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Life and Disability insurance > life and disability > Flashcards

life and disability Flashcards

1
Q

Stock companies that exist for the sole purpose of generating profits for their stockholders

A

non-participating companies

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2
Q

401 K

A

Portion of pre-tax salaries into investment accounts where it grows tax deferred. Employers match and investment choice is directed by employees

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3
Q

403 B

A

Public schools and non profits. Pre-tax contributions and tax deferred growth

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4
Q

absolute assignment

A

owner transfers the owners entire interest in the policy to the assignee

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5
Q

accelerated death benefit rider

A

requires the insurer to pay out part of the death benefit (~50%) if insured has a diagnosis of a particular illness likely to cause death in 12 months

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6
Q

accident only policies

A

helps pay the health care costs that result from an accident

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7
Q

accumulate at interest dividend

A

The dividends are left in a sales account to accumulate interest at a set amount specified in the policy. Dividends are not taxable, but interest is

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8
Q

actuary

A

person who tracks lifespan and chance of illness or accident based on specific factors

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9
Q

additional children coverage

A

covered from the moment of birth until 31 days, adopted children treated like newborns

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10
Q

additional insured term rider

A

whole life to insured, convertible life term riders on family members or business partners

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11
Q

Additional Paid up insurance dividend/Paid up additions option

A

Dividends used as a single net premium payment on a miniature paid up whole life policy. Automatic dividend option when no other is selected

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12
Q

AD&D (accidental death/dismemberment) Rider

A

Accidental loss of life, limb or vision. Lump sum only when medical problems (not sickness) is direct result of accident. Death within 90 days, value policy not indemnity.

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13
Q

AD&D specifications

A

1 hand, foot, or eye, =100% of capital sum. 2 hands, feet, or eyes=full pay out

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14
Q

Adjustable life

A

Components of policy is adjustable to meet needs of policy holder. Proof of insurance is required if increase in benefit is wanted

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15
Q

Adult disabled children

A

covered entire lives as long as they are incapable of taking care of themselves. proof of disability required 31 days after 18th birthday

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16
Q

Adverse selection

A

tendency that high risk people are more likely to apply for insurance than low risk people are

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17
Q

Agent/ producer

A

Will be you, acting as a legal representative for insurance company

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18
Q

Agent responsibilities

A

Explain the underwriting process to the applicant and
provide disclosures as required by law.
* If the agent makes a mistake on the agent’s portion
of the application, the agent should correct the change
and sign or initial the correction.
* Make certain that premium checks are filled out correctly,
signed, and made payable to the company, not to the agent.
* If an agent collects a premium check while out of the office, the agent should give the client a temporary hand-written receipt and then mail or a deliver an official receipt.
* Many companies require the agent to deliver a policy in
person. The reason for this is to explain the terms of the
policy and, if a policy is rated, to explain the reason why.
* Unless a conditional receipt is used, the agent should explain that the Insured will not be covered until the policy is delivered, no matter how many good faith delivery
attempts are made by the agent.

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19
Q

agreement

A

Offer + acceptance

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20
Q

Aleatory

A

agreements where the payouts to the insured depend on an uncertain event or outcome

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21
Q

annually renewable term

A

term after the level term policy where you can extend coverage without proof of insurance. premium goes up each year, max age is 65

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22
Q

Reentry term

A

two premium levels for renewal for people who can prove insurability and for people who can’t

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23
Q

annual stop loss limit

A

a measure that limits the max amount for which insurance can be responsible for in a stated time period

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24
Q

annuity (period) certain options

A

added to a straight life or joint and survivor annuity means the insurance company must continue making payments after the death of the annuitant or annuitants

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25
Q

assignment

A

having payments go directly from health care companies to the providers with the permission of the insured

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26
Q

assignment clause

A

the procedure where the transfer is accomplished

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27
Q

automatic premium loan rider

A

if policy owner doesnt pay the premium and grace period expires, the company will automatically make a loan against cash value to pay premium

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28
Q

average indexed monthly earnings

A

average earnings over time

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29
Q

aviation exclusion rider

A

excludes coverage for death while flying

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30
Q

Base/basic medical plans

A

Medical, hospital, surgical. No deductible and only covers most basic of health care needs

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31
Q

basic hospital policy

A

pays for every expense in hospital except doctors and surgeons. Daily benefit rate/dollar amount includes all except room and board

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32
Q

basic medical policy

A

non-surgical services of physicians for the treatment of accident or illness

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33
Q

basic surgical policy

A

covers the cost of surgery, including surgeons anesthesioligists, and post op care

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34
Q

beneficiary

A

person who is paid when claim is submitted

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35
Q

blanket policies

A

medical expense coverage designed to pay injuries or death associated with accidents only

36
Q

Blue cross/shield

A

local self governing insurance providers
Covers hospital bills with Coss, doctor bills with Shield.
Fee for service plan
emphasize reduced costs through negotiation

37
Q

Broker

A

representative of the insured, not the insurance company

38
Q

buying insurance

A

transfer of a portion of your risk to the insurer

39
Q

Buy-sell agreement/Business continuation plan

A

the business has the right to buy the share of the company from the deceased owners estate at an agreed upon price

