Final Review Flashcards
(157 cards)
1
Q
Policy assignment under which the assignee receives full control over the policy and also full rights to its benefits.
A
Absolute Assignment
2
Q
A life insurance rider that allows for the early payment of some portion of the policies’ face amount should the insured suffer from a terminal illness or injury.
A
Accelerated Benefits Rider
3
Q
An accident policy provision for disability income that requires the injury be accidental in order for benefits to be payable.
A
Accidental Bodily Injury Provision
4
Q
An insurance type that provides payments if the insured’s death results from an accident, if the insured accidentally severs a limb above the wrist or ankle joints, or totally and irreversibly loses eyesight.
A
Accidental Death & Dismemberment (AD&D)
5
Q
Unforeseen, unexpected, unintended cause of an accident. Requirement of an accident-based disability policy that requires that the cause of the mishap must be accidental in order for any claims to be payable.
A
Accidental Means Provision
6
Q
Insurance type under which claims are payable in case of disease, accidental injury, or accidental death.
A
Accident & Health Insurance. More commonly known as just Health Insurance
7
Q
A type of insurance contract in which buyers must adhere to the terms of the contact already in existence. They have no opportunity to negotiate terms, rates, and policy values.
A
Contract of Adhesion.
8
Q
Combines features of both term and whole life insurance coverage with the length of coverage and amount of accumulated cash value as adjustable factors. Premiums may be increased or decreased in the future to fit specific needs.
A
Adjustable Life Insurance Policy
9
Q
An insurance company that has met the legal and financial requirements to operate within a specific State.
A
Admitted Insurer
10
Q
A type of care (usually custodial) designed for individuals who require assistance with various activities of daily living while their primary caregivers are absent.
A
Adult Daycare
11
Q
Selection that goes “against the company.” The tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, the tendency of policyholders to take advantage of favorable options in insurance contracts.
A
Adverse Selection
12
Q
A situation wherein one party (an agent) has the power to act for another (the principal) in dealing with third parties.
A
Agency
13
Q
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.
A
Agent
14
Q
The section of the insurance application where the agent reports personal observations about the applicant.
A
Agent’s Report
15
Q
A feature of an insurance contract 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.
A
Aleatory
16
Q
An insurance company incorporated or organized under the laws of any foreign nation, providence, or territory.
A
Alien Insurer
17
Q
The one to whom an annuity is payable.
A
Annuitant
18
Q
A contract that provides a stipulated sum payable at certain regular intervals during the lifetime of one or more persons, or a payable for a specified time period.
A
Annuity
19
Q
A definition of total disability that requires that for disability income benefits to be payable, the insured must be unable to perform any job for which the insured is “reasonably suited by reason of education, training, or experience.
A
Any Occupation Disability Provision
20
Q
Authorization or certification of an agent to act for or represent an insurance company.
A
Appointment
21
Q
A type of conditional receipt that provides that insurance coverage is effective as of the date the application is approved but before the policy is delivered. It is rarely used today.
A
Approval Receipt
22
Q
An insurance company characterized by member-insureds who are assessed an individual portion of each loss that occurs. No premium payment is payable in advance.
A
Assessment Mutual Insurance Company
23
Q
The practice of making a policy effective at an earlier date than the present.
A
Back-dating
24
Q
A health insurance policy that provides “first dollar” benefits for specified and limited healthcare. Characterized by limited benefit periods and low coverage limits.
A
Basic Medical Expense Policy
25
A type of conditional receipt given by an insurer upon an applicant’s first premium payment. The policy, if approved, becomes effective as of the day of the receipt.
Binding Receipt
26
The period following the death of a family breadwinner during which no Social Security benefits are payable to the surviving spouse.
Blackout Period
27
An insurance policy that covers a number of individuals who are exposed to the same hazards, such as members of an athletic team or passengers on an airplane.
Blanket Policy
28
A licensed insurance representative who does not represent a specific company but places business among various insurance companies. Legally, they are regarded as representatives of the insured and not the insurer.
Broker
29
Arrangements between business owners that provide that the shares owned by any one of them who dies or becomes disabled shall be sold to and purchased by the other co-owners of the business.
Business Continuation Plan
30
A form of disability income coverage designed to pay necessary business overhead expenses, such as rent, should the insured business owner become disabled.
Business Overhead Expense Insurance
31
Informational consumer guidebooks that explain insurance policies and concepts and are required to be given to applicants before accepting an application, premium, or premium deposit.
