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Flashcards in Glossary Deck (197):
1

Accelerated benefits

Riders attached to policies to allow benefits to use nursing or convalescent home expenses

2

Accidental death benefits

Any death will be analyzed to see if it fits requiremebts

3

Accidental death insurance

Policy that provides if death is an accident

4

Accumulation period

Time before retirement where payments are being made to the policy

5

Actual cash value (acv)

Required amount to pay for property loss.

6

Adhesion

Take it or leave it offer on contacts

7

Adjustable life

Insurance allowing change in: face amount, premium amount, period of protection, and duration of premium payment period

8

Adjuster

Rep of insurance company acting in behalf of company

9

Administrator

Person appointed by court to settle affairs after someone dies

10

Admitted or authorized insurer

An insurance company licensed to transact business in a particular state

11

Adverse selection

Tenancy of someone to get insured who lives a high risk life style

12

Agency

Insurance office or company

13

Agent

Individual licensed to negotiate contacts fit the insurer

14

Agent appointment

Authorization of an agent to represent an insurer

15

Agents authority

Powers granted to agent by their agency contract

16

Aleotory

Contract where participating parties exchange unequal amounts

17

Alien insurer

Where the company is not in the United States

18

Annual statement

Financial report submitted by insurance company every year to department of states where they are based out of

19

Annuity

A contract that provides income for life or specified years

20

Apparent authority

Authority based on actions and looks

21

Applicant

Applying to be insured under a contract

22

Application

Document that provides info for underwriting purpose

23

Assignment

The transfer of ownership rights of a policy

24

Attained age

Age of insured at determined date

25

Attending physician statement (aps)

Statement obtained from applicants doctor

26

Avoidance

Dealing with risk by avoiding it

27

Basic illustration

Ledger in sale of the policy shows guaranteed and nonguaranteed elements

28

Beneficiary

Receives proceeds after policy owner dies

29

Birthday rule

Primary coverage goes to the holder who's bday comes first on a calendar year

30

Broker

Represents insured when negotiating a contract

31

Buy-sell agreement

Determines what will be done if a buisness owner dies

32

Buyers guide

Booklet that describes policies and concepts to help an applicant make an informed decision

33

Cash value

Amount policy owner is entitled to if the policy is surrendered before maturity

34

Certificate

A statement a policy has been written and describes the general coverage

35

Certificate of authority

Authorizes the kinds of contracts a company can transact

36

Certificate of insurance

States a legal policy had been issued and the amounts and type of insurance

37

Claim

Request a payment of benefits

38

Coercion

An unfair practice where the agent uses physical or mental force to get am applicant to purchase insurance

39

Coinsurance clause

The insurer add insured will share the losses of the policy with a previous proportion agreed on in advance

40

Commingling

Where an agent co mixes their funds with the insureds funds

41

Commission

Payment made by insurers to agent or broker fire a sale

42

Commissioner

Chief executive or administrative

43

Concealment

The withholding of known facts that if material can void a contract

44

Conditional contract

Contract where both parties must perform duties and follow rules

45

Consideration

Binding force in contract that requires something of value to be exchanged four the transfer of risk

46

Consumer report

Statement regarding consumers credit, character, reputation or habits

47

Contributory

A group insurance plan requires employees to pay party of the premium

48

Controlled buisness

License to just write for that buisness, immediate family, relatives, employer or employee

49

Convertible

A policy that can be changed for another policy of the policy owner wants to

50

Countersignature

Signing an insurance policy by a licensed agent

51

Coverage

Ploicy that includes causes and loss

52

Credit life insurance

Coverage to pay off a balance or loan in event of death

53

Death benefit

Amount payable upon death of the insured

54

Decreasing term

Insurance with a level premium and death benefit that decreases over duration of the policy

55

Defamation

Unfair practice where statements are made to hurt another's reputation

56

Dependant

Person relying on someone else for support

57

Director

Executive or administrative

58

Disclosure

Identifying the name of a rep

59

Domestic insurer

Conducts company in the state of the incorporation

60

Domicile of insurer

Legal ability to write buisness in a state

61

Earned premium

Premium amount the policy protection has been given

62

Effective date

Date when the insurance policy begins

63

Employee retirement income security act (erisa)

