General Insurance Vocab

Question 1

Facility of Payment Provision

Answer 1

The payout of benefits to any relative appearing entitled if there is no assigned beneficiary.

Question 2

Graded Premium Whole Life

Answer 2

Version of a traditional whole life policy where the first couple of years are cheaper in premium cost and then increase after the initial years to then level out premium payments.

Question 3

HMO’s (Health Maintenance Organization)

Answer 3

Stresses the importance of preventive health care. Fixed fee is paid periodically.

Question 4

Indexed Whole Life

Answer 4

Where the death benefit increases based of off inflation..

Question 5

Installment Refund Annuity

Answer 5

Provides the funds remaining to be payed to the beneficiary at the annuitants death.

Question 6

Integrated Deductible

Answer 6

Paying down a medical deductible with a basic plan and then the leftover with a major medical plan.

Question 7

Interest adjusted net cost method

Answer 7

Comparing cost of similar policies by using indexes that calculate the value of money throughout time (Interest - Inflation)

Question 8

Lien System

Answer 8

Lein put on a substandard rated insurance policy so that if the insured died due to the cause of the substandard rating the death benefit is less.

Question 9

Loading

Answer 9

Amount added to net premiums to cover company expenses and contingencies payed from gross premiums

Question 10

McCarran-Ferguson Act

Answer 10

Also known as public law, returned the power to regulate insurance to state governments from federal.

Question 11

Medical Expense Insurance

Answer 11

Pays benefits to non surgical doctors sometimes pays for home and office calls.

Question 12

Medicare Part A

Answer 12

Hospital benefits

Question 13

Medicare Part B

Answer 13

Supplementary medical insurance covers physician services, medical services, and supplies not covered A

Question 14

Minimum Premium Plan (MPP)

Answer 14

Designed as a self-insured plan that helps insure against large unpredictable losses.

Question 15

Modified Endowment Contract

Answer 15

A life insurance policy where in the initial years payments exceed the sum of net level premium.

Question 16

(MET) Multiple Employer Trust

Answer 16

Small group of people that would have unfavorable premiums individually so they come together to get more favorable premium prices.

Question 17

Multiple Protection Policy

Answer 17

A mix of life and term insurance that during the term portion multiples are payed out if the insured dies. If not during the term then the regular death benefit is payed out

Question 18

Non-Duplication Provision

Answer 18

Stipulates the insurer from receiving benefits from group plan if covered by (reimbursed) under their spouses plan.

Question 19

Non-Medical insurance

Answer 19

Insurance issued without the need of a regular medical examination.

Question 20

Non-Qualified plan

Answer 20

A retirement plan that does not meet the federal requirements therefore un-qualified.

Question 21

Optionally renewable

Answer 21

Insurer reserves the right to insure and can only not secure on two dates: 1. The Premium Due Date 2. Any anniversary date of the policy.

Question 22

Parol Evidence Rule

Answer 22

Brings all verbal statements into written ones in contract disallowing any change verbally.

Question 23

Permanent Flat Extra Premium

Answer 23

A fixed charge applied to the premium due to having a substandard rating.

Question 24

Policy-owner (Policyholder)

Answer 24

Used interchangeably as the person who simply pays on the policy.

Question 25

PPO’s Proffered Provider Organizations

Answer 25

Group of care providers that agree to give coverage to a certain group at fees negotiated in advanced

Question 26

Premium Factors

Answer 26

Three factors considered when calculating a premium: Mortality, Expense, and Interest

Question 27

Producer

Answer 27

Another title for insurance agent

Question 28

Re-Entry Option

Answer 28

At the renewal time of the policy it guarantees coverage without needing evidence of insurability.

Question 29

SEPA Simplified Employee Pension

Answer 29

Pension insurance payed for pre-tax income for smaller groups of workers (Helping to guarantee pension)

Question 30

Section Plans aka Cafeteria Plan aka Section 125

Answer 30

Multiple plan riders (a menu) that can be chosen and added to ones policy

Question 31

Sliding

Answer 31

Telling the applicant a feature on the insurance must be purchased when it does not or saying something can be added “free of charge” when there is in fact a charge aka U sliding on em

Question 32

Split-Dollar Life Insurance

Answer 32

An agreement between two parties where the insured and the other party pay the premium split and the other party receives the cash value while the insured can still choose the beneficiary of the death benefits.

Question 33

Stock Redemption Plan

Answer 33

An agreement where a corporation purchases a deceased stockholders interest.

Question 34

(STOLI) Stranger Originated Life Insurance

Answer 34

Where an agent gets consumers usually (older) to buy another insurance policy that they will help pay the premiums for in return receiving the death benefit and being named the beneficiary

Question 35

Surgical Schedule

Answer 35

The surgical expenses said to be covered.

Question 36

Taxable wage bases

Answer 36

The maximum amount of earnings FICA taxes must be paid

Question 37

Tax-Sheltered Annuity

Answer 37

Annuity plan reserved for non profit organizations and their employees tax differed until benefits are received.

Question 38

Trustee

Answer 38

One holding legal title title to property for the benefit of another such as a bank.

Question 39

Twisting / Churning

Answer 39

Inducing a policy owner to allow a policy to lapse and have them buy into another one (Illegal)