Buyer’s Guide
32
An agreement that a deceased business owner’s interest of a business will be sold and purchased at a predetermined price.
Buy-Sell Agreement
33
Employee benefit arrangements in which employees can select from a range of benefit options to tailor their benefit needs.
Cafeteria Plan
34
The amount provided for accidental dismemberment or loss of eyesight from a disability income plan. The loss of one limb or partial blindness pays a percentage of the overall sum.
Capital Sum
35
Qualified employer retirement plans where employees can defer amounts of their salaries into a retirement plan. The amounts deferred are not included in the employee’s gross income and are tax-deferred. Also called (k) plans.
Cash or Deferred Retirement Plan
36
A nonforfeiture option that allows whole life insurance policy owners to receive a payout of their policy’s cash values.
Cash Surrender Option
37
The cash equity amount or “savings” accumulated in a whole life insurance policy.
Cash Value
38
The amount available to the policy owner when a life insurance policy is surrendered to the insurance company.
Cash Surrender Value
39
The practice by which policy values in an existing life insurance policy or annuity are used to purchase another policy with the same insurer for the purpose of earning additional premiums or commissions without an objectively reasonable basis or demonstrable benefit.
Churning
40
A corporation owned by a small group of stockholders, each of whom usually has a voice in operating the business.
Closed Corporation
41
Extends group health coverage to terminated employees and their families for up to 18 months.
COBRA
42
The principle under which the health insurance company only insures part of the potential loss, with the policyholder paying for the other part.
Coinsurance
43
Assignment of a life policy to a creditor as a security for a debt. The creditor is allowed to take what they are owed out of the policy while the excess is given to the beneficiaries.
Collateral Assignment
44
Health insurance companies that operate on the “reimbursement” approach, which allows policyholders to seek medical treatment then submit the charges to the insurer for reimbursement.
Commercial Health Insurers
45
The head of the WA State insurance office, the public officer charged with supervising the State’s insurance business and administering insurance laws and regulations.
Insurance Commissioner
46
The table of mortality based on inter-company experience over a period of time, which is legally recognized as the mortality basis for computing maximum reserves on policies issued.
Commissioner’s Standard Ordinary (CSO) Table
47
A policy provision designed to provide an alternate beneficiary in the event that the insured as well as the original beneficiary die as a result of a common (same) accident.
Common Disaster Provision
48
Designed to give the protection offered by both a basic medical expense policy and a major medical expense policy. It is characterized by a low deductible amount, a coinsurance clause, and high maximum benefits.
Comprehensive Major Medical Insurance
49
The failure of the insured to disclose to the insurance company facts that are material to the acceptance of the risk at the time the application is made.
Concealment
50
A characteristic of an insurance contract in that the payment of benefits is dependent on, or a condition of, the occurrence of the risk insured against.
Conditional Contract
51
An insurance provision designed to prevent the duplication of group insurance benefits, limiting the insured to a percentage of the expenses covered and designates the order in which multiple carriers are to pay for benefits.
Coordination of Benefits Provision
52
A rider available with some life insurance policies that provides for an automatic increase in benefits typically tied to the Consumer Price Index to offset inflation.
Cost of Living Rider
53
Usually written as a decreasing term policy on a relatively small decreasing balance installment loan. If the borrower dies, the policy pays the balance of the loan.
Credit Life Insurance
54
An agreement that provides upon a business owner’s death, surviving owners will purchase the deceased’s interest with funds from life insurance policies owned by each principal owner on the lives of all other owners.
Cross-Purchase Plan
55
The level of assistance given to meet daily personal needs, such as dressing, bathing, eating, and so on. Though it does not require medical training, it must be administered under a physician’s orders.
Custodial Care
56
Term life insurance on which the face value slowly decreases in scheduled steps (monthly or annually) from the date the policy is issued to the day the policy expires, while the premium remains level.
Decreasing Term Life Insurance
57
An amount of expense or loss to be paid by the insured before a health insurance policy starts paying for benefits.
Deductible
58
A pension plan under which benefits are determined by a specific benefit formula.
Defined Benefit Plan
59
A tax-qualified retirement plan in which annual contributions are determined by a formula set forth in the plan. Benefits paid to a participant vary with the amount of contributions made on the participant’s behalf and the length of service under the plan.
Defined Contribution Plan
60
A disability income policy provision that allows a certain amount of time after an accident for a disability to result with the insured remaining eligible for benefits.
Delayed Disability Provision
61
A type of health insurance coverage typically offered on a group basis that covers the cost of normal dental maintenance as well as oral surgery and root canal therapy.
