Alaska Life & Health flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Alaska producer CE requirement

Alaska producers must complete 24 continuing education hours every two years, including at least 3 hours of ethics, before renewing a license.

Alaska guaranty association limits

Covers up to $300,000 in life death benefits, $100,000 in life cash surrender value, and $250,000 in annuity present value per insured per member insurer.

Fiduciary duty of producers

Premiums and funds collected on an insurer's behalf are held in trust and may not be commingled with a producer's personal or business funds.

Pure risk

A risk involving only the chance of loss or no loss, with no possibility of gain; only pure risks are insurable.

Law of large numbers

As the number of similar exposure units increases, actual losses approach predicted losses, allowing insurers to set more accurate premiums.

Aleatory contract

An insurance contract in which the amounts exchanged by the parties are unequal and depend on the occurrence of an uncertain event.

Insurable interest timing

Insurable interest must exist at the time the life insurance policy is applied for or issued, not at the time of the insured's death.

Conditional receipt

Coverage begins on the date of the completed application and premium only if the proposed insured satisfies the insurer's underwriting requirements.

Per stirpes distribution

A beneficiary designation that divides a deceased beneficiary's share among that beneficiary's descendants, rather than equally among surviving named beneficiaries.

Universal life Option A

A level death benefit option in which the pure insurance amount decreases as cash value grows, keeping cost of insurance charges lower.

Convertible term

A term policy feature allowing conversion to permanent coverage without evidence of insurability, usually before a stated age or policy year.

Variable life separate account

Cash values are invested in a separate account; the policyowner bears investment risk and the producer needs a securities registration.

Incontestability clause

After the policy has been in force two years, the insurer cannot contest it for misstatements on the application, except for nonpayment of premium.

Extended term option

A nonforfeiture option that uses the policy's cash value to purchase term insurance for the full face amount for a limited period.

Automatic premium loan

A provision that uses available cash value to pay an overdue premium at the end of the grace period, preventing the policy from lapsing.

Exclusion ratio

The portion of each annuity payment that is a tax-free return of the owner's investment, computed as investment in the contract divided by expected return.

Joint and survivor annuity

A payout covering two annuitants that continues after the first dies, often at a reduced amount, until the second annuitant dies.

Modified endowment contract

A life policy that fails the 7-pay test; withdrawals and loans are taxed income first and may incur a 10% penalty before age 59½.

Transfer for value rule

When a life policy is sold for valuable consideration, death proceeds become taxable to the buyer, except for transfers to the insured, a partner, or a partnership.

Executive bonus plan

An arrangement where the employer pays premiums on a life policy owned by the employee; the premium is deductible to the employer and taxable income to the employee.

Group conversion privilege

A terminating group member may convert to an individual policy without evidence of insurability, typically within 31 days after group coverage ends.

Contributory group plan

A group plan in which employees pay part of the premium; usually at least 75% of eligible employees must participate.

Coordination of benefits

Rules determining which of two health plans pays first to prevent duplicate payment; the birthday rule applies to dependent children.

Health maintenance organization

A prepaid managed care plan providing services through a network with a primary care gatekeeper and fixed copayments.

ACA metal tiers

Bronze, Silver, Gold, and Platinum plans cover roughly 60%, 70%, 80%, and 90% of allowed costs respectively.

Own occupation disability

A definition that pays benefits when the insured cannot perform the duties of their own specific occupation, regardless of ability to work elsewhere.

Elimination period

The waiting period after a disability or long-term care event begins before benefits are payable, functioning like a deductible measured in time.

LTC benefit trigger

Tax-qualified long-term care benefits begin when the insured cannot perform 2 of 6 activities of daily living for 90 days or has severe cognitive impairment.

Medicare Part B

Voluntary medical insurance covering physician services, outpatient care, and durable medical equipment; it requires a monthly premium.

COBRA continuation

Federal law letting employees of employers with 20 or more workers continue group health coverage for 18, 29, or 36 months at their own cost.

Minimum loss ratio

An ACA rule requiring insurers to spend at least 80% (individual and small group) or 85% (large group) of premiums on medical care or refund the difference.

Conditional receipt timing

Coverage under a conditional receipt is effective only if the insurer would have approved the application as submitted, not merely because premium was paid.

Group term imputed income

The value of employer-paid group term life insurance exceeding $50,000, calculated using IRS Table I rates and reported as taxable wages.