Life And Health Insurance Flashcards
Accelerated benefits rider
A life insurance rider that allows for the early payment of some portion of the policies face amount should be insured suffer from a terminal illness or injury.
Absolute assignment
Policy assignment under which the assignee (person to whom the policy is assigned) receives full control over the policy and also full rights to its benefits. Generally, when a policy is assigned to secure a debt, the owner retains all rights in the policy in excess of the debt, even though the assignment is absolute form. (See assignment)
Accident and health insurance
Insurance under which benefits are payable in case of disease, accidental injury, or accidental health. Also called health insurance, personal health insurance, and sickness and accident insurance.
Accidental bodily injury provision
Disability income or accident policy provision that requires that the injury be accidental in order for the benefits to be payable
Accidental death and dismemberment (AD&D)
Insurance providing payment if the insured’s death results from an accident or if the insurer accidentally severs a limb above the wrist or ankle joints or totally and irreversibly loses eyesight.
Accidental death benefit rider
Life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means.
Accidental dismemberment
Often defined as quotation “the severance of limbs at or above the wrists or ankle joints, or the entire irrevocable loss of sight.”
Accidental means provision
Unforscene, unexpected, unintended cause of an accident. Requirement of an accident-based policy that the cause of the mishap must be accidental for any claim to be payable.
Accumulation unit
Premiums and annuitant pays into a variable annuity are credited as accumulation units. At the end of the accumulation period, accumulation units are covered converted to annuity units.
Acquired immune deficiency syndrome (AIDS)
A life threatening condition brought on by the human immunodeficiency virus, insurers must adhere to strict underwriting and claims guidelines in regards to AIDS risks and AIDS-related conditions
Acute illness
A serious condition, such as pneumonia, from which the body can fully recover with proper medical attention.
Adhesion
A life insurance policy is a “contract of adhesion” because buyers must “adhere” to the terms of the contract already in existence. They have no opportunity to negotiate terms, rates, values, and so on.
Adjustable life insurance
Combines features of both term and whole life coverage with the length of coverage and amount of accumulated cash value as the adjustable factors. Premiums may be increased or decreased to fit the specific needs. Such adjustments are not retroactive and apply only to the future.
Administrative-services-only (ASO) plan
Arrangement under which an insurance company or an independent organization, for a fee, handles the administration of claims, benefits, and other administrative functions for a self-insured group.
Admitted insurer
An insurance company that has met the legal and financial requirements for an operation within a given state.
Adult daycare
Type of care, usually custodial, designed for individuals who require assistance with various activities of daily living, while their primary caregivers are absent. Offered in care centers.
Adverse selection
Selection “against the Company.” Tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, tendency of policy owners to take advantage of favorable options in insurance contracts.
Agency
Situation wherein one party “an agent” has the power to act for another “the principal” in dealing with third parties.
Agent
Anyone not a duly licensed broker, who solicits insurance or aids in placing risks, delivering policies, or collecting premiums on behalf of an insurance company.
Agent’s report
The section of insurance application where the agent reports personal observations about the applicant.
Aleatory
Feature of an insurance contracts 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.
Alien insurer
Company Incorporated or organized under the laws of any foreign nation, Providence, or territory.
Ambulatory surgery
Surgery preformed on an outpatient basis.
Annually renewable term (ART)
A form of renewable term insurance that provides coverage for one year and allows the policy owner to renew the coverage each year, without evidence of insurability. Also called yearly renewable term. (YRT)
Annuitant
One to whom an annuity is payable, or a person upon the continuance of whose life further payment depends.
Annuity
A contract that provides a stipulated sum payable at certain regular intervals during the lifetime of one or more persons, or payable for a specified period only.
Annuity unit
The number of annuity units denotes the share of the funds and annuitant will receive from a variable annuity account after the accumulation period ends and benefits begin. A formula is used to convert accumulation units to annuity units.
Any occupation
A definition of total disability that requires that for disability income benefits to be payable, the insured must be unable to preform any job for which the insured is “reasonably suited by reason of education, training, or experience”
Apparent authority
The authority of an agent appears to have, based on the principle’s (the insurer’s) actions, words, deeds or because of circumstances the principal (the insurer) created.
Application
Form supplied by the insurance company, usually filled in by the agent and medical examiner (if applicable) on the basis of information received from the applicant. It is signed by the applicant and is part of the insurance policy if it is issued. It gives information to the home office underwriting department so it may consider whether insurance policy will be issued and, if so, in what classification and at what premium rate.
Appointment
The authorization or certification of an agent to act for or represent an insurance company.
Approval receipt
Rarely used today, type of conditional receipt that provides the coverage that is effective as of the date the application is approved (before the policies delivered).
Assessment insurance
Plan by which either the amount of insurance is variable or the number and amount of assessments are variable. It is offered by assessment associations, either pure or advance.
Assignee
Person (including corporation, partnership, or other organization) to whom a right or rights under a policy are transferred by means of an assignment.
Assignment
Signed transfer of benefits of a policy by an insured to another party. The company does not guarantee the validity of an assignment.
Assignment provision (Health contracts)
Commercial health policy provisions that allows the policyholder to assign benefit payment from the insured directly to the healthcare provider.
Assignor
Person (including corporation, partnership, or other organization or entity) who transfers a right or rights under insurance policy to another by means of an assignment.
Attained age
With reference to insured, the current insurance age.
Authority
The actions and deeds and agent is authorized to conduct on behalf of an insurance company, as specified in the agents contract.
Automatic premium loan provision
Authorizes insurers to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan.
Average indexed monthly earnings (AIME)
The amount basis used for calculating the primary insurance amount (PIA) for Social Security benefits.
Aviation exclusion
Either attached by rider or included in standard policy language excepting from coverage certain deaths or disabilities due to aviation, such as “other then a fair pain passenger.”
Backdating
The practice of making a policy effective at an earlier date than the present.
Basic medical expense policy
Health insurance policy that provides “first dollar” benefits for specified (and limited) healthcare, such as hospitalization, surgery, or physician services. Characterized by limited benefit. And Brett relatively low coverage limits.
Beneficiary
Person to whom the proceeds of a life or accident policy are payable when the insured dies. The various types of beneficiaries are primary beneficiaries (those first entitled proceeds), secondary beneficiaries (those entitled to proceeds if no primary beneficiary is living when the insured dies), and tertiary beneficiaries (those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies).
Benefit
May be either money or a right to the policyholder upon the happening of the conditions set out in the policy.
Binding receipt
Given by a company upon applicants first premium payment. The policy, if approved, becomes effective from the date of the receipt.
