VA 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.
- Insurable interest
- A legal and financial interest in the continued life of the insured that must exist when a life insurance policy is applied for and issued.
- Incontestability clause
- A provision stating that after a specified period, usually two years, the insurer cannot contest the policy for misrepresentation except for nonpayment of premium.
- Suicide clause
- A life policy provision limiting the insurer's liability if the insured dies by suicide within a specified period, commonly two years from policy issue.
- Grace period
- A period, often 30 or 31 days after the premium due date, during which the policy remains in force if the overdue premium is paid.
- Nonforfeiture options
- Choices available when a permanent life policy with cash value is surrendered or lapses: cash surrender, reduced paid-up insurance, or extended term insurance.
- Dividend options
- Ways a participating policy dividend can be used: cash, reduce premium, accumulate at interest, buy paid-up additions, or buy one-year term insurance.
- Settlement options
- Methods for paying a death benefit: lump sum, interest only, fixed period, fixed amount, or life income.
- Term life insurance
- Temporary death protection with no cash value; it may be level, decreasing, increasing, renewable, or convertible depending on policy features.
- Universal life insurance
- Permanent coverage with flexible premiums and an adjustable death benefit; cash value accumulates subject to interest and policy charges.
- Variable life insurance
- Permanent coverage whose cash value and death benefit are tied to separate-account investments; it is a security and requires securities registration to sell.
- Modified endowment contract
- A life policy that fails the seven-pay test; loans and distributions are taxed on a last-in, first-out basis and may incur a 10% pre-age-59½ penalty.
- Deductible
- The amount an insured must pay for covered services before the health plan begins to pay benefits, subject to plan rules.
- Coinsurance
- The percentage of covered health costs the insured pays after the deductible, with the plan paying the remaining percentage until the out-of-pocket maximum.
- Out-of-pocket maximum
- The annual limit on covered in-network costs an insured pays through deductibles, coinsurance, and copayments; the plan pays 100% after it is reached.
- HMO
- A health maintenance organization that generally requires members to use a primary care physician and obtain referrals for specialist care within its network.
- PPO
- A preferred provider organization that contracts with a network but allows members to use out-of-network providers, usually at higher cost, without referrals.
- COBRA continuation
- Federal law allowing qualified beneficiaries to continue group health coverage after a qualifying event, generally for 18, 29, or 36 months depending on the event.
- Medicare Part A
- Hospital insurance under Medicare; it helps cover inpatient hospital stays, skilled nursing facility care, hospice, and some home health care.
- Medicare Part D
- The Medicare prescription drug benefit, provided through standalone drug plans or Medicare Advantage plans that include prescription coverage.
- Disability income insurance
- Coverage that replaces part of an insured's income when illness or injury prevents work; benefits depend on own-occupation or any-occupation definition.
- Elimination period
- The waiting period after a disability or long-term care event before benefits begin; it functions like a deductible measured in time.
- Long-term care insurance
- Coverage for necessary assistance with activities of daily living or cognitive impairment, typically paying for nursing home, home care, or assisted living services.
- Virginia Bureau of Insurance
- The division of the State Corporation Commission that regulates insurers, producers, and insurance transactions in Virginia under the Commissioner of Insurance.
- Producer appointment
- An insurer's authorization for a licensed producer to represent it and sell its insurance products; the insurer must file the appointment with Virginia regulators.
- Continuing education requirement
- Virginia requires licensed producers to complete approved continuing education on a biennial basis, including ethics, to maintain an active license.
- Rebating
- Offering a buyer an inducement not specified in the policy, such as cash or gifts, to purchase insurance; it is prohibited as an unfair trade practice.
- Twisting
- Misrepresenting or using misleading comparisons to persuade a policyholder to lapse, surrender, or replace existing insurance coverage.
- Unfair discrimination
- Charging different premiums or offering different terms to insureds of the same class and risk without actuarial justification, which Virginia prohibits.
- Fiduciary duty
- A producer's obligation to hold premiums or funds belonging to insurers or insureds in trust, avoid commingling, and remit them promptly.
- Replacement notice
- A disclosure a producer must give when proposing a new life policy or annuity that will replace existing coverage, allowing the buyer to compare policies.
- Annuity suitability
- The requirement that an annuity recommendation be suitable and in the consumer's best interest based on financial situation, needs, and objectives.
- Guaranty association
- A statutory entity that provides limited protection to policyholders when a member insurer becomes insolvent, subject to Virginia coverage limits.