Stipulates federal standards for private pension plans

64

Endorsement

Changing a rider to their own insurance plan

65

Endow

Time when the face amount equals the cash value

66

Estoppel

Something contrary to a previously implied action

67

Excess insurance

Pays in addition to basic policy limits

68

Exclusions

Causes of loss in policy that benefits will not cover

69

Expiration

Date in policy as date of termination

70

Express authority

Authority to agent in contract

71

Extension of benefits

Continue beyond termination date when not in work because of disability. Only good until they're back in work

72

Face

First page of a policy

73

Fair credit report act

Agents must follow these proceedures to ensure confidentiality

74

Fiduciary

Agent who handles funds in a trust

75

Fixed annuity

Offers fixed payments and minimum interest to be credited

76

Flexible premium

Allows policy holder to vary premium payments

77

Foreign insurer

Insurance company incorporated in a different state

78

Fraternal benefit societies

Non profit organizations offering insurance

79

Fraud

Misrepresentation to get someone to part with something of value

80

Free look

Time period to see if new policy is good

81

Grace period

Time period after due dates that premium can still be paid

82

Group life

Insurance to members of a group

83

Hazard

Circumstance increasing the likelihood of loss

84

Moral hazard

Reputation ous on the line ie lying on part paperwork

85

Morale hazard

When someone is careless about risk

86

Physical hazard

A condition they are born with

87

Implied authority

Authority granted but not written

88

Indemnify

Restore insured to same condition prior to loss, no gain

89

Insolvent organization

When you can't pay your side of the contract so the court liquidates you

90

Insurability

The acceptability of the applicant

91

Insurable interest

Possibility of loosing something of value if insured should die

92

Insurance

A contract where one side promises protection of loss and the other side promises premium payments

93

Insured

Person protected by insurance

94

Insurer

Company protecting loss

95

Insuring clause

Agreement between the insured and insurer

96

Intentional injury

Not covered by accidental insurance

97

Investigative consumer reports

Consumer report that includes info on the consumers habits and reputation

98

Issue age

Age of individual when policy is issued

99

Joint life

Single policy to cover 2 or more lives

100

Juvenile life

Insurance for life of a minor

101

Lapse

Terminating policy because premium wasn't paid before the grace period ended

102

Law of large numbers

Principle saying the greater amount of similar exposures the more accurate the probability of loss will be

103

Level premium

Premium stays the same over time

104

Life expectancy

Average amount of time someone is expected to live

105

Life settlement

Policy owners can sell existing life insurance to 3rd party for compensation

106

Limited pay whole life

Premiums for coverage will be completely paid before 100

107

Liquidation

Selling assets to raise capitol

108

Living benefits rider

Rider attached to insurance that provides LTC benefits for terminally ill

109

Lloyds associations

Provides underwriters for groups or individuals that accept risk

110

Loan value

Amount of money you can borrow using policy as collateral

111

Loss

The reduction of value the policy is insured against

112

Lump sum

Putting payments in 1 upfront group targe6t than spread out

113

Market value adjusted annuity

Single premium that allows the policy owner to lock in an interest rate

114

Maturity date

When face amount of life insurance becomes payable

115

Medical information bureau (mib)

Database storing medical histories

116

Misrepresentation

False statement rendering in contract void

117

Mode of payment

Method of payment times
Annually
Semi anual
Quarterly
Monthly

118

Mortality table

Shows probability of death at each age

119

Mutual companies

Insurance organization with no capital just policy holders

120

Nonadmitted/ nonauthorized

Been denied certificate of authority and may not transact insurance on a particular state

121

Noncancellable

Insurance company can't cancel, can't raise premium, can't reduce benefits

122

Non forfeiture values

Guaranteed life values that cannot be taken from insured even if they stop paying premium

123

Nonmedical

Policy written based on health and not a medical exam

124

Nonpartisipating policies (non-par)

Insurance that doesn't pay dividends

125

Nonqualified plan

Plans: discriminate, isn't required to be filled by irs, doesn't provide tax deductions or contributions

126

Nonrenewal

Termination of a policy by insurer on renewal date

127

Nonresident agent

Licensed in state you dont reside in

128

Option

Ways to recieve: policy dividends, nonforeiture values, death benefits, or cash value

129

Overinsurance

Excessive amount of insurance that would result in overpayment to the insured in result of loss

130

Paid up insurance

All premiums have been paid but haven't matured due to death or endowment

131

Participating policies (par)

