WY Life & Health cheat sheet

The Wyoming Insurance Commissioner is appointed by the Governor to head the Wyoming Department of Insurance and enforce the Wyoming Insurance Code (W.S. Title 26).

A person must hold a Wyoming producer license in the line being sold (life; accident and health) before soliciting, negotiating, or selling insurance in that line.

Wyoming continuing education: 24 credit hours every 2 years, including at least 3 hours of ethics, reported for each licensed line.

Individual life policies must include a free-look right of at least 10 days after delivery; returning the policy in that window entitles the owner to a full premium refund.

Life policies must contain a grace period of at least 30 days; coverage stays in force during the grace period and any unpaid premium is deducted from the death benefit.

Incontestability: after 2 years from issue an insurer generally cannot void a life policy for misrepresentation in the application; nonpayment of premium remains grounds.

Twisting, misrepresentation, rebating, and commingling premium funds are prohibited unfair trade practices that can result in fines, suspension, or revocation of a license.

The Wyoming Life and Health Insurance Guaranty Association pays covered claims when a member insurer is insolvent, commonly up to $300,000 of death benefit and $100,000 of net cash surrender value.

A temporary producer license of up to 180 days may be issued to a designee (for example, after a producer's death or disability) to service existing business.

Three parties: the owner holds all contract rights, the insured's life is covered, and the beneficiary receives the proceeds; owner and insured are often but not always the same person.

Insurable interest must exist at the time of application; a policy purchased without it is void, but the interest does not have to continue until the insured's death.

Gross premium = net premium + expense loading; the net premium reflects mortality (expected deaths on the CSO tables) offset by assumed interest earnings on reserves.

Level-premium whole life charges more than the current cost of protection in early years, building a reserve that funds rising mortality costs in later years.

Term life is pure protection for a stated period with no cash value; forms include level, decreasing, increasing, annually renewable, and return-of-premium term.

Whole life is permanent, level-premium, builds guaranteed cash value, and endows at maturity (age 100 or 121) when cash value equals the face amount.

Universal life separates the death benefit from the cash value: flexible premiums, an adjustable face amount, monthly cost-of-insurance deductions, and a declared interest rate.

Variable life cash value is invested in a separate account; the contract is a security, so a producer needs both a state insurance license and securities registration.

A policy that fails the 7-pay test is a modified endowment contract: loans and withdrawals are taxed income-first, with a 10% penalty before age 59 1/2.

Entire contract clause: the policy plus the attached application are the whole agreement; only an authorized officer of the insurer can change it, and its terms cannot be waived orally.

Ownership rights include naming and changing the beneficiary (unless irrevocable), assigning the policy (absolute or collateral), borrowing, surrendering, and selecting settlement options.

Reinstatement is available within about 3 years of lapse with evidence of insurability and payment of overdue premiums plus interest; a new contestable period may begin.

Nonforfeiture options on whole life: cash surrender, reduced paid-up (smaller face amount, no further premiums), or extended term (same face amount for a limited period).

Dividend options: cash, reduce premium, accumulate at interest, paid-up additions, or one-year term; dividends are a return of divisible surplus and are never guaranteed.

Settlement options: lump sum, interest only, fixed period, fixed amount, and life income (straight life, life with period certain, joint and survivor).

Policy loans accrue interest and need not be repaid, but any unpaid loan plus interest is subtracted from the death benefit or cash value.

Common riders: waiver of premium, guaranteed insurability, accidental death and dismemberment, term, family income, cost-of-living, return of premium, and accelerated death benefit.

Suicide clause: within 2 years of issue the insurer refunds premiums instead of paying the face amount; misstatement of age or sex adjusts the benefit rather than voiding the policy.

Cost-sharing terms: premium, deductible, coinsurance (the percentage the insured pays), copayment, and out-of-pocket maximum, which caps covered in-network spending for the year.

Renewability ladder: cancellable (insurer may cancel at any time), optionally renewable, conditionally renewable, guaranteed renewable (class-wide rate increases only), and noncancellable (rate and renewal guaranteed).

Individual health policies generally provide a 31-day grace period for premium payment, compared with the 30-day grace period standard in life insurance.

Time limit on certain defenses: after 2 years the insurer cannot deny a claim because of misstatements on the application, except for fraudulent misstatements.

Under the ACA, non-grandfathered plans cannot exclude or rate up preexisting conditions, cannot impose annual or lifetime dollar limits on essential health benefits, and must cover preventive services with no cost sharing.

ACA market rules also require dependent coverage to age 26, guaranteed availability and issue, community rating varied only by age (3:1), tobacco, geography and family size, and an 80/85% medical loss ratio with rebates.

Coordination of benefits: the primary plan pays first up to its limits and the secondary plan considers the balance; for dependent children the birthday rule (earlier birthday in the year) usually governs.

Claim handling: the insurer must supply claim forms within 15 days of notice of claim and pay a clean claim within the period set by state rule, commonly 30 to 45 days.

Tax-advantaged accounts: an HSA requires a qualifying high-deductible health plan and offers deductible contributions, tax-deferred growth, and tax-free qualified withdrawals; FSA funds are generally use-it-or-lose-it.

Disability income: an own-occupation definition pays more readily than any-occupation; the elimination period is the waiting time before benefits and the benefit period is the maximum payout.

Partial or residual disability pays a reduced benefit for lost income, while presumptive disability (loss of sight or limbs) pays full benefits without an elimination period.

Business disability coverages: key person disability replaces a key employee's contribution, business overhead expense pays fixed operating costs, and disability buy-sell funds an ownership buyout.

Group insurance issues one master contract to the employer and certificates to participants; contributory plans typically require at least 75% participation and noncontributory plans 100%.

Group conversion lets a terminating member buy an individual policy without evidence of insurability, usually within 31 days; COBRA covers employers with 20+ employees for 18, 29, or 36 months at up to 102% of premium.

Managed care models: HMO (closed panel, gatekeeper, capitation), PPO (network discounts, no referrals, higher cost outside the network), POS (HMO/PPO hybrid), and EPO (network only).

Medicare: Part A hospital, Part B medical with a premium, Part C Medicare Advantage, Part D drugs; initial enrollment is the 7-month window around age 65 and annual enrollment runs October 15 to December 7.

Medicaid is jointly funded by the state and federal government, income-tested, and the primary payer of long-term nursing home care; it is separate from Medicare.

Long-term care benefits trigger on inability to perform 2 of 6 activities of daily living for at least 90 days or severe cognitive impairment; Social Security disability pays after 5 full months, with Medicare after 24 months.