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Insurance Exam > Vocab > Flashcards

Vocab Flashcards

(70 cards)

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1
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Adverse Selection

A

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

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2
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

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

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Applicant

A

a person applying for insurance

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4
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Beneficiary

A

person who receives the benefits of an insurance policy

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5
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Death benefit

A

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

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6
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

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

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Insurance policy

A

a contract between a policy owner (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

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Insured

A

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

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9
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Insurer (principal)

A

the company who issues an insurance policy

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10
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Lapse

A

policy termination due to nonpayment of premium

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11
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Life insurance

A

coverage on human lives

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12
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Policy owner

A

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

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13
Q

COMPLETING THE APPLICATION, UNDERWRITING, AND DELIVERING THE POLICY

Premium

A

the money paid to the insurance company for the insurance policy

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14
Q

Attained age

A

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

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15
Q

Cash value

A

a policy’s savings element or living benefit

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16
Q

Face amount

A

the amount of benefit stated in the life insurance policy

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17
Q

Deferred

A

withheld or postponed until a specified time or event in the future

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18
Q

Endow

A

the cash value of a whole life policy has reached the contractual face amount

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19
Q

Level premium

A

the premium that does not change throughout the life of a policy

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20
Q

Liquidation of an estate

A

converting a person’s net worth into a cash flow

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21
Q

Nonforfeiture values

A

benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses

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22
Q

Policy matruity

A

in life policies, the time when the face value is paid out

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23
Q

Securities

A

financial instruments that may trade for value (for example, stocks, bonds, options)

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24
Q

Activities of daily living (ADLs)

A

a person’s essential activities that include bathing, dressing, eating, transferring, toileting, continence

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25
Assignment
transfer of rights of policy ownership
26
Consideration
something of value that each party gives to the other (binding force in any contract)
27
Indemnity
a principle of reimbursement on which insurance is based; in the event of a loss, an insurer reimburses the insureds or beneficiaries for the loss
28
Lump sum
payment of the entire benefit in one sum
29
Minor
a person under legal age
30
NAIC
National Association of Insurance Commissioners, an organization composed of insurance Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues
31
Principal
the face value of the policy; the original amount invested before the earnings
32
Earned income
salary, wages, or commissions; but not income from investments, unemployment benefits, and similar sources of income
33
FIFO (First In, First Out)
principle under which it is assumed that the funds paid into the policy first will be paid out first
34
Gross income
a person's income before taxes or other deductions
35
LIFO (Last In, First Out)
principle applied to asset management in life insurance products, under which it is assumed that the funds paid into the policy last will be paid out first
36
Nonprofit organization
an organization that uses its surplus to fulfill its purpose instead of distributing the surplus to its owners or members
37
Policy endowment
maturity date
38
Pretax contribution
contribution made before federal and/or state taxes are deducted from earnings
39
Rollover
withdrawal of the money from one qualified plan and placing it into another plan
40
Surrender
early termination of a policy by the policy owner
41
Vesting
the right of a participant in a retirement plan to retain part or all of the benefits
42
Tax deductible
a reduction of taxable income , resulting in lower tax liability
43
Taxable
subject to taxation, payable to state and federal government
44
Tax deferred
taxes on investments or gains (such as interest or dividends) are paid at a future date instead of in the period in which they are incurred tax
45
Aggregate
combined total
46
Authorized insurer
insurer who has received a Certificate of Authority from the department of insurance to transact insurance in this state
47
Business entity
a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity
48
Cease and desist
to stop or discontinue
49
Commission
payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
50
Commissioner
the head of the Division of Insurance
51
Disclosure
revealed information to help someone make an intelligent and educated decision
52
Exempt
not subject to an obligation
53
Immunity
exemption from a duty or legal obligation, or protection against a liability
54
Inducement
an offer that attempts to influence the other party
55
Moral turpitude
conduct that is contrary to community standards of justice, honesty, or good morals
56
Promulgate
to make public, to put into action (e.g. laws, court decrees, and similar)
57
Solvency
ability to meet financial obligations
58
Statute
a formal written law enacted by legislature; insurance statutes can be found in the state Insurance Code
59
Subpoena
an order for someone to appear as a witness or submit testimony or evidence
60
Compliance
meeting official requirements
61
Creditor/Lender
an entity that extends credit by giving another party permission to borrow money intended to be repaid in the future
62
Debtor
a borrower of funds, someone who owes money to the creditor or lender
63
Disclosure
revealed information to help someone make an intelligent and educated decision
64
Endowment contract
type of whole life insurance that matures early (before insured’s age 100)
65
ERISA
Employee Retirement Income Security Act: defines federal standards for private pension plans
66
Illustrations
presentation or depiction of nonguaranteed elements of a life insurance policy
67
Nonguaranteed elements
policy components that are not guaranteed in the contract or that may fluctuate (e.g. dividends, interest)
68
Policy proceeds
in life insurance, the death benefit
69
Reciprocity (reciprocal)
a mutual interchange or rights and/or privileges
70
Suitability
a requirement to determine if an insurance product or an investment is appropriate for a particular customer

Insurance Exam (1 decks)

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