DE Life & Health flashcards
DE Life & Health · Build recall with a focused review session.
33 cards. Read the term and the definition here. The deck at the top of this page is optional.
- McCarran-Ferguson Act
- The 1945 federal law that gives states primary authority to regulate insurance and grants insurers a limited antitrust exemption for activities regulated by state law.
- Twisting
- An illegal replacement practice in which a producer uses misrepresentation or incomplete comparison to induce a policyholder to lapse or surrender existing coverage and buy a new policy.
- Guaranty association
- A state-established entity that pays covered claims of policyholders when an admitted life or health insurer becomes insolvent, subject to statutory limits.
- Insurable interest
- A financial or love-and-affection interest that would cause a person to suffer loss from another's death; it must exist when a life policy is applied for.
- Adverse selection
- The tendency for people at higher-than-average risk to seek or keep insurance more than lower-risk people, which can raise costs for the insurer.
- Moral hazard
- A hazard arising from dishonesty or character, such as a person who may intentionally cause a loss or misrepresent facts to obtain benefits.
- Conditional receipt
- A receipt given when a life application and initial premium are submitted; coverage begins on the date specified only if underwriting conditions are met.
- Incontestability clause
- A life policy provision stating that after the policy has been in force for a stated period, usually two years, the insurer cannot contest it for misrepresentation except nonpayment.
- Suicide clause
- A provision limiting the insurer's liability, often to return of premium, if the insured dies by suicide within a stated period, commonly two years.
- Term life insurance
- Life coverage for a specified period with no significant cash value; the death benefit is paid only if the insured dies during the term.
- Whole life insurance
- Permanent life insurance with level premiums, a guaranteed death benefit, and guaranteed cash value that grows over the life of the policy.
- Universal life insurance
- Permanent life insurance with flexible premiums and an adjustable death benefit; the cash value earns interest and is reduced by cost-of-insurance and expense charges.
- Variable life insurance
- Permanent life insurance whose cash value is invested in separate-account subaccounts; the owner bears investment risk and the death benefit may vary.
- Free-look period
- A period after delivery, commonly 10 to 30 days, during which a policyowner may return a new policy for a full refund of premium.
- Grace period
- A period, commonly 30 or 31 days after a premium due date, during which a policy remains in force and the premium may still be paid.
- Nonforfeiture options
- Choices available when a cash-value life policy is surrendered or lapses: cash surrender, reduced paid-up insurance, or extended term insurance.
- Waiver of premium rider
- A rider that waives premium payments if the insured becomes totally disabled for a specified waiting period, keeping the policy in force.
- Deferred annuity
- An annuity with an accumulation phase before income payments begin; it may be funded by a single premium or flexible premiums.
- Straight life annuity
- An annuity payout option that pays income for the annuitant's lifetime and stops at death, with no refund or survivor benefit.
- Exclusion ratio
- The portion of each annuity payment excluded from income tax, calculated as the investment in the contract divided by expected return.
- 1035 exchange
- A tax-free exchange of a life insurance, endowment, annuity, or qualified long-term care contract for a like-kind contract under IRC section 1035.
- Modified endowment contract
- A life policy that fails the 7-pay test; withdrawals and loans are taxed income-first and may incur a 10% penalty before age 59½.
- Transfer-for-value rule
- A rule making death proceeds taxable to a buyer who acquires an existing life policy for value, subject to exceptions such as certain related-party transfers.
- Coinsurance
- The percentage of covered medical costs, after the deductible, that the insured pays; the insurer pays the remaining percentage.
- Elimination period
- A waiting period before disability income or long-term care benefits begin, functioning like a time deductible for each period of disability.
- Coordination of benefits
- A claims process that determines which health plan pays first and which pays second when a person is covered by more than one plan.
- Health maintenance organization
- A managed care plan that provides services through a defined network with a primary care gatekeeper and often uses capitation to pay providers.
- Preferred provider organization
- A managed care plan that contracts with a network of providers and also covers out-of-network care at a higher cost, usually without a gatekeeper.
- Own-occupation disability
- A disability definition that pays benefits when the insured cannot perform the substantial duties of their own occupation, even if they could work elsewhere.
- Medicare Part A
- The hospital insurance part of Medicare, covering inpatient hospital, skilled nursing facility, hospice, and some home health care; most beneficiaries pay no premium.
- Medicare Part B
- The medical insurance part of Medicare, covering physician services, outpatient care, and preventive services; it requires a monthly premium.
- Medicaid
- A joint federal-state health program for low-income individuals and families that also pays for a large share of long-term care services.
- COBRA
- A federal law allowing qualified beneficiaries to continue group health coverage temporarily after a qualifying event, commonly for 18 months.