MD Life & Health key terms

State laws and oversight governing insurance companies, agents, and policies to protect consumers, ensure insurer solvency, and promote fair market conduct.

Official state license that allows an insurer to transact insurance business in that state and subjects it to state regulation.

Insurer authorized by a state insurance department to sell policies there, subject to state rules and guaranty fund protection.

Non-admitted insurer permitted to sell coverage for unusual or high risks that admitted insurers in the state decline to cover.

Legal obligation of an agent or insurer to act honestly and in the client's best interest when handling premiums or policy funds.

Financial or emotional stake in a person's life or property such that a loss would cause real harm; generally required when a policy starts.

Process an insurer uses to evaluate an applicant's risk, decide whether to accept the application, and set premium and coverage terms.

Grouping applicants with similar risk traits so premiums reflect expected losses and rates are fair rather than unfairly discriminatory.

Life coverage for a set period that pays a death benefit only if the insured dies during that term and builds no cash value.

Term life option that lets the insured continue coverage after the initial term without new underwriting, usually at a higher premium.

Term life feature allowing the owner to change coverage to a permanent policy without proving insurability, often within a stated time.

Permanent life insurance with guaranteed premiums, a guaranteed death benefit, and cash value that grows over time for the insured's lifetime.

Permanent life insurance with flexible premiums and an adjustable death benefit; cash value earns interest and monthly costs are deducted.

Savings portion inside permanent life insurance that grows tax-deferred and may be borrowed against, withdrawn, or paid out at surrender.

One master policy covering many people, usually employees, often with simplified underwriting and lower cost per member than individual policies.

Right of a group life insured to replace group coverage with an individual policy without proving insurability after group coverage ends.

Policy provision barring the insurer from contesting a life policy for material misrepresentation after it has been in force for a set period, usually two years.

False or misleading statement on an insurance application that affects the insurer's decision to issue coverage or charge a particular premium.

Time after policy delivery during which the owner may cancel for a full premium refund, commonly 10 to 30 days.

First person or entity named to receive life insurance proceeds when the insured dies; payment is made before any contingent beneficiary.

Person or entity named to receive life insurance proceeds if the primary beneficiary has died or cannot take the benefit.

Rider that pays the policy's premiums if the insured becomes totally disabled as defined in the policy, keeping coverage in force.

Rider that pays an extra amount, often equal to the face amount, if the insured dies from a covered accident.

Rider letting the insured buy additional coverage at specified ages or events without providing evidence of insurability at the insurer's standard rates.

Transfer of a life policy's ownership rights to another person or entity, either permanently or as security for a debt.

Contract that pays a stream of income, usually funded by premiums and often used to provide retirement income; may be immediate or deferred.

Period during which an annuity builds value from premiums and earnings before the owner starts receiving income payments from the contract.

Point at which an annuity's accumulated value is converted into a series of regular income payments, often for life or a set period.

Annuity that credits a guaranteed minimum interest rate and pays fixed income amounts, so the owner has little investment risk.

Annuity whose value depends on underlying investments; income payments can rise or fall and are not guaranteed. The owner bears market risk.

Fee an insurer charges when an annuity or cash-value policy is cashed out during an early surrender period. It is designed to recover sales costs.

Amount the insured pays for covered health services before the insurer begins paying, usually reset each benefit year. It may not apply to preventive care.

Percentage of covered health costs the insured shares with the insurer after the deductible is met, such as 20 percent.

Fixed dollar amount the insured pays for a covered health service, such as a doctor visit or prescription, at the time of service.

Annual limit on the insured's covered health spending; after it is reached, the insurer pays most or all covered costs.

Insurer approval required before certain non-emergency health services to confirm medical necessity and coverage. Without approval, the claim may be denied or paid differently.

Rules that decide which health plan pays first when a person has coverage under more than one plan, avoiding duplicate payment.

State agency that regulates insurers and producers, licenses agents, reviews rates and forms, and handles consumer complaints in Maryland.