SD Life & Health flashcards
SD Life & Health · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- McCarran-Ferguson Act
- Federal law that leaves primary regulation of insurance to the states and limits federal antitrust application to insurance to the extent state law regulates it.
- Nonresident producer license
- License issued by a state to a producer already licensed in another state, typically through reciprocity, allowing lawful solicitation there.
- Twisting
- Unfair trade practice of inducing a policyholder to lapse or surrender a policy through misrepresentation or incomplete comparison in order to sell another policy.
- State guaranty association
- State-established entity that pays covered claims of policyholders of an insolvent insurer, subject to statutory limits; it is not a government guarantee.
- Insurable interest
- A financial or love-and-affection relationship such that a person benefits from another's continued life or suffers loss from that person's death.
- Pure risk
- A risk that involves only chance of loss or no loss, with no possibility of gain; it is generally insurable.
- Indemnity principle
- Insurance principle that restores the insured to approximately the same financial position after a loss, not allowing profit from the loss.
- Aleatory contract
- A contract in which the parties' performance depends on an uncertain event, so the premium paid and benefits received may be unequal.
- Human life value
- Method of estimating life insurance need as the present value of the insured's future earnings and services that dependents would lose at death.
- Conditional receipt
- Receipt giving temporary life insurance coverage from the date of application or medical exam, provided the proposed insured is insurable under the insurer's rules.
- Per stirpes
- Beneficiary distribution method in which a deceased beneficiary's share passes to that beneficiary's descendants, rather than being divided equally among surviving primary beneficiaries.
- Free look period
- Period after policy delivery, commonly 10 to 30 days, during which the owner may cancel a life policy and receive a refund of premium.
- Universal life insurance
- Permanent policy with flexible premiums and adjustable death benefit; cash value is credited with interest and reduced by cost of insurance and expenses.
- Variable life insurance
- Permanent policy whose cash value and death benefit fluctuate with separate-account investments; selling it requires a securities license in addition to a life license.
- Convertible term
- Term policy feature allowing the insured to exchange the term coverage for permanent insurance without proving insurability, usually before a stated deadline.
- Survivorship life insurance
- Second-to-die policy covering two people and paying the death benefit after both die; often used for estate planning and estate tax liquidity.
- Incontestability clause
- Provision stating that after a stated period, usually two years, the insurer cannot contest the policy for material misrepresentation, except for nonpayment of premium.
- Automatic premium loan
- Provision that uses available cash value to pay an overdue premium at the end of the grace period, preventing lapse unless cash value is insufficient.
- Extended term option
- Nonforfeiture option that uses cash value to buy term insurance for the full face amount for a limited period, with no further premiums due.
- Waiver of premium rider
- Rider that waives premiums after the insured becomes totally disabled for a specified waiting period and remains disabled, keeping the policy in force.
- Exclusion ratio
- Formula for partly tax-free annuity payments: investment in the contract divided by expected return, applied to each payment; the taxable portion is the remainder.
- Immediate annuity
- Annuity purchased with a single premium and beginning income payments within one payment period, often one month or one year.
- Joint and survivor annuity
- Payout option that continues income for two annuitants, typically reduced at the first death and continuing until the second death.
- Fixed indexed annuity
- Deferred annuity crediting interest based on an external index subject to a floor, cap, and participation rate, while protecting principal from market loss.
- Health maintenance organization
- Managed care plan providing comprehensive services through a network and a primary care gatekeeper, often with fixed copays and little or no deductible.
- Coinsurance
- Cost-sharing percentage the insured pays after the deductible, such as 20 percent, while the insurer pays the remaining percentage until the out-of-pocket maximum.
- Out-of-pocket maximum
- Annual limit on covered medical expenses the insured pays through deductibles, copays, and coinsurance; after reaching it, the plan pays covered benefits in full.
- COBRA continuation
- Federal law allowing eligible employees and dependents to continue group health coverage after a qualifying event, generally 18, 29, or 36 months, at their own expense.
- Elimination period
- Waiting period in disability income insurance before benefits begin; longer elimination periods usually reduce premium.
- Own occupation disability
- Disability definition paying benefits when the insured cannot perform the duties of their own specific occupation, even if able to work elsewhere.
- Medicare Part B
- Voluntary Medicare part covering medically necessary outpatient care, physician services, preventive services, and durable medical equipment, financed partly by premiums.
- Social Security disability
- Federal program paying monthly benefits to workers with sufficient work credits who cannot work because of a severe disability expected to last at least 12 months or result in death.