PA 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.
- Pennsylvania Insurance Department
- The state agency that licenses insurers and producers, examines market conduct, reviews policy forms and rates, and enforces Pennsylvania insurance laws.
- Producer license
- A Pennsylvania credential required to sell, solicit, or negotiate insurance; it must be renewed and can be suspended or revoked for violations.
- Fiduciary duty
- A producer's obligation to hold premium funds in trust for the insurer or insured, keep them separate, and not commingle them with personal funds.
- Rebating
- Offering any inducement not specified in the policy, such as cash or gifts, to persuade a buyer to purchase insurance; prohibited as an unfair trade practice.
- Twisting
- Misrepresenting or using misleading comparisons about an existing policy to induce a policyholder to lapse it and buy a replacement policy.
- Insurance fraud
- Knowingly presenting false information on an application or claim to obtain insurance benefits; punishable by criminal penalties, fines, and restitution in Pennsylvania.
- Department notice
- Formal guidance issued by the Pennsylvania Insurance Department that clarifies how statutes and regulations will be interpreted and enforced by the agency.
- Replacement notice
- A disclosure given when a new policy will replace existing coverage, comparing benefits and costs and informing the applicant of the right to keep the old policy.
- Privacy notice
- A disclosure explaining what nonpublic personal financial information an insurer collects, how it is used, and how customers may limit sharing with nonaffiliates.
- Unfair claim practice
- An insurer practice such as unreasonable delay, failure to acknowledge a claim, or offering less than the amount owed, prohibited by state regulation.
- Suitability review
- The process of evaluating a buyer's financial situation, needs, and objectives before recommending an annuity or life policy, including surrender charge disclosure.
- Market conduct examination
- A Department review of an insurer's sales, underwriting, claims, and complaint handling to verify compliance with insurance laws and regulations.
- Insurable interest
- A financial or legal interest in the continued life of another person; it must exist when a life policy is issued for the contract to be valid.
- Adverse selection
- The tendency of individuals at higher risk of loss to seek insurance more than lower-risk individuals, which underwriting and policy design attempt to control.
- Aleatory contract
- An insurance contract in which the exchange of values is unequal and depends on chance, because premiums paid may be far less than a claim benefit.
- Contract of adhesion
- A contract prepared by one party, the insurer, and offered on a take-it-or-leave-it basis, so ambiguities are construed against the insurer.
- Law of large numbers
- The principle that as the number of similar exposure units increases, actual losses approach expected losses, making insurance premiums more predictable.
- Moral hazard
- A risk factor arising from dishonest intent or character, such as deliberately causing a loss or exaggerating a claim to collect benefits.
- Term life insurance
- Coverage for a specified period with no cash value; it pays a death benefit only if the insured dies during the policy term.
- Whole life insurance
- Permanent coverage with level premiums, guaranteed cash value accumulation, and a death benefit payable whenever the insured dies.
- Nonforfeiture options
- Choices available when a permanent policy is surrendered or lapses: cash surrender value, reduced paid-up insurance, or extended term insurance.
- Incontestability clause
- A provision stating that after the policy has been in force for two years, the insurer cannot contest the policy for misstatements on the application.
- Waiver of premium rider
- A rider that waives premium payments if the insured becomes totally disabled, keeping the policy and its cash value in force.
- Per stirpes
- A beneficiary distribution method that divides benefits among the descendants of a deceased beneficiary by branch, so each family line receives an equal share.
- Modified endowment contract
- A life policy that fails the seven-pay test; cash value growth is taxed less favorably, with lifetime distributions taxed income-first and possible penalties.
- Elimination period
- The waiting period after a disability begins before benefits are payable; longer elimination periods reduce the premium.
- Coordination of benefits
- Rules that determine which health plan pays first when a person is covered by more than one plan, preventing duplicate payment for the same expense.
- COBRA continuation
- A federal right for qualified beneficiaries to continue group health coverage after a qualifying event, generally for 18, 29, or 36 months.
- Medicare Supplement
- A Medigap policy sold by private insurers that pays some costs Original Medicare does not cover, such as coinsurance and deductibles.
- Out-of-pocket maximum
- The most a covered person pays in a plan year for covered essential benefits through deductibles, copayments, and coinsurance before the plan pays 100 percent.
- Residual disability
- A disability benefit that pays a portion of the benefit when the insured can work but earns less than before because of illness or injury.
- Preventive care benefit
- Under the ACA, certain screenings and services must be covered with no cost sharing when delivered by an in-network provider.