VT Life & Health key terms

A state-issued authorization allowing a person or business to sell, solicit, or negotiate insurance in Vermont, obtained after prelicensing education, an exam, and a background check.

A producer's legal obligation to hold client premiums and funds in trust, use them only for their intended purpose, and keep them separate from personal or business money.

A prohibited insurance sales or claims behavior, such as misrepresentation, twisting, rebating, or unfair claim settlement, that regulators may investigate and penalize.

Intentional deception by an applicant, insured, or producer to obtain an improper insurance benefit or advantage, such as falsifying an application or claim.

A regulatory review of an insurer's sales, underwriting, claims, and recordkeeping practices to check compliance with Vermont insurance law.

A financial or emotional stake in another person's continued life or health that justifies buying insurance on that person, and it must exist when the policy is issued.

Spreading the cost of losses across many people exposed to similar risks so each member pays a predictable premium instead of bearing a large individual loss.

The tendency for people with higher-than-average risk to seek or keep insurance more than lower-risk people, which can raise costs unless insurers use underwriting and pricing safeguards.

The insurer's process of evaluating an applicant's health, lifestyle, and financial information to decide whether to issue coverage and at what premium.

Restoring an insured to approximately the same financial position after a loss without allowing profit; health insurance benefits are generally based on this principle.

The amount an insurer pays a named beneficiary when the insured dies, usually the policy face amount plus applicable riders and less any outstanding policy loans.

The savings component inside permanent life insurance that grows tax-deferred and can be borrowed against or received if the policy is surrendered.

A person, trust, or estate named in a life insurance policy to receive the death benefit; primary beneficiaries are first in line, with contingent beneficiaries as backups.

The person who owns a life insurance contract and controls its rights, such as naming beneficiaries, taking loans, or surrendering it; may differ from the insured.

A short statutory period after policy delivery during which the owner may cancel the coverage and receive a refund, giving buyers time to review the contract.

Life coverage that lasts for a specified number of years and pays a death benefit only if the insured dies during that term; it builds no cash value.

Permanent life insurance with level premiums, a guaranteed death benefit, and guaranteed cash value growth that lasts for the insured's entire life.

Flexible permanent life insurance that separates the death benefit from the cash account; the owner may adjust premiums or coverage within policy limits.

Permanent life insurance whose cash value is invested in separate accounts chosen by the owner, so values fluctuate with market performance and are not guaranteed.

A choice available when a permanent policy lapses with cash value, such as reduced paid-up insurance or extended term insurance, so the owner keeps some coverage.

A contract that accumulates money and then pays it out as a stream of income, usually for retirement; it may be immediate or deferred and fixed or variable.

The point at which an annuity's accumulated value is converted into regular income payments, after which the payout schedule generally cannot be reversed.

A fee charged for withdrawing money or canceling an annuity or permanent life policy during an early contract period, designed to recover sales costs.

The amount an insured must pay out of pocket for covered health services each year before the insurer begins paying its share, except for certain preventive care.

The percentage of covered health costs that the insured pays after meeting the deductible, with the insurer paying the remaining share until the out-of-pocket limit is reached.

The most an insured must pay in a plan year for covered in-network services, after which the insurer generally pays 100 percent of covered benefits.

A health problem for which medical advice or treatment was received before coverage began; under current rules, most health plans cannot deny or limit coverage because of it.

A waiting period after a disability or illness begins before benefits become payable, common in disability income and long-term care policies.

A policy provision stating that after a set period, usually two years, the insurer generally cannot deny a claim or cancel the policy because of misstatements on the application, except fraud.

Coverage that replaces a portion of earned income when the insured cannot work because of illness or injury, often defined by own-occupation or any-occupation terms.

The Vermont agency that licenses insurers and producers, enforces insurance laws, reviews rates and forms, and handles consumer complaints about insurance.

Vermont's state-based health insurance marketplace where individuals and small businesses compare and buy qualified health plans and apply for financial help.

Vermont's Medicaid and Children's Health Insurance Program coverage for children, pregnant women, and some young adults, offering low-cost or free health coverage.

A program letting Vermonters who buy a qualifying long-term care policy protect a matching amount of assets from Medicaid spend-down when applying for long-term care assistance.

A Vermont nonprofit entity funded by member insurers that pays certain claims if a licensed life, health, or annuity insurer becomes insolvent, subject to statutory limits.