MN Life & Health key terms

A financial or love-and-affection relationship that would cause a person to suffer a loss if the insured died or became disabled; it must exist before a policy may be issued.

The insurer's process of evaluating an applicant's health, finances, and habits to decide whether to issue coverage and at what rate class.

Coverage that pays a death benefit only if the insured dies during a stated number of years; it builds no cash value and is usually the least expensive form of life insurance.

Permanent coverage with a level premium guaranteed not to increase, a guaranteed death benefit, and a cash value that grows on a guaranteed schedule.

Permanent, flexible-premium coverage in which the insurer credits interest to a cash value account and deducts monthly mortality and expense charges from that account.

The policyowner's written naming of who receives the death proceeds, often a primary and a contingent person, which may be changed unless the designation is irrevocable.

A provision barring the insurer, after the policy has been in force a stated period (usually two years), from denying a claim because of misstatements on the application.

A short period after the premium due date, commonly 31 days for life insurance, during which the policy stays in force and the premium may still be paid.

Choices that let the owner of a cash-value policy keep some benefit if the policy lapses, such as cash surrender, reduced paid-up insurance, or extended term insurance.

A rider that pays premiums on the insured's behalf if the insured becomes totally disabled for a waiting period, keeping the policy in force without further out-of-pocket cost.

A feature allowing the insured to receive part of the death benefit early after diagnosis of a terminal illness or other qualifying condition, with the remainder paid to the beneficiary later.

A contract issued by an insurer that pays income, often for life, in exchange for premiums accumulated over time.

An annuity in which the insurer guarantees a minimum interest rate and a fixed dollar amount of income, placing the investment risk on the insurer.

An annuity whose cash value and income vary with the performance of subaccounts chosen by the owner; the owner bears the investment risk and must receive a prospectus.

A fee charged for withdrawing more than the allowed amount from a deferred annuity or cash-value policy during the early contract years, usually declining over time.

A tax-free transfer of a life insurance policy, annuity, or endowment into a new policy or annuity of similar type without recognizing gain.

The amount a covered person must pay out of pocket for covered services each year before the health plan begins to pay its share.

The percentage of covered medical costs the insured must pay after the deductible is met, with the insurer paying the remaining percentage.

A yearly cap on deductibles, coinsurance, and copayments for covered in-network services; once it is reached, the plan pays all of the covered expenses.

Rules that decide the order in which two or more health plans pay when a person is covered by both, so that combined benefits do not exceed the actual cost of care.

A Medicare-approved private policy that pays some of the coinsurance, copayments, and deductibles that original Medicare leaves to the beneficiary.

A managed care plan that provides care through a contracted network, requires members to use a primary care physician, and generally pays nothing outside the network except in emergencies.

A managed care plan that contracts with a network of providers, pays more when members use network providers, and still allows care outside the network at a higher cost.

A requirement that the plan approve certain services in advance for them to be covered; care obtained without approval may be paid at a reduced rate or denied.

The plan's process of evaluating whether care requested or already provided is medically necessary, appropriate, and delivered at the proper level of care.

A policy the insurer must renew as long as premiums are paid, although the insurer may raise rates for an entire class of policyholders rather than for one individual.

Coverage that replaces a portion of earned income when the insured cannot work because of sickness or injury, paying a monthly benefit after a waiting period.

A disability standard that treats the insured as disabled when unable to perform the main duties of the occupation held at the time of disability, regardless of other work available.

The waiting period after a disability or long-term care event begins before benefits become payable, functioning much like a deductible measured in time.

A provision that pays a reduced benefit when the insured returns to work but earns less income or cannot perform all of the prior duties.

Basic self-care tasks such as bathing, dressing, eating, toileting, transferring, and continence; inability to perform a set number of them often triggers long-term care benefits.

Coverage for the cost of custodial, home, and nursing facility care needed because of a prolonged illness, disability, or cognitive impairment.

The Minnesota official who heads the Department of Commerce, licenses producers and insurers, enforces the insurance code, and issues rules and orders.

The license an insurer must obtain from the state before it may transact insurance business in Minnesota.

Surrendering, lapsing, or amending an existing life or annuity contract to buy a new one; Minnesota requires a notice and comparison disclosure to the buyer.

A statutory entity funded by member insurers that pays certain claims of policyholders of an insolvent life or health insurer, up to defined limits.

The producer's obligation to act in the client's best interest and to hold money collected for the insurer or client in trust, without commingling it with personal funds.

Giving a policyholder anything of value, such as cash, gifts, or a share of commission, that is not stated in the policy as an inducement to buy; an unfair trade practice in Minnesota.

An unfair practice of inducing someone to drop an existing policy through misrepresentation or an incomplete comparison in order to sell a replacement policy.

The insurer's authorization, filed with the state, for a licensed producer to act as its agent and submit business on its behalf.