Insurance Terms Flashcards
Misrepresentation of material fact made knowingly with intent to be deceptive
Fraud
The reduction in value of an asset which is measured before and after
Loss
The state in which the insurer was formed and is headquartered
Domestic
Insurer writes business in states other than its home state
Foreign
Insurer outside of the United States
Alien
Insurer whose participation and dividends are owned by policyowners
Mutual
Insurer who is non-participating and no dividends are owned by stockholders
Stock
Insurer where company has certificate of authority and approved to transact insurance in that state
Admitted
Insurer where company has no certificate and not approved to transact in state
Non-Admitted
What is the process of evaluating risk determination if it is acceptable based on established guidelines
Underwriting
One sided contract where one party is legally bound to performed under contract
Unilateral
Feature of insurance contract in that there is an element of chance for both parties and that the dollar given by the policyholder (premiums) and the insurer (benefits) may not be equal
Aleatory
Intentional failure to disclose facts
Concealment
Intentionally or voluntarily giving up your known right
Wavier
Authority in writing
Express Authority
Authority not in writing
Implied Authority
Authority in action/statement
Apparent Authority
Transfer of risk
Insurance
Uncertainty
Risk
Type of risk with only possibility of loss
Pure Risk
Type of risk with possibility of loss or gain
Speculative Risk
Transfer of risk from one insurer to another. Company accepts the risk
Reinsurance
Reducing risk onto the reinsurer
Ceding Insurer
The dollar amount beyond which the insured is no longer participates in payment of medical expenses
Stop Loss limit
What is the frequency of payment
Mode
Type of annuity covers 2 or more annuitants and provides monthly incomes only until the first annuitant dies
Joint life annuity
Type of receipt makes the insurer liable for the risk from the application date regardless of applicant’s insurability
Binding receipt
Type of life policy that can be continued year after year without a medical examination, rates are dependent on age of insured at current time
Renewable term
What was specifically designed to address STOLI & IOLI
NCOLI Act (National Council of Insurance Legislators
What is considered double indemnity
Accidental death
What type of coverage pays a monthly cash benefit following the elimination period for total disability due to accident or sickness
Disability income insurance
What is a nonforfeiture option
cash dividend option
Current assumption whole life policies are sensitive to
Interest rates
Short term disability insurance generally only covers injuries due to
Non occupational injuries
What type of life insurance is also known as whole life and is in place until age 100
Permanent
Type of life insurance is temporary, only offered death benefit, and has no cash value
Term
What type of insurance has a distribution of dividends to its policyowners of 75%
Participating
What type of life insurance has no distribution of dividend of 100%
Non-Participating
What type of life insurance offers a guaranteed minimum or set benefits
Fixed
What type of life insurance has no guarantee of performance and has a separate account
Variable
Medical plan where is paid in return for service provided
Fee for service
Medical plan where individuals pay health pay maintenance organizations specified amount and HMO agrees to provide needed care
Pre-paid
What type of whole life insurance has the same premiums for the life of the policy and pays the cash value if the premiums are stopped
Continuous Premium Whole Life
What type of whole life insurance allows for a lifetime of premiums to be paid in a shorter period of time (10 or 20 level annual installments)
Limited Payment Whole life
What type of whole life insurance policy has only one payment made at the time of purchase and creates immediate cash value
Single premium whole life
What type of whole life insurance policy has lower premiums in the first 3-5 years but then increase and become more level? (End up being more expensive)
Modified Premium Whole Life
What type of whole life policy insurance has a lower initial premium than modified whole life and increases every 5-10 years as long as the policy remains in force
Graded Premium Whole Life
What type of whole life insurance policy is similar to a non-participating policy policy but allows foe adjustable premiums
Indeterminate Premium Whole Life
What type of life insurance gives the policyowner power to adjust the face value and death benefit, premium, and length if coverage without have to change the policy
Adjustable Life Insurance
What of life insurance insurance was designed for flexible premiums and flexible coverage for the life of the policy where death benefits can be altered. Premiums accumulate as interest within this policy’s cash value
Universal Life insurance
What type of life insurance policy has a separate account instead of a guaranteed cash value with numerous death benefit options
Variable Life Insurance
Agent who sells insurance products of several other companies and works for themselves or other agents
Independent Agent
Agent who represents only one one company (insurance company) compensated by commission
Exclusive or Capitve Agent
What of annuity provides an individual with an income within a month or up to 12 months
Immediate Annuity
What type annuity doesn’t provide an immediate income and the owner choose the amount and the frequency of payments with funds to be withdrawn
Deferred Annuity
What type of annuity has values guaranteed against loss and never be less than what is paid into the contract
Fixed Annuity
What type of annuity has the potential to keep pace with inflation because they are supported by stocks and bonds and have an investment risk
Variable Annuity
What type of annuity is also tax-deferred and its interest is linked to S&P 500 index
Equity Indexed Annuity
What type of disability rider waives the premium if the interest is 100 percent disabled with a 6 month waiting period
Waiver of Premium
What type of disability rider replaces lost income if one cannot work and premiums are waived
Disability Income
What type of disability rider is used for for juvenile policies
Payor Benefit Life
Type of disability insurance defined as the inability to perform any duties of own occupation
Total Disability
Type of disability insurance defined as one can perform some but not all essential duties of their occupation
Partial Disability
Type of disability insurance defined as the loss of 2 limbs, total and permanent blindness, total loss of speech, and loss of hearing
Presumptive Disability
Type of disability insurance defined as one that is paid when insured cannot perform the same duties as before as based on income lost
Residual Disability
Type of disability insurance as one for employees who return to work but becomes disabled again within 90 days
