VA Life & Health key terms

A financial or emotional stake in the continued life of the insured that must exist when a life policy is purchased; without it, the contract is not legally enforceable.

The death benefit shown on the policy's schedule page. It is the base sum the insurer pays the beneficiary when the insured dies, before adjustments for loans, dividends, or riders.

The savings component inside a permanent life policy. It grows over time and may be borrowed against, withdrawn, or taken at surrender; term policies build no cash value.

The person, trust, or estate named to receive the death benefit. A primary beneficiary is paid first; a contingent beneficiary is paid only if the primary is unavailable.

The insurer's process of reviewing an applicant's health, finances, and lifestyle to decide whether to issue coverage and which rate class to assign.

A receipt issued when the first premium is collected with the application. It provides interim coverage, usually effective on the application or exam date, if the applicant proves insurable.

A provision that prevents the insurer from cancelling a policy or denying a claim because of misrepresentation once the policy has been in force for a set period, commonly two years.

A set number of days after a premium due date during which the policy remains in force. If the insured dies in that window, the unpaid premium is subtracted from the benefit.

Guaranteed choices such as cash surrender, reduced paid-up, or extended term that let a permanent policyholder keep some value after premiums stop and cash value has built up.

A loan taken from the insurer against a policy's cash value, with interest charged. Unpaid loan balances plus interest reduce the cash value or death benefit.

Temporary coverage that lasts a fixed number of years or until a stated age and pays a death benefit only if the insured dies during that term. It builds no cash value.

Permanent coverage with level premiums that stays in force for the insured's entire life, builds guaranteed cash value, and pays a death benefit whenever death occurs.

Flexible permanent coverage that separates the death benefit from the cash account. The owner may vary premium amounts and, within limits, change the death benefit.

A contract that accumulates money and then pays it out as a stream of income, often guaranteed for life. It addresses the risk of outliving one's savings rather than dying too soon.

A provision or rider that lets the policy owner collect part of the death benefit early when the insured is diagnosed with a terminal illness or another qualifying condition.

The amount the insured must pay out of pocket for covered services during a benefit year before the insurer begins paying its share of the bill.

The share of covered costs the insured pays after the deductible is met. For example, with 20% coinsurance the insurer pays 80% and the member pays 20%.

A fixed dollar amount the insured pays at the time of a covered service, such as $30 for an office visit, instead of paying a percentage of the cost.

The most a member will pay in deductibles, coinsurance, and copayments during a benefit year. Once it is reached, covered services are generally paid in full.

Advance approval from the insurer before a service, procedure, or prescription is obtained. Without it, the claim may be reduced, delayed, or denied.

The number of days at the start of a disability or illness during which no benefits are payable. It works like a deductible measured in time.

The maximum length of time benefits are paid for one illness, injury, or confinement, such as two years of long-term care or 52 weeks of disability income.

Rules that determine which plan pays first when a person is covered by more than one health plan, so combined payments never exceed the actual covered expense.

A health plan built around a network of contracted providers, usually with a primary care physician coordinating care. Non-emergency care outside the network is generally not covered.

A plan that pays more when members use contracted network providers but still allows care outside the network at a higher cost, usually without requiring referrals.

A policy the insured may keep in force by paying premiums until a stated age. The insurer cannot cancel the individual policy but may raise premiums for the whole class.

Coverage that pays for custodial or skilled care in the home, an assisted living facility, or a nursing home when a person cannot perform activities of daily living.

The federal health program for people age 65 and older and certain disabled individuals, split into Part A hospital, Part B medical, Part C Advantage, and Part D drug coverage.

The Virginia agency, part of the State Corporation Commission, that regulates insurers and producers, issues licenses, reviews rates and forms, and investigates complaints and violations.

The license an insurer must hold from Virginia's insurance regulator before it may legally transact insurance business in the state.

The state-issued credential an individual must hold to sell, solicit, or negotiate insurance in Virginia. A separate line of authority is required for life and for health.

An insurer's authorization for a licensed producer to act on its behalf. In Virginia the appointing insurer must notify the Bureau of Insurance of the appointment.

Credit hours a Virginia producer must complete during each renewal cycle, including an ethics component, to keep an active license and stay current on state rules.

Business conduct prohibited by Virginia insurance law, including misrepresentation, twisting, rebating, and unfair claim settlement. Violations can bring fines, cease-and-desist orders, or license loss.

Persuading a policyholder to drop one policy and buy another by making misleading or incomplete comparisons. Virginia prohibits the practice as an unfair trade practice.

Offering part of the producer's commission or any other inducement not stated in the policy to persuade someone to buy insurance. It is illegal in Virginia.

A required review window, generally 10 days after delivery, during which a Virginia buyer may return a newly delivered individual life insurance policy for a full premium refund.

The Virginia Life and Health Insurance Guaranty Association, funded by member insurers, which pays covered claims up to statutory limits when a licensed life or health insurer becomes insolvent.

The sale of an existing life insurance policy by a terminally or chronically ill insured to a third party for less than the face amount. Virginia regulates the transaction and its providers.

Knowingly giving false information or filing a false claim to obtain insurance coverage or benefits. Virginia makes it a crime and requires insurers to report suspected fraudulent acts.