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925 Cards in this Set
- Front
- Back
Underwriting classification in which individuals are in average physical condition with average lifestyles and habits for people of their respective sex and age group.
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Standard
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A medical condition, disease or illness.
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Sickness
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The insurance practice of combining similar losses from many people so that the average loss over the entire group is relatively constant.
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Risk Pooling
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Risk that present a chance for loss or gain. Gambling is an example of a *** risk. *** risks are not insurable.
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Speculative
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Insurance that is comprised of *** life and *** annuities. They invest premium dollars in securities, which carry more risk due to price fluctuations. A requirement of selling *** products is a securities license and a life insurance producer license.
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Variable Insurance
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Annuities that have variable interest rates and benefits.
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Variable Annuties
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Method of handling risk in which risk is transferred from one party to another. This is the essence of insurance.
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Transfer
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Method of handling risk which entails distributing risk over a large number of people so that all members of the group carry a portion of the risk.
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Sharing
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It is defined as the possibility of a loss occurring.
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Risk
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Provision in individual health insurance policies stating that written proof of loss must be provided to the insurer within 90 days after the date of loss unless not reasonably possible. Under no circumstance may proof of loss be submitted later than one year from the date proof of loss was initially required.
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Proof of Loss
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The insurer that accepts the additional risk.
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Reinsurer
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Spreading risk from one insurer to one or more other insurers.
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Reinsurance
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Method of handling risk in which ways of minimizing loss exposure are actively sought.
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Reduction
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Risk that present a potential for loss only (not gain). Pure risks include injury, illness, and death, and are the only insurable risks.
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Pure Risk
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Insurance that protects against the risk of damage and destruction to all types of property.
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Property insurance
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The amount the insured must pay before the insurer will pay for a health insurance claim.
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Deductible
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Health coverage used to insure a debt. If a debtor becomes disabled, payments are made to a creditor until the insured can resume work.
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Credit Health Insurance
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The entity that assumes the insured’s risk. It is synonymous with insurance company.
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Insurer
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The person who is covered under the policy.
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Insured
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An economic phenomena, where in order to have a general idea of how many losses will occur in a given year, insurers use the ***, which states that as the group increases in size, it is easier to predict the number of future losses over a certain period of time.
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Law of Large Numbers
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A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
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Insurance Policy
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A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer.
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Insurance Contract
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The entity that assumes the insured's risk.
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Insurance Company
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An individual’s valid concern for the continuation of the life or well-being of the person insured, which must be present at the time of application.
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Insurable Interest
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It is the cause of the loss and the event insured against. In life and health insurance, the perils are premature death, dependency during old age, accident, and sickness.
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Peril
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Mathematicians employed by insurers to collect and analyze risk data.
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Actuaries
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The amount paid to the beneficiary under an insurance policy upon the death of the insured.
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Death Benefit
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The total amount the insurer will pay for an insured risk.
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Limit of Liability
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It is designed to protect against the risk of premature death.
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Life Insurance
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The application of laws, regulations, and legal court rulings which increase the chance or amount of loss.
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Legal Hazard
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A legally binding agreement between 2 or more parties where a promise of consideration is exchanged.
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Contract
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The rights and responsibilities of all parties of the contract.
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Conditions
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It is the unintentional decrease in value of an asset due to a peril.
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Loss
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Physical characteristics which raise the loss potential.
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Physical Hazard
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The insurer's costs which include: acquisition costs, staff salaries, rent, contingency funds, and claims payments.
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Expenses
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It is the condition of being prone to loss due to a hazard or uncertain event.
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Exposure
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A contract which protects against the risk of living longer than expected. They provide a guaranteed life income to protect against the risk of depleting retirement funds.
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Annuities
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Tendency for poorer than average risks to seek insurance.
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Adverse Selection
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Set cost of insurance coverage, paid by the policyholder to the insurer.
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Premium
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A cost-sharing mechanism between the insurer and the insured in a medical insurance transaction in which the insurer agrees to pay a large percentage of the expenses, and the insured is responsible for paying the remainder.
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Coinsurance
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The insured’s notification to the insurer that a payment is requested for a covered loss.
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Claim
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The insurer that gives the risk to the reinsurer. Also termed primary insurer.
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Ceding company
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A legally binding agreement between two or more parties where a promise of consideration is exchanged.
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Contract
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A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work.
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Disability
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In life insurance, the rate at which a specific population dies.
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Mortality
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In health insurance, the rate at which accident, sickness or disability will occur.
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Morbidity
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An insured’s careless attitude, indifference or lack of responsibility which increase the chance of a loss occurring.
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Morale Hazard
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The item insured in the policy.
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Exposure Unit
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It is a form of insurance, which protects against the risk of legal liability for injury, death, disability, damage and destruction to property.
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Casualty Insurance
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It is anything that increases the chance of a loss occurring from a particular peril.
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Hazard
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Protects against the risk that a person in debt, termed debtor, cannot repay the debt to the creditor because of accident, sickness, disability or death.
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Credit Insurance
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They are limits placed on certain medical coverages within a policy.
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Inside Limits
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Method of handling risk in which a person intentionally steers clear of exposure to a risk.
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Avoidance
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The predisposition, character, habits and values of a person which increase the chance of a loss occurring.
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Moral Hazard
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The named person(s) who receive the policy benefits.
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Beneficiary
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Broad term used to describe policies that cover loss of income due to accident or sickness and health care expenses.
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Health Insurance
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The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered.
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Policyowner
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The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered.
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Policyholder
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To restore a financial loss to the state prior to the occurrence of the loss.
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Indemnity
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The form filled out by the applicant that includes information about the proposed insured's health history and background. The applicant's statements made on the *** are representations.
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Application
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Protects against the risk that a person in debt, termed debtor, cannot repay the debt to the creditor because of accident, sickness, disability or death.
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Credit Insurance
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They are limits placed on certain medical coverages within a policy.
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Inside Limits
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Method of handling risk in which a person intentionally steers clear of exposure to a risk.
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Avoidance
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The predisposition, character, habits and values of a person which increase the chance of a loss occurring.
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Moral Hazard
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The named person(s) who receive the policy benefits.
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Beneficiary
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Broad term used to describe policies that cover loss of income due to accident or sickness and health care expenses.
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Health Insurance
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The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered.
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Policyowner
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The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered.
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Policyholder
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To restore a financial loss to the state prior to the occurrence of the loss.
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Indemnity
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The form filled out by the applicant that includes information about the proposed insured's health history and background. The applicant's statements made on the *** are representations.
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Application
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Federal social insurance program which provides retirement, disability, and survivors benefits. Also referred to as OASDI, or Old Age, Survivors, and Disability Insurance.
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Social Security
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Option to cancel a health insurance policy at any time before its expiration date.
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Cancellation
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The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
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Underwriting
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They select, classify and rate risks.
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Underwriters
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Non-licensed or nonadmitted insurers. These insurers do not have licensure because they have not yet applied, have applied and been denied licensure, or are excess and surplus lines insurers.
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Unauthorized insurers
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It is defined as the possibility of a loss occurring.
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Risk
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People who sell, solicit and negotiate insurance. “***” is an all-encompassing term which includes agents and brokers.
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Producers
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An insurer that conducts business in the state it was incorporated
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Domestic Insurer
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Federal social insurance program which provides retirement, disability, and survivors benefits. Also referred to as OASDI, or Old Age, Survivors, and Disability Insurance.
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Social Security
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Provision in individual health insurance policies stating that a lapsed policy may be reinstated on the 45th day after an application is submitted, unless denied. Accidents will be covered immediately upon reinstatement, but sicknesses have a 10-day waiting period.
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Reinstatement
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A medical condition, disease or illness.
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Sickness
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The characteristics, privileges, duties of all parties, and rights of a policy.
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Provisions
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Incorporated companies owned by their stockholders
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Stock Insurers
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Health insurance coverage for accidental injury and sickness that occurs as a result of employment. Coverage is mandatory for most employers.
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Workman
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Health insurance coverage for active duty and retired members of the uniformed services and their dependents.
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TRICARE
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In health insurance, individuals covered by prepaid health plans. Synonymous with member.
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Subscriber
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The insurer’s account used to invest premium dollars for variable life insurance and annuities.
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Separate Account
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Licensed salespeople who work for an agent or broker.
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Solicitor
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Insured retains risk.
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Self Insured
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The entity that assumes the insured’s risk. It is synonymous with insurance company.
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Insurer
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The person who is covered under the policy.
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Insured
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They are limited liability companies or member-owned corporations which collectively assume and spread its members
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Risk Retention Groups
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They are also referred to as interinsurance exchanges or simply reciprocals, are unincorporated groups of individuals. Each individual member, called a subscriber, provides insurance for other members through indemnity contracts.
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Reciprocal Exchanges
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It is sold by debit agents who collect premiums from policyholders on a weekly basis
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Industrial Life Insurance
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The rights and responsibilities of all parties of the contract.
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Conditions
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Case holding that insurance transactions crossing state lines are interstate commerce and are subject to federal regulation.
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U.S. vs South-Eastern Underwriters Association
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It is designed to protect against the risk of premature death.
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Life Insurance
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Mathematicians employed by insurers to collect and analyze risk data.
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Actuaries
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A legally binding agreement between 2 or more parties where a promise of consideration is exchanged.
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Contract
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Insurers that insure risks that traditional insurers will not insure due to the nature or amount of coverage of the risk.
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Excess and Surplus Lines
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Provision in individual health insurance policies stating that benefits are payable according to the beneficiary designation in the policy.
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Payment of Claims
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Agents that work for only one insurer synonymous with captive producers and career agents.
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Exclusive Agents
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It is the condition of being prone to loss due to a hazard or uncertain event.
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Exposure
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Any insurer that conducts business in a country in which it wasn’t incorporated.
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Alien Insurer
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Insurance producers who represent the insurer, not the insured.
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Agent
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It is the unintentional decrease in value of an asset due to a peril.
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Loss
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Court ruling that insurance transactions crossing states lines are not interstate commerce which meant that insurance transactions would be regulated on state and local levels, rather than on the federal level.
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Paul v. Virginia
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Insurance distribution system that uses producers to transact insurance.
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Agency
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Underwriting classification in which individuals are above average in terms of physical condition and lifestyle and present a less than average risk to the insurer.
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Preferred
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Approval required by some health insurers prior to a treatment or procedure.
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Preauthorization
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A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
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Insurance Policy
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They are any written, oral, or other communication of information by a consumer reporting agency about a consumer
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Consumer Report
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They compile and maintain credit information about consumers nationwide, and issue credit reports to third parties who have a valid business need for the information. Examples: MIB, Experian and Equifax.
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Consumer Reporting Agencies
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An indication of the offeror to the offeree of the offeror
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Offer
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The amount of coverage under a life insurance policy synonymous with face value.
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Face Amount
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When the agent retains evidence of authority, such as sales brochures and applications, after the agent no longer has expressed authority with the insurer.
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Lingering Implied Authority
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They provide insurance advice to insureds for a fee.
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Consultants
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Ethical code describing how insurers and producers handle business.
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Market Conduct
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It is the explicit authority granted to the agent by the principal as written in the agency contract.
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Expressed Authority
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In contrast to risk retention groups, risk purchasing groups do not retain risk. Risk *** groups buy group liability insurance from an outside insurer or from a risk retention group.
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Risk Purchasing Group
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The insurer that accepts the additional risk.
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Reinsurer
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Spreading risk from one insurer to one or more other insurers.
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Reinsurance
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The entity that assumes the insured's risk.
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Insurance Company
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A market where individuals and groups gather to exchange insurance - corporations that advertise and market the financial services of an association of underwriters.
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Lloyd
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The person applying for the policy who fills out the application.
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Applicant
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A legally binding agreement between two or more parties where a promise of consideration is exchanged.
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Contract
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The insurer's costs which include: acquisition costs, staff salaries, rent, contingency funds, and claims payments.
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Expenses
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Set cost of insurance coverage, paid by the policyholder to the insurer.
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Premium
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An offer is made when the applicant submits an application for insurance with initial premium to the insurer.
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Offer
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Insurers who sell insurance to make a profit.
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Commercial Insurers
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Insurers that issue dividends to their policyholders.
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Participating Insurers
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Nonprofit entities offering strictly health coverage on a service basis.
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Noncommercial Organizations
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Incorporated companies owned by their stockholders
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Capital Stock Insurers
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Service providers. Benefits are provided to subscribers on a service basis rather than a reimbursement basis. *** covers hospital costs and *** covers physician's fees.
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Blue Cross and Blue Shield
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Payments a corporation makes to shareholders from the company's earnings.
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Dividends
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A return of overcharged premium, which is not taxable.
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Dividends
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Transformation of a mutual insurer into a stock insurer.
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Demutualization
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Transformation of a stock insurer into a mutual insurer.
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Mutualization
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Commercial insurers who are owned by their policyholders.
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Mutual Insurers
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The Civilian Health and Medical Program of the Uniformed Services, replaced by TRICARE.
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CHAMPUS
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It is a form of insurance, which protects against the risk of legal liability for injury, death, disability, damage and destruction to property.
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Causality Insurance
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Insurance producers who represent the insured or purchaser of insurance, not the insurer. They work for several different insurers.
