NH Life & Health key terms

An insurance company that has received a state's permission to sell policies there and must follow that state's insurance laws, including participating in the state guaranty fund.

A state organization funded by admitted insurers that pays covered claims, up to legal limits, when a member insurer becomes insolvent, so policyholders are not left completely unprotected.

An illegal sales practice in which a producer uses misleading or incomplete comparisons to persuade a policyholder to cancel existing coverage and buy a replacement policy, usually to earn a new commission.

Giving a client part of the producer's commission or another valuable inducement to buy insurance, which state law generally prohibits as an unfair trade practice.

A financial or emotional stake in another person's life or health that justifies buying insurance on that person; for life insurance it must exist when the application is made.

An insurance contract in which the amounts exchanged are unequal and depend on chance, because the policyholder may receive a large benefit or nothing at all.

A contract prepared by one party, the insurer, and offered to the other on a take-it-or-leave-it basis, so ambiguities are usually resolved in favor of the policyholder.

The duty of both parties to an insurance contract to be honest and to disclose all material facts, since the insurer relies on information supplied by the applicant.

A statistical principle that the more similar exposure units are pooled, the more predictable losses become, allowing insurers to estimate claims and set premiums with confidence.

The tendency of an insured person to be less careful, or to act dishonestly, because insurance will pay for a loss; insurers counter it through underwriting and policy terms.

A statistical chart showing how many people at each age are expected to die within a year, used with an interest assumption to calculate life insurance premiums and reserves.

A receipt issued when an application and first premium are submitted; it can provide temporary life coverage from the application or medical exam date if the proposed insured turns out to be insurable.

The person, people, or entity named in a life insurance policy to receive the death benefit; a revocable beneficiary can be changed by the owner without that person's consent.

Coverage that lasts for a stated period, such as 10 or 20 years, pays a death benefit only if the insured dies during that period, and usually builds no cash value.

Permanent coverage that remains in force for the insured's whole life, charges level premiums, builds guaranteed cash value, and pays the face amount whenever death occurs.

Permanent coverage with flexible premiums and an adjustable death benefit; the cash value earns current interest while monthly charges are deducted, so the policy can lapse if values are exhausted.

Permanent coverage whose cash value and death benefit depend on separate account investments chosen by the owner, so the owner bears investment risk and the producer needs a securities license.

The savings component of permanent life insurance that grows as premiums are paid and can be reached through policy loans, surrender, or nonforfeiture options.

A provision stating that after the policy has been in force for a stated period, usually two years, the insurer cannot contest the contract or deny a claim because of misstatements on the application.

The time allowed after a premium due date, commonly 30 or 31 days, to pay an overdue premium without losing coverage; a death during this period usually has the unpaid premium deducted.

Choices that determine what happens to the cash value of a permanent policy if the owner stops paying premiums, such as cash surrender, reduced paid-up insurance, or extended term insurance.

A provision that lets the insurer borrow from a policy's cash value to pay an overdue premium, preventing an unintended lapse, with the loan and interest repaid later.

A rider that cancels premium payments while the insured is totally disabled, often after a waiting period, so the policy stays in force without further payment.

A provision allowing an insured with a terminal or qualifying illness to receive part of the death benefit early, which reduces the amount later paid to the beneficiary.

A contract that turns accumulated savings into a stream of income, often for retirement; the insurer receives premiums and later makes payments for a set period or for life.

The part of each annuity payment that is a tax-free return of the owner's original investment, found by dividing the investment in the contract by the expected total payout.

An annuity that continues payments as long as either of two named people is alive, commonly chosen by married couples, and generally pays less each month than a single-life annuity.

The rate at which sickness and injury occur in a group of people, used by health insurers much as mortality is used by life insurers to estimate claims and set premiums.

A rule that sets the order in which two or more health plans pay when a person has overlapping coverage, so combined payments do not exceed the actual cost of care.

A health policy clause that, after a stated period such as two years, prevents the insurer from denying a claim or canceling coverage because of misstatements in the application, except fraud.

A right to return a newly delivered policy within a set number of days, usually 10 to 30, for a full refund of premium and cancellation of the coverage.

A waiting period that must pass after a disability or illness begins before benefits are paid, working like a time deductible; longer periods usually lower the premium.

A condition in which the insured can still work but earns less because of illness or injury, with benefits making up part of the lost income.

A health maintenance organization delivers care through a network of contracted doctors and hospitals for a prepaid fee, often requiring a primary care physician and referrals to specialists.

The single group contract issued to an employer or other sponsor that covers all eligible members; individual participants receive certificates that summarize their coverage.

A federal law that allows employees and their dependents to keep group health coverage for a limited time after events such as job loss, if they pay the full premium.

The right of a person leaving a group plan to buy an individual policy without proving insurability, if the application is made within the time allowed by the policy.

Private insurance sold to Medicare enrollees to help pay expenses original Medicare does not fully cover, such as deductibles and coinsurance; plans are standardized by letter in most states.

Coverage that pays for help with daily activities or supervision in a home, assisted living facility, or nursing home when the insured has a chronic illness or cognitive impairment.

A federal health program for people aged 65 and older and some younger people with disabilities, with parts covering hospital care, medical services, and prescription drugs.