Recurrent Disability
Type of disability insurance defined as requiring 40 quarters completed with a 5 month waiting period ceases when retirements starts
Social Security Disability
Type of long term care that refers to skilled medical and therapy services performed by individuals home home by visiting home health aids
Home Health Care
Type of long term care that provides company supervision along with social and recreational support for people whose grown children care for them at home but work during the day
Adult Day Care
Type of long term care that is similar to hospice care where professionals care for someone who temporarily in order to give few days rest to family members who provide care
Respite Care
Type of long term care for people who need assistance from time to time but can live independently compared to those who receive custodial care
Assisted Living
Level of long term care that requires 24/7 nursing by a medical professional
Skilled Care
Level of long term care that requires occasional nursing or rehab by medical professional
Intermediate Care
Level of long term care that requires help with activities of daily living not performed by a medical professional
Custodial Care
Type of limited health policy that pays a flat dollar amount as a daily benefit for each day the insured is hospitalized as an inpatient where payment is made directly to the insured not the hospital
Hospital Indemnity
Type of limited health policy that only covers accidents as peril and excludes any type of sickness or disease
Accident Only
Type of limited health policy that was developed to cover one or one type of catastrophic illness in the policy such as cancer or heart disease
Specified or Dread Disease
Type of limited health policy that covers routine eye and vision correction
Vision Care
Type of limited health policy that covers hearing exams and some or all hearing aids
Hearing Insurance
Type of limited health policy where group policy has retailer as master policyowner and the debtors are group members. If debtor becomes disabled then policy benefits are paid to the creditor
Creditor Disability Insurance
Type of of limited health where group members engage in similar activity and members are automatically covered when part of the (no application or certificate)
Blanket Coverage
Type of limited health policy which which is sold as a means of temporary health coverage which are not renewable and must be qualified for
Short-Term Medical Expenses
What is the use of annuity uses settlement to make big deposit into annuity
Lump Sum
What use of annuity allows IRS to accept annuity as a retirement option
Retirement Plan
What use of annuity allows one to have income during retirement as a supplemental income
Retirement Income
What use of annuity allows for money to be put away for educational purposes
Education
Types of of specialized life policy that has more than one person but the benefit is paid after the first death
Joint Life
Type of of specialized policy that has more than one person but the death benefit extends to the last death
Survivorship
Type of business disability insurance where important member of business loss could cause financial incapability to cover the expenses for business
Key Person Disability
Type of business disability insurance to cover overhead expenses while owner is disabled but doesn’t cover the owner/partner salary
Business Overhead Expense
Type of disability insurance used to fund agreement to buy out interest of business owner/partners
Disability Buy-Sell
Type of life insurance policy rider where policyholder becomes disabled premiums are paid so coverage continues
Waiver of Premium
Type of life insurance policy rider that provides insured with monthly benefit
Disability Income
Pays a large portion of healthcare bills for people for 65 and older, have end-stage renal failure, or have been receiving social security disability for at least 24 months. Individual must be fully insured with 40 credits and funded by the branch of the Department of Human Health Services
Medicare
Medical plan that includes HMO allows subscribers to use providers outside of HMO, no gatekeeper for out of network services, subscribers pay more of the cost, called an open-ended HMO
Position of Service (POS)
Medical plan that includes managed care, fee for service, pre-negotiated rates, insured pay less when using in network providers
Preferred Provider Organization (PPO)
Medical plan that includes managed care, prepaid services, co-pays, gatekeeper, limited choice of providers, limited service area, emergency care, preventive care, hospital care, office based care, and outpatient services
Health Maintenance Organization (HMO)
Includes a size of group, composition of group, contributory/non-contributory, persistency, administrative capability
Enrollment Card in Group Health
What are the 2 annuity phases
Accumulation: Pay in
Annuitization: Pay out
Illness or disease or that existed before individual’s health insurance went into effect
Pre-existing Condition
What are the 2 types of perils covered by health insurance
Accident and Sickness
Assignment that transfers all rights of ownership to another person or entity
Absolute/Permanent Assignment
Assignment does not change ownership of a policy and is common within loans
Collateral Assignments
Health insurance coverage that offers benefits for only particular type of loss and are number of special insurance policies
Limited Coverage
Health insurance coverage that offers broad services
Comprehensive Coverage
Cause of loss that insurer agrees to cover caused by a specific one
Peril
Include evidence of coverage, who is covered by plan and summary of benefits
Certificated of Coverage in Group Health
Risk assumed by insurer amount is responsible for paying out
Exposure
Designed to provide steady cashflow during retirement years and protect against someone living too long
Annuity
Death within 24 months
Terminally Ill
Inability to perform 2 activities of daily living (ADLs)
Chronically Ill
What are 5 types of beneficiaries
Individuals, Classes, Estates, Trusts, Minors
Hazard that involves one’s state of mind or careless attitude
Morale Hazard
Hazard that arises from individual’s character
Moral Hazard
Hazard that is physical identifiable using equipment that produces tangible evidence of existence
Physical Hazard
Type of life insurance policy rider which changes insured to a different person
Exchange Privilege
Type of life insurance policy rider with convertible term insurance spouse or immediate family member of primary insured
Other Insured Term
Type of life insurance policy rider where if person responsible for the premiums becomes disabled/deceased premiums are waived until child is 18-21 years of age
Payor Benefit Life
Medical supplement insurance that is sold by private companies to help cover some health care cost that original medicare does not cover and is designed to to fill the gaps in Parts A and B, but cannot be purchased by someone in Part C
Medigap
