CO Life & Health flashcards

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

Insurable Interest

A requirement that the policyowner would suffer a financial loss if the insured died; it must exist when the policy is applied for, not at death.

Incontestability Clause

A provision stating that after a life policy has been in force for two years, the insurer cannot void it for misstatements on the application; nonpayment of premium is still grounds for termination.

Suicide Clause

A provision limiting the insurer's liability to a refund of premiums if the insured dies by suicide within the first two years after the policy is issued.

Grace Period (Life)

The period, commonly 30 days after a premium due date, during which a life policy remains in force; a death benefit paid during it is reduced by the overdue premium.

Reinstatement Provision

Allows a lapsed life policy to be restored within three years by proving insurability and paying overdue premiums with interest; a new two-year contestability period then applies.

Reduced Paid-Up Option

A nonforfeiture option that applies the cash surrender value as a single premium to buy a smaller amount of whole life coverage that stays in force for life.

Extended Term Option

A nonforfeiture option that uses cash value to buy term insurance equal to the policy face amount for as long as the value will pay; no more premiums are due.

Automatic Premium Loan

A provision allowing the insurer to advance an overdue premium from the policy's cash value to keep it in force, provided the cash value is sufficient.

Modified Endowment Contract

A life policy that fails the seven-pay test; loans and withdrawals are taxed gains-first and may carry a 10% penalty before age 59 and a half.

Section 1035 Exchange

A tax-free swap of an existing life insurance policy for a new life policy or annuity; the reverse exchange, annuity to life, does not qualify.

Per Stirpes

A beneficiary arrangement under which a deceased beneficiary's share passes to that beneficiary's descendants rather than being divided among the surviving named beneficiaries.

Spendthrift Clause

A policy clause preventing a beneficiary from assigning proceeds held by the insurer, and shielding those proceeds from the beneficiary's creditors.

Group Life Conversion Right

A terminated group member may convert group term coverage into an individual whole life policy within 31 days, without proving insurability, at the attained-age premium.

Free Look Period (Life)

A Colorado requirement giving individual life policyowners at least 10 days after delivery to return the policy for a full premium refund.

Waiver of Premium Rider

A rider that cancels premium payments while the insured is totally disabled beyond a waiting period, usually six months, keeping the policy and its values intact.

Cash Surrender Value

The amount paid to a policyowner who surrenders a permanent policy; it equals the policy reserve minus any surrender charge and grows over the policy's life.

COBRA

A federal law requiring group health plans with 20 or more employees to let qualified beneficiaries continue coverage after a qualifying event, paying up to 102% of the premium.

COBRA Election Period

The 60-day window, measured from the date the election notice is provided, during which a qualified beneficiary must decide whether to continue group coverage.

COBRA Disability Extension

An extension of continuation coverage from 18 to 29 months for a beneficiary who is Social Security disabled during the first 60 days of COBRA coverage.

Creditable Coverage

Prior health coverage, documented by a certificate, that reduces or eliminates a new group plan's pre-existing condition exclusion period under HIPAA.

HIPAA Special Enrollment

A right to enroll in a group health plan outside open enrollment after events such as marriage, birth, adoption, or loss of other coverage, usually within 30 days.

Guaranteed Issue

An ACA rule requiring health insurers to sell individual and small group policies regardless of health status, and barring them from charging more or excluding coverage for pre-existing conditions.

Medical Loss Ratio

An ACA standard requiring insurers to spend at least 80% of individual and small group premiums, or 85% of large group premiums, on claims and quality, rebating the excess.

Essential Health Benefits

Ten required benefit categories for ACA individual and small group plans, including hospitalization, prescription drugs, maternity care, mental health, and preventive services.

Preventive Services Mandate

An ACA rule requiring non-grandfathered plans to cover in-network preventive care, such as screenings and immunizations, with no copayment, coinsurance, or deductible.

Medicare Part A

Hospital insurance that pays for inpatient stays, skilled nursing facility care after a hospital stay, hospice, and home health; it is premium-free for workers with 40 quarters of coverage.

Medicare Part B

Medical insurance covering physician services, outpatient care, and durable medical equipment; it charges a monthly premium and, after a deductible, 20% coinsurance.

Medicare Part D

Outpatient prescription drug coverage sold by private insurers as stand-alone plans or as part of Medicare Advantage, with a late-enrollment penalty for gaps in creditable drug coverage.

Medigap Open Enrollment

A six-month period starting when a person age 65 or older first enrolls in Medicare Part B, during which insurers must sell any Medigap policy without medical underwriting.

Elimination Period

The waiting time after a disability or illness begins before benefits are payable, commonly 30 to 90 days for disability income and longer for long-term care.

Residual Disability Benefit

A disability income provision that pays a reduced benefit when the insured returns to work but loses income because of the continuing disability.

Own Occupation Definition

A disability definition that pays benefits when the insured cannot perform the duties of their own occupation, even if they could work in another occupation.