WV Life & Health flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

West Virginia Insurance Commissioner

The state official appointed by the Governor who administers West Virginia insurance laws, issues licenses, examines insurers, and enforces unfair trade practice rules.

Twisting

A prohibited practice of misrepresenting an existing policy to induce a policyholder to lapse, surrender, or replace it, typically to the detriment of the policyholder.

Producer continuing education

West Virginia generally requires licensed life and health producers to complete 24 credit hours every two years, including at least 3 hours of ethics instruction.

Law of large numbers

The principle that as the number of similar independent exposure units increases, actual loss experience tends to approach the expected or predicted loss experience.

Adverse selection

The tendency for individuals with higher-than-average risk to seek or keep insurance more often than lower-risk individuals, which can raise premiums without underwriting controls.

Contract of adhesion

An insurance contract drafted by the insurer with little negotiation; ambiguities are generally interpreted against the insurer and in favor of the insured.

Human life value

A life insurance needs method that estimates the present value of a person's future earnings and services that dependents would lose upon death.

Conditional receipt

A receipt given when a life application and initial premium are submitted; coverage begins only if the applicant meets the insurer's underwriting requirements, often as of the application date.

Term life insurance

Coverage that pays a death benefit only if the insured dies during the stated term; it generally has no cash value and is renewable or convertible.

Universal life insurance

Permanent life insurance with flexible premiums and an adjustable death benefit; cash value earns interest and is reduced by cost-of-insurance and expense charges.

Variable life insurance

Permanent life insurance whose cash value is invested in separate accounts; the policyowner bears investment risk and a securities license is required to sell it.

Incontestability clause

A policy provision that generally prevents the insurer from contesting the policy after it has been in force for two years, except for nonpayment of premium.

Nonforfeiture options

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

Automatic premium loan

A provision that uses available cash value to pay an overdue premium at the end of the grace period, preventing the policy from lapsing.

Exclusion ratio

The portion of each annuity payment that is excluded from taxable income, calculated as investment in the contract divided by the expected return.

Immediate annuity

An annuity purchased with a lump sum that begins income payments within one payment period, often one month, after purchase.

Variable annuity

A deferred or immediate annuity whose value is invested in separate accounts; payments fluctuate with investment performance, and the annuitant bears investment risk.

Coordination of benefits

A process that determines which health plan pays first when a person has coverage under more than one plan, preventing duplicate payment for the same expense.

Out-of-pocket maximum

The limit on covered in-network cost sharing a health plan enrollee pays in a year; after it is reached, the plan generally pays 100% of covered benefits.

Guaranteed renewable policy

A health insurance policy the insurer must renew at the policyholder's option, but the insurer may increase premiums by class rather than cancel the individual policy.

Change of occupation provision

A health policy provision that reduces benefits if the insured changes to a more hazardous occupation than was stated in the application.

Conversion privilege

A right that lets an insured convert group or individual health coverage to another policy without evidence of insurability, usually within a stated period.

Own-occupation disability

A disability definition that pays benefits when the insured cannot perform the duties of the insured's own occupation, even if able to work elsewhere.

Elimination period

The waiting period after a disability begins before benefits are payable; longer elimination periods reduce the premium for disability income coverage.

Residual disability

A disability benefit that pays a reduced amount when the insured returns to work but still earns less than the pre-disability income due to the disability.

COBRA continuation

A federal law that lets eligible participants continue group health coverage after certain events, generally for 18 months, 29 months for disability, or 36 months for family events.

Experience rating

A group insurance premium method that bases the group's rate on its own past claims experience rather than on the broad community's average risk.

Medicare Part B

Medicare coverage for physician services, outpatient care, durable medical equipment, and preventive services; it generally pays 80% of approved charges after the deductible.

Medigap open enrollment

A six-month period beginning when a person first enrolls in Medicare Part B at age 65 or later, during which Medigap insurers must sell a policy without medical underwriting.

Medicare Part D

Optional Medicare prescription drug coverage offered through private plans; beneficiaries enroll during specified periods and may owe a late enrollment penalty without creditable coverage.

Employer-paid health premiums

Premiums paid by an employer for employee health coverage are deductible by the employer and generally excluded from the employee's taxable gross income.

Disability benefit taxation

Disability income benefits are taxable to the recipient to the extent the employer paid the premiums; if the employee paid with after-tax dollars, benefits are generally tax-free.