Pf. Ch.9 Words To Know

Front 1

Earnings Multiple Approach

Back 1

Method of determining your life insurance needs calculates the annual loss of income stream

Front 2

Life Annuity

Back 2

A life insurance beneficiary can receive the death proceeds tax-free and a monthly check until their death under this settlement option

Front 3

Flexible Spending Account

Back 3

A savings plan offered by some employers that allows each employee to have pretax earnings deposited into a specifically designated account for paying qualified medical and dependent care bills

Front 4

Loan Clause

Back 4

Cash value policies include this clause that allows you to borrow against cash value of policy

Front 5

Affordable Care Act

Back 5

Children are allowed to stay on their parents insurance policy until their 26

Front 6

Rating Agencies

Back 6

Companies such as A.M. Best, Moody's and Standard & Poor's evaluate the financial stability of the insurance industry

Front 7

Beneficiary

Back 7

Individual designated by the owner of the life insurance policy to receive the policy's proceeds upon the death of the insured

Front 8

Needs Approach

Back 8

Insurance purchase when you think about immediate needs at time of death, debt elimination funds, immediate transitional funds, dependency expenses, spousal life income, educational expenses for the children and retirement income

Front 9

Worker's Compensation

Back 9

Insurance that covers cost of work related injuries

Front 10

Major Medical Insurance

Back 10

Insurance that covers medical costs beyond those covered by basic heath insurance

Front 11

Dread Disease

Back 11

Insurance that only covers certain issues such as lung cancer

Front 12

Whole Life

Back 12

Insurance whose cash value amount to be fixed rather than dependent upon other variables

Front 13

Group Term Life

Back 13

Life insurance through her place of employment. She will not need to take a physical exam

Front 14

Disability Insurance

Back 14

Many people without this insurance because price is prohibitive for most people

Front 15

Annuity

Back 15

Settlement option that provides for ongoing payment for a period of time

Front 16

Risk Pooling

Back 16

Sharing the financial consequences associated with the risk in the insurance industry

Front 17

Riders

Back 17

Special provisions that might be added to your policy which either provide extra benefits to the beneficiary or limit the company's liability under certain conditions

Front 18

Actuaries

Back 18

Statisticians specializing in estimating probability of death based on personal characteristics

Front 19

Settlement Options

Back 19

The alternative ways that a beneficiary can choose to receive the policy benefits upon the death of insured

Front 20

Grace Period

Back 20

This policy feature that allows you to pay the premium late but still retain coverage

Front 21

Decreasing Term Insurance

Back 21

The premiums remain constant, but the face amount of the policy declines

Front 22

Term Insurance

Back 22

The primary advantage of this is affordability

Front 23

Incontestability Clause

Back 23

This clause states that the insurance company cannot dispute the validity of the contract after a specified time, usually 2 years

Front 24

Cost of living adjustment

Back 24

This rider increases your death benefits at the same rate as inflation without forcing you to complete a new medical exam

Front 25

Insurance MATH

Back 25

To determine the coverage subtract deductible and coinsurance amount