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Brokers
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A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work.
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Disability
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Special types of mutual insurers/ nonprofit religious, ethnic or charitable organizations that provide insurance solely to their members
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Fraternal Benefit Societies
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A person in a position of financial trust and responsibility. Producers are ***
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Fiduciary
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Health plans that cover a small group of individuals; however, unlike group insurance each individual is issued an individual policy.
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Franchise
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*** is an intentional misrepresentation or concealment of material fact made by one party in order to cheat another party out of something that has economic value.
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Fraud
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It is industrial life insurance sold by debit agents who collect premiums from policyholders on a weekly basis synonymous with industrial life insurance.
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Home Service Insurance
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investigate losses and determine payment of claims.
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Adjuster
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Act which allows financial entities to merge and accommodate greater competition, including the ability to merge with banks, and either financial institution to perform the duties of both. Regardless, any entity acting as an insurer is regulated by its respective state insurance department.
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Gramm-Leach-Bliley Act
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A statute stating that while the federal government has the power to regulate the insurance industry, it may not exercise such rights if the insurance industry is effectively and adequately regulated on the state level.
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McCarran Ferguson Act
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Statute that establishes a code of fair information practices dictating how information is handled by federal agencies.
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Privacy Act 1974
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Work for only one insurer – synonymous with captive producer and exclusive agent.
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Career Agents
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Work for only one insurer
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Captive Producers
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An insurer that conducts business in the state, district or commonwealth in which it was incorporated.
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Domestic Insurer
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Insurance companies that do not use producers to market and sell their policies.
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Direct Writing Companies
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Any insurer that conducts business in a state, district, or commonwealth in which it wasn’t incorporated.
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Foreign Insurer
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They issue insurance policies but are not insurers themselves. These include financial institutions including the banking and credit issuing companies.
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Noninsurance Sponsors
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Insurance which provides protection against fundamental risks by redistributing income to help people who cannot afford to pay the cost of incurring such losses themselves.
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Government Insurance
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State and federally-funded medical assistance program for financially disadvantaged individuals.
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Medicaid
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Have a certificate of authority to transact insurance in a particular state, district or commonwealth
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Authorized Insurers
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Assess policyholders a premium when losses are incurred.
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Assessment Insurers
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Insurers that pay dividends to stockholders, not policyholders.
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Nonparticipating Insurers
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It is implicit in the agent
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Implied Authority
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They are credit rating agencies that rate or
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Independent Rating Service
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Agents that are appointed to work for several insurers non-exclusively.
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Independent Insurance Agents
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Special types of mutual insurers/ nonprofit religious, ethnic or charitable organizations that provide insurance solely to their members synonymous with fraternal benefit societies.
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Fraternals
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Government health insurance coverage for individuals over the age of 65, and special needs individuals.
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Medicare
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Insurance which provides life insurance to many people under one policy, where a master policy is issued to the organization and individual certificates are given to each member.
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Group Life Insurance
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Broad term used to describe policies that cover loss of income due to accident or sickness and health care expenses.
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Health Insurance
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The form filled out by the applicant that includes information about the proposed insured's health history and background. The applicant's statements made on the application are representations.
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Application
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To restore a financial loss to the state prior to the occurrence of the loss.
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Indemnity
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Insurance which offers coverage to people through the individual market.
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Private Insurers
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Surrendering a known right.
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Waiver
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Deals with the relationship between the insurer, the agent and the customer. It is a situation in which the insurer gives the customer reasonable belief that an agent has the power and authority to bind the principal even in cases where the agent does not have such authority.
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Apparent Authority
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Surrendering a known right.
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Waiver
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Law based on legal liability for civil wrongs.
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Tort Law
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The characteristics, privileges, duties of all parties, and rights of a policy.
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Provisions
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Insurance contracts are *** contracts because certain conditions must be met by all parties to the contract when a loss occurs in order for the contract to be legally enforceable.
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Conditional Contract
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One sided agreement, where only the insurer is legally bound
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Unilateral Contract
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Unequal exchange because payment of benefits is contingent upon the occurrence of an uncertain loss.
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Aleatory Contract
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Take it or leave it agreements, where the insured has no say in the contract terms and conditions.
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Contract of Adhesion
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An insurance contract must be legal and not in opposition of public policy. If an insurance contract has insurable interest and the insured has provided written consent, it has *** purpose.
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Legal Purpose
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All parties must be of legal competence, meaning they must be of legal age, mentally capable of understanding the terms, and not influenced by drugs or alcohol
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Competent Parties
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The right of the insurer to assume the rights of the insured and sue the responsible third party for damages inflicted upon the insured.
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Subrogation
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It is defined as the possibility of a loss occurring.
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Risk
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Insurance contracts may be voided if one or more parties to the contract commit a material misrepresentation or concealment.
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Rescission
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Statements made by the insured, to the best of his knowledge.
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Representations
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Rule that prevents parties to a contract from changing the meaning of a written contract by introducing oral or written statements made prior to the formation of the contract but are not part of the contract
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Parol Evidence Rule
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"rescind" means to void and cancel a contract
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Rescission
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The amount paid to the beneficiary under an insurance policy upon the death of the insured.
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Death Benefit
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One sided agreement, where only the insurer is legally bound.
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Unilateral Contract
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The insurer’s promise to pay covered losses as long as the insured pays the premiums and abides by the terms and conditions.
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Insuring Clause
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The entity that assumes the insured’s risk. It is synonymous with insurance company.
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Insurer
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A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
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Insurance Policy
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If the applicant submits the application to the insurer without the initial premium.
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Invitation to Offer
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If the insurer receives an application and initial premium, but issues the policy with modified coverage or premium.
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Counter-Offer
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A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer.
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Insurance Contract
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An individual’s valid concern for the continuation of the life or well-being of the person insured, which must be present at the time of application.
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Insurable Interest
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The first premium due on an insurance policy. Typically, the*** is collected upon application submittal.
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initial premium
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An insurance contract must be legal and not in opposition of public policy. If an insurance contract has insurable interest and the insured has provided written consent, it has ***. *** is one of the four required elements of a contract.
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Legal Purpose
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Take it or leave it agreements, where the insured has no say in the contract terms and conditions.
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Contract of Adhesion
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Law based on legal contracts.
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Contract Law
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The legal process of preventing one party from reclaiming a right that was waived.
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Estoppel
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It is the unintentional decrease in value of an asset due to a peril.
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Loss
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It means information that is fundamental to insuring a risk.
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Material to the Risk
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The rights and responsibilities of all parties of the contract.
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Conditions
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A legally binding agreement between two or more parties where a promise of consideration is exchanged.
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Contract
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Withholding information material to the risk. Insurers may void policies if the *** is intentional and material to the risk.
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concealment
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The amount of coverage under a life insurance policy synonymous with face value.
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Face Amount
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Dividend option in which the policyowner receives a check for the amount of the dividend.
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Cash Payment
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Rule that prevents parties to a contract from changing the meaning of a written contract by introducing oral or written statements made prior to the formation of the contract but are not part of the contract.
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Parol Evidence Rule
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A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work.
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Disability
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Certain conditions must be met by all parties to the contract when a loss occurs in order for the contract to be legally enforceable.
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Conditional Contract
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A contract between an individual and an insurer.
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Personal Contract
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Unequal exchanges because payment of benefits is contingent upon the occurrence of an uncertain loss.
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Aleatory Contract
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An offer is made when the applicant submits an application for insurance with initial premium to the insurer.
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Offer
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The title page of the contract, identifying the insured’s name, policy number, issue date, limits, premiums, due dates, right to return provision, and the insurer’s signature.
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Policy Face
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Broad term used to describe policies that cover loss of income due to accident or sickness and health care expenses.
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Health Insurance
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Statements that are guaranteed to be true and are part of the legal contract. Breach of *** is grounds for voiding an insurance contract.
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warranties
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Intentional misstatements made by the insured. *** that are material to the risk may void the contract.
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Misrepresentations
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The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
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Underwriting
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Also referred to as the binding receipt or unconditional receipt. Coverage begins on the date of the application regardless of whether or not the applicant is insurable. Coverage is issued for a short period of time, such as 30 to 60 days.
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Temporary Insurance Agreement
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The statement required to be signed by the applicant upon policy delivery to assure the insured.
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Statement of Good Health
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|
Provision in individual health insurance policies stating that the policy becomes incontestable and cannot be voided or claims denied after two years (three years in some states) except in the case of fraud.
|
Incontestability
|
|
A person other than the insured is the owner of the policy.
|
Third Party Ownership
|
|
Interest earned on invested premiums.
|
Interest Earnings
|
|
Life insurance policies effective for the entire life of the insured, or up to age 100. It is synonymous with whole life insurance.
|
Permanent Life Insurance
|
|
A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
|
Insurance Policy
|
|
The characteristics, privileges, duties of all parties, and rights of a policy.
|
Provisions
|
|
Underwriting classification in which the risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage.
|
Declined
|
|
If the applicant submits the application to the insurer without the initial premium.
|
Invitation to Offer
|
|
A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer.
|
Insurance Contract
|
|
Conditional receipt in which coverage begins upon approval of the application with premium payment
|
Insurability Receipt
|
|
The date in which an insurance policy is in force.
|
Effective Date of Coverage
|
|
A required provision in a life insurance policy stating that the insurance policy itself (including any riders and endorsements/amendments) and the application, if attached to the policy, comprise the *** between all parties.
|
entire contract
|
|
A required provision in a life insurance policy which places a limit on the period in which a claimant can file suit against an insurer, usually 60 days since the insurer received proof of loss and within 2 years from the date proof of loss was submitted to the insurer.
|
Legal Action
|
|
Handing over control of the policy to another person is called *** Delivery.
|
Constructive Delivery
|
|
Underwriting classification in which the risk is greater than standard risks, due to the applicant’s physical condition, medical history, hazardous occupation or dangerous hobbies or habits.
|
Substandard
|
|
A life insurance policy that does not require the prospective insured to undergo a medical examination.
|
Simplified Issue Life Insurance
|
|
Provision of policy specifying the insured’s and insurer’s rights to renew or terminate a policy during or after the expiration of the original policy term.
|
Renewability
|
|
The producer issues a *** receipt to the applicant when the application and premium are collected. There are two types of *** receipts: insurability and approval.
|
conditional receipt
|
|
The claim frequency rate and average cost per claim multiplied together. This is one of the primary factors in establishing health insurance rates.
|
Aggregate Claim Amount
|
|
A medical condition, disease or illness.
|
Sickness
|
|
The proportion of losses incurred by an insurer with respect to the total dollar value of premiums received (total losses divided by total premiums).
|
Loss Ratio
|
|
Part III of the application, also referred to as the producer’s report. The *** report is used to underwrite coverage, but does not become part of the policy.
|
Agent Report
|
|
Underwriting done by the producer, face-to-face with the applicant.
|
Field Underwriting
|
|
Receipt given to the applicant by the producer or insurer, as proof of a premium payment.
|
Premium Receipt
|
|
Frequency at which premium payments are made.
|
Premium Payment Mode
|
|
Underwriting classification in which individuals are above average in terms of physical condition and lifestyle and present a less than average risk to the insurer.
|
Preferred
|
|
Mortality minus interest.
|
Net Single Premium
or Net Premium |
|
Document prepared by the NAIC which explains the type of coverages available to buyers.
|
Buyer's Guide
|
|
National registry operated by the Federal Trade Commission which allows consumers to limit the number of telemarketing phone calls they receive.
|
Do Not Call List
|
|
A medical condition, whether physical or mental, resulting from accident or sickness preventing a person from being able to work.
|
Disability
|
|
A policy is delivered after the insurer approves the application and issues the policy for ***.
|
Delivery
|
|
Investigative consumer report.
|
Inspection Report
|
|
The rights and responsibilities of all parties of the contract.
|
Conditions
|
|
Frequency at which a specific population is predicted to become injured, sick or disabled.
|
Claim Frequency Rate
|
|
An *** is made when the applicant submits an application for insurance with initial premium to the insurer.
|
offer
|
|
In life insurance, document explaining the coverage purchased and the names of the insurer and agent.
|
Policy Summary
|
|
Also referred to as the temporary insurance agreement or unconditional receipt. Coverage begins on the date of the application regardless of whether or not the applicant is insurable. Coverage is issued for a short period of time, such as 30 to 60 days.
|
Binding Receipt
|
|
The process of predating the application a certain number of months, up to 6 months, in an attempt to achieve a lower premium.
|
Backdating
|
|
Net premium plus loading expenses for one year.
|
Gross Annual Premium
|
|
Net premium plus loading expenses. And Mortality plus loading expenses minus interest. Also: net premium plus loading expenses.
|
Gross Single Premium or Gross Premium
|
|
Conditional receipt which does not provide interim coverage; however, coverage begins when the application is approved by the insurer.
|
Approval Receipt
|
|
They involve how policy funds are utilized.
|
Options
|
|
Insurance distribution system that uses producers to transact insurance.
|
Agency
|
|
Report made on a prospective insured from an abbreviated medical examination. *** are made by a paramedic or a registered nurse.
|
Paramedical reports
|
|
The base premium for life insurance calculated using mortality tables.
