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Life Insurance Vocab > vocab > Flashcards

vocab Flashcards

1
Q

Accelerated benefits rider

A

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.

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2
Q

Accidental means provision

A

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.

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3
Q

accumulation unit

A

premiums an annuitant pays into annuities are credited as accumulation units. At the end of accumulation period, they are converted in to annuity units.

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4
Q

Adjustable Life Insurance

A

combines features of both term and whole life coverage.

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5
Q

Adverse Selection

A

against the company.

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6
Q

Aleatory

A

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.

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7
Q

Annuitant

A

one to whom the annuity is payable

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8
Q

Annuity

A

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.

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9
Q

Apparent Authority

A

The authority an agent appears to have, based on the principles actions, words, deeds, or because of circumstances the principle created.

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10
Q

Automatic Premium Loan

A

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.

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11
Q

Blackout Period

A

period following the death of a family breadwinner during which no social security benefits are available to the surviving spouse

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12
Q

Cash Deferred arrangements

A

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

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13
Q

Cash refund annuity

A

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.

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14
Q

Cash Surrender Option

A

nonforfeiture option that allows whole life insurance policy owners to receive a payout of their policy’s cash values

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15
Q

COBRA

A

extends group health coverage to terminated employees and their families.

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16
Q

Collateral assignment

A

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.

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17
Q

Consideration Clause

A

Part of an Insurance contract setting forth the amount of initial and renewal premiums and frequency of future payments.

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18
Q

constable period

A

period during which the company may contest a claim on a policy because of misleading or incomplete information in the application

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19
Q

Cost of living rider

A

rider available with some policies that provides for an automatic increase in benefits, offsetting the effects of inflation.

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20
Q

Credit Life Insurance

A

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.

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21
Q

Deferred Annuity

A

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.

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22
Q

Dividend

A

Policy owners share in the divisible surplus of a company issuing insurance on the participating plan.

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23
Q

Dividend Options

A

cash, reduction of premium, additional paid-up insurance, left on deposit at interest, or as additional term insurance

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24
Q

enhanced whole life

A

whole life policy in which dividends are used to provide extra death benefits or to reduce future premiums.

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25
Q

Estoppel

A

legal impediment to denying the consequences of ones actions or deeds if they lead to detrimental actions by another

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26
Q

exclusion rider

A

health insurance policy rider that waives insurers liability for all future clams on a preexisting condition

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27
Q

express authority

A

specific authority given in writing to the agent in the contact of agency

28
Q

extended term insurance

A

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.

29
Q

FICA

A

contributions made by employees and employers to fund social security benefits (OASDI)

30
Q

Fixed Annuity

A

a type of annuity that provides guaranteed fixed benefit amount, payable for the life of the annuitant

31
Q

Fraternal Benefit Insurer

A

nonprofit organization that provides insurance to its members

32
Q

group credit insurance

A

form of group insurance issued by insurance companies to creditors to cover the lives of debtors for the amounts of their loans.

33
Q

Hazard

A

any factor that gives rise to peril

34
Q

immediate annuity

A

provides for payment of annuity benefits at one payment interval from date of purchase. can only be purchased with single annuity.

35
Q

Indexed whole life

A

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.

36
Q

law of large numbers

A

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.

37
Q

level term insurance

A

coverage on which the face value remains unchanged from the date the policy comes into force to the date the policy expires.

38
Q

life annuity

A

payable during the continued life of the annuitant. NO provision is made for the guaranteed return of the unused portion of the premium.,

39
Q

limited pay life insurance

A

form of whole life insurance characterized by premium payments only being made for a specified or limited number of years

40
Q

limited risk policy

A

provides coverage for specific kinds of accidents or illnesses

41
Q

lloyds of london

A

an association of individuals and companies that underwrite insurance on their own accounts and provide specialized coverages

42
Q

master contract

A

Issued to the employeer under a group plan, contains all the insuring clauses defining employee benefits.

43
Q

medicaid

A

provides medical care for the needy under joint federal state participation

44
Q

Medicare

A

federally sponsored health insurance

45
Q

medicare supplement policy

A

health insurance coverage that provides coverage to fill the gaps in medicare coverage

46
Q

modified whole life

A

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

47
Q

morale hazard

A

hazard arising from indifference to loss because of the existence of insurance

48
Q

moral hazard

A

effect of personal reputation, character, associates, personal living habits

49
Q

mortgage insurance

A

usually made payable to beneficiary instead of the mortgage holder

50
Q

mutual insurer

A

insurance company characterized by having no capital stock, owned by policy owners, usually issues participating insurance.

51
Q

Nonforfeiture options

A

privileges allowed under terms of a life insurance contract after crash values have been created.

52
Q

nonforfeiture values

A

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.

53
Q

Other insureds rider

A

term rider covering family member other than the insured, that is attached to the base policy covering the insured.

54
Q

overhead insurance

A

short term disability

55
Q

per capita rule

A

proceeds from insurance policy are divided equally among the living primary beneficiaries

56
Q

Peril

A

the immediate specified event causing loss and giving rise to risk

57
Q

Period certain annuity

A

annuity income option that guarantees a definite minimum period of payments

58
Q

preferred risk

A

risk whose physical condition, occupation, mode of living, and other characteristics indicate a prospect for longevity for unimpaired lives of the same age

59
Q

preliminary term insurance

A

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.

60
Q

reciprocal insurer

A

insurance company characterized by the fact its policy holders insure risks of other policyholders

61
Q

reduced paid up insurance

A

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.

62
Q

reserve

A

fund held by the company to help fulfill future claims

63
Q

risk pooling

A

basic principle of insurance whereby a large number contribute to cover the losses of a few.

64
Q

risk selection

A

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

65
Q

spendthrift provision

A

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

Life Insurance Vocab (1 decks)

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