Dental Insurance
62
The period following the death of the breadwinner up until the youngest child reaches the age of maturity.
Dependency Period
63
A type of health insurance coverage that provides for regular, periodic income should the insured become disabled from illness or injury.
Disability Income Insurance
64
Typically a rider to a life insurance policy, it provides benefits in the form of income in the event the insured becomes disabled.
Disability Income Rider
65
A physical or mental impairment making a person incapable of performing one or more duties of that person’s occupation.
Disability
66
A policy owner’s share in the divisible surplus of a company issuing insurance on the participating plan.
Dividend
67
The different ways in which an insured under a participating life insurance plan may elect to receive surplus earnings - in cash, as a reduction of premium, as additional paid-up insurance, left in deposit at interest, or as additional term insurance.
Dividend Options
68
An insurance company within the state in which it is chartered and in which its home office is located
Domestic Insurer
69
Provides coverage for specific kinds of accidents or illnesses, such as injuries received as a result of travel accidents or medical expenses stemming from a specific disease.
Dread Disease Policy/Limited Risk Policy
70
The duration of time between the beginning of an insured’s disability and the commencement of the period for which benefits are payable.
Elimination Period
71
Insurance plans through which employers offer employee benefits such as coverage for medical expenses, disability, retirement, and at death.
Employee Benefit Plans
72
A contract providing for payment of the face amount at the end of a fixed period, at a specified age of the insured, or at the insured’s death before the end of the stated period.
Endowment
73
A whole life insurance policy issued by a mutual insurer, in which policy dividends are used to provide extra death benefits or to reduce future premiums.
Enhanced Whole Life Policy
74
An insurance policy provision stating that the application and the policy contain all of the provisions and constitute the entire contract.
Entire Contract Provision
75
Professional liability insurance that protects an insurance producer against claims arising from service the producer rendered or failed to render.
Errors and Omission Insurance
76
A legal impediment to denying the consequences of one’s actions or deeds if they lead to detrimental actions by another.
Estoppel
77
Any statement or proof regarding a person’s physical condition, occupation, and so forth, affecting acceptance of the applicant for insurance.
Evidence of Insurability
78
The difference between the rates of interest the company guarantees to pay on proceeds left under settlement options and the interest actually paid on such funds by the company.
Excess Interest
79
A fraction used to determine the amount of annual annuity income exempt from federal income tax. It is the total contribution or investment in the annuity divided by the expected ratio.
Exclusion Ratio
80
Specified hazards listed in a policy for which benefits will not be paid.
Exclusions
81
A provider organization concept that contracts with a limited number of physicians and typically only one hospital that provides services to members. Members who receive healthcare outside of the organization receive no benefits.
Exclusive Provider Organization (EPO)
82
The number of deaths that theoretically should occur among a group of insureds during a given period, according to the mortality table in use. Normally, a lower mortality rate is anticipated and generally experienced.
Expected Mortality
83
Review of the previous year’s claims experience for a group insurance contract in order to establish premiums for the next period.
Experience Rating
84
The specific authority given in writing to the agent in the contact with an insurance company.
Express Authority
85
A nonforfeiture option providing for the cash surrender value of a policy to be used as a net single premium at the insured’s attained age to purchase term insurance for the face amount of the policy, less indebtedness, for as long a period as possible, but no longer than the term of the original policy.
Extended Term Insurance
86
The mortality or morbidity tables indicating the percentage amount increase of premium for certain impaired health conditions.
Extra Percentage Tables
87
Insurance policy that offers entire-family protection, usually with permanent insurance on the primary wage earner and term insurance on the spouse and children.
Family Plan Policy
88
A life insurance settlement option whereby the beneficiary instructs that proceeds be paid in regular installments of a fixed dollar amount.
Fixed-Amount Settlement Option
89
A type of annuity that provides a guaranteed fixed benefit amount, payable for the life of the annuitant.
Fixed Annuity
90
A life insurance settlement option in which the number of payments is fixed by the payee, with the amount of each payment determined by the amount of proceeds.
Fixed-Period Settlement Option
91
A company operating in a state in which it is not chartered and in which its home office is not located.
Foreign Insurer
92
A non-profit benevolent organization that provides insurance to its members.
Fraternal Benefit Society
93
A provision required in Washington State whereby policyholders have 10 days to examine their new policies at no obligation. A full premium refund is returned if the insured decides not to keep the policy.
Free-Look Provision
94
The period of time after the due date of a premium during which the policy remains in force without penalty. In Washington, this period is 31 days for life insurance.
