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Vocab Flashcards

(105 cards)

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1
Q

Group contract

A

between an insurer and the employer

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2
Q

Keogh plan

A

a retirement plan for those who are self employed

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3
Q

Illustration

A

a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years

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4
Q

Equity indexed annuity

A

has a fixed minimum interest rate and the chance to get a higher rate of return like that of the stock market

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5
Q

Joint life policy

A

covers multiple lives and pays out when the first insurer dies

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6
Q

Exclusion ratio

A

the formula used to determine the amount of annuity distribution which is taxable

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7
Q

Coordination of benefits

A

a provision which would prevent a family from collecting for the same loss twice in a group plan

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8
Q

Profile sharing plan

A

a plan that gives employees a share in the profits of the company
- each EE receives a percentage of those profits based on the company’s earnings

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9
Q

Speculative risk

A

a risk situation that includes a chance of loss and a potential for gain
- speculative risks are non-insurable

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10
Q

Premium

A

the amount that the insured pays the insurer for the coverage period

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11
Q

The Law of Numbers

A

states the more similar risks the insurance company combines together the better they can guess approximately how many losses they will have in a given time period

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12
Q

The Doctrine of Utmost Good Faith

A

allows each party to rely on the representations made by the other party

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13
Q

Tax Sheltered Annuity (TSA or 403-B)

A

a qualified plan created for public school EEs and non-profits

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14
Q

Respite care

A

if a daughter needs a break from caring for her father her father may have coverage in his Long Term Care policy that would pay for a caregiver to come in to give her a break

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15
Q

Hospice care

A

an individual who needs terminal ill care would find this coverage provided in their Long Term Care policy

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16
Q

COBRA

A

The Consolidated Omnibus Reconciliation Act
- requires groups with 20+ EEs to offer a health insurance continuation to EEs and DEPs who become ineligible for coverage due to a QLE

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17
Q

Elimination period

A

the waiting period included in disability income policies

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18
Q

Waiting period

A

the period of time (30, 60, 90, 180 days) the insured is not eligible for benefits once they become disabled

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19
Q

Implied authority

A

an EE working for “x” insurance company doing things necessary to transact insurance that are not specified in his contract

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20
Q

ERISA

A

The Employees Retirement Income Security Act

- states that fiduciary pension plans were created for the benefit of plan participants and beneficiaries

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21
Q

Vesting

A

ownership of employer contributions

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22
Q

Foreign insurer

A

ex. an insurance company based in Utah that is selling in CA

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23
Q

Solvent insurer

A

an insurance company that has enough reserves to pay for all its liabilities

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24
Q

State insurance guarantee fund

A

provides protection to policyholders whose insurer becomes insolvent (financially impaired)
- fund only covers member insurers (licensed insurance companies)

