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1
Q

Adverse selection

A

insuring of risks that are more prone to losses than the average risk

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2
Q

Agent/Producer

A

a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer

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3
Q

Applicant or proposed insured

A

a person applying for insurance

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4
Q

Beneficiary

A

a person who receives the benefits of an insurance policy

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5
Q

Death benefit

A

the amount paid upon the death of the insured in a life insurance policy

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6
Q

Fraud

A

intentional misrepresentation or deceit with the intent to induce a person to part with something of value

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7
Q

Insurance policy

A

a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

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8
Q

Insured

A

person covered by the insurance policy; may or may not be the policyowner

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9
Q

Insurer (principal)

A

the company who issues an insurance policy

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10
Q

Lapse

A

policy termination due to nonpayment of premium

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11
Q

Life insurance

A

coverage on human lives

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12
Q

Policyowner

A

the person entitled to exercise the rights and privileges in the policy

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13
Q

Premium

A

the money paid to the insurance company for the insurance policy

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14
Q

Aleatory

A

Unequal exchange

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15
Q

Personal

A

Between insurer and insured

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16
Q

Adhesion

A

Take it or leave it

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17
Q

Unilateral

A

One-sided promise

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18
Q

Warranties

A

Absolutely true statements. Breach of warranties can void the policy

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19
Q

Policyowner

A

Pays premium to the insurance company

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20
Q

Insurance company

A

Issues policy to policyowner and pays benefit to beneficiary

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21
Q

Underwriting

A

The risk selection and classification process

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22
Q

Attained age

A

the insured’s age at the time the policy is issued or renewed

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23
Q

Cash value

A

a policy’s savings element or living benefit

24
Q

Face amount

A

the amount of benefit stated in the life insurance policy

25
Deferred
withheld or postponed until a specified time or event in the future
26
Endow
the cash value of a whole life policy has reached the contractual face amount
27
Level premium
the premium that does not change throughout the life of a policy
28
Liquidation of an estate
converting a person's net worth into a cash flow
29
Nonforfeiture values
benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses
30
Policy maturity
in life policies, the time when the face value is paid out
31
Securities
financial instruments that may trade for value (for example, stocks, bonds, options)
32
Viator
The owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract
33
Provisions
Define the characteristics of an insurance contract, such as the rights and obligations under the contract, and are fairly universal from one policy to the next
34
Riders
added to a policy to modify provisions that already exist.
35
Options
offer insurers and insureds ways to invest or distribute a sum of money available in a life policy.
36
Activities of daily living (ADLs)
a person's essential activities that include bathing, dressing, eating, transferring, toileting, continence
37
Assignment
transfer of rights of policy ownership
38
Consideration
something of value that each party gives to the other (binding force in any contract)
39
Indemnity
a principle of reimbursement on which insurance is based; in the event of loss, an insurer reimburses the insureds or beneficiaries for the loss
40
Lump sum
payment of the entire benefit in one sum
41
Minor
a person under legal age
42
NAIC
National Association of Insurance Commissioners, an organization composed of insurance Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues
43
Principal
the face value of the policy; the original amount invested before the earnings
44
Business entity
a corporation, association, partnership, limited liability company, or other legal entity
45
Cease and desist
to stop or discontinue
46
Coercion
forceful act or threat aimed to influence a person to act against their will
47
Commissioner
the head of the State Department of Insurance
48
Disclosure
revealed information to help someone make an intelligent and informed decision
49
ERISA
Employee Retirement Income Security Act: defines federal standards for private pension plans
50
Exempt
not subject to an obligation
51
Home state
a state in which an insurance producer maintains their principal place of residence or principal place of business and is licensed to act as an insurance producer
52
Inducement
an offer that attempts to influence the other party
53
Insolvent
unable to meet financial obligations
54
Nonforfeiture values
benefits in a life insurance policy that the policyowner cannot lose
55
Person
an individual or a business entity
56
Reciprocity
a mutual interchange of rights and privileges
57
Uniform application
the NAIC Uniform Application for resident and nonresident producer licensing

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