OK Life & Health cheat sheet

Insurable interest must exist at policy issue for life insurance; it need not continue afterward, unlike property insurance.

Premium modes: annual, semiannual, quarterly, monthly. More frequent modes increase total annual outlay due to lost interest and higher administrative cost.

Nonforfeiture options on cash-value policies: cash surrender, reduced paid-up, extended term. Extended term uses the net cash value as a single premium for term coverage at the original face amount.

Dividend options: cash, reduce premium, accumulate at interest, paid-up additions, one-year term. Paid-up additions purchase additional permanent coverage with no new evidence of insurability.

Settlement options: lump sum, interest only, fixed period, fixed amount, life income (straight life, life with period certain, joint and survivor).

Grace period is typically 30 or 31 days; coverage continues during it, and the premium may be deducted from a claim. Reinstatement usually allowed within 3 years with evidence of insurability and back premiums with interest.

Suicide clause typically excludes payment of face amount for death by suicide within 2 years of issue; the insurer refunds premiums. Misstatement of age or sex adjusts the benefit to what the premium would have purchased at the correct age/sex.

Tax treatment: death benefit is generally income-tax-free to beneficiary; cash value grows tax-deferred; policy loans are not taxable while the policy remains in force; surrenders may trigger taxable gain.

Group life: master contract held by employer; certificates issued to members; conversion privilege allows conversion to individual whole life without evidence of insurability within 31 days of termination.

Coordination of benefits (COB) order: the plan covering the patient as employee pays before the plan covering the patient as dependent; for dependent children, the birthday rule applies (parent whose birthday falls earlier in the year pays first).

Disability income policies define total disability as inability to perform the duties of one's own occupation (own-occ) for an initial period, then any occupation thereafter; residual disability pays a percentage for partial loss of income.

Benefit periods and elimination periods: the elimination period is a time deductible before benefits begin; a longer elimination period reduces premium. The benefit period is the maximum duration of benefits.

Health insurance renewability provisions: cancellable, optionally renewable, conditionally renewable, guaranteed renewable, noncancellable. Noncancellable guarantees the insurer cannot raise premium or cancel; guaranteed renewable allows premium increases by class.

Accidental death and dismemberment (AD&D) pays a principal sum for accidental death and a capital sum (often a percentage of principal) for loss of limb or sight. Exclusions typically include suicide, self-inflicted injury, and war.

Major medical features: deductibles, coinsurance (commonly 80/20), out-of-pocket maximums, and internal limits. A stop-loss limit caps the insured's coinsurance share.

Medicare parts: Part A hospital (no premium for most), Part B medical (premium), Part C Medicare Advantage, Part D prescription drug. Medigap policies are standardized into lettered plans.

Workers' compensation provides no-fault benefits for work-related injury or illness: medical, disability income, and death benefits; it is the exclusive remedy against the employer in most states.

Health Savings Accounts (HSAs) require a high-deductible health plan, have annual contribution limits, and offer tax-deductible contributions, tax-deferred growth, and tax-free qualified withdrawals.