CISR Life & Health key terms

A requirement that the person buying a policy would suffer genuine financial or emotional loss if the insured died. It must exist when the policy is purchased, not when a claim is filed.

The amount of money a policyholder pays an insurer, usually monthly, quarterly, or annually, in exchange for coverage. It is set using expected claims, expenses, and the insurer's profit margin.

The death benefit stated on the policy's first page, paid to the beneficiary if the insured dies while coverage is in force. It may differ from the total a beneficiary receives after riders or loans.

The person, people, trust, or estate named in the policy to receive the death benefit. Primary beneficiaries are paid first; contingent beneficiaries receive the money only if primaries are unavailable.

The insurer's process of reviewing an applicant's health, habits, occupation, and finances to decide whether to issue coverage and at what price. It may involve questionnaires, medical records, or a paramedical exam.

A statistical chart showing how many people in a group are expected to die each year at each age. Insurers use it to estimate risk and calculate premium rates for life products.

The expected rate of illness, injury, or disability within a population during a period. Health and disability insurers rely on morbidity data the way life insurers rely on mortality data.

Coverage that lasts for a set number of years, such as 10, 20, or 30, and pays a death benefit only if the insured dies during that period. It usually has no cash value.

Term coverage whose face amount and premium stay the same for the entire policy period. It is the simplest and often least expensive form of life insurance for a fixed need.

Term coverage whose death benefit shrinks over the policy period while the premium stays level. It is often used to match a mortgage or loan balance that falls over time.

A term policy feature allowing the insured to continue coverage at the end of the term without providing new evidence of insurability. The premium typically increases at each renewal.

A term policy feature letting the insured exchange the policy for a permanent policy without a new medical exam. The new premium is based on the insured's age at conversion.

Permanent coverage that stays in force for the insured's lifetime as long as premiums are paid, and builds guaranteed cash value. Premiums are usually level for life.

Permanent coverage with flexible premiums and an adjustable death benefit, where the cash value earns interest. The policy stays in force only while the cash value covers its monthly costs.

Permanent coverage whose cash value is invested in separate accounts such as stock or bond funds, so value rises and falls with market performance. It is a securities product requiring a license.

A universal life variant whose credited interest is tied to an external index, such as the S&P 500, subject to a floor and a cap. It offers upside potential with protection against negative index returns.

The savings portion inside a permanent policy that grows over time and can be borrowed against, withdrawn, or paid out on surrender. Term policies generally have none.

Money borrowed from an insurer using a policy's cash value as collateral. Interest accrues, and any unpaid balance plus interest is subtracted from the death benefit or surrender value.

The amount an insurer pays if a permanent policy owner cancels the contract and gives up all coverage. It equals cash value minus any surrender charge or outstanding loan.

Choices available when a permanent policy owner stops paying premiums but does not want to lose accumulated value. Options include cash surrender, reduced paid-up insurance, and extended term insurance.

A share of an insurer's surplus returned to owners of participating policies. It is not guaranteed and may be taken in cash, used to reduce premiums, or used to buy additional coverage.

A provision stating the insurer cannot void a policy for misrepresentation on the application after it has been in force for a set period, commonly two years. Fraudulent claims remain contestable.

A provision limiting the death benefit if the insured dies by suicide within a stated period, usually two years. After that period, the full face amount is payable.

A window, often 10 to 30 days after delivery, during which a policy owner can cancel coverage for a full premium refund. It gives buyers time to review the contract.

The time allowed after a premium due date, commonly 30 or 31 days, during which coverage continues even though payment is late. A claim during this period may have the premium deducted.

The termination of coverage that occurs when a required premium is not paid within the grace period and no cash value keeps the policy in force. Reinstatement may be possible afterward.

Restoring a lapsed policy to its original status by paying overdue premiums with interest and providing evidence of insurability. New contestability and suicide periods may restart.

A rider allowing a terminally or chronically ill insured to receive part of the face amount early. The amount paid is subtracted from the benefit eventually paid to beneficiaries.

A rider that suspends premium payments if the insured becomes totally disabled for a specified period, such as six months. Coverage continues as if premiums were being paid.

Rules that decide which of two or more health plans pays first when a person is covered by more than one policy. It prevents total payments from exceeding the actual medical expense.

The amount a person must pay out of pocket for covered services each year before the health plan begins paying. Plans with higher deductibles usually charge lower monthly premiums.

The share of covered medical costs the insured pays after meeting the deductible, commonly 20 percent. The insurer pays the remaining share until the out-of-pocket maximum is reached.

The most a person must pay in a plan year for covered care, including deductibles, copayments, and coinsurance. After it is reached, the insurer pays 100 percent of covered services.

A managed care plan that generally covers care only from in-network providers and requires a primary care physician to coordinate treatment and referrals. Premiums tend to be lower than other plan types.

A managed care plan that contracts with a network of providers but still pays for out-of-network care at a lower rate. Members usually do not need referrals to see specialists.

A tax-advantaged account paired with a high-deductible health plan that lets people save pre-tax money for medical expenses. Funds roll over and follow the account holder when changing jobs.

An employer-sponsored account funded with pre-tax salary that reimburses eligible medical expenses. It is generally use-it-or-lose-it, with limited carryover or grace period options.

A health plan with deductibles above a federally set minimum, which makes it eligible to pair with a Health Savings Account. It typically offers lower premiums in exchange for higher cost sharing.

A federal law letting workers and dependents keep group health coverage for a limited time after a qualifying event such as job loss, at their own expense plus an administrative fee.

A federal law limiting exclusions for pre-existing conditions when people change group plans and setting national standards for protecting personal health information. It also guarantees certain enrollment rights.

A health problem that existed before a person's coverage began. Under current federal rules, group and individual health plans generally cannot deny coverage or charge more because of it.

Hospital insurance that helps pay for inpatient stays, skilled nursing facility care after a hospital stay, hospice, and some home health. Most people get it premium-free through work history.

Medical insurance covering doctor visits, outpatient care, preventive services, and durable medical equipment. It requires a monthly premium and is optional for people enrolled in Part A.

A private plan approved by Medicare that provides Part A and Part B benefits, often with extra services such as dental or vision. Many plans include drug coverage and use provider networks.

Optional prescription drug coverage offered through private insurers, either as a standalone plan or built into a Medicare Advantage plan. It charges premiums, deductibles, and copayments.

Private insurance sold to people with Original Medicare to help pay costs like deductibles, coinsurance, and copayments. It cannot be used with Medicare Advantage plans.