UT 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 loss the policyowner would suffer if the insured died; it must exist when the policy is issued, not at the time of death.

Human Life Value

An underwriting approach that sets face amount from the insured's projected future earnings, minus personal expenses and taxes, discounted to present value.

Modified Endowment Contract

A life policy that fails the 7-pay test; loans and withdrawals are then taxed last-in first-out, with a 10% penalty before age 59 and one-half.

Owner, Insured, Beneficiary

The owner controls all contract rights, the insured is the person whose life is covered, and the beneficiary receives the death proceeds.

Term Life Insurance

Pure death protection with no cash value that expires at the end of the stated term; it may be renewable and may be convertible to permanent coverage.

Universal Life Option A

A level death benefit option in which the specified amount stays fixed and growing cash value offsets the pure insurance amount, lowering the cost of insurance.

Variable Life Licensing

Variable life is a security, so a producer needs a state insurance license, FINRA registration, and prospectus delivery before soliciting the sale.

Survivorship Life Policy

A second-to-die policy insuring two people that pays after both have died; commonly used to fund estate taxes and provide estate liquidity.

Incontestability Clause

After the policy has been in force two years, the insurer cannot rescind coverage or reduce the benefit for application misstatements, except for nonpayment of premium.

Nonforfeiture Options

Choices available for the cash value when a permanent policy lapses or is surrendered: cash surrender, reduced paid-up insurance, or extended term insurance.

Waiver of Premium Rider

Waives premiums after the insured is totally disabled for a stated waiting period, keeping the policy and its cash value in force without further payment.

Extended Term Option

A nonforfeiture choice that uses the cash value to buy term coverage for a limited period at the original face amount, ending with no value.

Annuity Exclusion Ratio

Investment in the contract divided by the expected return; that percentage of each nonqualified annuity payment is a tax-free return of principal.

Straight Life Annuity

A life-only payout that stops at the annuitant's death; it produces the highest periodic income because no refund or survivor benefit is included.

Deferred Annuity Accumulation

The growth phase before payments begin; interest is tax-deferred, surrender charges may apply to early withdrawals, and a portion of withdrawals is usually penalty-free.

Per Stirpes Distribution

A deceased beneficiary's share passes to that beneficiary's own heirs instead of being spread among the other named survivors of the insured.

Conditional Receipt

Coverage takes effect on the application or medical exam date if the proposed insured meets the insurer's underwriting requirements; otherwise no coverage exists.

Attending Physician Statement

A medical report requested from the applicant's doctor describing diagnoses, treatment, and prognosis, used by underwriters to classify and rate the risk.

Health Coinsurance Clause

After the deductible is met, the insurer pays a fixed percentage of covered charges, commonly 80%, and the insured pays the balance up to a stop-loss limit.

Out-of-Pocket Maximum

The most an insured pays for covered essential benefits in a plan year, after which the insurer pays 100% of covered charges.

Health Grace Period

A short period after a premium due date, commonly 7 to 31 days, during which the policy stays in force; any claim is reduced by the unpaid premium.

HMO Gatekeeper Model

An HMO assigns a primary care physician who authorizes referrals and generally covers only network care except in emergencies, in exchange for a prepaid premium.

COBRA Continuation

Federal law letting qualified beneficiaries keep group coverage after a qualifying event, typically 18 months, by paying the full premium plus a 2% fee.

Own-Occupation Disability

A disability definition that pays benefits when the insured cannot perform the duties of his or her own occupation, even if working in another field.

Pre-existing Condition Rule

ACA rules bar individual and small-group plans from excluding or surcharging pre-existing conditions; HIPAA group rules use a 6-month look-back with creditable coverage offsets.

Coordination of Benefits

Rules setting payment order when a person has two health plans: the primary plan pays first and the secondary pays up to remaining allowable expenses.

Medicare Part B

Optional medical insurance covering physician services, outpatient care, and supplies; it requires a monthly premium that increases with the enrollee's income.

Social Security Full Retirement Age

Age 66 to 67 depending on birth year; claiming at 62 permanently reduces the benefit, while delaying to age 70 adds 8% per year.

Medicaid

A joint federal-state program providing coverage to low-income people using MAGI rules, and the primary payer of long-term nursing home care in the United States.

Utah Continuing Education

Utah producers must complete continuing education credit hours each license term, including required ethics hours, and certify compliance when renewing the license.

Twisting

An unfair trade practice of inducing a policyholder to lapse existing coverage through misleading or incomplete comparisons in order to sell a new policy.

Fiduciary Premium Handling

Producers hold collected premiums in a trust capacity, must keep those funds separate from personal accounts, and must forward them to the insurer promptly.