AMF Group Insurance flashcards

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

Master Contract

The single group policy issued to the employer, association, or trustee that governs all insureds; individuals receive certificates summarizing their rights and benefits under it.

Active-at-Work Provision

A rule requiring an employee to be actively working on the day coverage would begin; otherwise coverage is delayed until the employee returns to active employment.

Experience Rating

A premium-setting method that uses the group's own past claims and expense history, adjusted for credibility, rather than pooled community rates.

Grace Period

A period after the premium due date, commonly 31 days, during which coverage remains in force; the premium is still owed and nonpayment can terminate coverage retroactively.

Incontestability Clause

A provision limiting the insurer's right to contest coverage for misstatement after a stated period, typically two years, except for nonpayment of premium.

Conversion Privilege

The right to convert terminating group coverage to an individual policy without evidence of insurability, usually within 31 days, at rates based on attained age.

Misstatement of Age Adjustment

When an insured's age or sex was misstated, the insurer recalculates benefits or premiums to the amount the correct information would have purchased.

Certificate of Coverage

The document furnished to each insured describing the group policy's benefits, eligibility, exclusions, and claims procedures; it is not the master contract itself.

Group Term Life

Employer-provided life coverage for a stated term with no cash value, typically paying a benefit equal to a multiple of salary or a flat amount.

Schedule of Benefits

The table in a group life policy stating the death benefit for each class of insureds, often based on earnings, job class, or a flat amount with a maximum cap.

Accidental Death and Dismemberment

Group coverage paying an additional principal sum for accidental death and a stated percentage of that sum for losses such as a limb or sight.

Imputed Income

Taxable income attributed to an employee for employer-paid group term life coverage exceeding $50,000 of death benefit, valued using IRS Table I rates.

Dependent Group Life

Coverage for an employee's spouse and dependent children, usually in flat amounts smaller than the employee's benefit, ending when the employee's coverage ends.

Contributory Plan

A group plan in which employees share the premium cost; participation requirements, such as a minimum percentage of eligible employees, must be satisfied.

Group Universal Life

A permanent group product combining term insurance with a cash-value account that accumulates interest and may be funded through payroll contributions.

Survivor Income Benefit

An optional group life feature that pays a monthly income to a surviving beneficiary for a stated period instead of, or in addition to, a lump sum.

Elimination Period

A time deductible measured from the onset of disability during which no benefit is paid; longer periods reduce premium and are common in long-term disability plans.

Own Occupation Definition

A disability standard that applies during an initial period, often 24 months, and pays benefits when the insured cannot perform the duties of their own job.

Any Occupation Definition

A stricter disability standard applying after the own-occupation period, requiring inability to perform any job for which the insured is reasonably fitted.

Residual Disability Benefit

A partial benefit paid when a disabled insured returns to work at reduced hours or earnings, usually proportional to the loss of income.

Coordination of Benefits

Rules determining which plan pays first when a person is covered by two group health plans, preventing total payments from exceeding the actual expense.

Coinsurance

The percentage of covered expenses shared between plan and participant after the deductible, such as the plan paying 80% and the participant 20%.

Out-of-Pocket Maximum

The annual limit on covered cost-sharing a participant pays before the plan pays 100% of covered expenses for the remainder of the year.

Disability Benefit Offset

A reduction of group disability benefits by amounts received from Social Security, workers' compensation, or other income sources to limit total replacement of earnings.

Waiting Period

The time a newly hired employee must wait after the hire date before becoming eligible to enroll in the group plan.

Cafeteria Plan

A flexible benefits arrangement under Section 125 allowing employees to choose among benefits and pay their share with pre-tax dollars.

Self-Funded Plan

An arrangement in which the employer pays claims directly rather than buying insurance, often purchasing stop-loss coverage to cap catastrophic claim exposure.

Summary Plan Description

An ERISA-required plain-language document explaining plan eligibility, benefits, exclusions, and claims procedures to participants and beneficiaries.

ERISA Fiduciary Duty

The obligation to act solely in the interest of plan participants, follow plan documents, and manage plan assets prudently; prohibited transactions are barred.

COBRA Continuation

A federal right for qualified beneficiaries of employers with 20 or more employees to continue group health coverage, generally 18 months, paying up to 102% of premium.

HIPAA Privacy Rule

Standards protecting individually identifiable health information, requiring safeguards, minimum necessary use, and authorization for most non-treatment disclosures.

Twisting

An unfair trade practice of inducing a policyholder to lapse or replace coverage through misrepresentation or incomplete comparison of policies.