vocab Flashcards
Accelerated benefits rider
rider that allows for the early payment of some portion of the policies face amount should the insured suffer from a terminal illness or inquiry.
Accidental means provision
unforeseen, 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 an annuitant pays into annuities are credited as accumulation units. At the end of accumulation period, they are converted in to annuity units.
Adjustable Life Insurance
combines features of both term and whole life coverage.
Adverse Selection
against the company.
Aleatory
Feature of Insurance contracts in that there is an element of chance for both parties and that the dollar given by the PH and the insurer many not be equal.
Annuitant
one to whom the annuity is payable
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.
Apparent Authority
The authority an agent appears to have, based on the principles actions, words, deeds, or because of circumstances the principle created.
Automatic Premium Loan
Authorizes Insurer 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.
Blackout Period
period following the death of a family breadwinner during which no social security benefits are available to the surviving spouse
Cash Deferred arrangements
A qualified employer retirement plan under which employees can differ amounts of their salaries into a retirement plan. These amounts are not included in the employees gross income are TAX DEFERRED
Cash refund annuity
upon the death of an annuitant before payments totaling the purchase price have been made, the excess of the amount paid by the purchaser over the total annuity payments received will be paid in one sum to designated beneficiaries.
Cash Surrender Option
nonforfeiture option that allows whole life insurance policy owners to receive a payout of their policy’s cash values
COBRA
extends group health coverage to terminated employees and their families.
Collateral assignment
Assignment of a policy to a creditor as security for debt. Creditor is entitled to be reimbursed out of policy proceeds for the amount owed. Beneficiary is entitled to any excess of policy proceeds over the amount due.
Consideration Clause
Part of an Insurance contract setting forth the amount of initial and renewal premiums and frequency of future payments.
constable period
period during which the company may contest a claim on a policy because of misleading or incomplete information in the application
Cost of living rider
rider available with some policies that provides for an automatic increase in benefits, offsetting the effects of inflation.
Credit Life Insurance
usually written as a decreasing term on a relatively small decreasing balance installment loan that may reflect direct borrowing or a balance due for merchandise purchased. If borrower dies, benefits pay balance due.
Deferred Annuity
provides for postponement of the commencement of an annuity until after a specified period or until the annuitant attains a specified age. Can be single premium or flexible premium.
Dividend
Policy owners share in the divisible surplus of a company issuing insurance on the participating plan.
Dividend Options
cash, reduction of premium, additional paid-up insurance, left on deposit at interest, or as additional term insurance
enhanced whole life
whole life policy in which dividends are used to provide extra death benefits or to reduce future premiums.
Estoppel
legal impediment to denying the consequences of ones actions or deeds if they lead to detrimental actions by another
exclusion rider
health insurance policy rider that waives insurers liability for all future clams on a preexisting condition
express authority
specific authority given in writing to the agent in the contact of agency
extended term insurance
nonforfeiture option providing for the cash surrender value of a policy to be used as a net single premium at the insureds attained age to purchase term insurance for the face amount of the policy, for as long as possible but not longer than the term of the original policy.
FICA
contributions made by employees and employers to fund social security benefits (OASDI)
Fixed Annuity
a type of annuity that provides guaranteed fixed benefit amount, payable for the life of the annuitant
Fraternal Benefit Insurer
nonprofit organization that provides insurance to its members
group credit insurance
form of group insurance issued by insurance companies to creditors to cover the lives of debtors for the amounts of their loans.
Hazard
any factor that gives rise to peril
immediate annuity
provides for payment of annuity benefits at one payment interval from date of purchase. can only be purchased with single annuity.
Indexed whole life
whole life insurance policy whose death benefit increases according to the rate of inflation. Such as policies are usually tied to the consumer price index.
law of large numbers
principle of insurance that the larger the number of individual risks combined into a group, the more certainty there is in predicting the degree or amount of loss that will be incurred in any given period.
level term insurance
coverage on which the face value remains unchanged from the date the policy comes into force to the date the policy expires.
life annuity
payable during the continued life of the annuitant. NO provision is made for the guaranteed return of the unused portion of the premium.,
limited pay life insurance
form of whole life insurance characterized by premium payments only being made for a specified or limited number of years
limited risk policy
provides coverage for specific kinds of accidents or illnesses
lloyds of london
an association of individuals and companies that underwrite insurance on their own accounts and provide specialized coverages
master contract
Issued to the employeer under a group plan, contains all the insuring clauses defining employee benefits.
medicaid
provides medical care for the needy under joint federal state participation
Medicare
federally sponsored health insurance
medicare supplement policy
health insurance coverage that provides coverage to fill the gaps in medicare coverage
modified whole life
whole life insurance premium payable during the first few years (usually 5) only slightly larger than the rate for term insurance. Afterwards, the premium is higher for the remainder of the life
morale hazard
hazard arising from indifference to loss because of the existence of insurance
moral hazard
effect of personal reputation, character, associates, personal living habits
mortgage insurance
usually made payable to beneficiary instead of the mortgage holder
mutual insurer
insurance company characterized by having no capital stock, owned by policy owners, usually issues participating insurance.
Nonforfeiture options
privileges allowed under terms of a life insurance contract after crash values have been created.
nonforfeiture values
those benefits in a life insurance policy that by law, the policy owner does not forfeit even if policy owner discontinues premium payments. Usually cash value, loan value, paid up insurance value, and extended term insurance value.
Other insureds rider
term rider covering family member other than the insured, that is attached to the base policy covering the insured.
overhead insurance
short term disability
per capita rule
proceeds from insurance policy are divided equally among the living primary beneficiaries
Peril
the immediate specified event causing loss and giving rise to risk
Period certain annuity
annuity income option that guarantees a definite minimum period of payments
preferred risk
risk whose physical condition, occupation, mode of living, and other characteristics indicate a prospect for longevity for unimpaired lives of the same age
preliminary term insurance
term insurance attached to a newly issued permanent life insurance policy extending term coverage of a preliminary period of two months, until permanent insurance become affective.
reciprocal insurer
insurance company characterized by the fact its policy holders insure risks of other policyholders
reduced paid up insurance
nonforfeiture option contained in most life insurance policies providing for the insured to elect to have the cash surrender value of the policy used to purchase a paid up policy for a reduced amount of insurance.
reserve
fund held by the company to help fulfill future claims
risk pooling
basic principle of insurance whereby a large number contribute to cover the losses of a few.
risk selection
the method of a home office underwriter used to choose applicants that the insurance company will accept. The UW must determine whether risks are standard, substandard, or preferred and adjust rates accordingly
spendthrift provision
stipulates that, to the extent permitted by law, policy proceeds shall not be subject to the claims of creditors of the beneficiary or policy owner