Grace Period
95
A variation of a traditional whole life insurance policy that includes lower than normal premiums during the first few policy years, with premiums increasing gradually each year until they level off.
Graded Premium Whole Life Policy
96
Insurance that provides coverage for a group of persons, usually employees of a company, under one master contract.
Group Insurance
97
An arrangement, generally provided by a rider, whereby additional insurance may be purchased at various times without evidence of insurability.
Guaranteed Insurability
98
A health insurance contract that the insured has the right to continue in force by payment of premiums for a substantial period of time during which the insurer has no right to make any change in any provision other than a change in premium rate for classes of insureds.
Guaranteed Renewable Contract
99
An association established by each State to support insurers and protect consumers in the case of insurer insolvency. The association is funded by assessments paid by insurers.
Guaranty Association
100
Any factor that gives rise to a peril.
Hazard
101
Insurance against loss through sickness or accidental bodily injury.
Health Insurance
102
Health care management stressing preventative heath care, early diagnosis, and treatment on an outpatient basis. Insureds generally pay a fixed, periodic fee and must see providers that are “in-network.”
Health Maintenance Organization (HMO)
103
Skilled or unskilled care provided in an individual’s home, usually on a part-time basis.
Home Health Care
104
Heath insurance benefits subjected to a specified daily maximum for a specific period of time while in injured is confined to a hospital, plus a limited allowance for miscellaneous hospital expenses, such as operating room and lab expenses.
Hospital Expense Insurance
105
A form of health insurance that provides a stipulated daily, weekly, or monthly indemnity during hospital confinement; payable on an unallocated basis without regard to actual hospital expenses.
Hospital Indemnity
106
An individual’s economic worth measured by the sum of the individual’s future earnings that is devoted to their family.
Human Life Value
107
Provides payment of annuity benefits at one payment interval from the date of purchase. Can only be purchased with a single, lump-sum payment.
Immediate Annuity
108
Authority not specifically granted to an agent in their contact with an insurer, but by which common sense dictates the agent has. It enables the agent to conduct routine responsibilities.
Implied Authority
109
A clause that allows an insurance company to void a life insurance policy if the applicant made misstatements or concealed information for up to two years after the policy was issued.
Incontestable Clause
110
Term life insurance in which the death benefit increases periodically over the policy’s term. Usually purchased as a cost of living rider to a whole life insurance policy.
Increasing Term Insurance
111
A method of paying health policy benefits to insureds based on a predetermined, fixed rate for the medical services provided, regardless of the actual expenses incurred.
Indemnity Approach
112
A whole life insurance policy whose death benefit increases according to the rate of inflation and is usually tied to the Consumer Price Index.
Indexed Whole Life Insurance
113
An insurance policy tied to the policy owner, distinct from group and blanket insurance.
Individual Insurance
114
A personal, qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount annually, depending on their tax bracket.
Individual Retirement Account (IRA)
115
A life insurance policy providing modest benefits and a relatively short benefit period. Premiums are collected on a weekly or monthly basis by an agent calling on the insured’s home.
Industrial Insurance
116
An annuity income option that provides for the funds remaining at the annuitant’s death to be paid to the beneficiary in the form of continued annuity payments.
Installment Refund Annuity
117
The requirement of insurance contracts that a loss must be sustained by the applicant upon the death or disability of another and the loss must be sufficient to warrant compensation.
Insurable Interest
118
Social benefit for minimizing the risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss.
Insurance
119
A mode of settlement under which all or part of the proceeds of a policy are left with the insurance company for a definite period at a guaranteed minimum interest rate. Interest may then be either added to the proceeds or paid out in installments.
Interest-Only Option (Interest Option)
120
A level of health or medical care that is occasional or rehabilitative, ordered by a physician, and performed by skilled medical personnel.
Intermediate Nursing Care
121
A life insurance policy that covers two or more lives and provides for the payment of the benefits at the death of the first among those insured, at which time the policy terminates.
Joint Life Policy
122
A joint life policy variation that covers two lives but pays the benefit upon the death of the second (and last) survivor.
Joint Life/Last Survivor Policy
123
A life insurance policy written on the life of a child who is within specified age limits and generally under parental control.
Juvenile Life Policy
124
Designed to fund retirement of self-employed individuals, under which contributions are given favorable tax treatment.
Keogh Plan
125
Insurance that provides protection of a business against financial losses caused by the death or dismemberment of a vital member of the company.
Key-Person Insurance
126
Policy reserves that are maintained according to levels established by insurance laws that vary from State to State.
