TN Life & Health flashcards

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

Tennessee Commissioner of Commerce and Insurance

The appointed official who heads Tennessee's Department of Commerce and Insurance and enforces state insurance laws, licensing, and market-conduct rules.

Producer license renewal in Tennessee

A Tennessee insurance producer license generally renews biennially, and renewal requires completing 24 hours of continuing education, including 3 hours of ethics, before the deadline.

Fiduciary duty of producers

Producers must hold premiums and client funds in a trustworthy manner, keep accurate records, and avoid commingling personal or business funds with money belonging to insurers or clients.

Tennessee replacement notice

When replacing life insurance or an annuity, the producer must give the applicant a replacement notice, list the existing coverage, and leave a copy with the applicant.

Unfair trade practice: rebating

Offering any inducement not stated in the policy, such as cash, gifts, or special favors, to persuade a person to buy insurance is prohibited as rebating.

Tennessee free-look period

A buyer may return a newly delivered life insurance policy within the state-specified review period, commonly 10 days, for a full premium refund.

Insurance guaranty association

A state organization that pays covered claims of insolvent insurers, subject to statutory limits; it does not protect against insurer sales misconduct or replace all policy benefits.

Insurable interest

A financial or love-and-affection interest in the continued life of the insured; for life insurance it must exist when the policy is issued, not necessarily at death.

Peril versus hazard

A peril is the cause of a loss, such as death or accident, while a hazard is a condition that increases the chance or severity of that loss.

Principle of indemnity

The idea that insurance should restore the insured to approximately the same financial position as before a loss, without profit; life insurance is treated as a valued contract instead.

Utmost good faith

An insurance principle requiring both parties to disclose material facts honestly; misrepresentation or concealment can affect the validity of the contract.

Aleatory contract

An insurance contract in which the amounts exchanged by the parties are unequal and depend on uncertain events, such as whether a covered loss occurs.

Adverse selection

The tendency of people with higher-than-average risk to seek insurance more often, which insurers manage through underwriting, exclusions, and risk classification.

Conditional receipt

A receipt that provides temporary coverage if the initial premium is paid and the proposed insured meets the insurer's underwriting requirements; coverage may begin before policy delivery.

Incontestability clause

A life insurance provision stating that after the policy has been in force for two years, the insurer generally cannot contest the policy for material misstatements.

Suicide exclusion

A policy provision that limits or denies death benefits if the insured dies by suicide within a specified period, commonly two years from policy issue.

Misstatement of age

If the insured's age or sex was misstated, the insurer adjusts the death benefit to what the premium would have purchased at the correct age or sex.

Nonforfeiture options

Choices available when a cash-value life policy lapses or is surrendered, including cash surrender value, reduced paid-up insurance, and extended term insurance.

Waiver of premium rider

A rider that waives premiums during a total disability lasting beyond an elimination period, keeping the policy in force while the insured remains disabled.

Accelerated death benefit

A rider allowing the policyowner to receive part of the death benefit early when the insured is terminally or chronically ill, subject to policy conditions.

Annuity exclusion ratio

The percentage of each annuity payment that represents a tax-free return of the owner's after-tax basis; the remainder is taxable as ordinary income.

Immediate annuity

An annuity purchased with a lump sum and converted to income payments within about one year, often used to provide current retirement income.

Variable annuity

An annuity whose value fluctuates with investments in a separate account; it requires both an insurance license and a securities registration to sell.

Life with period certain

An annuity payout option that guarantees income for the annuitant's life and, if death occurs before the period ends, continues payments to a beneficiary for the remainder.

Indexed annuity

A fixed annuity whose credited interest is linked to an index, subject to caps, participation rates, and a floor that protects against negative index returns.

Section 1035 exchange

A tax-deferred exchange of an existing life insurance policy or annuity for a new annuity or life policy that meets Internal Revenue Code requirements.

Health coinsurance

The percentage of covered medical expenses that the insured pays after meeting the deductible, while the insurer pays the remaining percentage until the out-of-pocket maximum.

HMO gatekeeper

A primary care physician in a health maintenance organization who coordinates care and must authorize referrals to specialists for coverage at in-network rates.

COBRA continuation

A federal right letting qualified beneficiaries continue group health coverage after certain events; 18 months for job loss and 36 months for divorce, death, or Medicare eligibility.

Disability own-occupation

A disability policy definition that pays benefits when the insured cannot perform the material duties of their own occupation, even if able to work elsewhere.

Long-term care ADLs

Activities of daily living such as bathing, dressing, eating, toileting, transferring, and continence; inability to perform several often triggers long-term care benefits.

Coordination of benefits

A process that determines which health plan pays first when a person has overlapping coverage, preventing payment beyond the actual covered expenses.