ND Life & Health cheat sheet

The North Dakota Insurance Commissioner is an elected statewide official serving a four-year term and heads the Insurance Department.

Insurers must hold a Certificate of Authority from the Department to transact insurance in North Dakota.

Producers must be licensed and appointed by an insurer before soliciting, negotiating, or selling that insurer's products.

North Dakota producers renew every two years and must complete 24 hours of continuing education, including 3 hours of ethics.

Individual life insurance policies and annuities must give the owner at least a 10-day free-look period to return the policy for a full refund.

Unfair trade practices include misrepresentation, twisting, rebating, and unfair claim settlement; penalties include fines, suspension, or revocation.

The Department may examine insurer books, issue cease-and-desist orders, and impose civil penalties for violations.

The North Dakota Life and Health Insurance Guaranty Association pays covered claims up to statutory limits (for example, $300,000 of life death benefit) if an insurer is insolvent.

Life and health policy forms and premium rates must be filed with the Department and are subject to its review and approval before use.

A life insurance policy has three parties: the owner (controls the policy), the insured (whose life is covered), and the beneficiary (receives proceeds).

Insurable interest must exist at policy inception; it is not required at the time of death.

Term insurance provides pure death protection with no cash value and expires at the end of the term.

Whole life (ordinary life) charges a level premium for life, builds guaranteed cash value, and matures at age 100 or 121.

Universal life offers flexible premiums and an adjustable death benefit; cash value earns current interest subject to a minimum guarantee.

Variable life and variable annuities are securities; the producer needs a life license plus FINRA registration and must deliver a prospectus.

Nonforfeiture options for whole life: cash surrender, reduced paid-up, and extended term insurance.

Annuity payout options include life only, life with period certain, joint and survivor, and refund (installment or cash) life.

Death benefits are generally income-tax free; cash value grows tax-deferred; a modified endowment contract (MEC) fails the 7-pay test and gets LIFO taxation plus a 10% pre-59½ penalty on gains.

Major medical cost sharing: deductible, then coinsurance (for example, 80/20), then copays, capped by an out-of-pocket maximum.

HMOs use a provider network and a primary care gatekeeper with referrals; PPOs allow out-of-network care at higher cost.

Disability income replaces roughly 60–70% of income; own-occupation is broader than any-occupation, and benefits start after an elimination period.

Medicare Part A covers hospital care (premium-free with 40 work quarters); Part B covers medical care; Part C is Medicare Advantage; Part D covers drugs.

Medigap open enrollment lasts six months starting when Part B begins; insurers must sell guaranteed-issue policies during that window.

COBRA continuation lasts 18 months for termination or reduced hours, 29 months for disability, and 36 months for death, divorce, or Medicare eligibility.

ACA plans cover essential health benefits, cannot exclude preexisting conditions, allow dependents to age 26, and use metal tiers (Bronze–Platinum).

Coordination of benefits determines primary vs. secondary payer; for dependent children the birthday rule usually makes the parent with the earlier birthday primary.

Health savings accounts (HSAs) require a qualifying high-deductible health plan and allow tax-deductible contributions with tax-free qualified withdrawals.

The entire contract clause means the policy plus the application form the whole agreement; only an authorized officer can change it by endorsement.

The incontestability clause bars the insurer from contesting the policy after two years, except for nonpayment of premium.

The suicide clause limits payment to return of premium if death occurs within the first two years.

The grace period is 30 days for life insurance (often 7, 10, or 31 days for health) and keeps coverage in force while the premium is paid.

Reinstatement is allowed within three years of lapse with evidence of insurability and payment of overdue premiums plus interest.

A misstatement of age or sex adjusts the death benefit to what the premium would have purchased at the correct age or sex.

Common riders: waiver of premium, accidental death, guaranteed insurability, cost-of-living, term, child, and long-term care.

Underwriting risk classes: preferred, standard, substandard (table ratings), and flat extra for temporary or hazardous risks.

STOLI (stranger-originated life insurance) lacks insurable interest and is prohibited; replacement requires disclosure and comparison.