DC Life & Health flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Fiduciary premium handling
- Producers and insurers must hold premium funds in a fiduciary capacity, keep them separate from personal funds, and are prohibited from commingling or misappropriating them.
- Twisting
- An unfair trade practice in which a producer induces a policyholder to lapse, surrender, or replace coverage through misleading or incomplete comparisons of policies.
- Rebating
- Offering a prospect any inducement not specified in the policy, such as cash or gifts, in exchange for purchasing insurance; prohibited as an unfair trade practice.
- Peril versus hazard
- A peril is the cause of a loss, such as fire or death, while a hazard is a condition that increases the chance or severity of that loss.
- Insurable interest
- A financial or emotional stake in a person such that the insured suffers a loss if the event occurs; required at policy issue for life insurance.
- Adhesion contract
- A contract drafted entirely by the insurer with no negotiation by the insured, so ambiguous wording is interpreted in favor of the insured.
- Conditional receipt
- A receipt giving temporary coverage from the application date if the proposed insured meets the insurer's underwriting requirements; otherwise coverage begins only when a policy is issued.
- Field underwriting
- The producer's role in gathering accurate information on the application, obtaining required signatures, and submitting the initial premium, which reduces insurer risk and speeds issuance.
- Premium mode
- The frequency of premium payment, such as annual, semiannual, quarterly, or monthly; more frequent payments result in a higher total annual premium.
- Decreasing term
- Term coverage whose face amount declines over the policy period while the premium stays level, often used to match a shrinking mortgage or loan balance.
- Universal life option B
- An increasing death benefit option equal to a level specified amount plus the accumulated cash value, so the total payable grows as the account value grows.
- Survivorship life policy
- A joint policy insuring two people that pays the death benefit after the second death, commonly used for estate planning and paying estate taxes.
- Incontestability clause
- After the policy has been in force two years from issue, the insurer cannot contest the contract or deny a claim based on a material misstatement on the application.
- Extended term option
- A nonforfeiture option that uses the cash value to buy term insurance for the full face amount for whatever period the money will purchase.
- Waiver of premium rider
- A rider that waives premiums after the insured is totally disabled for a waiting period, typically six months, while keeping the policy and its values in force.
- Per stirpes
- A beneficiary distribution method in which a deceased beneficiary's share passes to that beneficiary's heirs rather than only to the surviving named beneficiaries.
- Exclusion ratio
- The portion of each annuity payment that is a tax-free return of the investment in the contract, calculated as investment divided by expected total return.
- Annuity surrender charge
- A fee imposed by the insurer when a deferred annuity is surrendered or withdrawn beyond the free withdrawal amount during the early contract years.
- Life income with period certain
- An annuitization option paying income for life with a guarantee that payments continue to a beneficiary for a set number of years if the annuitant dies early.
- HMO gatekeeper model
- A managed care arrangement in which a primary care physician coordinates all care and referrals, and non-emergency specialist care without a referral is not covered.
- Coinsurance
- The percentage of covered expenses after the deductible that the insured and insurer share, such as an 80/20 split where the insurer pays 80 percent.
- Out-of-pocket maximum
- The limit on covered cost-sharing an insured pays in a benefit period; after it is reached, the insurer pays 100 percent of covered expenses.
- Time limit on certain defenses
- A health policy provision stating that after two years from issue, statements on the application cannot be used to deny a claim except for fraud.
- Elimination period
- The waiting period, stated in days, that must pass after a disability or illness begins before benefits become payable under the policy.
- Residual disability benefit
- Pays a partial benefit when the insured returns to work but earns less than the pre-disability income because of the ongoing condition.
- Guaranteed renewable policy
- The insurer must renew the policy at each anniversary while premiums are paid, but may increase premiums for an entire class of insureds.
- COBRA continuation
- A federal law letting employees and dependents keep group health coverage after a qualifying event, generally 18 months, or 36 months for dependents and disability.
- Noncontributory group plan
- A plan where the employer pays the full premium; typically all eligible employees must participate, which reduces adverse selection.
- Certificate of coverage
- The document given to each participant in a group plan summarizing benefits, exclusions, and provisions of the master contract held by the employer.
- Medicare Part A
- Hospital insurance covering inpatient stays, skilled nursing after a qualifying hospital stay, hospice, and some home health care, financed by payroll taxes.
- Medigap open enrollment
- A six-month window starting the month a person is 65 and enrolled in Part B, during which insurers must sell any Medigap policy without underwriting.
- Medicare Part D
- The optional outpatient prescription drug benefit delivered through stand-alone drug plans or Medicare Advantage plans, with premiums, deductibles, and coverage phases.