|
Natural Premium
|
|
In health insurance, document explaining the coverage purchased and the names of the insurer and agent.
|
Outline of Coverage
|
|
A standard provision for group life and health insurance, stating that except for nonpayment of premium, the policy is incontestable after having been in force for at least two years.
|
Incontestability Clause
|
|
The insurer collects a base premium amount, but is entitled to collect additional premium amounts based on the actual loss experience.
|
Retrospective Premium
|
|
One or more labor unions or associations forming a trust fund for a MET. Synonymous with negotiated trusteeship.
|
Taft-Hartley Trust
|
|
Underwriting classification in which the risk is greater than standard risks, due to the applicant’s physical condition, medical history, hazardous occupation or dangerous hobbies or habits.
|
Substandard
|
|
In group health insurance, the policyowner may self-fund its medical expenses.
|
Shared-funding
|
|
A government group life insurance plan that offers inexpensive group term life insurance for members of the armed forces.
|
Servicemembers
|
|
A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
|
Insurance Policy
|
|
Insurance that is issued on the life of one individual, with individual underwriting, rates, and coverage.
|
Individual Life Insurance
|
|
The period of time new members may enroll in group coverage each year.
|
Open Enrollment Period
|
|
The period during which an eligible individual may enroll in a group insurance plan without needing to undergo a medical exam.
|
Eligibility Period
|
|
In group insurance, a premium payment method where the premiums are paid jointly by the policyowner and the insureds.
|
Contributory
|
|
Method used to establish premium rates for group health plan members, based on the claims experience of the group.
|
Experience Rating
|
|
In group health insurance, a group policy is self-funded and the insurer is subcontracted only to process claims.
|
Administrative Services Only
|
|
Group premiums are based on the actual or projected costs of insured members in a particular geographic location with reference to insureds’ age, gender, occupation and health.
|
Community Rating
|
|
Proof of insurance coverage issued to each member insured under a group contract. The *** lists the type of coverage provided, the amount of benefits, who will receive the policy benefits and include coverage for dependents if provided by the policy.
|
Certificates of Insurance
|
|
The group’s ability to pay premiums and renew coverage.
|
Persistency
|
|
All of the insured's assets and liabilities.
|
Estate
|
|
A standard provision for group life and health insurance where the insurer must stipulate what information individuals must provide as ***
|
Evidence of Insurability
|
|
The group contract, which is issued to and owned by the group entity.
|
Master Policy
|
|
The group
|
Persistency
|
|
A government group life insurance plan that offers group term life insurance for federal employees, retirees, and their family members.
|
Federal Employees
|
|
An *** is made when the applicant submits an application for insurance with initial premium to the insurer.
|
Offer
|
|
The benefits payable from an insurance policy or contract.
|
Policy Proceeds
|
|
One or more labor unions or associations forming a trust fund for a MET. Synonymous with Taft-Hartley Trust.
|
Negotiated Trusteeship
|
|
One or more labor unions or associations forming a trust fund for a MET. Synonymous with Taft-Hartley Trust.
|
Full Contributory
|
|
Insurance which provides protection against fundamental risks by redistributing income to help people who cannot afford to pay the cost of incurring such losses themselves.
|
Government Insurance
|
|
A standard provision for group life and health insurance, stating that a *** period of at least 31 days is allotted for nonpayment of premium during which period the policy remains in force.
|
Grace Period
|
|
Insurance which provides life insurance to many people under one policy, where a master policy is issued to the organization and individual certificates are given to each member.
|
Group Life Insurance
|
|
In group insurance, a premium payment method where the premiums are paid entirely by the policyowner, not by member insureds.
|
Noncontributory
|
|
The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
|
Underwriting
|
|
The waiting period, prior to being eligible for coverage under a group plan, that individuals must undergo when they join a group with existing group coverage. For non-group policies, the time between the effective date of the policy and the date coverage begins.
|
Probationary Period
|
|
A standard provision for group life and health insurance, stating that except for nonpayment of premium, the policy is incontestable after having been in force for at least two years.
|
Incontestability Clause
|
|
A standard provision for group life and health insurance, stating that a copy of the application must be attached to the policy if considered part of the entire contract.
|
Application copy
|
|
The person applying for the policy who fills out the application.
|
Applicant
|
|
Provision in individual health insurance policies stating that a lapsed policy may be reinstated on the 45th day after an application is submitted, unless denied. Accidents will be covered immediately upon ***, but sicknesses have a 10-day waiting period.
|
Reinstatement
|
|
A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer’s promise to pay benefits in the event of covered losses.
|
Insurance Policy
|
|
It is sold by debit agents who collect premiums from policyholders on a weekly basis
|
Industrial Life Insurance
|
|
The rights and responsibilities of all parties of the contract.
|
Conditions
|
|
It is anything that increases the chance of a loss occurring from a particular peril.
|
Hazard
|
|
Intentional misstatements made by the insured. *** that are material to the risk may void the contract.
|
Misrepresentations
|
|
Policies that earn a fluctuating rate of interest and do not guarantee a certain cash value. Policies have fixed level premiums and a guaranteed minimum death benefit.
|
Variable Life Insurance
|
|
Insurance that is comprised of variable life and variable annuities. They invest premium dollars in securities, which carry more risk due to price fluctuations. A requirement of selling *** products is a securities license and a life insurance producer license.
|
Variable Insurance
|
|
Annuities that have variable interest rates and benefits.
|
Variable Annuities
|
|
It is an entity plan used by a corporation.
|
Stock Redemption Plan
|
|
A cross-purchase plan used by corporations to buy the stock from deceased shareholders.
|
Stock Purchase Plan
|
|
When a terminally or chronically ill insured sells his life insurance policy to a third party in exchange for payment of a large portion of the death benefit.
|
Viatical Settlement
|
|
The time during which a surviving spouse is ineligible to receive Social Security survivors benefits.
|
Social Security Black out Period
|
|
Incorporated companies owned by their stockholders
|
Stock Insurers
|
|
Insurance that provides pure death protection since it only pays a death benefit if the insured dies during the policy term. It does not accrue cash value.
|
Term Life Insurance
|
|
It measures the cost of an insurance policy by projecting the total amount of cash value in a policy and deducting the total cost of premiums after a certain number of years.
|
Surrender Cost Index
|
|
Optional life insurance provision stating that the policy will be voided and no death benefit will be paid if the insured commits suicide within a stipulated time period.
|
Suicide Clause
|
|
They are policy elements that “ride on” or add to the existing coverage by modifying provisions or coverage.
|
Riders
|
|
Method of handling risk in which ways of minimizing loss exposure are actively sought.
|
Reduction
|
|
Nonforfeiture option that allows the policyowner to purchase paid-up whole life coverage at a reduced face amount based on the amount of the policy cash value.
|
Reduced Paid-up Insurance
|
|
A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer.
|
Insurance Contract
|
|
Provision in individual health insurance policies stating that benefits are payable according to the beneficiary designation in the policy.
|
Payment of Claims
|
|
Nonforfeiture option that permits the policyowner to use the policy's cash values to buy paid-up term insurance.
|
Extended Term
|
|
The amount of coverage under a life insurance policy synonymous with face value.
|
Face Amount
|
|
An employee benefit plan in which an employer and an employee share in the cost of purchasing a life insurance policy on the employee.
|
Split-Dollar Plan
|
|
Insurance that provides life insurance protection for the insured’s entire life, or until age 100. It provides living benefits. Synonymous with permanent life insurance.
|
Whole Life Insurance
|
|
The insurer’s account used to invest premium dollars for variable life insurance and annuities.
|
Separate Account
|
|
The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
|
Underwriting
|
|
A type of stock redemption plan in which the corporation redeems a portion of the stock to provide the shareholder
|
Section 303 Stock Redemption
|
|
The amount paid to the beneficiary under an insurance policy upon the death of the insured.
|
Death Benefit
|
|
A buy-sell plan in which each partner buys, pays the premiums, and is the beneficiary of a life insurance policy on each of the other partners.
|
Cross-Purchase Plan
|
|
Insurance purchased to protect a business from potential loss due to the death of a key employee.
|
Key Person Insurance
|
|
Life insurance policies effective for the entire life of the insured, or up to age 100. It is synonymous with whole life insurance.
|
Permanent Life Insurance
|
|
Insurance that is issued on the life of one individual, with individual underwriting, rates, and coverage.
|
Individual Life Insurance
|
|
Insurance plans given to employees as perks or privileges designed to provide incentive to join or remain with the company long-term.
|
Employee Benefit Plans
|
|
A buy-sell plan in which the business agrees to buy the deceased partner's share of the business. *** plans are best for businesses with several partners.
|
Entity
|
|
Ability for assets to be converted into cash.
|
Liquidity
|
|
The value of premiums plus interest in a permanent life insurance policy.
|
Cash Value
|
|
Dividend option in which the policyowner uses the dividend to pay up the policy earlier.
|
Paid up-Insurance
|
|
The benefits payable from an insurance policy or contract.
|
Policy Proceeds
|
|
Nonforfeiture value – The policyowner is entitled to the cash value of a whole life policy. A *** may be taken from the cash value and need not be repaid.
|
Policy loan
|
|
The U.S.***, which oversees the operations of FINRA.
|
Securities and Exchange Commission (SEC)
|
|
Choices available to policyowners for settling dividend payment.
|
Dividend Options
|
|
All of the insured's assets and liabilities.
|
Estate
|
|
The stated amount or face value of a stock.
|
Par
|
|
The group contract, which is issued to and owned by the group entity.
|
Master Policy
|
|
A policy is delivered after the insurer approves the application and issues the policy for ***.
|
Delivery
|
|
Policies that earn a constant rate of interest and provide guaranteed minimum benefits.
|
Fixed Life Insurance
|
|
Agreements used to assure that the ownership of the business is sold to the surviving owners in the event of the insured employee's death
|
Buy-Sell Funding
|
|
An executive benefit that an employer can use to pay a highly paid employee at a later date, such as upon disability, retirement or death.
|
Deferred Compensation
|
|
An interest-adjusted net cost method that excludes the cash value and only predicts the average annual premium cost.
|
Net Payment Cost Index
|
|
This method calculates the amount of life insurance a family needs immediately upon the death of the insured to pay for their expenses and basic necessities, by looking at expenses, maintenance income, debts or mortgages, and dependent children's education.
|
Needs Approach
|
|
Purchasing a new life insurance policy or annuity contract to replace an existing policy or contract.
|
Policy Replacement
|
|
The investment objective of investors who want the ability to quickly convert an investment into cash at a fair price.
|
Liquidity
|
|
An employee benefit plan in which an employer gives an employee a bonus in the amount of the premium payments on a life insurance policy.
|
Executive Bonus Plan
|
|
Established by the Securities Exchange Act of 1934 and responsible for regulating the trade of all securities and the operations of the exchanges.
|
SEC
|
|
The *** (***), formerly known as the National Association of Securities Dealers (NASD).
|
FINRA (Financial Industry Regulatory Authority)
|
|
In life insurance, document explaining the coverage purchased and the names of the insurer and agent.
|
Policy Summary
|
|
Special types of mutual insurers/ nonprofit religious, ethnic or charitable organizations that provide insurance solely to their members
|
Fraternal Benefit Societies
|
|
A standard provision for group life and health insurance, stating that a *** of at least 31 days is allotted for nonpayment of premium during which period the policy remains in force.
|
Grace Period
|
|
Proof of insurance coverage issued to each member insured under a group contract. It lists the type of coverage provided, the amount of benefits, who will receive the policy benefits and include coverage for dependents if provided by the policy.
|
Certificate of Insurance
|
|
Annuities that have a guaranteed minimum interest rate.
|
Fixed Annuities
|
|
Participating life insurance.
|
Par
|
|
A legally binding agreement between two or more parties where a promise of consideration is exchanged.
|
Contract
|
|
The title page of the contract, identifying the insured’s name, policy number, issue date, limits, premiums, due dates, right to return provision, and the insurer’s signature.
|
Policy Face
|
|
They involve how policy funds are utilized.
|
Options
|
|
Insurance which provides life insurance to many people under one policy, where a master policy is issued to the organization and individual certificates are given to each member.
|
Group Life Insurance
|
|
Commercial insurers who are owned by their policyholders.
|
Mutual Insurers
|
|
Cash value in a whole life insurance policy.
|
Living Benefits
|
|
Insurance producers who represent the insured or purchaser of insurance, not the insurer. They work for several different insurers.
|
Brokers
|
|
State and federally-funded medical assistance program for financially disadvantaged individuals.
|
Medicaid
|
|
This method calculates the amount of money a person is expected to earn over his lifetime to determine the face amount of life insurance needed, thereby placing a dollar value on the life of an individual.
|
Human Life Value Approach
|
|
A document depicting the nonguaranteed aspects of a policy.
|
Illustration
|
|
Option to cancel a health insurance policy at any time before its expiration date.
|
Cancellation
|
|
Nonparticipating life insurance.
|
Nonpar
|
|
Period during which the policy or contract is effective.
|
Policy Term
|
|
Universal life insurance with a separate account. The variable portion of premiums is invested in the insurer’s separate account.
