GA Life & Health cheat sheet

The Georgia Insurance Commissioner is an elected statewide officer who administers the Insurance Code, licenses insurers and producers, examines insurer records, and enforces unfair-trade-practice rules.

A resident producer license generally requires age 18, prelicensing education or an approved exemption, a passed licensing exam, fingerprint and background check, and payment of the license fee.

Georgia resident producer licenses are renewed biennially; renewal generally requires 24 continuing education hours every two years, including at least 3 hours of ethics.

An insurer must appoint a producer before the producer solicits or sells for that insurer; the appointment is filed with the Commissioner and may be terminated by the insurer.

Prohibited unfair trade practices include rebating, twisting, misrepresentation, false advertising, intimidation, boycott, and transacting with unauthorized insurers.

A producer who receives premiums acts in a fiduciary capacity; premiums must be remitted promptly and must not be commingled with the producer's personal or general business funds.

The Commissioner may examine insurers and producers, issue cease-and-desist orders, suspend or revoke licenses, and impose monetary penalties after notice and hearing.

The Georgia Life and Health Insurance Guaranty Association pays covered claims of insolvent member insurers, subject to statutory caps and exclusions.

Risk is uncertainty of loss; peril is the cause of loss; hazard is a condition that increases the chance or severity of loss.

Pure risk involves only loss or no loss and is insurable; speculative risk involves gain or loss and is generally not insurable.

Insurable risk generally requires a large number of similar exposure units, accidental loss, measurable loss, and premiums that are affordable.

Insurable interest in life insurance must exist at application; without it, the contract is void.

The principle of indemnity restores the insured to the pre-loss financial position; life insurance is a valued contract and may pay more than premiums paid.

Utmost good faith requires disclosure of material facts; material misrepresentation or concealment can permit rescission.

A contract of adhesion is drafted by the insurer; ambiguous policy language is generally construed against the insurer.

Subrogation lets an insurer pursue a third party after paying a loss, preventing double recovery by the insured.

Reinsurance transfers risk from a ceding insurer to a reinsurer; retention is the amount the ceding insurer keeps.

Life insurance underwriting evaluates age, health, occupation, hobbies, and family history; the MIB and medical exams may be used.

Insurable interest must exist at the time of application, not at death.

Standard life policy provisions include a 31-day grace period, two-year incontestability, a two-year suicide clause, and reinstatement within three years with evidence of insurability.

A free-look period allows the owner to return a newly delivered life policy for a full premium refund within a stated number of days set by state law and the policy.

Beneficiary designations: primary receives proceeds first; contingent receives if the primary is deceased; revocable may be changed by the owner, while irrevocable generally may not be changed without consent.

Dividend options for participating policies include cash, premium reduction, accumulate at interest, paid-up additions, and one-year term.

Nonforfeiture options on lapse or surrender of cash-value life insurance include cash surrender value, reduced paid-up insurance, and extended term insurance.

Settlement options include lump sum, interest only, fixed period, fixed amount, life income, and joint and survivor arrangements.

Death benefits are generally income-tax-free to beneficiaries; cash value grows tax-deferred; policy loans are not taxable unless the policy lapses or is surrendered.

An annuity is a contract in which an insurer promises periodic payments; it manages longevity risk by liquidating principal over time.

The accumulation phase builds value; the annuitization phase converts value into income payments.

Immediate annuities begin payments within one payment period; deferred annuities have an accumulation period before payments start.

Fixed annuities guarantee a rate and payment; variable annuities fluctuate with subaccounts and are securities; indexed annuities credit interest based on an index with caps and participation rates.

Surrender charges often apply during early contract years and decline over time; many contracts permit limited free withdrawals.

Annuitization options include life only, life with period certain, period certain only, and joint and survivor.

Exclusion ratio equals investment in the contract divided by expected return; the result is the nontaxable fraction of each annuity payment.

Distributions from nonqualified annuities are generally taxed earnings-first; before age 59½ a 10% federal penalty generally applies, with exceptions.

Variable annuity sales require both an insurance license and a securities registration because the product is a security.

Major medical cost-sharing includes a deductible, coinsurance or copay, and an out-of-pocket maximum; preventive services are often covered without cost sharing under the ACA.

HMO: gatekeeper primary care physician and referrals required; PPO: in-network and out-of-network benefits with no referrals; POS: hybrid; EPO: network only except emergencies.

Medicare Part A covers inpatient hospital, skilled nursing, hospice, and some home health; Part B covers outpatient medical; Part C is Medicare Advantage; Part D covers prescriptions.

Disability income policies define total disability as own occupation or any occupation; benefits begin after an elimination period and continue for a benefit period.

AD&D pays a principal sum for accidental death; dismemberment pays a percentage, called the capital sum, of the principal sum for specified losses.

COBRA generally provides 18 months of continuation coverage for employees and 36 months for dependents in qualifying events, with the beneficiary paying the premium.

Coordination of benefits determines primary and secondary payers when a person has multiple health plans, preventing duplicate payment.

Long-term care insurance typically triggers benefits when the insured cannot perform a specified number of activities of daily living or has cognitive impairment.

The ACA prohibits preexisting-condition exclusions and annual or lifetime dollar limits on essential health benefits for non-grandfathered plans.