NY Life & Health flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- New York producer license
- A license issued by the New York Department of Financial Services authorizing a person to solicit, negotiate, or sell life and health insurance in New York.
- Fiduciary premium duty
- A producer must hold premiums in trust for the insurer and may not commingle them with personal or business funds; misappropriation can lead to license action.
- Twisting
- Misrepresenting an existing policy to induce a policyholder to lapse or replace it; it is a prohibited market-conduct practice in New York.
- McCarran-Ferguson Act
- Federal law that leaves regulation of the business of insurance primarily to the states, while allowing federal antitrust laws to apply where states do not regulate.
- Insurable interest
- A financial or love-and-affection interest in the insured's continued life that must exist when a life policy is issued for the contract to be valid.
- Aleatory contract
- An insurance contract in which the amounts exchanged by the parties are unequal and depend on chance, such as a large death benefit for relatively small premiums.
- Adverse selection
- The tendency of individuals at higher-than-average risk to buy or retain insurance, which can raise costs unless underwriters classify and price risk properly.
- Mortality cost
- The portion of a life insurance premium that reflects the insurer's expected death claims based on age, health, and other risk factors.
- Primary beneficiary
- The person or entity first entitled to receive life insurance proceeds if the insured dies while the designation is in effect.
- Per stirpes
- A beneficiary distribution method that divides a deceased beneficiary's share among that beneficiary's descendants rather than among all surviving beneficiaries equally.
- Revocable beneficiary
- A beneficiary designation that the policyowner may change without the beneficiary's consent, because the beneficiary has no vested right to the proceeds.
- Term life insurance
- Coverage for a specified number of years that pays a death benefit if the insured dies during the term and generally builds no cash value.
- Universal life insurance
- Permanent life insurance with flexible premiums and an adjustable death benefit; cash value accumulates subject to mortality and expense charges.
- Variable life insurance
- Permanent life insurance whose cash value is invested in separate accounts and fluctuates with market performance; it is a security requiring a securities license.
- Group life insurance
- A master policy issued to an employer or association that covers eligible members, who receive certificates rather than individual policies.
- Incontestability clause
- A provision stating that after a specified period, usually two years, the insurer generally cannot contest the policy for misrepresentation except for nonpayment of premium.
- Grace period
- A period after a premium due date during which the policy remains in force; if the premium is not paid, coverage may lapse.
- Nonforfeiture options
- Choices available when a permanent life policy is surrendered or lapses, including cash surrender, reduced paid-up insurance, and extended term insurance.
- Waiver of premium rider
- A rider that keeps a life policy in force without premium payment if the insured becomes totally disabled and satisfies the elimination period.
- Deferred annuity
- An annuity that accumulates value during a deferral period before income payments begin, often used for retirement savings.
- Exclusion ratio
- A formula used to determine the taxable portion of annuity payments by dividing the investment in the contract by the expected return.
- Annuitization
- The process of converting an annuity's accumulated value into a series of periodic income payments, often for life or a specified period.
- Death benefit taxation
- Life insurance proceeds paid to a named beneficiary are generally free from federal income tax, though estate tax may apply if the insured owned the policy.
- Modified endowment contract
- A life policy that fails the seven-pay test; it loses favorable tax treatment, and distributions are taxed income-first with possible 10% penalty.
- Policy loan taxation
- Loans from a life policy are generally not taxable while the policy stays in force, but unpaid loans can create taxable gain on lapse or surrender.
- 401(k) plan
- An employer-sponsored retirement plan allowing employees to defer salary on a pre-tax or Roth basis; employer matching contributions are common.
- Buy-sell agreement
- A business agreement funded by life insurance that provides for purchase of a deceased owner's interest from heirs or the estate.
- Key-person insurance
- Life insurance owned by a business on a key employee to protect the business against financial loss caused by that person's death.
- Elimination period
- The waiting period after a disability begins before disability income benefits become payable under a health insurance policy.
- Coordination of benefits
- Rules that determine which health plan pays first when an insured has coverage under more than one plan, preventing duplicate payment.
- New York DBL
- New York Disability Benefits Law requires employers to provide statutory short-term disability coverage for eligible employees for off-the-job illness or injury.
- New York Paid Family Leave
- A state program providing wage replacement for eligible workers to bond with a new child, care for a family member, or handle military family needs.