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70 Cards in this Set
- Front
- Back
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Accelerated Benefits
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Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent
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Accidental Death Benefits
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A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.
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Accidental Death Insurance
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An insurance policy that provides payment if the insured’s death is the result of an accident.
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Accumulation Period
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The time before an annuitant’s retirement during which the annuitant is making payments or investments in an annuity.
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Acquired Immunodeficiency Syndrome (AIDS)
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An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
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Actual Cash Value (ACV)
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The required amount to pay damages or for property loss. This amount is calculated based on the property's current replacement value minus depreciation.
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Actuary
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A person trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurance; a person who, on behalf of the company, determines the mathematical probability of loss.
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Adhesion
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A contract offered on a "take-it-or leave-it" basis by an insurer, in which the insured’s only option is to either accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
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Adjustable Life
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Life insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.
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Adjuster
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A representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim.
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Administrator
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An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
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Admitted (Authorized) Insurer
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An insurance company authorized and licensed to transact business in a particular state.
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Adult Day Care
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A program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes.
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Adverse Selection
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The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
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Agency
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An insurance sales office or company.
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Agent
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An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer.
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Agent’s Authority
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Special powers granted to an agent by his or her agency contract.
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Aleatory
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A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
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Alien Insurer
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An insurance company that is incorporated outside the United States.
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Alzheimer’s Disease
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A disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss.
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Ancillary
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Additional, miscellaneous services provided by a hospital, such as x-rays, anesthesia, and lab work, but not hospital room and board expenses.
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Annual Statement
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A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
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Annuity
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A contract that provides income for a specified period of years, or for life.
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Apparent Authority
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The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
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Applicant
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A person making application for, or offering him/herself or another to be insured under an insurance contract.
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Application
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A document that provides information for underwriting purposes. After the policy is issued, any unanswered questions are considered waived by the insurer.
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Assignment
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The transfer of ownership rights of a life insurance policy from one person to another.
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Attained Age
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The age of the insured at a determined date.
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Attending Physician’s Statement (APS)
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A statement usually obtained from the applicant’s doctor.
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Authorized (Admitted) Insurer
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An insurance company authorized and licensed to transact business in a particular state.
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Avoidance
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A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane).
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Back-End Load
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a fee charged at the time of a sale, transfer or withdrawal from an annuity or a life insurance policy.
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Basic Illustration
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A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
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Beneficiary
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The person who receives the proceeds from the policy when the insured dies.
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Binder (Binding Receipt) -
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A temporary contract that puts an insurance policy into force before the premium has been paid.
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Birthday Rule
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The method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calendar year is designated as primary.
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Broker
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An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.
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Buy-Sell Agreement
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A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
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Buyer's Guide
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A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
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Cash Value
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The amount to which a policyowner is entitled if the policy is surrendered before maturity.
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Certificate
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A statement or booklet that confirms that a policy has been written and that describes the coverage in general.
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Certificate of Authority
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A document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate.
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Certificate of Insurance
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A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.
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Claim
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A request for payment of the benefits provided by an insurance contract.
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Coercion
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An unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance.
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Coinsurance Clause
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A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance.
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Commingling
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A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust.
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Commission
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The payment made by insurers to agents or brokers for the sale and service of policies.
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Commissioner
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The chief executive and administrative officer of a state insurance department.
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Concealment
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The withholding of known facts which, if material, can void a contract
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Conditional Contract
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A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
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Consideration
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The binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss.
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Consumer Report
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A written and /or oral statement regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
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Contract
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An agreement between two or more parties enforceable by law.
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Contributory
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A group insurance plan that requires the employees to pay part of the premium..
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Controlled Business
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An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer or employees.
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Convertible
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A policy that may be exchanged for another type of policy by contractual provision, at the option of the policyowner, and without evidence of insurability (i.e. term life changed to a form of permanent life).
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Coordination of Benefits
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A provision that helps determine the primary provider in situations where an insured is covered by more than one policy, thus avoiding claims overpayments.
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Co-pay
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An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.
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Countersignature
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The act of signing an insurance policy by a licensed resident agent.
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Credit Life Insurance
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A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
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CSO Table
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(The Commissioner’s Standard Ordinary Table) A mortality table used in life insurance that mathematically predicts the likelihood of death.
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Custodial Care
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Care that is rendered to help an insured complete his/her activities of daily living.
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Death Benefit
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The amount payable upon the death of the person whose life is insured.
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Decreasing Term
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A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
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Defamation
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An unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person’s or company’s reputation.
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Dependent
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A person who relies on another for support and maintenance.
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Director
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The chief executive and administrative officer of the Insurance Department.
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Disability Income Insurance
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Health insurance that provides periodic payments to replace an insured’s income when he/she is injured or ill.
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Disclosure
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An act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation.
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