Legal Reserves
127
Term insurance coverage on which the face value remains unchanged from the date of policy issuance to the date the policy expires.
Level-Term Insurance
128
An annuity that’s payable during the continued life of the annuitant. No provision is made for the guaranteed return of the unused portion of the premium.
Life Annuity
129
A settlement option providing for life insurance or annuity proceeds to be used to buy an annuity payable to the beneficiary for life, often with a specified number of payments.
Life Income Settlement Option
130
Insurance against loss due to the death of the insured upon whose death the insurer agrees to pay a stated sum or income to the beneficiary.
Life Insurance
131
Policies that restrict benefits to specified accidents or diseases, such as travel policies, dread disease policies, ticket policies, etc.
Limited (Risk) Policies
132
An association of individuals and companies that underwrite insurance on their own accounts and provide specialized coverage.
Lloyd’s of London
133
Refers to the broad range of medical and personal services for individuals (often the elderly) who need assistance with daily activities for an extended period of time.
Long-Term Care
134
Health insurance policies that provide for daily indemnity benefits for extended care confinement; contracts must be guaranteed renewable.
Long-Term Care Insurance
135
A health insurance policy that provides broad coverage and high benefits for hospitalization, surgery, and physician services. Characterized by deductibles and countenance cost sharing.
Major Medical Expense Insurance
136
A system of delivering health care services, characterized by arrangements with selected providers, quality control programs, and utilization review and financial incentives for members to use providers and procedures covered by the plan.
Managed Care
137
Issued to the employer under a group plan and contains all insuring clauses defining employee benefits. Participating employees receive a certificate of coverage.
Master Contract (Master Policy)
138
Provides medical care for the needy under joint federal-State participation under the Kerr-Mills Act.
Medicaid
139
The process of controlling how policyholders utilize their policies in order to control costs.
Medical Cost Management
140
Insurance that pays benefits for non-surgical fees commonly rendered in hospitals and sometimes pays for home and office calls.
Medical Expense Insurance
141
A service organization that collects medical data on life and health insurance applicants for member insurance companies.
Medical Information Bureau (MIB)
142
A federally-sponsored health insurance and medical program administered under provisions of the Social Security Act.
Medicare
143
A Medicare part that offers compulsory hospitalization insurance.
Medicare Part A
144
A voluntary Medicare part designed to provide supplementary medical insurance to cover physician services, medical services, and supplies not covered under Part A.
Medicare Part B
145
A part of Medicare that offers a variety of managed care plans, a private fee-for-service plan, and Medicare specialty plans that focus care on the the management of specific diseases and conditions.
Medicare Part C (Medicare Advantage)
146
A part of Medicare that offers prescription drug benefits that is only available to those entitled to Medicare Part A and/or enrolled in Medicare Part B.
Medicare Part D
147
Health insurance that provides coverage to fill the gaps in Medicare coverage.
Medicare Supplement Policy
148
The act of making, issuing, or circulating estimates, illustrations, or statements that do not represent the correct policy terms, dividends, or share of surplus or the name or title for any policy that does not in fact reflect its true nature.
Misrepresentation
149
A provision that allows the insurer to adjust the benefit payable to what the amount would have been had the applicant give to their correct age and/or sex.
Misstatement of Age or Sex Provision.
150
A life insurance policy under which the amount a policy owner pays in during the first years exceeds the sum of net level premiums that would have been payable to provide paid-up future benefits in seven years.
Modified Endowment Contract (MEC)
151
A whole life policy with a premium during the first few years that is only slightly larger than the rate for term insurance. Afterwards the introductory rate, the premium is higher for the remainder of life than the premium for ordinary life but still lower than the rate at the attained age at the time of charge.
Modified Whole Life Insurance
152
The relative incidence of disability due to sickness or accident within a given group.
Morbidity
153
The relative incidence of death within a given group.
Mortality
154
Several small groups of individuals that need life and health insurance but do not qualify for true group insurance who band together under state trust laws to purchase insurance at more favorable rates.
Multiple Employer Trust (MET)
155
A network of employers similar to MET, however, with this group of employers the employers pool their risks and self-ensure.
Multiple Employer Welfare Arrangement (MEWA)
156
An insurance company characterized by having no capital stock and is owned by its policy owners, usually issuing participating insurance.
Mutual Insurer
157
A method for determining how much insurance coverage a person should have by analyzing a family’s or business’ needs and objectives should the insured die, become disabled, or retire.
Needs Approach