|
Variable Universal Life
|
|
Policies that earn a fluctuating rate of interest and do not guarantee a certain cash value. Policies have fixed level premiums and a guaranteed minimum death benefit.
|
Variable Life Insurance
|
|
Life insurance that allows the policyowner to buy term and invest the difference. Synonymous with unbundled life insurance and flexible premium adjustable life.
|
Universal Life
|
|
The ways, other than lump-sum, that life insurance policy proceeds are paid out to beneficiaries upon the insured’s death or when the policy endows.
|
Settlement Options
|
|
Securities license permitting a person to transact only mutual funds and variable annuities.
|
Series 6 License
|
|
The insurer’s account used to invest premium dollars for variable life insurance and annuities.
|
Separate Account
|
|
The premium in a universal life policy that builds policy cash value.
|
Target Premium
|
|
Premiums paid cannot cause a policy to be paid-up after seven years.
|
Seven-pay Test
|
|
Term insurance that allows the policyowner to renew the term policy after the designated term expires without having to prove insurability.
|
Renewable Term
|
|
Interest earned on invested premiums.
|
Interest Earnings
|
|
An *** policy is a whole life policy that will pay the face amount under one of two situations: 1.) if the insured is alive at the contract maturity date, or 2.) if the insured dies during the policy period. The policy cash value must equal the face amount by the end of the policy period.
|
Endowment
|
|
The most common type of whole life insurance sold. Coverage has a level face amount and level premiums payable over the entire life of the insured. Synonymous with continuous premium and ordinary life.
|
Straight Life
|
|
Insurance policy which allows the insured to pay the entire premium in one lump-sum.
|
Single Premium Whole Life Policy
|
|
The age of the insured upon policy application.
|
Issue Age
|
|
Whole life policies that provide a lower initial premium which can fluctuate up to a maximum premium as stated in the policy.
|
Intermediate Premium Whole Life
|
|
Insurance that provides pure death protection since it only pays a death benefit if the insured dies during the policy term. It does not accrue cash value.
|
Term Life Insurance
|
|
Term insurance that permits the policyowner to renew a term life policy at the end of the policy period by providing evidence of insurability so the insured can obtain a lower premium than the renewal premium that is offered without evidence of insurability
|
Reentry Term
|
|
Insurance that provides a face amount that decreases to zero over the policy period. Example: mortgage reduction insurance.
|
Decreasing Term
|
|
Interim term coverage provides instantaneous coverage and is intended for people who plan on purchasing permanent life insurance coverage within one year.
|
Interim Term
|
|
Life insurance rider that allows the policy face amount to be adjusted to account for inflation.
|
Cost of Living Rider
|
|
Term policies that have premiums which fluctuate between the current rate and the maximum rate.
|
Intermediate Premium Term
|
|
Cash value in a whole life insurance policy.
|
Living Benefits
|
|
Term insurance that provides a level face amount.
|
Level Term
|
|
Term insurance which has a level face amount and level premiums.
|
Level Premium Term
|
|
Term life insurance which can be converted to permanent life insurance.
|
Convertible Term
|
|
The rights and responsibilities of all parties of the contract.
|
Conditions
|
|
With a *** whole life policy, the insured is covered for his entire life, but premiums are paid for a limited time. The face amount and premiums are level.
|
Limited Payment (LP)
|
|
The most common type of whole life insurance sold. Coverage has a level face amount and level premiums payable over the entire life of the insured. Synonymous with straight life and ordinary life.
|
Continuous Premium
|
|
*** works the same way as universal life insurance except the interest rate is tied to a stock market index.
|
Equity indexed universal life
|
|
Life insurance rider that adds term coverage to an existing life insurance policy.
|
Term Rider
|
|
Tax Reform Act of 1984. This act restricts the payout of endowment policies.
|
TAMRA
|
|
Joint life policy in which the policy proceeds are paid out upon the death of the second insured. Synonymous with second-to-die joint life policy.
|
Survivorship Life Policy
|
|
Legislation requiring sales representatives have a Series 6 license. Legislation also regulates the duties of sales representatives.
|
Securities Act of 1934
|
|
Legislation requiring policyowners of variable products receive a prospectus. Legislation also defines securities products.
|
Securities Act of 1933
|
|
A document that must be given to policyowners of variable insurance products which describes the investments, charges on the contract and policy features.
|
Prospectus
|
|
Coverage provides flexible premiums based on a changing interest rate. Synonymous with interest-sensitive whole life.
|
Current Assumption Whole Life
|
|
Insurance that is issued on the life of the person who has the debt (debtor) and the creditor owns and is the beneficiary of the policy.
|
Credit Life Insurance
|
|
Coverage provides flexible premiums based on a changing interest rate. Synonymous with current assumption whole life.
|
Interest-Sensitive Whole Life
|
|
Policies that provide life insurance protection on the lives of minors. Example: jumping juvenile.
|
Juvenile Policies
|
|
A standard provision for group life and health insurance where the insurer must stipulate what information individuals must provide as evidence of insurability.
|
Evidence of Insurability
|
|
The amount of coverage under a life insurance policy synonymous with face value.
|
Face Amount
|
|
The amount of coverage under a life insurance policy synonymous with face amount.
|
Face Value
|
|
Juvenile life insurance policy in which a parent or guardian purchases a life insurance policy on a child. The face amount is small (e.g. $1,000), but jumps fivefold upon the child maturation.
|
Jumping Juvenile
|
|
Level term insurance which has a level face amount and increasing premiums.
|
Annual Renewable Term
|
|
The value of premiums plus interest in a permanent life insurance policy.
|
Cash Value
|
|
Joint life insurance policies insure the lives of two or more people.
|
Joint Life
|
|
Nonforfeiture option that allows the policyowner to receive the policy's cash value.
|
Cash Surrender Value
|
|
Policy face amount increases with respect to inflation without requiring the insured to undergo a medical exam or provide proof of insurability.
|
Index-Linked Whole Life
|
|
Combines a whole life policy with a term rider in which dividends are used to buy paid-up coverage. Synonymous with enhanced ordinary life and extra ordinary life.
|
Economatic Whole Life
|
|
Combines a whole life policy with a term rider in which dividends are used to buy paid-up coverage. Synonymous with economatic whole life and extra ordinary life.
|
Enhanced Ordinary Life
|
|
Juvenile life insurance policy in which a parent or guardian purchases a life insurance policy on a child. The face amount is small (e.g. $1,000), but jumps fivefold upon the child's 21st birthday. Synonymous with jumping juvenile.
|
Estate Builder
|
|
Life insurance rider which waives premiums if the premium-payor becomes disabled or dies before the insured child reaches a certain age.
|
Payor Rider
|
|
A formal written offer to sell securities that sets forth the plan for a proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision.
|
Prospectus
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Combines a whole life policy with a term rider in which dividends are used to buy paid-up coverage. Synonymous with enhanced ordinary life and economatic whole life.
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Extra Ordinary Life
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The benefits payable from an insurance policy or contract.
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Policy Proceeds
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A health insurance policy providing continuation of coverage of the insured to a specified age subject to payment of premiums and allowing the insurer to increase premium rates by classes of insureds.
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Guaranteed Renewable
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The age of the insured upon policy conversion.
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Attained Age
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Nonforfeiture value – The policyowner is entitled to the cash value of a whole life policy. A *** may be taken from the cash value and need not be repaid.
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Policy Loan
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policies combine whole life and decreasing term. Only the primary breadwinner is insured, not the entire family. Coverage provides income payments to the family if the primary breadwinner dies during the income period. The income period begins when the policy is issued.
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Family Income
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Mix of whole and term insurance. The policyowner can modify the premium, face amount, coverage period, and premium-paying period.
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Adjustable Life
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Life insurance that allows the policyowner to buy term and invest the difference. Synonymous with unbundled life insurance and universal life.
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Flexible Premium Adjustable Life
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Life insurance policies with flexible features including: premiums, face amounts, coverage period and premium-paying period.
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Flexible Premium Policies
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The person who purchases the annuity, pays the premiums and has all ownership rights.
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Contract Owner
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The group contract, which is issued to and owned by the group entity.
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Master Policy
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Established by the Securities Exchange Act of 1934 and responsible for regulating the trade of all securities and the operations of the exchanges.
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SEC
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A document given to potential buyers of securities that provides a description of the issuer and the stock.
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prosectus
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A family policy insures each member of a family. The primary breadwinner is insured with whole life coverage, and the spouse and children are covered with term coverage.
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Family Policy
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The age of the insured upon policy application – synonymous with issue age.
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Original Age
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Life insurance policy in which sales and administrative charges were deducted from the first-year premium.
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Front-end Loaded
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Family *** policies combine whole life and level term. Only the primary breadwinner is covered, not the entire family. In contrast to family income policies, the income period begins on the date of the primary breadwinner's death.
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Family Maintenance Policies
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Joint life policy that pays the face amount upon the death of the first insured.
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First-to-die Joint Life Policy
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Decreasing term insurance used to secure a mortgage.
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Mortgage Reduction Insurance
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Life insurance used to fund funeral and burial costs. The funeral home is the beneficiary of the policy.
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Pre-need Funeral
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The period of time in which the family is most vulnerable to financial instability if the insured dies prematurely.
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Income Period
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Policies which use convertible term and whole life to provide permanent protection that has lower premiums during the early policy years.
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Modified Whole Life
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Coverage has several premium increases that occur annually during each year of the step-rate premium period, which is usually the first five or ten years of the policy. After this period, premiums level off at the higher rate for the remainder of the policy.
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Graded Premium Whole Life
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Term insurance that provides an increasing face amount with level premiums.
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Increasing Term
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Dividend option in which the dividend is used to offset the cost of a future premium payment.
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Reduction of Premium Payments
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The ways, other than lump-sum, that life insurance policy proceeds are paid out to beneficiaries upon the insured’s death or when the policy endows.
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Settlement Options
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Medical expense plan that pays on a first-dollar basis.
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Scheduled
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Life income settlement option which pays the beneficiary periodic income for his entire life. If the beneficiary dies before the policy proceeds have been paid out entirely, then a second beneficiary receives the payments until the principal reaches zero.
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Refund Life
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Life income settlement option which allows two or more individuals to receive income payments for their entire lives.
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Joint and Survivor
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Duration of time that annuity payments are guaranteed to be paid. Typically 5, 10, or 15 years.
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Period Certain
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Provision in universal life insurance policies that provides for withdrawals or partial surrenders of policy cash value.
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Withdrawals or Partial Surrenders
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Optional life insurance provision stating that the insurer will not pay the claim if the insured dies while in active military service or due to an act of war.
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War or Military Service
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Optional provision in life insurance policies: military exclusion stating that the insurer will not pay the claim if the insured dies while in active military service.
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Status Clause
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Optional provision in life insurance policies: war exclusion stating that the insurer will not pay the claim if the insured dies due to an act of war.
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Results Clause
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If the insured and the primary beneficiary are killed at the same time due to a common accident and there is no conclusive evidence as to who died first, the policy proceeds will be paid as if the primary beneficiary died first, in which case the policy proceeds are paid to the contingent beneficiaries or to the insured’s estate.
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Uniform Simultaneous Death Act
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Naming beneficiaries by succession. If both the primary and contingent beneficiaries predecease the insured, then the *** will receive the policy proceeds.
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Tertiary Beneficiary
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Prevents creditors from seizing life insurance policy proceeds provided there is at least one named beneficiary, excluding the insured’s estate.
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Spendthrift Clause
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Naming beneficiaries by succession. If the primary beneficiary predeceases the insured, then the *** will receive the policy proceeds. Synonymous with contingent beneficiary.
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secondary beneficiary
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A beneficiary who essentially becomes co-owner of a life insurance policy. The policyowner must receive the *** beneficiary’s written consent for any change made to the policy.
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Irrevocable
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Surrendering a known right.
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Wavier
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Optional provision in health insurance allowing continuation of coverage without payment of premium in the event of permanent and total disability.
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Wavier of Premium
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Life insurance rider that allows the policyowner to waive premium payments during a disability, and keeps the life insurance policy in force as long as the disability is total and permanent.
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Wavier of Premium Rider
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Life insurance rider that allows a universal life policyowner who becomes disabled to waive the cost of death protection but does not waive the cost of premium required to build cash value.
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Waiver of Cost of Insurance
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Life insurance term rider covering a spouse or other individual, usually until age 65.
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Spouse/Other-Insured Term Rider
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Life insurance rider that pays the total amount of premiums paid into the policy in addition to the policy face amount upon the insured's death.
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Return of Premium Rider
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Life insurance rider that pays the amount of the policy cash value in addition to the policy face amount upon the insured’s death.
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Return of Cash Value
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Life insurance rider which pays an additional sum, termed the principal sum, to the beneficiary if the insured dies due to an accident. Also applies to accidental death and dismemberment policies in which the policy will pay double or triple the benefit based on dismemberment or death. Synonymous with multiple indemnity rider.
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Accidental Death Benefit
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Life insurance rider which pays an additional amount for dismemberment or death caused by an accident.
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Accidental Death and Dismemberment Rider
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Life insurance rider which allows the insured to receive a portion of the death benefit prior to death if the insured has a terminal illness.
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Accelerated Benefits Rider
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Integrated accelerated benefit which pays the accelerated benefit as long as the insured is expected to die within one or two years.
