may extend beyond the rights and powers explicitly provided in the agency contract.

A provision that places a time limit – up to two years – on a life insurance company´s right to deny payment of a claim because of a material misrepresentation on your application.

Indemnity is the process by which loss responsibility is explicitly transferred within a contractual relationship. Without this, there’s no way for an insurance policy to establish that accountability – meaning there would be no way to enforce its provided protections.

A fixed annuity contract in which its values are based on a crediting index, such as the Standard & Poor’s 500 Index.

A whole life plan of insurance that provides for the face amount of the policy and, correspondingly, the premium rate, to automatically increase every year based on an increase in the Consumer Price Index (CPI) or another index as defined in the policy.

For persons related by blood, a substantial interest established through love and affection, and for all other persons, a lawful and substantial economic interest in having the life of the insured continue. An insurable interest is required when purchasing life insurance on another person.

Insurance is a legal agreement between two parties – the insurer and the insured, also known as insurance coverage or insurance policy. The insurer provides financial coverage for the losses of the insured that s/he may bear under certain circumstances.

The laws that govern the business of insurance in a state.

The person or organization covered by an insurance policy.

The insurance company.

The insuring clause is found on the first page of the policy, the face of the policy. It is the insurer’s legally enforceable promise to pay. The insuring clause includes the parties to the contract, the policy effective date, and the coverage.

A named beneficiary whose rights to life insurance policy proceeds are vested and whose rights cannot be canceled by the policy owner unless the beneficiary consents.

Coverage that is offered to an employee (and often his or her family) by an employer.

This payout option covers two or more lives, and pays an amount monthly until the last party dies.

A life insurance policy that covers two insureds and pays when the last party dies.

A life insurance policy that covers two insureds and pays when the first party dies.