CISR Life & Health flashcards

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

Insurable interest

A financial or relationship-based stake that justifies buying insurance on a life. It must exist at policy issue, and its absence can make the contract void.

Policyowner rights

The owner controls the policy: naming and changing beneficiaries, surrendering, taking loans, assigning ownership, and receiving dividends or cash value. The insured need not be the owner.

Mortality table

A statistical table showing the probability of death at each age for a defined population. Insurers use it to calculate mortality cost and price life insurance premiums.

Field underwriting

The agent's role in risk selection: gathering accurate application information, reporting known material facts, collecting the initial premium, and delivering the policy properly.

Fiduciary responsibility

A duty to hold premiums and policyholder funds in trust for the insurer and to act in the insurer's and client's best interest. Commingling funds is prohibited.

Material misrepresentation

A false or misleading statement on an application that would have changed the insurer's decision to issue coverage or set the premium. It can void the policy.

Level term insurance

Term coverage with a face amount and premium that stay fixed for the stated period. It builds no cash value and pays only if death occurs during the term.

Renewable term

A term policy feature allowing continuation at the end of the term without new evidence of insurability. Premiums increase with age because mortality cost rises.

Convertible term

A right to exchange term coverage for a permanent policy without proving insurability. The privilege usually has a deadline and a maximum conversion age.

Whole life insurance

Permanent coverage with level premiums, guaranteed cash value, and a guaranteed death benefit. Premiums are typically paid for life or to a stated age.

Universal life insurance

Permanent, interest-sensitive coverage separating cash value from cost of insurance. Premiums are flexible, but inadequate funding can cause the policy to lapse.

Variable life insurance

Permanent coverage whose cash value is invested in separate-account subaccounts chosen by the owner. The owner bears investment risk and needs a securities license to sell it.

Decreasing term

Term coverage whose face amount declines on a schedule while the premium remains level. It suits debts that shrink over time, such as a mortgage.

Contingent beneficiary

The person or entity paid the death benefit only if no primary beneficiary is living at the insured's death. Naming one avoids probate delays.

Per stirpes distribution

A beneficiary distribution method in which a deceased beneficiary's share passes to that beneficiary's descendants, rather than being split among the surviving beneficiaries.

Incontestability clause

A provision barring the insurer from contesting the policy for misrepresentation after it has been in force a stated period, commonly two years from issue.

Suicide clause

A provision limiting payment to a refund of premiums if the insured dies by suicide within a stated period, usually two years. After that, the full benefit is paid.

Grace period

A set time after the premium due date during which coverage remains in force. If death occurs, any unpaid premium is subtracted from the death benefit.

Reduced paid-up option

A nonforfeiture option that uses existing cash value to buy a smaller permanent policy with no further premiums due. Coverage stays in force for life.

Extended term option

A nonforfeiture option that applies cash value as a single premium to buy term coverage equal to the original 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 unintentional lapse.

Policy loan

A loan from the insurer secured by the policy's cash value. Unpaid loan interest reduces cash value and any outstanding balance reduces the death benefit.

Coordination of benefits

Rules determining payment order when a person has two group health plans. The primary plan pays first and the secondary pays up to the allowable charge, never more.

Coinsurance

The percentage of covered costs the insured pays after the deductible, with the insurer paying the rest, until the insured reaches the out-of-pocket maximum.

HMO gatekeeper model

A managed care arrangement in which a primary care physician coordinates all care and referrals are required for specialists. Care is prepaid and network-based.

PPO network benefits

A managed care plan paying more for in-network providers and less for out-of-network care. No referral is needed to see a specialist.

Elimination period

The waiting period at the start of a disability income claim before benefits begin. Longer elimination periods lower the premium.

Long-term care benefit trigger

Conditions that activate long-term care benefits, typically inability to perform a set number of activities of daily living or cognitive impairment requiring supervision.

COBRA continuation

A federal right for qualified beneficiaries to keep group health coverage after a qualifying event such as job loss, generally paying up to 102 percent of the premium.

ACA metal tiers

Actuarial value levels for marketplace plans: bronze about 60 percent, silver about 70 percent, gold about 80 percent, and platinum about 90 percent of covered costs.

Health savings account

A tax-advantaged account paired with a high-deductible health plan, owned by the individual, portable, and funded with pre-tax dollars for qualified medical expenses.

Medicare Part B

Coverage for physician services, outpatient care, durable medical equipment, and preventive services. It carries a monthly premium, a deductible, and 20 percent coinsurance.

Medigap policy

A private supplement policy that pays some Original Medicare cost sharing, such as the Part B coinsurance. It cannot be used with a Medicare Advantage plan.