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Living Needs Rider
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All the things the insurer will not do, including the risks that are not covered.
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Exclusion
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Life insurance settlement option in which an annuity is used to pay the policy proceeds. The beneficiary is provided a stream of income that cannot be outlived.
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Life Income Settlement Option
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Dividend option in which the insurer retains the dividend to be invested.
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Accumulation at Interest
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Statements that are guaranteed to be true and are part of the legal contract. Breach of *** is grounds for voiding an insurance contract.
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warranty
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Life income settlement option that pays periodic payments to a beneficiary for his entire life. If the beneficiary dies before the period certain ends, then a second beneficiary will receive payments until the period certain ends.
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Life Income Certain
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Method of handling risk in which risk is transferred from one party to another. This is the essence of insurance.
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Transfer
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A required provision in a life insurance policy stating that the applicant
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Statements of the Insured
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Provision in individual health insurance policies stating that written proof of loss must be provided to the insurer within 90 days after the date of loss unless not reasonably possible. Under no circumstance may proof of loss be submitted later than one year from the date proof of loss was initially required.
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Proof of Loss
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The insurer’s promise to pay covered losses as long as the insured pays the premiums and abides by the terms and conditions.
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Insuring Clause
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The individual whose life the annuity has been issued, and the person who receives annuity payments.
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Annuitant
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An assignment that occurs when the policyowner assigns all rights including cash values to another person or entity. Synonymous with voluntary assignment.
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Absolute
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A required provision in a life insurance policy stating that the insurance policy itself (including any riders and endorsements/amendments) and the application, if attached to the policy, comprise the*** between all parties.
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entire contract
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A required provision in a life insurance policy which places a limit on the period in which a claimant can file suit against an insurer, usually 60 days since the insurer received proof of loss and within 2 years from the date proof of loss was submitted to the insurer.
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Legal Action
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Term life insurance which can be converted to permanent life insurance.
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Convertible Term
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Term insurance that provides a level face amount.
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Level Term
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The rights and responsibilities of all parties of the contract.
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Conditions
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A type of accelerated benefit which is used to pay long-term care costs.
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Long-term Care Rider
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Dividend option in which the policyowner uses the dividend as a single premium to purchase one-year term protection.
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One-year Term Option
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Provision in individual health insurance policies stating that the policy becomes incontestable and cannot be voided or claims denied after two years (three years in some states) except in the case of fraud.
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Incontestability
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By the root
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Per Stripes
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By the head
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Per Capita
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Naming beneficiaries by succession. The first person to receive policy proceeds upon the insured’s death.
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Primary Beneficiary
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A required provision in a life insurance policy stating that a policyowner must pay a premium in exchange for the insurer's promise to pay benefits.
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Consideration Clause
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Life insurance rider which waives premiums if the premium-payor becomes disabled or dies before the insured child reaches a certain age.
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Payor Rider
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A required provision in a life insurance policy stating that the policy is established when all parties to the contract have met the policy’s conditions.
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Exclusion Clause
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Combines the spouse and children's term rider in one rider.
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Family Term Rider
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Allows the insurer to choose a beneficiary if the insurer cannot get in contact with the named beneficiaries after a certain amount of time.
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Facility of Payment Provision
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Dividend option in which the policyowner receives a check for the amount of the dividend.
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Cash Payment
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Frequency at which premium payments are made.
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Premium Payment Mode
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Clause protects the contingent beneficiaries’ rights by stipulating a certain number of days the primary beneficiary must outlive the insured after a common accident causing near-simultaneous death in order for the primary beneficiary to receive the policy proceeds.
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Common Disaster Clause
|
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A *** assignment is the partial and temporary transfer of ownership rights to another person or entity. Synonymous with partial and conditional assignment.
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Collateral
|
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Classes of individuals may be named as beneficiaries. Naming a class of beneficiaries allows the policyowner to name a group of individuals generally, without naming each individual member of the group. This is called *** Designation.
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Class Designation
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Nonforfeiture option that allows the policyowner to receive the policy's cash value.
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Cash Surrender Value
|
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Choices available to policyowners for settling dividend payment.
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Dividend Option
|
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Life insurance rider in which periodic income payments are paid by the insurer in the event that the policyowner becomes totally and permanently disabled.
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Disability Income Benefits
|
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Purchasing a new life insurance policy or annuity contract to replace an existing policy or contract.
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Policy Replacement
|
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Life insurance rider which pays an additional sum, termed the principal sum, to the beneficiary if the insured dies due to an accident. Also applies to accidental death and dismemberment policies in which the policy will pay double or triple the benefit based on dismemberment or death. Synonymous with accidental death benefit.
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Multiple Indemnity Rider
|
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Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with guaranteed insurability rider.
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Future Increase Option
|
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Life insurance provision in which policyowners can make a policy loan in an amount up to the current cash value, less any existing indebtedness (prior loans with interest).
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Cash Loan
|
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Dividend option in which the policyowner uses the dividend as a single premium to purchase an additional amount of whole life coverage. This dividend option increases the face amount of the policy.
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Paid-up Addition
|
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The benefits payable from an insurance policy or contract.
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Policy Proceeds
|
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Dividend option in which the policyowner uses the dividend to pay up the policy earlier.
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Paid-up Insurance
|
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The partial and temporary transfer of ownership rights to another person or entity. Synonymous with collateral and conditional assignment.
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Partial Assignment
|
|
A required provision in a life insurance policy stating that policyowners have the right to transfer policy rights to another person or entity.
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Assignment Clause
|
|
They involve how policy funds are utilized.
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Options
|
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The face amount of AD&D coverage which is paid out if the insured loses two limbs, two hands, two feet, vision in both eyes, or dies as a result of an accident.
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Policy Sum
|
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Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with future increase option.
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Guaranteed Insurability Rider
|
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Life insurance provision that requires the proposed insured to undergo a medical examination prior to issuing coverage, and autopsy where not prohibited by law.
|
Medical Examination and Autopsy
|
|
Life insurance provision which allows the insurer to automatically use the policy cash value to pay an overdue premium.
|
Automatic Premium Loans
|
|
To restore a financial loss to the state prior to the occurrence of the loss.
|
Indemnity
|
|
Optional life insurance provision stating that if the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.
|
Hazardous Occupation of Hobby
|
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Feature of a policy that cannot be forfeited. Example: policy cash value.
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Nonforfeiture Values
|
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Guarantees that are required by law to be part of life insurance policies that build cash value. Insurers are required to make nonforfeiture values available when policyowners discontinue premium payments for any reason.
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Nonforfeiture Options
|
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Life insurance provision stating that policy changes must be made by an authorized officer of the insurer and attached to the policy and only the policyowner has the right to request changes.
|
Modifications
|
|
A required provision in a life insurance policy which prevents the insurer from denying a claim or voiding a life insurance policy, except for nonpayment of premiums, after the policy has been in force for a certain number of years, usually 2.
|
Incontestable Clause
|
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Term insurance that provides an increasing face amount with level premiums.
|
Increasing Term
|
|
Clause used when the insured is a minor. The applicant maintains control over the policy until the insured reaches the age of majority.
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Ownership Clause
|
|
Optional life insurance provision stating that the insurer will not pay the claim if the insured dies due to involvement with aviation, such as a military pilot flying a jet aircraft.
|
Aviation Clause
|
|
Requirement for full disability income benefits, typically inability to perform work duties. Each policy defines total disability differently.
|
Total Disability
|
|
A government group life insurance plan that offers inexpensive group term life insurance for members of the armed forces.
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Servicemembers
|
|
Provision in individual health insurance policies stating that written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible.
|
Notice of Claim
|
|
Underwriting classification in which the risk is uninsurable because the applicant poses too great a risk for the insurer to provide coverage.
|
Declined
|
|
The group contract, which is issued to and owned by the group entity.
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Master Policy
|
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Level term insurance which has a level face amount and increasing premiums.
|
Annual Renewable Term
|
|
A government group life insurance plan that offers group term life insurance for federal employees, retirees, and their family members.
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Federal Employees
|
|
Insurance which provides life insurance to many people under one policy, where a master policy is issued to the organization and individual certificates are given to each member.
|
Group Life Insurance
|
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Group life which is issued for one year and may be renewed annually without evidence of insurability at the discretion of the policyowner.
|
Group Term Life
|
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Group life insurance which offers permanent protection for insured members under the group.
|
Group Whole Life
|
|
In group insurance, a premium payment method where the premiums are paid entirely by the policyowner, not by member insureds.
|
Noncontributory
|
|
Annuities that have variable interest rates and benefits.
|
Variable Annuities
|
|
Annuities that have annuity periods beginning sometime in the future, after one year or many years from the date of purchase.
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Deferred Annuities
|
|
The insurer’s account used to invest premium dollars for variable life insurance and annuities.
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Separate Account
|
|
An economic phenomena, where in order to have a general idea of how many losses will occur in a given year, insurers use the ***, which states that as the group increases in size, it is easier to predict the number of future losses over a certain period of time.
|
law of large numbers
|
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The pay-in period of an annuity during which the contract owner pays premiums. Synonymous with accumulation period.
|
Accumulation Phase
|
|
The pay-in period of an annuity during which the contract owner pays premiums. Synonymous with accumulation phase.
|
Accumulation Period
|
|
Annuities which have two distribution values contingent upon whether or not the annuity is surrendered in a lump-sum prior to annuitization.
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Two-Tiered Annuities
|
|
Annuity certain payout option where the insurer guarantees annuity payments for a certain number of years or life, whichever is shorter.
|
Temporary Annuity Certain
|
|
Annuities available to employees of tax-exempt nonprofit organizations and public schools.
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Tax-sheltered Annuities
|
|
The person who purchases the annuity, pays the premiums and has all ownership rights.
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Contract Owner
|
|
An annuity that covers the life of one person.
|
Single Life Annuity
|
|
A deferred annuity with a decreasing term life insurance rider which provides a beneficiary with a death benefit and the annuity
|
Retirement Income Annuities
|
|
Life income settlement option which pays the beneficiary periodic income for his entire life. If the beneficiary dies before the policy proceeds have been paid out entirely, then a second beneficiary receives the payments until the principal reaches zero.
|
Refund Life
|
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Informs contract owners what portion of each annuity payment is taxable.
|
Exclusion Ratio
|
|
Life annuity payout option in which the annuitant receives income for life and the beneficiary will receive the balance of premiums plus interest minus benefits already paid when the annuitant dies. Two types: cash refund and installment refund.
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Refund Life Annuity
|
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Life annuity payout option in which the annuitant receives annuity payments for his entire life; however, once the annuitant dies, annuity payments stop. Synonymous with life only and straight life.
|
Pure Life
|
|
Duration of time that annuity payments are guaranteed to be paid. Typically 5, 10, or 15 years.
|
Period Certain
|
|
Refund life annuity in which the beneficiary receives the balance of premium minus benefits paid in installments.
|
Installment Refund
|
|
A variable annuity contract owner’s interest in the separate account prior to annuitization.
|
Accumulation Unit
|
|
Fixed annuities that provide a guaranteed minimum interest rate and earn a current interest rate that is tied to an equity index.
|
Equity Index Annuity
|
|
Life annuity payout option in which the annuitant receives annuity payments for his entire life; however, once the annuitant dies, annuity payments stop. Synonymous with straight life and pure life.
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Life Only
|
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Life annuity payout option which provides the annuitant with guaranteed income for life and further guarantees annuity payments for a minimum number of years, such as 10 or 20. If the annuitant dies within the period certain, the beneficiary will receive annuity payments for the remainder of the period.
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Life Annuity with Period Certain
|
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Fixed annuities in which a surrender fee is incurred if surrendered prior to annuitization.
|
Market Value Adjusted Annuity
|
|
Established by the Securities Exchange Act of 1934 and responsible for regulating the trade of all securities and the operations of the exchanges.
|
SEC
|
|
A variable annuity contract owner's interest in the separate account after annuitization.
