NC Life & Health flashcards
NC 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.
- McCarran-Ferguson Act
- Federal law enacted in 1945 that reserves primary authority to regulate the business of insurance to the states and limits federal antitrust application where state law governs.
- Domestic insurer
- An insurer incorporated and organized under the laws of North Carolina, regardless of where it actually conducts its insurance business.
- Foreign insurer
- An insurer chartered by another state or United States jurisdiction and authorized by the Commissioner to transact insurance business in North Carolina.
- Alien insurer
- An insurer formed under the laws of a country outside the United States; it must be authorized by the Commissioner before transacting business in North Carolina.
- Admitted insurer
- An insurer holding a certificate of authority from the North Carolina Commissioner of Insurance permitting it to transact insurance within the state.
- Producer appointment
- The insurer's authorization, filed with the Commissioner, that permits a licensed producer to act as its agent; commissions cannot be paid without a valid appointment.
- Continuing education requirement
- North Carolina producers must complete 24 credit hours every two years, including at least three hours of ethics instruction, in order to renew a license.
- Twisting
- Misrepresenting policy terms or making misleading comparisons to induce a policyholder to lapse, surrender, or replace existing coverage to the insured's detriment.
- Rebating
- Offering a client part of the commission or any inducement not stated in the policy; both the producer and the recipient violate North Carolina insurance law.
- Fiduciary handling of premiums
- Premiums collected by a producer belong to the insurer or insured and must be held in trust and remitted promptly; commingling with personal funds is prohibited.
- Insurable interest
- A financial or love-and-affection relationship between the policyowner and insured that must exist when the policy is applied for, not at the time of death.
- Conditional receipt
- Provides interim coverage effective from the application date or the last required medical exam, whichever is later, if the proposed insured proves insurable as a standard risk.
- Adverse selection
- The tendency of individuals with the greatest risk of loss to seek insurance, which underwriting, risk classification, and policy exclusions are designed to control.
- Mutual insurer
- An insurance company owned by its policyholders rather than by shareholders; it typically issues participating policies that may pay dividends to owners.
- Implied authority
- Authority not expressly written in the agency contract but reasonably necessary to carry out the producer's express duties, such as collecting the initial premium.
- Medical Information Bureau
- A membership organization of life insurers that stores coded medical and underwriting information; applicants must be notified and may dispute inaccurate entries under federal law.
- Level term insurance
- A term policy whose face amount and premium stay constant for the stated period; it builds no cash value and expires without benefit if not renewed or converted.
- Universal life option B
- An increasing death benefit equal to the specified face amount plus the accumulated cash value, carrying a higher cost of insurance than the level option.
- Incontestability clause
- After the policy has been in force two years, the insurer generally cannot contest it for misstatements on the application, except for nonpayment of premium.
- Reinstatement provision
- Allows a lapsed policy to be restored within three years if the insured provides evidence of insurability and pays overdue premiums with interest.
- Nonforfeiture options
- Guaranteed choices available when a whole life policy is surrendered or lapses: cash surrender value, reduced paid-up insurance, or extended term insurance.
- Spendthrift clause
- A provision preventing a beneficiary from assigning or encumbering policy proceeds and shielding those proceeds from the beneficiary's creditors until they are paid out.
- Coinsurance
- The percentage of covered expenses, after the deductible is satisfied, that the insured and the insurer each pay under a health insurance policy.
- Copayment
- A fixed dollar amount the insured pays at the time of service for a covered health care visit, procedure, or prescription.
- Coordination of benefits
- Rules determining the order in which multiple health plans pay; the primary plan pays first and the secondary plan pays the balance up to its allowable limit.
- Elimination period
- The waiting period that must pass after a disability or long-term care event begins before benefits become payable under the policy.
- Prospective utilization review
- Precertification required before a non-emergency hospitalization or procedure, confirming that the proposed treatment meets the plan's medical necessity criteria.
- Own occupation definition
- A disability definition that pays benefits when the insured cannot perform the material duties of the specific occupation held before disability, regardless of other work available.
- COBRA continuation periods
- 18 months for termination or reduced hours, 29 months when disability qualifies, and 36 months for death, divorce, or a dependent aging out of the plan.
- Long-term care benefit trigger
- Benefits begin when the insured cannot perform two of six activities of daily living for at least 90 days or has a severe cognitive impairment.
- Medigap open enrollment
- A one-time six-month window beginning the month the person is 65 and enrolled in Medicare Part B, during which insurers must accept the applicant regardless of health.
- ACA metal tiers
- Plans categorized by actuarial value: bronze pays about 60 percent, silver 70 percent, gold 80 percent, and platinum 90 percent of covered benefits.