TN Life & Health key terms

A license from Tennessee's insurance regulator that lets an insurer legally sell policies in the state. A company without one cannot transact insurance business with Tennessee residents.

The state agency whose Insurance Division licenses producers and companies, reviews market conduct, handles consumer complaints, and enforces Tennessee insurance statutes and regulations.

A credential issued by Tennessee regulators that allows a person to sell, solicit, or negotiate insurance. Applicants must complete prelicensing education, pass an exam, and meet background rules.

An insurer's written authorization for a licensed producer to represent it. Tennessee generally requires a valid appointment before a producer may submit business for that company.

A producer's legal obligation to hold client premiums or funds in trust and handle them honestly. Mixing personal money with client money is prohibited and can lead to license penalties.

Illegal conduct such as misrepresentation, rebating, twisting, and unfair claim settlement. Tennessee's insurance commissioner may investigate these acts and impose fines or license sanctions.

Offering part of a commission or an extra inducement not stated in the policy to persuade someone to buy insurance. Tennessee treats rebating as an illegal unfair trade practice.

Selling a new life policy or annuity that causes the buyer to lapse, surrender, or reduce an existing policy. Tennessee requires written disclosure comparing the old and new coverage.

A set number of days after a policy is delivered during which the owner may return it for a full premium refund. Tennessee requires this right on life and annuity products.

A financial or emotional stake in another person's continued life or health that justifies buying insurance on them. It must exist when the application is made and at policy issue for life insurance.

A principle that insurance should restore an insured to roughly the same financial position after a loss, without creating profit. Health and property coverage follow it; life insurance pays a stated amount.

The rule that both the insurer and the applicant must deal honestly and disclose all material facts. The insurer relies on truthful answers when deciding to issue coverage.

A policy written by the insurer with little negotiation from the buyer. Because the insurer drafts it, courts generally resolve ambiguous wording in favor of the insured.

An insurance agreement where the values exchanged are unequal and depend on chance. A small premium may buy a large death benefit, or the insurer may pay nothing.

A false or misleading statement on an application that would have changed the insurer's decision to issue coverage or its terms. It may allow the insurer to rescind the policy.

Temporary life insurance that pays a death benefit only if the insured dies during a specified period. It builds no cash value and is often renewable or convertible.

Permanent life insurance with level premiums, a guaranteed death benefit, and cash value that grows over time. It stays in force as long as required premiums are paid.

Permanent life insurance with flexible premium payments and an adjustable death benefit. The cash value earns interest, and monthly charges are deducted from the policy.

The savings portion inside a permanent life policy that grows over time. The owner may borrow against it or receive it when surrendering the policy.

Choices available when a permanent policy owner stops paying premiums, such as cash surrender, reduced paid-up insurance, or extended term insurance. These options protect the policy's built-up value.

A short period after a premium due date, often 31 days, during which coverage remains in force. A death during this time is covered, with overdue premium subtracted.

A provision that stops the insurer from canceling a life policy for misrepresentation after it has been in force for a set period, usually two years from issue.

The person or entity named to receive a life insurance death benefit. A primary beneficiary is first in line, and a contingent beneficiary receives the money if the primary cannot.

A contract that accumulates money and then pays it out over time, often to provide retirement income. Payments may last for life or for a chosen period.

The period when an annuity's value grows through premiums and earnings before income payments begin. Surrender charges often apply if money is withdrawn during this phase.

The process of converting an annuity's accumulated value into a series of periodic income payments. Once chosen, the payout option usually cannot be reversed.

A fee for withdrawing money from an annuity or permanent policy during its early years. It typically decreases over time and discourages early cancellation.

An annuity that credits a guaranteed minimum interest rate and pays set dollar amounts during payout. The insurer, not the owner, bears the investment risk.

An annuity whose value depends on investment subaccounts chosen by the owner. The owner bears market risk, and selling it requires a securities license.

A tax-free transfer of cash value from one life policy or annuity to another of like kind. Internal Revenue Code Section 1035 governs it.

The amount an insured pays for covered medical services before the health plan begins paying. It typically resets each year or benefit period.

The percentage of covered medical costs the insured pays after meeting the deductible. The insurer pays the remaining share until the out-of-pocket maximum is reached.

A fixed dollar amount paid at the time of a medical service, such as $25 for an office visit. It is common in managed care plans.

The most an insured pays in deductibles, coinsurance, and copayments for covered care during a plan year. After that limit, the insurer pays 100% of covered benefits.

A health condition diagnosed or treated before new coverage begins. Federal and state rules limit how long a plan may exclude or delay benefits for it.

Rules that determine which health plan pays first when a person is covered by two policies. They prevent duplicate payment and share costs properly.

A managed care plan that usually requires members to use network providers and get referrals from a primary care doctor. Nonemergency care outside the network is often not covered.

A health plan with a network of providers offering discounted rates. Members may use out-of-network providers but pay more through higher deductibles or coinsurance.

Pays a portion of lost earnings when the insured cannot work because of illness or injury. Benefits usually begin after an elimination period and may last months or years.

A waiting period before disability or long-term care benefits start. It works like a time deductible and may be measured in days or months.