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Annuity Unit
|
|
Ways that the accumulated funds in an annuity may be received upon annuitization.
|
Annuity Payout Option
|
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Provides income payments for a fixed time period. Three types: fixed period, fixed amount and temporary.
|
Annuity Certain
|
|
The individual whose life the annuity has been issued, and the person who receives annuity payments.
|
Annuitant
|
|
When the investor is contributing to the annuity and not receiving any distributions, allowing the annuity's cash value to grow.
|
Accumulation Phase
|
|
Annuities that have a guaranteed minimum interest rate.
|
Fixed Annuities
|
|
Refund life annuity payout option in which the beneficiary receives the balance of premiums plus interest minus benefits paid in a lump-sum.
|
Cash Refund
|
|
Annuity certain payout option which pays periodic annuity payments to the annuitant for a stipulated period of time.
|
Fixed Period Installment
|
|
Annuity certain payout option which pays the annuitant a stipulated amount periodically.
|
Fixed Amount Installment
|
|
Guarantees that are required by law to be part of life insurance policies that build cash value. Insurers are required to make nonforfeiture values available when policyowners discontinue premium payments for any reason.
|
Nonforfeiture Options
|
|
Annuity payments that begin immediately after the annuity is purchased, do not have an accumulation period, and have payout periods which must begin within one year of purchase.
|
Immediate Annuities
|
|
Life insurance policy in which sales and administrative charges are not deducted until the policyowner takes out cash value from the policy or surrenders the policy for its cash value.
|
Back-end Loaded
|
|
The time during which a surviving spouse is ineligible to receive Social Security survivors benefits.
|
Social Security Blackout Period
|
|
Method of handling risk in which ways of minimizing loss exposure are actively sought.
|
Reduction
|
|
A worker who is covered by Social Security.
|
Covered Worker
|
|
A person who is eligible for multiple Social Security benefits, such as survivors and retirement.
|
Dual Benefit Eligibility
|
|
Insured status in which 40 quarters are required for survivors and retirement benefits, and 6 quarters are required for disability.
|
Fully Insured
|
|
Old Age, Survivors, and Disability Insurance. More commonly referred to as Social Security.
|
OASDI
|
|
The age (65 years) when a person is entitled to Social Security retirement benefits regardless of employment status.
|
Normal Retirement Age
|
|
Basis for determining Social Security insured status. A maximum of 4 quarters can be earned in one year. Synonymous with quarters of credit.
|
Quarters of Coverage
|
|
A covered worker who has accrued at least 6 quarters of coverage over the past 13 quarters ending with the quarter of disability onset, death or retirement, is currently insured.
|
Currently Insured
|
|
Qualification for Social Security benefits based on the quarters of credit earned cumulatively throughout employment.
|
Insured Status
|
|
A government group life insurance plan that offers group term life insurance for federal employees, retirees, and their family members.
|
Federal Employees
|
|
The maximum monthly amount a covered worker and his family can receive from Social Security.
|
Maximum Family Benefit
|
|
A covered worker who qualifies for Social Security disability benefits based on the number of quarters of credit earned.
|
Disability Insured
|
|
The inability to perform one or more work duties of a person’s own occupation, or inability to work full-time.
|
Partial Disability
|
|
Medicare hospital insurance.
|
Part A
|
|
Government health insurance coverage for individuals over the age of 65, and special needs individuals.
|
Medicare
|
|
Combination of a defined contribution plan and a defined benefit plan.
|
Target Benefit Pension Plan
|
|
Method of handling risk which entails distributing risk over a large number of people so that all members of the group carry a portion of the risk.
|
Sharing
|
|
Medical expense plan that pays on a first-dollar basis.
|
Scheduled
|
|
Retirement plans approved by the IRS that provide special tax advantages for employers and employees.
|
Qualified Plans
|
|
Qualified retirement plan in which company profits are contributed to plan participants.
|
Profit-sharing Plan
|
|
Qualified retirement plan for self-employed individuals. May be organized as a defined contribution plan or a defined benefit plan. Synonymous with HR-10 plan.
|
Keogh Plan
|
|
Retirement plan which doesn't guarantee a specific benefit amount, but specifies a certain contribution amount.
|
Defined Contribution Plan
|
|
Retirement plan which pays a specified benefit amount.
|
Defined Benefit Plan
|
|
Retirement plans without the tax advantages of qualified plans. *** plans do not have to be approved by the IRS and may favor highly-paid employees.
|
Nonqualified
|
|
CODA plan in which plan participants make contributions via salary reductions, cash bonuses or thrift plans.
|
401 (k) Plan
|
|
Qualified retirement plan which provides plan participants with periodic income benefits upon retirement. Examples: money-purchase pension plan and target benefit pension plan.
|
Pension Plan
|
|
An executive benefit that an employer can use to pay a highly paid employee at a later date, such as upon disability, retirement or death.
|
Deferred Compensation
|
|
For qualified plans, a set of ERISA-mandated rules establishing how participants achieve ownership of contributions made by employers.
|
Vesting Rules
|
|
Individual retirement account in which contributions are not tax-deductible, but withdrawals are tax-free.
|
Roth IRA
|
|
A transfer of funds from one IRA or qualified plan to another preventing withholding tax on a withdrawal.
|
Rollover
|
|
Insurance plans given to employees as perks or privileges designed to provide incentive to join or remain with the company long-term.
|
Employee Benefit Plans
|
|
Medical expense plans may pay benefits based on the type of procedure, or a fixed amount.
|
Schedule
|
|
A person in a position of financial trust and responsibility. Producers are ***.
|
Fiduciaries
|
|
Individual retirement account in which contributions are tax-deferred.
|
Traditional IRA
|
|
A nonqualified deferred compensation plan for government and nonprofit employees.
|
Section 457 Plan
|
|
IRA funds moved from one trustee to another trustee.
|
IRA Transfer
|
|
Annuities available to employees of tax-exempt nonprofit organizations and public schools.
|
Tax-sheltered Annuities
|
|
The employer contributes a fixed amount to the plan every year, and this amount is apportioned among each plan participant
|
Money-purchase Pension Plan
|
|
Tax Reform Act of 1984. This act restricts the payout of endowment policies.
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TAMRA
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Premiums paid cannot cause a policy to be paid-up after seven years.
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Seven-pay Test
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Retirement plans approved by the IRS that provide special tax advantages for employers and employees.
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Qualified Plans
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A required provision in a life insurance policy stating when premium payments are due, how and to whom they must be paid.
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Payment of Premiums
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A *** assignment is the partial and temporary transfer of ownership rights to another person or entity. Synonymous with partial and conditional assignment.
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collateral
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Statements that are guaranteed to be true and are part of the legal contract. Breach of *** is grounds for voiding an insurance contract.
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warranty
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Policies that earn a fluctuating rate of interest and do not guarantee a certain cash value. Policies have fixed level premiums and a guaranteed minimum death benefit.
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Variable Life Insurance
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The process that insurers use to select, classify and rate risks so that they accurately reflect the amount of risk undertaken.
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Underwriting
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A required provision in a life insurance policy stating that the policyowner is permitted 10 days from the date the policy is delivered to examine the policy and return it for a refund of all premiums paid. In health insurance, this provision is optional but is usually included.
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Right to Examine (Free Look)
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The group
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Persistency
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The group’s ability to pay premiums and renew coverage.
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Persistency
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Nonforfeiture option that allows the policyowner to receive the policy's cash value.
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Cash Surrender Value
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Document prepared by the NAIC which explains the type of coverages available to buyers.
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Buyer's Guide
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The benefits payable from an insurance policy or contract.
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Policy Proceeds
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The process of predating the application a certain number of months, up to 6 months, in an attempt to achieve a lower premium.
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Backdating
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Life insurance provision stating that policy changes must be made by an authorized officer of the insurer and attached to the policy and only the policyowner has the right to request changes.
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Modifications
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The insurer pays an amount for each procedure or treatment based on the average charges in that geographic area. Payment method for nonscheduled plans.
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Usual, Reasonable and Customary
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A type of accident-only medical expense coverage which only pays for death or injury to a fare-paying passenger on a regularly scheduled commercial carrier.
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Travel Accident
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Insurance premium paid in advance which is used for future coverage.
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Unearned Premium
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Health insurance coverage for active duty and retired members of the uniformed services and their dependents.
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TRICARE
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Once the insured has paid a certain amount out-of-pocket, the insurer pays the remaining eligible expenses. Synonymous with out-of-pocket limit.
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Stop-loss
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Medical providers are paid a set amount per month regardless of how many patients they treat. Synonymous with prepaid basis.
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Service Basis
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It allows members to consult other medical practitioners to obtain second and third opinions regarding the necessity of surgical procedures.
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Second Surgical Opinions
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The insured pays the medical providers for services, and the insurer reimburses the insured. Commercial insurers use this payment method.
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Reimbursement Basis
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In health insurance, individuals covered by prepaid health plans. Synonymous with member.
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Subscriber
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Medical expense plans may pay benefits based on the type of procedure, or a fixed amount.
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Schedule
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An unforeseen and unintentional bodily injury resulting from an accident.
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Accidental Injury
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Optional provision in health insurance policies which states the length of time between when sickness, accident, or disability begins and when benefits become payable. Often referred to as a “time deductible.”
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Elimination Period
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Health insurance policies that provide specialized limited coverage, such as AD&D and dread disease.
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Limited Policies
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Insurance premium paid in advance which is used to pay current coverage.
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Earned Premium
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The producer issues a *** receipt to the applicant when the application and premium are collected. There are two types of *** receipts: insurability and approval.
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conditional receipt
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Health insurance policies that provide broad coverage.
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Comprehensive Policies
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The Civilian Health and Medical Program of the Uniformed Services, replaced by TRICARE.
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CHAMPUS
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Early disease detection and health maintenance. Examples: annual physical exams and immunizations.
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Preventative care
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Medical providers are paid for each service they provide.
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Fee-for-service
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Medical providers are compensated on a service basis, instead of a dollar reimbursement. Medical providers are paid a set amount per month regardless of how many patients they treat. Synonymous with service basis.
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Prepaid Basis
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Pays periodic benefits when an insured cannot work because of accident or injury.
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Disability Income Insurance
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Health insurance policies covering specific diseases.
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Dread Disease
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Health plans that insure a group of individuals participating in the same activity.
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Blanket
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Health coverage centered on cost containment.
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Managed Care
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In group health insurance, a group policy is self-funded and the insurer is subcontracted only to process claims.
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Administrative Services Only
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Private organizations which administer Medicare Part B benefits. Each state or region has its own ***.
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carrier
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Allow employees to choose which health care benefits and coverages they want from a list of options.
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Cafeteria Plans
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Service providers. Benefits are provided to subscribers on a service basis rather than a reimbursement basis. *** hospital costs and *** covers physician's fees.
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Blue Cross covers and Blue Shield
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Health plans that cover a small group of individuals; however, unlike group insurance each individual is issued an individual policy.
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Franchise
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Insurance which provides protection against fundamental risks by redistributing income to help people who cannot afford to pay the cost of incurring such losses themselves.
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Government Insurance
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Existing medical conditions for which the insured sought medical treatment or advice prior to policy issuance.
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Preexisting Conditions
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State and federally-funded medical assistance program for financially disadvantaged individuals.
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Medicaid
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Government health insurance coverage for individuals over the age of 65, and special needs individuals.
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Medicare
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Provision in individual health insurance policies stating that benefits are payable according to the beneficiary designation in the policy.
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Payment of Claims
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Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
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Medical Expense Insurance
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In health insurance, document explaining the coverage purchased and the names of the insurer and agent.
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Outline of Coverage
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Care provided in an individual's home. *** usually includes intermediate or custodial care.
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Home health care
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Policies that pay a dollar benefit for each day the insured is confined to a hospital. Benefits can be used for anything, not strictly medical purposes.
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Hospital Income
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Provision of policy specifying the insured’s and insurer’s rights to renew or terminate a policy during or after the expiration of the original policy term.
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Renewability
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Optional provision in health insurance allowing continuation of coverage without payment of premium in the event of permanent and total disability.
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Waiver of Premium
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If the insured becomes disabled from the same or related event or condition caused from a prior disability.
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Recurrent Disability
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Insurance premium paid in advance which is used for future coverage.
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Unearned Premium
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Model health provisions developed by the NAIC which provide standardization for all individual health insurance policy provisions and identify the rights of the insurer and policyowner.
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Uniform Individual Accident and Sickness Policy
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Provision in individual health insurance policies stating that claims other than those providing periodic payment are payable immediately upon receipt of written proof of loss.
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Time of Payment of Claims
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Provision in individual health insurance policies stating that written proof of loss must be provided to the insurer within 90 days after the date of loss unless not reasonably possible. Under no circumstance may proof of loss be submitted later than one year from the date proof of loss was initially required.
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Proof of Loss
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Provision in individual health insurance policies stating that the insurer, upon receipt of the notice, must furnish the forms for filing proofs of loss. If not provided within 15 days, the claimant may submit proof of loss on any form he chooses.
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Claim Forms
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Provision in individual health insurance policies stating that written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible.
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Notice of Claim
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Provision in individual health insurance policies stating that unless the policyowner makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the policyowner and does not require the consent of the beneficiary.
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Change of Beneficiary
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Provision in individual health insurance policies stating that legal action may not be brought to recover on the policy until 60 days after written proof of loss is provided to the insurer, and no later than two years (three years in some states) after written proof of loss is provided to the insurer.
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Legal Action
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Provision in individual health insurance policies stating that the insurer, at its own expense, has the right and opportunity to examine the person or autopsy of the insured when reasonably required while a claim is pending. The insurer has the right to have an autopsy performed on the insured if not prohibited by law.
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Physical Examination and Autopsy
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Provision in individual health insurance policies stating that the entire contract between the parties consists of the policy, any endorsements and the application, if attached. Any change to the policy must be made by an executive officer of the insurer with the consent of all parties to the contract. No agent has authority to make changes to a policy.
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Entire Contract; Changes
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Requirement for full disability income benefits, typically inability to perform work duties. Each policy defines *** differently.
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total disability
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Medical expense plans may pay benefits based on the type of procedure, or a fixed amount.
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Schedule
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The insurer’s promise to pay covered losses as long as the insured pays the premiums and abides by the terms and conditions.
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Insuring Clause
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The date in which an insurance policy is in force.
