KY Life & Health flashcards
KY Life & Health · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Commissioner of Insurance
- Kentucky's insurance regulator, who heads the Department of Insurance, enforces the state Insurance Code, and issues, suspends, or revokes producer licenses.
- Kentucky continuing education
- Resident producers must complete 24 hours of approved continuing education every two years, including at least 3 hours of ethics instruction.
- Rebating
- An illegal unfair trade practice in which a producer offers part of a commission or other value not stated in the policy to induce a sale.
- Free-look period
- Kentucky individual life policies may be returned within 10 days of delivery for a full premium refund, giving the buyer time to review the contract.
- Pure risk
- A situation offering only the chance of loss or no loss, with no possibility of gain; this is the type of risk insurers will accept.
- Insurable interest
- A financial interest in a person's continued life; for life insurance it must exist at the time of application, not at the insured's death.
- Hazard
- A condition that increases the likelihood or severity of a loss, such as poor health, a dangerous occupation, or careless habits.
- Adverse selection
- The tendency of people with higher-than-average risks to seek insurance, which can push losses beyond the insurer's predicted levels.
- Conditional receipt
- Provides interim coverage from the date the application and initial premium are submitted, provided the applicant proves insurable under the insurer's underwriting rules.
- Human life value
- An approach that sets coverage at the present value of the insured's expected future earnings that survivors would lose at death.
- Field underwriter
- The producer's role in gathering an accurate application, medical evidence, and personal observations so the insurer can classify the risk.
- Decreasing term
- A term policy whose face amount declines over time while the premium stays level, often matched to a shrinking mortgage balance.
- Variable life
- Permanent coverage whose cash value is invested in separate-account subaccounts; the owner bears investment risk and the producer needs a securities registration.
- Survivorship life
- A policy insuring two people that pays the death benefit on the second death, commonly used to fund estate settlement costs.
- Incontestability clause
- After the policy has been in force two years, the insurer generally cannot contest it for misstatement, except for nonpayment of premium.
- Misstatement of age
- A provision adjusting the death benefit to the amount the premium paid would have purchased at the insured's correct age or sex.
- Reduced paid-up
- A nonforfeiture option that uses the cash value to buy a smaller whole life policy on which no further premiums are due.
- Waiver of premium
- A rider that keeps the policy in force by waiving premiums during the owner's total disability, usually after a waiting period.
- Exclusion ratio
- The portion of each annuity payment that is free of income tax, calculated as the investment in the contract divided by expected return.
- Straight life annuity
- A payout giving the highest income for life, with all payments stopping at the annuitant's death and nothing passing to survivors.
- Accumulation units
- Units purchased during a variable annuity's accumulation phase whose value rises and falls with the performance of the separate account.
- Modified endowment contract
- A life policy that fails the 7-pay test; loans and withdrawals are taxed income first and may incur a 10% penalty before age 59½.
- Transfer for value
- Selling a policy for consideration removes the income-tax-free death benefit, with exceptions for transfers to the insured, basis partners, partnerships, and certain corporations.
- Incidents of ownership
- Rights such as changing the beneficiary, surrendering, or borrowing, which cause death proceeds to be included in the insured's gross estate.
- Coinsurance
- The share of covered expenses remaining after the deductible that the insured pays, commonly 20% under an 80/20 health plan.
- Guaranteed renewable
- The insurer must renew the policy and cannot cancel it, but may increase premiums for an entire class of policyholders.
- Coordination of benefits
- Rules that determine which of two health plans pays first, preventing duplicate payment for the same covered expense.
- Own-occupation definition
- A disability standard that pays benefits when the insured cannot perform the duties of their own specific occupation, regardless of other work.
- Residual disability
- Pays a proportionate share of the monthly benefit when the insured returns to work with reduced income after a disabling illness or injury.
- Benefit period
- The maximum length of time that disability income or long-term care benefits will be paid for a covered claim.
- LTC ADL trigger
- Long-term care benefits begin when the insured cannot perform 2 of 6 activities of daily living or has a qualifying cognitive impairment.
- COBRA
- A federal law requiring employers with 20 or more employees to offer continued group health coverage after specified qualifying events.