Insurance pays dividends to policy holders

132

Payor benefits

Insurance for minor, they waive premium if the payer is disabled or dead before minor is 18

133

Peril

Cause of loss

134

Permanent life insurance

Whole life insurance goes to age 100 as long as premium is paid

135

Persistency

Likelihood of insurance not lapsing

136

Physical exam and autopsy

Insurer pays for instead to be physically examined

137

Policy loan

Insurer loans part or all of cash value of policy to the policy holder

138

Policyholder

Person with possession of policy

139

Policyowner

Entitled to exercise policy rights and privileges

140

Preferred Risk

Lower expectation of loss so they are covered at reduced rate

141

Premium

Payment to insurance to keep policy in force

142

Primary beneficiary

They get first benefits from a policy

143

Primary policy

Main policy that pays with respect to other policies

144

Principal amount

Full face value of policy

145

Private insurance

Nongovernmental insuring organizations

146

Pro rata cancellation

Termination of a policy with a change in premium charge and coverage

147

Proceeds

Amount payable to company when insured dies or policy matures

148

Producer

Insurance agent or broker

149

Pure protection

Premiums are paid for perfection in event of death or disability

150

Qualified plan

Retirement plan that meets irs guidelines

151

Rate service organization

Group of investors together to file rates on behalf of members

152

Rebating

Inducement in sale of insurance not specified in policy

153

Reciprocal exchange

Group of unincorporated individuals who insure eachother, each assume a fraction of the risk

154

Reciprocity

2 parties provide same advantages to each other

155

Reduction

Lessening the possibility of wash

156

Reinsurance

One insurance company agrees to indemnify another insurance company

157

Renewability clause

Defends both sides of contract for the right to cancel or renew

158

Representations

Statements by applicant on application that are assumed true but may not be

159

Rescission

Termination of insurance by material misrepresentation, fraud, or duress by agent

160

Retention

Method of dealing with risk, by keeping a portion of money in insureds account

161

Rider

Agreement expanding a coverage or condition

162

Risk

Unknown out come of event because mite than one variables are in play

163

Pure risk

Situation where loss is the only outcome

164

Risk retention group

Group insurance from similar exposure

165

Speculative risk

Outcome could result in loss or gain

166

Standard risk

Average probability of risk

167

Substandard risk

Higher than normal risk level

168

Rollover

Taking money from 1 qualified plan to put into another qualified plan

169

Secondary beneficiary

Gets death benefits if primary is not alive to receive it

170

Settlement options

Choices to insured for insurance proceeds

171

Sharing

Method of dealing with risk, for people in same exposure

172

Single premium whole life (spwl)

Insurance ploicy made by lump sum that goes until age 100

173

Spendthrift clause

Prevents debtors from collecting debt until after after beneficiary receives them

174

Standard provisions

State requirements that must be in all policies

175

Stock companies

Stock holders companies that allow the capital necessary to operate insurance

176

Straight life

Level premium ploicy with a guaranteed death benefit

177

Superintendent

Head of state department

178

Surrender

Giving up policy to receive cash value from the insurer

179

Term insurance

Provides perfection for a specific time period

180

Terminally III

someone expected to die in a short time due to illness or sickness

181

Total disability

Someone who can't make an income due to injury or sickness

182

Transfer

Financial most is against another party

183

Twisting

Getting a policy owner to change policy even if it's at their disadvantage

184

Underwriter

Evaluates and classifies risk to accept or reject them on behalf of the insurer

185

Underwriting

Reviewing applications to accept or reject

186

Unearned premium

Portion of premium for which protection had yet to be given

187

Unilateral contract

Binds only one side of the contract to obligations after premium is paid

188

Universal life

Cash account invested in general fund of insurance company

189

Utmost good faith

Insurer must disclose all contract info and insured must disclose all risk factors

190

Valued contract

Pays statement amount in event of loss

191

Waiting period

Time between beginning of disability and start of disability

192

Waiver

Voluntary abandonment of a legal right

193

Waiver of cost

Disability rider that waives cost of insurance but not cost of premium

194

Waiver of premium

Still have coverage even if insured becomes totally disabled

195

Warranty

Material stipulation, if breached will void coverage

196

Whole life insurance

Kept in force for whole life and pays benefit when insured dies

197

Face amount

Death benefit