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Effective Date of Coverage
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Optional provision in individual health insurance policies which states the insurer will not pay benefits if the insured incurs a loss while being intoxicated or using any non-prescribed narcotic.
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Intoxication and Narcotics
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Optional provision in individual health insurance policies stating that the insurer will not pay benefits if the insured incurs a loss while committing a felony or engaging in an illegal occupation.
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Illegal occupation
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Optional provision in individual health insurance policies stating that the insurer has the right to adjust the policy benefits or premium if the insured changes occupations to one that is either more or less hazardous.
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Change of Occupation
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Insurance premium paid in advance which is used to pay current coverage.
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Earned Premium
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Health insurance policy providing the insurer the right to not renew the policy for any reason specified in the policy and allowing the insurer to increase premium rates.
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Conditionally Renewable
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The entity that assumes the insured's risk.
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Insurance Company
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Payments the insured makes for benefits or services provided under the policy coverage. Sometimes called “copays,” these fixed-dollar payments are usually small ranging from five dollars to forty dollars.
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Copayment
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Claims payment process in which a person is insured under multiple health plans providing coverage for the same loss.
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Coordination of Benefits
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Optional provision in health insurance policies which states the length of time between when sickness, accident, or disability begins and when benefits become payable. Often referred to as a “time deductible.”
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Elimination Period
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Benefits or services provided under the policy coverage.
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Eligible Expenses
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A required provision in a life insurance policy stating that a policyowner must pay a premium in exchange for the insurer's promise to pay benefits.
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Consideration Clause
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Provision in individual health insurance policies stating that benefits are payable according to the beneficiary designation in the policy.
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Payment of Claims
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A cost-sharing mechanism between the insurer and the insured in a medical insurance transaction in which the insurer agrees to pay a large percentage of the expenses, and the insured is responsible for paying the remainder.
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Coinsurance
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A health insurance policy providing the insured
|
Noncancelable
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Approval required by some health insurers prior to a treatment or procedure.
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Preauthorization
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Optional provision in individual health insurance policies stating that an insured with excess insurance coverage under one insurer, will have the excess coverage voided and premiums returned.
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Other Insurance in the Insurer
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Life insurance rider which pays an additional sum, termed the principal sum, to the beneficiary if the insured dies due to an accident. Also applies to accidental death and dismemberment policies in which the policy will pay double or triple the benefit based on dismemberment or death. Synonymous with accidental death benefit.
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Multiple Indemnity Rider
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Health insurance coverage that pays benefits for sickness or injury occurring only while on the job. Example: Workman's Compensation.
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Occupational Coverage
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Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with guaranteed insurability rider.
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Future Increase Option
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Government health insurance coverage for individuals over the age of 65, and special needs individuals.
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Medicare
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Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with future increase option.
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Guarenteed Insurability Rider
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A health insurance policy providing continuation of coverage of the insured to a specified age subject to payment of premiums and allowing the insurer to increase premium rates by classes of insureds.
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Guarenteed Renewable
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Optional provision in individual health insurance policies stating that any premium due and unpaid may be deducted from the payment of a claim.
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Unpaid Premium
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Health insurance policy providing the insurer the right to not renew the policy for any reason and allowing the insurer to increase premium rates.
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Optionally Renewable
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Optional provision in individual health insurance policies which assures that policies are always in alignment with state laws.
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Conformity with State Statutes
|
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Option to cancel a health insurance policy at any time before its expiration date.
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Cancellation
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To restore a financial loss to the state prior to the occurrence of the loss.
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Indemnity
|
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Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
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Medical Expense Insurance
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Optional provision in health insurance policies which describes how and when benefits are paid.
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Benefit Payment Clause
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Health insurance coverage that pays benefits for sickness or injury occurring only while not on the job.
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Nonoccupational Coverage
|
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Optional health insurance provision allowing for reduction or refund of premiums during the period of service.
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Military Suspense Provision
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Rider that exclude coverage for a specific condition that would otherwise be covered under the policy.
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Impairment Rider
|
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Life insurance rider that pays the total amount of premiums paid into the policy in addition to the policy face amount upon the insured's death.
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Return of Premium Rider
|
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Provides job training coverage to an insured with total disability so he can return to work.
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Rehabilitation Benefit
|
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An unforeseen and unintentional bodily injury resulting from an accident.
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Accidental Injury
|
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Disability income policies with benefit periods of less than two years.
|
Short-Term Disability Income Policies
|
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Basis for determining Social Security insured status. A maximum of 4 quarters can be earned in one year. Synonymous with quarters of credit.
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Quarters of Coverage
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A worker who is covered by Social Security.
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Covered Worker
|
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Life insurance rider that allows the policyowner to waive premium payments during a disability, and keeps the life insurance policy in force as long as the disability is total and permanent.
|
Waiver of Premium Rider
|
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A disability in which a person is prevented from working during recovery or rehabilitation, but is expected to fully recover.
|
Temporary Disability
|
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The insured has a total disability and returns to work but can only perform some of the duties he could perform prior to the disability. Synonymous with permanent partial disability.
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Residual Disability
|
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If the insured becomes disabled from the same or related event or condition caused from a prior disability.
|
Recurrent Disability
|
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A disabling condition which returns within a specified period of time to be considered an extension of prior disability. The insured is not required to undergo another elimination period.
|
Recurrent Disability Provision
|
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Disability for which the insured is not expected to recover.
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Permanent Disability
|
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The insured has a total disability, returns to work but can only perform some of the duties he could perform prior to the disability. Synonymous with residual disability.
|
Permanent Partial Disability
|
|
Restrictive definition of accident in which the cause of the accident must be unintentional and unexpected.
|
Accidental Means
|
|
Definition of accident in which the injury is unintentional and unexpected. Policies using this definition cover all injuries except self-inflicted injuries.
|
Accidental Bodily Injury
|
|
Provision in disability income policies which prolongs the benefit period to the duration of the insured’s life.
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Lifetime Benefits
|
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Disability which restricts a person to staying indoors.
|
Confining Disability
|
|
A standard provision for group life and health insurance where the insurer must stipulate what information individuals must provide as evidence of insurability.
|
Evidence of Insurability
|
|
Definition used to establish total disability. The insured must be unable to perform the work duties of any occupation for which he is qualified by education, experience, or training. More restrictive than the own occupation definition of total disability.
|
Any Occupation
|
|
A condition, such as loss of sight, hearing, speech, or the use of arms or legs, which qualify as total disability, regardless of ability to work.
|
Presumptive Disability
|
|
Disability income policies with benefit periods of two years or more.
|
Long-Term Disability Income Policies
|
|
The maximum monthly amount a covered worker and his family can receive from Social Security.
|
Maximum Family Benefit
|
|
The value of premiums plus interest in a permanent life insurance policy.
|
Cash Value
|
|
Nonforfeiture option that allows the policyowner to receive the policy's cash value.
|
Cash Surrender Value
|
|
A percentage (usually half) of the principal sum which is paid for loss of one limb, primary body part, or eye.
|
Capital Sum
|
|
The inability to perform one or more work duties of a person’s own occupation, or inability to work full-time.
|
Partial Disability
|
|
Pays periodic benefits when an insured cannot work because of accident or injury.
|
Disability Income Insurance
|
|
Life insurance rider in which periodic income payments are paid by the insurer in the event that the policyowner becomes totally and permanently disabled.
|
Disability Income Benefits
|
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Disability which does not restrict a person to staying indoors.
|
Nonconfining Disability
|
|
Business disability policy that pays off a business loan if the owner becomes disabled.
|
Disability Reducing Term
|
|
A covered worker who qualifies for Social Security disability benefits based on the number of quarters of credit earned.
|
Disability Insured
|
|
Business disability insurance policy that establishes how ownership in a business is transferred upon an owner's disability.
|
Disability Buy-sell Policy
|
|
Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with guaranteed insurability rider.
|
Future Increase Option
|
|
Insured status in which 40 quarters are required for survivors and retirement benefits, and 6 quarters are required for disability.
|
Fully Insured
|
|
Pays medical expenses for nondisabling injuries.
|
Medical Reimbursement Benefit
|
|
The length of time a disability income policy pays benefits to the insured.
|
Benefit Period
|
|
Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
|
Medical Expense Insurance
|
|
Optional provision in individual health insurance policies stating that monthly disability income benefits may not exceed the amount of monthly earnings of the insured at the time the disability began or the average amount of monthly earnings for the previous two years, whichever is greater.
|
Relation of Earning to Insurance
|
|
A health insurance policy providing continuation of coverage of the insured to a specified age subject to payment of premiums and allowing the insurer to increase premium rates by classes of insureds.
|
Guaranteed Renewable
|
|
Definition used to establish total disability. The insured must be unable to perform the work duties of his own occupation. Less restrictive than the any occupation definition of total disability.
|
Own Occupation
|
|
The face amount of AD&D coverage which is paid out if the insured loses two limbs, two hands, two feet, vision in both eyes, or dies as a result of an accident.
|
Principal Sum
|
|
Life insurance rider that permits the policyowner to purchase additional amounts of whole life coverage at specific points in the future. Also applies to disability income insurance permitting the insured to purchase additional disability income coverage at future dates. Synonymous with future increase option.
|
Guaranteed Insurability Rider
|
|
Optional benefit which waives the elimination period of a disability income policy if the insured requires inpatient hospitalization.
|
Hospital Confinement Rider
|
|
Disability income policy that pays a portion of the insured
|
Income Replacement Contract
|
|
Medical expense plans may pay benefits based on the type of procedure, or a fixed amount.
|
schedule
|
|
Tooth replacement with artificial structures, dental implants, bridges and dentures.
|
Prosthodontics
|
|
Deductible in comprehensive major medical policies used in lieu of a corridor deductible. The amount of the *** deductible is the greater of what the base plan pays and a stated amount in the policy.
|
integrated Deductible
|
|
Treatment of gums and structures around teeth; treatment of gum disease.
|
Periodontics
|
|
Treatment for the pulp, or soft tissue in the core of each tooth – root canal.
|
Endodontics
|
|
Early disease detection and health maintenance. Examples: annual physical exams and immunizations.
|
Preventive Care
|
|
A type of accident-only medical expense coverage which only pays for death or injury to a fare-paying passenger on a regularly scheduled commercial carrier.
|
Travel Accident
|
|
Medical providers are paid a set amount per month regardless of how many patients they treat. Synonymous with prepaid basis.
|
Service Basis
|
|
The insured pays the medical providers for services, and the insurer reimburses the insured. Commercial insurers use this payment method.
|
Reimbursement Basis
|
|
A medical expense plan that pays benefits for certain nonscheduled medical procedures as a percentage of the absolute value of another medical procedure.
|
Relative Value
|
|
A combination of a base plan and a major medical policy with first-dollar coverage, catastrophic coverage and deductibles. Also referred to as comprehensive major medical.
|
Supplementary Major Medical
|
|
Once the insured has paid a certain amount out-of-pocket, the insurer pays the remaining eligible expenses. Synonymous with out-of-pocket limit.
|
Stop-loss
|
|
Medical expense policy that allows the insured’s maximum lifetime benefit to be restored after a large portion of benefits has been used.
|
Restoration of Benefits
|
|
Health coverage used to insure a debt. If a debtor becomes disabled, payments are made to a creditor until the insured can resume work.
|
Credit Health Insurance
|
|
They are limits placed on certain medical coverages within a policy.
|
Inside Limits
|
|
Deductible in comprehensive major medical plans. The *** Deductible is paid after the base plan portion of the policy pays benefits, and before the major medical portion of the policy pays benefits.
|
Corridor Deductible
|
|
Benefits or services provided under the policy coverage.
|
Eligible Expense
|
|
Deductible paid for each cause in which medical care is sought.
|
Per Cause Deductible
|
|
Health coverage centered on cost containment.
|
Managed Care
|
|
Policies that provide high limits for catastrophic coverage and broad coverage for medical expenses. Major medical plans have deductibles, coinsurance, eligible expenses and a maximum dollar benefit.
|
Major Medical Policies
|
|
Dental care for children.
|
Pediatric Dentistry
|
|
Annual deductible that must be met for the year prior to the policy paying benefits. Also referred to as all cause or calendar year deductible.
|
Maximum Annual Deductible
|
|
A combination of a base plan and a major medical policy with first-dollar coverage, catastrophic coverage and deductibles. Also referred to as supplementary major medical.
|
Comprehensive Major Medical
|
|
Medical providers are paid for each service they provide.
|
Fee-for-Service
|
|
Health insurance policy that does not have deductibles or coinsurance. Example: base plans.
|
First-dollar Coverage
|
|
Caps the amount of total lifetime benefits per individual, usually one million dollars.
|
Maximum Lifetime Benefit
|
|
An unforeseen and unintentional bodily injury resulting from an accident.
|
Accidental Injury
|
|
Care provided to assist an individual with ADLs. *** care can be performed by a medical non-professional, but must be performed under physician's orders.
|
Custodial
|
|
An assignment that occurs when the policyowner assigns all rights including cash values to another person or entity. Synonymous with voluntary assignment.
|
Absolute
|
|
A medical expense plan that pays a fixed maximum dollar amount for a procedure.
|
Absolute Value
|
|
Arrangement in which medical providers may only treat patients that are part of the managed care plan.
