General Insurance Flashcards
Premium Elements
- Mortality
- Interest
- Expenses
- Net Premium
Net Premium
Mortality minus interest
Net Single
Gross Premium
Net premium plus expenses
Gross annual
Dividend Options
CARPPO Cash Accumulate with interest Reduce next premium Paid up policy One year term - attained age
Non Forfeiture Options
Surrender for cash
Reduced paid up insurance
Extended term
Backdating
Usually no more than 6 months
Conditional Receipt
- Premium paid with application
- Insurance effective - later of - date of application completed and signed or medical exam if required
- Must be standard or preferred risk
Binding Receipt
Temporary - not common in life insurance
Underwriting Sources
Application - primary source
Medical exams and testing
Attending Physician Statement (APS)
AIDS testing - cannot be in MIB
MIB - application cannot be denied solely on this, insured must be informed
Consumer reports - Insured must be informed
Investigative Reports - Insured must give consent
Fair Credit Reporting Act: Penalty and Fines
Max of $5,000 Or imprisonment (one year)
Moral Hazard
A belief that intentionally causing a loss is acceptable. Habits or lifestyle included
Morale Hazard
Carelessness
Business Overhead Expense Plan
Deductible
Taxable
Dental Expense Plan
Offered through PPO
Skilled Nursing Care for Medicare
100 Days
Medicare
Hospital Stays
Skilled Nursing Care
Home Health
Cobra Continuation Notice For Qualifying Events
14 Days
Executive Bonus Plan
EE Access to policy living benefits
ER Pays Premium
EE Owns Policy
Disability Buy Sell
Cannot Deduct
Benefits not taxed
Limited Pay
Stop paying premiums at a specified time
No reduction of death benefits
LTC Insurance
Assisted living facilities
Home health care
Adult day care
Respite care
Hospital Indemnity Plan / Hospital Income Plan
Payment directly to insured
Flat dollar daily benefit
Used toward deductible and coinsurance payments
Non Contributory
100%
Employer pays entire premium
Contributory
75%
Employees pay part of premium
Blanket Coverage
Covers accidents
Volunteer groups
No application needed for new members
Group exposed to same risks
Underwriting is the process of
Selecting, classifying, and rating risks
Cold Lead Advertising
Illegal marketing practice
Appointment
A written agreement in which an insurer authorizes a producer to sell its products
LTC Group Plan
Excluded from EE income
ER deducts
Reduced Paid Up
Face value is reduced
Cash values continue to increase
Insurers must maintain advertisements on file for
4 years (Four Advertisements)
Insurance Application
Part 1: Personal and Occupational history
Part 2: Insureds Medical History
Life Insurance Premium Factors
Interest earnings
Expenses
Mortality
Producers Report
- character
- habits
- financial status
The report is not attached to the application and never seen by the insured
Reciprocal Exchange
Cooperative Insurance
Each Insured is an Insurer
Managed by attorney in fact
Reinstating a lapsed policy
3 Years from missed premium payment
Reinsurance
Act of one insurer selling part of a policy to another
Original company = ceding company
Second insurer = assuming company
Treaty Reinsurance
Agreement of a reinsurer to underwrite certain class of business submitted by a ceding company
Consideration Clause
The amount and frequency of premium payments
Speculative Risk
Chance of both loss and gain
Representations
Believed to be true and the time it has been given
Misrepresentations
Information given that is false
Does not affect insurance companies decision in the contract
Material Misrepresentations
Can void a contract
Does impact the insurer’s decision in the contract
Binding Coverage
Coverage is guaranteed until insurer formally rejects the application
Currently Insured
6 credits in the last 13 quarters
Facility of Payment
Exists to expedite payment if unable to locate the beneficiary
Basic Form of Health Insurance
Medical
Accident Only
Disability
