OK Life & Health flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable interest

A financial or emotional stake in the continued life of the insured that must exist at policy issue for life insurance; it prevents gambling on human life.

Extended term option

A nonforfeiture option that uses the policy's net cash value as a single premium to buy term insurance for the original face amount for a limited period.

Reduced paid-up option

A nonforfeiture option that applies the net cash value to purchase a smaller whole life policy with the same premium and no further payments required.

Paid-up additions

A dividend option in which dividends buy small amounts of additional permanent coverage, increasing death benefit and cash value without new underwriting.

Grace period

A period, typically 30 or 31 days after the premium due date, during which the policy remains in force; a claim may be reduced by unpaid premium.

Reinstatement provision

Allows a lapsed policy to be restored within a set period, usually three years, upon evidence of insurability and payment of overdue premiums with interest.

Suicide clause

A provision limiting the insurer's liability to a refund of premiums if the insured dies by suicide within a stated period, commonly two years from issue.

Misstatement of age

A provision that adjusts the death benefit to the amount the premium paid would have purchased at the insured's correct age, rather than voiding the policy.

Whole life insurance

Permanent coverage with level premiums for life, guaranteed cash value, and a death benefit payable whenever death occurs, subject to policy terms.

Term life insurance

Coverage for a specified period with no cash value; it pays the face amount only if death occurs during the term while the policy is in force.

Universal life insurance

Permanent insurance with flexible premiums and adjustable death benefit; the cash value grows at a declared interest rate subject to a guaranteed minimum.

Variable life insurance

Permanent insurance whose cash value and death benefit vary with the performance of separate account investments chosen by the policyowner.

Policy loan

A loan from the insurer secured by the policy's cash value; unpaid loans plus interest reduce the death benefit or cash surrender value.

Automatic premium loan

A provision that uses available cash value to pay an overdue premium at the end of the grace period, preventing unintentional lapse.

Incontestability clause

After the policy has been in force for a stated period, usually two years, the insurer cannot contest the policy for misrepresentation, except for nonpayment of premium.

Group life conversion privilege

Allows an insured leaving a group plan to convert to an individual whole life policy without evidence of insurability, usually within 31 days of termination.

Coordination of benefits

Rules determining which health plan pays first when a person is covered by more than one plan, preventing duplicate payment beyond actual expenses.

Birthday rule

For dependent children covered by both parents' plans, the plan of the parent whose birthday falls earlier in the calendar year pays first.

Elimination period

A waiting period after a disability or illness begins before benefits become payable; it functions like a time deductible and reduces premium when longer.

Residual disability

A disability income benefit that pays a proportionate amount when the insured returns to work at reduced income due to continuing disability.

Own-occupation definition

A disability standard that pays benefits when the insured cannot perform the duties of the occupation they held at the time of disability.

Any-occupation definition

A stricter disability standard that pays benefits only when the insured cannot perform the duties of any occupation for which they are reasonably suited.

Guaranteed renewable policy

The insurer must renew the policy as long as premiums are paid, but may increase premiums for an entire class of insureds, not individually.

Noncancellable policy

The insurer cannot cancel the policy or raise the premium, as long as premiums are paid; this gives the insured the strongest renewal guarantee.

Coinsurance clause

A cost-sharing provision in which the insured pays a percentage of covered expenses, commonly 20%, after the deductible, up to an out-of-pocket maximum.

Stop-loss limit

The maximum out-of-pocket amount the insured must pay in coinsurance during a benefit period; the insurer pays covered expenses above this limit.

AD&D principal sum

The amount payable for accidental death under an accidental death and dismemberment policy; a capital sum is a percentage paid for a covered loss.

Medicare Part A

Hospital insurance covering inpatient hospital stays, skilled nursing facility care, hospice, and some home health care; most people pay no premium.

Medicare Part B

Medical insurance covering physician services, outpatient care, and preventive services; it requires a monthly premium and has an annual deductible.

Medigap

Private supplemental insurance that helps pay Medicare Part A and B cost-sharing; policies are standardized into lettered plans with defined benefits.

Workers' compensation

State-mandated no-fault coverage for work-related injury or illness, providing medical care, disability income, and death benefits to employees.

Health Savings Account

A tax-advantaged account paired with a high-deductible health plan; contributions are deductible and qualified medical withdrawals are tax-free.