|
Closed Pannel
|
|
Payment method in which medical providers are paid a fixed fee per person no matter how many medical services are performed.
|
Capitation
|
|
Existing medical conditions for which the insured sought medical treatment or advice prior to policy issuance.
|
Preexisting Conditions
|
|
Health insurance policies that provide specialized limited coverage, such as AD&D and dread disease.
|
Limited Policies
|
|
The length of time a disability income policy pays benefits to the insured.
|
Benefit Period
|
|
Miscellaneous expenses covered under a basic hospital expense plan.
|
Ancillary Benefit
|
|
Medical expense plans providing first-dollar coverage which have low limits for catastrophic coverage. *** plans include medical, hospital and surgical.
|
Base
|
|
The face amount of AD&D coverage which is paid out if the insured loses two limbs, two hands, two feet, vision in both eyes, or dies as a result of an accident.
|
Principal Sum
|
|
Tissue biopsy to diagnose oral diseases such as cancer.
|
Oral Pathology
|
|
A deductible that must be paid each time the insured receives a medical service.
|
Flat Dollar Deductible
|
|
Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
|
Medical Expense Insurance
|
|
Surgery of the oral cavity (i.e. wisdom teeth extraction).
|
Oral Surgery
|
|
Policies that pay a dollar benefit for each day the insured is confined to a hospital. Benefits can be used for anything, not strictly medical purposes.
|
Hospital Income
|
|
Prevention and correction of teeth irregularities; braces.
|
Orthodontics
|
|
Once the insured has paid a certain amount out-of-pocket, the insurer pays the remaining eligible expenses. Synonymous with stop-loss.
|
Out-of-Pocket Limit
|
|
Medical providers not contracted with an HMO or PPO. Members using *** medical providers typically pay higher copayments.
|
out-of-network
|
|
Necessary medical equipment prescribed by a physician for use in an individual's home, such as walkers, wheel chairs, and oxygen.
|
Durable Medical Equipment
|
|
Care provided in an individual's home. *** care usually includes intermediate or custodial care.
|
Home health
|
|
Proof of prior insurance, used to reduce waiting periods and exclusions for preexisting conditions.
|
Creditable Coverage
|
|
The period during which an eligible individual may enroll in a group insurance plan without needing to undergo a medical exam.
|
Eligibility Period
|
|
Claims payment process in which a person is insured under multiple health plans providing coverage for the same loss.
|
Coordination of Benefits
|
|
Method used to establish premium rates for group health plan members, based on the claims experience of the group.
|
Experience Rating
|
|
Group premiums are based on the actual or projected costs of insured members in a particular geographic location with reference to insureds’ age, gender, occupation and health.
|
Community Rating
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The period of time new members may enroll in group coverage each year.
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Open Enrollment Period
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The group’s ability to pay premiums and renew coverage.
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Persistency
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Existing medical conditions for which the insured sought medical treatment or advice prior to policy issuance.
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Preexisting Conditions
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The length of time a disability income policy pays benefits to the insured.
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Benefit Period
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The group
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Persistency
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Group life which is issued for one year and may be renewed annually without evidence of insurability at the discretion of the policyowner.
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Group Term Life
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Cost control program used by HMOs which utilizes primary care physicians also referred to as “gatekeepers,” utilization reviews, and prescription drug formularies.
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Utilization Management
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Method of organizing an HMO. Physicians are employees of the HMO.
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Staff Model
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Medical providers are paid a set amount per month regardless of how many patients they treat. Synonymous with prepaid basis.
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Service Basis
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Geographic area to which HMO services and medical providers are limited.
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Service Area
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It allows members to consult other medical practitioners to obtain second and third opinions regarding the necessity of surgical procedures.
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Second Surgical Opinion
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Method of organizing an HMO. Functions like the group model except the HMO contracts with medical groups, physicians’ associations and independent physicians providing open panel services.
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Individual Practice Association Model
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Arrangement in which medical providers may treat any patient.
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Open Panel
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Early disease detection and health maintenance. Examples: annual physical exams and immunizations.
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Preventative Care
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Medical providers are paid for each service they provide.
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Fee-for-Service
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An unforeseen and unintentional bodily injury resulting from an accident.
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Accidental Injury
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Arrangement in which medical providers may only treat patients that are part of the managed care plan.
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Closed Panel
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Private organizations contracted by the CMS to process claims payments, enroll medical providers and investigate fraud. Each state or region has its own FI. Also referred to as ***.
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fiscal intermediaries
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Nursing care and rehabilitation needed occasionally. *** is performed by a medical professional under physician
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Intermediate care
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Medicare enrollment period. Enrollment is delayed because the person has coverage under his employer or his spouse’s employer group health plan. Enrollment spans an eight-month period which begins upon cessation of employment or termination of group health coverage, whichever occurs first.
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Special Enrollment Period
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Surrendering a known right.
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Waiver
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Optional provision in health insurance allowing continuation of coverage without payment of premium in the event of permanent and total disability.
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Waiver of Premium
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Nursing care and rehabilitation needed on a daily basis performed by a medical professional under physician’s orders.
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Skilled Care
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Temporary care that allows an individual’s family member or caregiver to have time off from caring for the individual.
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Respite Care
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Long-term care plans which provide tax advantages.
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Qualified LTC Plans
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Care provided to assist an individual with ADLs. *** can be performed by a medical non-professional, but must be performed under physician's orders.
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Custodial care
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Nursing care and rehabilitation needed occasionally. *** is performed by a medical professional under physician
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Intermediate care
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Optional provision in health insurance policies which states the length of time between when sickness, accident, or disability begins and when benefits become payable. Often referred to as a “time deductible.”
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Elimination Period
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Monthly income paid by Social Security to individuals with limited incomes, are disabled or blind, or are age 65 and older. Pays for individuals
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Supplemental Security Income Benefits
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Individuals applying for Medicaid assistance must deplete their financial resources to a specific minimum before receiving Medicaid benefits.
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Spend-Down
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Restrictive definition of accident in which the cause of the accident must be unintentional and unexpected.
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Accidental Means
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The period of time new members may enroll in group coverage each year.
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Open-Enrollment Period
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60 nonrenewable days that may be used after an individual has been using Medicare Part A hospital benefits for over 90 days.
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Lifetime Reserve Days
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Early disease detection and health maintenance. Examples: annual physical exams and immunizations.
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Preventative Care
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The proportion of losses incurred by an insurer with respect to the total dollar value of premiums received (total losses divided by total premiums).
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Loss Ratio
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Medicare supplement policies offered on a PPO basis.
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Medicare Select
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Medicare Part C plan managed by one or more medical providers.
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Provider Sponsored Organization
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Health coverage centered on cost containment.
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Managed Care
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A physician's or medical provider's actual bill for services rendered (Medicare).
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Actual Charge
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15% higher than the Medicare approved charge.
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Limited Charge
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Physicians and other medical professionals selected by the government to audit the quality of care received by Medicare patients.
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Peer Review Organizations
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The difference between the actual charge and the Medicare approved charge.
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Excess Charge
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Provided to individuals by their medical providers stating which medical services Medicare will not or probably will not cover.
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Advance Beneficiary Notice
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Medicare prescription drug coverage.
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Part D
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Medicare managed care. Formerly known as Medicare+Choice. Also referred to as Medicare Advantage.
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Part C
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Health insurance coverage for active duty and retired members of the uniformed services and their dependents.
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TRICARE
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Nonforfeiture option that permits the policyowner to use the policy's cash values to buy paid-up term insurance.
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Extended Term
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Care provided to an individual who does not need 24-hour care. *** care may be provided in the home or at an adult day care facility.
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Adult day
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Medicare medical insurance.
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Part B
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Medicare hospital insurance.
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Part A
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Proof of prior insurance, used to reduce waiting periods and exclusions for preexisting conditions.
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Creditable Coverage
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Private organizations which administer Medicare Part B benefits. Each state or region has its own ***.
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carriers
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Physicians, medical providers and suppliers who sign agreements to accept assignment for Medicare claims, charging the Medicare approved charge.
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Participating Doctors of Suppliers
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Medicare eligibility period – six-month period spanning three months prior to reaching age 65 to three months after a person’s 65th birthday.
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Initial Enrollment Period
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Medicare Part C, which provides managed care Medicare coverage.
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Medicare Advantage
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Medical expense policies issued by private organizations which help cover certain costs not covered by Medicare, such as deductibles, coinsurance and actual charges in excess of what Medicare pays. Also referred to as Medicare supplement policies.
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Medigap
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The period during which an eligible individual may enroll in a group insurance plan without needing to undergo a medical exam.
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Eligibility Period
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Insurance distribution system that uses producers to transact insurance.
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Agency
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People enrolled in Part A who do not pay premiums because they have met the minimum Medicare tax requirements.
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Premium-free Part A
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Medicare supplement policies offered on a PPO basis
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Medicare Select
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Medical expense policies issued by private organizations which help cover certain costs not covered by Medicare, such as deductibles, coinsurance and actual charges in excess of what Medicare pays. Also referred to as Medigap.
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Medicare Supplement Polices
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A health insurance policy providing continuation of coverage of the insured to a specified age subject to payment of premiums and allowing the insurer to increase premium rates by classes of insureds.
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Guaranteed Renewable
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Medicare Parts A and B providing only hospital and medical coverage.
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Original Medicare
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The value of premiums plus interest in a permanent life insurance policy.
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Cash Value
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The date in which an insurance policy is in force.
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Effective Date of Coverage
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In life insurance, document explaining the coverage purchased and the names of the insurer and agent.
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Policy Summary
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Necessary medical equipment prescribed by a physician for use in an individual's home, such as walkers, wheel chairs, and oxygen.
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Durable Medical Equipment
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Medicare enrollment period - January 1st through March 31st annually.
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General Enrollment Period
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The Medicare approved charge/amount is the dollar amount that Medicare considers to be the reasonable charge for a particular medical service.
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Medicare Approved Charge
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Medical care for individuals who have a terminal illness expected to result in death within six months.
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Hospice Care
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Guarantees that are required by law to be part of life insurance policies that build cash value. Insurers are required to make *** values available when policyowners discontinue premium payments for any reason.
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Nonforfeiture Options
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Part D combined spending reaches $2,840, at which point the individual pays 100% of prescription drug costs until he has spent Four thousand five hundred fifty ($4,550).
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Doughnut Hole
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In health insurance, document explaining the coverage purchased and the names of the insurer and agent.
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Outline of Coverage
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Insurance which offers coverage to people through the individual market.
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Private Insurers
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Once the insured has paid a certain amount out-of-pocket, the insurer pays the remaining eligible expenses. Synonymous with stop-loss.
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Out-of-Pocket Limit
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Action that an individual can take if he disagrees with the payment of Medicare plans for medical services and prescription drugs.
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Appeal
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Allow employees to choose which health care benefits and coverages they want from a list of options.
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Cafeteria Plan
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Business disability policy that pays off a business loan if the owner becomes disabled.
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Disability Reducing Term
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Pays periodic benefits when an insured cannot work because of accident or injury.
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Disability Income Insurance
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Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
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Medical Expense Insurance
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Business disability policy that pays off a business loan if the owner becomes disabled.
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Disability Reducing Term
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Business disability policy that pays off a business loan if the owner becomes disabled.
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Disability Reducing Term
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Insurance that covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness.
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Medical Expense Insurance
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Medical expense policies issued by private organizations which help cover certain costs not covered by Medicare, such as deductibles, coinsurance and actual charges in excess of what Medicare pays. Also referred to as Medigap.
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Medicare Supplement Policies
|
|
Medical providers are paid a set amount per month regardless of how many patients they treat. Synonymous with prepaid basis.
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Service Basis
|
|
Provision in individual health insurance policies stating that written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible.
|
Notice of Claim
|
|
Provision in individual health insurance policies stating that legal action may not be brought to recover on the policy until 60 days after written proof of loss is provided to the insurer, and no later than two years (three years in some states) after written proof of loss is provided to the insurer.
|
Legal Action
|
|
Optional provision in individual health insurance policies stating that the insurer has the right to adjust the policy benefits or premium if the insured changes occupations to one that is either more or less hazardous.
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Change of Occupation
|
|
The period of time new members may enroll in group coverage each year.
|
Open Enrollment Period
|
|
Benefits or services provided under the policy coverage.
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Eligible Expenses
|
|
The date in which an insurance policy is in force.
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Effective Date of Coverage
|
|
Policies that provide nursing or home health care for individuals no longer capable of performing activities of daily living or are cognitively impaired.
|
Long Term Care (LTC) Insurance
|
|
Medicare supplement policies offered on a PPO basis.
|
Medicare Select
|
|
Medicare medical insurance.
|
Part B
|
|
Optional provision in individual health insurance policies stating that any premium due and unpaid may be deducted from the payment of a claim.
|
Unpaid Premium
|
|
Optional provision in individual health insurance policies which assures that policies are always in alignment with state laws.
|
Conformity with State Statutes
|
|
In health insurance, document explaining the coverage purchased and the names of the insurer and agent.
|
Outline of Coverage
|
|
Life insurance provision stating that policy changes must be made by an authorized officer of the insurer and attached to the policy and only the policyowner has the right to request changes.
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Modifications
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