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25
Primary insurer (ceding insurer)
the insurance company that purchases REINSURANCE
26
Waiver of premium rider
will be waive the insured's premium if the insured becomes disabled
27
Disability income rider
when added to a life policy - will pay a replacement of the insured's lost income if they become disabled
28
Accidental death benefit rider
pays double the face amount if the insured dies in an accident - also known as double indemnity
29
Extended term
a non-forteiture option that provides a new term life insurance policy with the same face amount of coverage as the original policy - not a settlement option
30
Conversion feature
allows an EE to go from group coverage to an individual policy
31
Family policy
provides life insurance for an entire family and allows the children to convert from term to whole life coverage without a physical exam
32
Hospital confinement policy
pays a set amount per day if the insured is confined in the hospital
33
Corridor deductible
applies in a major medical policy between the basic and excess coverage
34
Major medical policies
include a deductible, coinsurance, and a stop loss | - first dollar coverage is NOT a feature
35
Capitation fee
a 'per head' fee that is paid to doctors that treat subscribers of HMOs - not a feature of Major medical
36
Stop loss
the maximum the insured would have to pay of the coinsurance
37
Coinsurance
a feature of major medical insurance - a sharing of the loss after the deductible has been satisfied - usually expressed as a percentage sharing of the loss between the insurer and the insured, with the insurer paying the larger percentage (i.e. 90/10)
38
Co-payment
are included in HMO and PPO plans and are a fixed amount the subscriber must pay when they go to the doctor
39
Gatekeeper
a.k.a PCP - cannot be a specialist, they must be a general practice doctor
40
Open enrollment period
the time where an EE can enroll without any restrictions
41
Non-contributory group plan
a group contract where the ER pays 100% of the premium
42
Multiple employer trust
a trust that small employers join to purchase health insurance
43
Medicare part C
does NOT cover prescription drugs
44
Medicare part D
covers prescription drugs
45
Medicare part A
provides coverage for hospital services and is free for those eligible once they reach age 65
46
Medicare part B
optional; if an eligible individual enrolls they must pay a monthly premium for the coverage - provides coverage for doctor services
47
Specified disease policy
policy that covers only certain dread diseases such as cancer insurance
48
Preferred risks
receive the lowest premium charges as they pose the lowest risk to the insurer
49
Insurance binder
always creates immediate coverage | - the main difference between a binder and a conditional receipt
50
Incontestability clause
states that after a life insurance policy has been in effect for 2 years, it becomes totally incontestable - very restrictive for the insurer and prevents them from contesting a claim for any reason after 2 years
51
Replacement
when you replace your customer's current policy with a new one and is NOT illegal - cannot be a worse policy or higher premium
52
Captive insurer
an insurer created by a corporation to insure its own risks
53
Occupational disability income policy
provides coverage on and off the job
54
Workers compensation policy
law requires the employer to be responsible for employee injury on the job regardless of fault
55
Entire contract clause
states the application is part of the contract if attached when issued
56
Deductible
payed by the insured | - the higher the deductible, the lower the premium
57
Absolute assignment
a permanent transfer of ownership rights
58
Alien insurer
an insurance company that is based in Canada and doing business in CA
59
Doctrine of utmost good faith
states that all parties to the contract can rely upon the statement of the other party
60
Concealment
when party fails to communicate that which a party knows, and ought to communicate, so that the other party may make a sound decision
61
Key person life insurance
used by a business to protect themselves in case a valued employee dies - the death benefit would be paid to the company to hire and train a replacement
62
Contributory group policy
the premium is shared between the employer and employee | - the employee contributes toward the premiums
63
Underwriting division
selects which risks the insurer will take on
64
Morbidity table
contains statistical data relating to the probability of a sickness or disability occurring
65
Probationary period
a period of time that excludes coverage for prior medical conditions that begins when a health insurance policy is brand new - also known as pre-existing condition exclusion
66
"Nolo contendere"
latin for no contest | - under the CIC if an applicant enters a plea of 'nolo contendere' they will be convicted
67
Spendthrift clause
protects the policy proceeds from the creditors of the beneficiary - will not apply if the proceeds are paid out in a lump sum
68
Domestic insurer
an insurer organized in CA and selling in CA
69
ERISA
the Federal Law that is designed to protect group plan participants, establish pension equality and mandate strict reporting and discloser requirements - will also protect their beneficiaries
70
HMOs and PPOs
referred to as service providers since the doctors and hospitals get paid directly for those services provided
71
Miscellaneous insurance
ex. a movie company that is concerned about the financial loss they would incur in case of the illness of one of their staring actors
72
HICAP
Health Insurance Counseling and Advocacy Program - provides free counseling to seniors on health insurance related issues - does NOT sell insurance
73
Insurance policy
the written instrument in which the insurance contract is set forth
74
Defined contribution plan
a plan in which employers make specific contributions to an EE's retirement account
75
Demutualization
the process whereby a mutual insurer becomes a stock company
76
Loss exposure
any situation that presents the possibility of a loss
77
Rate
the cost per exposure unit
78
Non-guaranteed elements
life insurance illustrations showing premiums, values , credits or charges that are not determined at issue
79
Stock insurer
an insurance company which is owned by individuals who purchase shares of stock in the company, share in profits in proportion to shares owned, and vote for a board of director
80
Misstatement of age provision
if the insured lies about their age in order to obtain a lower premium, at death the insurer will pay less than the face amoutn
81
Automatic premium loan
a rider that can be added to a cash value life insurance policy n case the insured forgets to pay their premium - takes effect at the end of the grace period
82
Binding receipt
provides a limited amount of coverage right away
83
Conditional receipt
there is no coverage under a conditional receipt until all conditions are satisfied
84
ROTH IRA
has both non-deductible contributions and non-taxable distributions
85
Defined contribution
a qualified plan where the employer contributes a specified amount
86
Annual renewable term life insurance
has a level face amount, but an increasing premiums
87
Family life insurance policy
consists of whole life on one spouse and level, convertible term on the other spouse and children
88
Whole life insurance
also known as "continuous premium" whole life insurance
89
Variable life
a life insurance policy that allows the policy owner to "self-direct" cash values into different sub-accounts
90
Guaranteed insurability rider
allows the insured to adjust benefits upwards at specified future option dates
91
Indexed whole life policy
the rate of return paid on the cash value of this policy will keep up with the rate of inflation
92
Variable annuity
if you need to multiply the value of an accumulation unit by the number of units owned in the separate account, you have a variable annuity
93
Premium
the amount that is exchanged for coverage
94
Hazard
something that increases the risk
95
Executed
a policy is considered to be "executed" when coverage is bound
96
Guaranteed renewal health insurance policies
must offer renewal and cannot change in any way, EXCEPT rates by "class" only
97
Promise
a representation as to the future, unless it is merely a statement of an expectation or belief
98
"Stop-loss" feature
on a major medical expense policy, a "stop-loss" feature limits out-of-pocket expenses
99
Extended term
a life insurance non-forfeiture provision, not a rider or settlement option
100
Social security offset rider
on a disability income policy, this rider will pay the difference between what social security pays and the insured's actual loss of earned income
101
Principle of indemnity
most closely associated with insurable interest
102
"Prohibited" person
a person whose activities affect interstate commerce and who knowingly, with the intent to deceive, makes any false material statement of financial report to any insurance regulator for the purpose of influencing their actions
103
Family and Medical Leave Act
provides certain EEs with up to 12 weeks of unpaid, job-protected leave per year for the birth and care of a newborn child, the adoption of a child, to care for an immediate family member (CH, parent, SP) with a serious health condition; or to take medical leave when the employee is unable to work due to a serious health condition
104
Mutual insurer
owned soley by its policyholders
105
Mortality table
- contains statistical data related to the probability of death

Insurance Exam (2 decks)

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