40
Q

cancelable policy

A

may be cancelled at anytime without having a reason. refund of the unearned portion of previously paid premiums is required

41
Q

cancellation provision

A

the insured has the right to cancel the policy at any time without affecting any pending claims

42
Q

cash out

A

taking the money nullifies the 3 year right of reinstatement privileges

43
Q

cash dividend option

A

the company sending policy owner a check with the dividend value on the anniversary date
WHOLE LIFE POLICIES

44
Q

Cash settlement option

A

lump sum check

45
Q

cash value options

A

borrowing against the cash value, using a living trust, or surrendering and terminating the policy

46
Q

cash value taxation

A

growth of money is tax deferred. if the policy lapses or is surrendered, money after that point is taxed as well as any cash value that exceeds premiums paid
DEATH BENEFIT IS ALWAYS TAX FREE

47
Q

Certificate of insurance

A

identification card and booklet explaining the coverage

48
Q

change of occupation provision

A

insured must notify company when occupation changes. if not reported and insured makes a claim, the company will adjust the benefits based on the already paid premium

49
Q

claim form provision

A

the company must provide claim forms to the insured within 15 days of receiving the notification loss

50
Q

COBRA

A

continued group coverage for former employees for specified period of time.
doesnt apply if you were fired for gross misconduct

51
Q

Coinsurance

A

the company and the insured will share the payment of covered expenses after the deductible

52
Q

collateral assignment

A

when a policy is transferred to a creditor and the creditor names itself as the beneficiary

53
Q

combination policy

A

a hybrid of permanent and temporary coverage

54
Q

common disaster clause

A

if both the insured and the beneficiary die in result of the same accident, unless the beneficiary outlives the insured by 60 days, no one gets any money

55
Q

community rating

A

combines claims history over a class of groups that are similare in nature and may even be in a similar geographical area

56
Q

comprehencive major medical plan

A

combination of base plan with a major medical policy

57
Q

concealment

A

intentional nondisclosure of material facts

58
Q

conditionally renewable

A

right to terminate policy in case of “trigger event”

59
Q

conditional receipt

A

policy will be in effect on date of application or medical exam, whichever is later.

60
Q

consideration clause

A

states that insured must give the premium and fill out application to be considered

61
Q

consumer credit report

A

done without knowledge or consent of insured, 7 year time limit on financial report (10 year for bankruptcy)

62
Q

consumer directed health plan

A

high deductible policy
pre tax advantage, plus a pre funded savings account you can use to cover the deductibles and use later on in retirement

63
Q

consumer inspection report

A

background report, client can contact company and make corrections or request corrective investigation

64
Q

contestable clause

A

AFTER first 2 years
incontestable if: it was an honest mistake, and if youre a life or group health insurer fraud

65
Q

contingent secondary beneficiary

A

the one who will receive the death benefit if the primary beneficiary is no longer living at the time of the insureds death

66
Q

continuous premium whole life

A

the default premium

67
Q

contract of adhesion

A

non negotiable contract (take it or leave it)

68
Q

contributory plan

A

all or part of the cost of coverage must be paid by individual group members

69
Q

Conversion privilege from group to individual

A

New policy face value cant exceed old one
31 day grace period (60 if employees werent notified )
If insured dies during grace period death benefit still paid
term life is converted to whole life

70
Q

Conversion (whole life)

A

proof of insurability from whole life to term life

71
Q

convertible term

A

can turn term into whole wo proving insurability. Premium goes up

72
Q

Coordination of benefits clause

A

if family has 2 group policies, each family member is deemed to have only one promary policy. the other spouses policy will be secondary

73
Q

copay

A

flat dollar amount insured pays out of pocket each time service is rendered

74
Q

copy of the application provision

A

info in the application is represenation. insurer must attach copy to group policy

75
Q

cost of living rider

A

cost of policy may go up but so will the face value (if cost of living goes up so does the face value. Basically an increasing term policy)

76
Q

critical illness policy

A

pays its benefit when you show youve contracted the disease. paid to you as you wish

77
Q

cross purchase plans

A

the partners own the life insurance policies on each other

78
Q

currently insured

A

worked less than 10 years, only eligible for survivor benefits

79
Q

Declined risks

A

applicants who are to risky to insure

80
Q

decreasing term (mortgage protection insurance)

A

face value decreases over time. typically used to pay off mortgage

81
Q

deffered annuity

A

postponed payouts

82
Q

deferred compensation plan

A

postponed payouts

83
Q

deferred compensation plan

A

employer pays the employee in the furure for work done today
in retirement, the employee can surrender the policy and take cash value when hes in a lower tax bracket

84
Q

difined benefit pension plans

A

guaranteed specific retirement benefit paid for by employer

85
Q

defined contribution pension plans

A

employer contributes a specific amount each year to the plan. employee responsible for choosing the investment from choices provided

86
Q

disability income insurance

A

Life and Disability insurance (1 decks)

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