Insurance life and health final exam prep

NYS/ Key terms from ExamFx

Accelerated Benefits

A rider attached to life insurance policies that allows the insured to access death benefits while alive to help cover expenses like nursing care or convalescent home fees.

Accident

An unexpected and unplanned event that occurs suddenly, often in an unforeseen location, potentially causing harm.

Accident Insurance

A type of insurance that offers financial protection to an insured individual against losses arising from accidental bodily injuries.

Accidental Bodily Injury

An unforeseen and unintended physical injury resulting from an accident.

Accidental Death and Dismemberment (AD&D)

An insurance policy that provides a predetermined amount to the insured or beneficiaries if the insured suffers death or significant loss of body parts due to an accident.

Accidental Death Benefits

A specific rider in an insurance policy that stipulates the investigation of death causes to determine compliance with the policy's description of accidental death.

Accidental Death Insurance

Insurance coverage that pays out a benefit upon the insured's death resulting specifically from an accident.

Accumulation Period

The time frame during which an annuitant makes contributions to an annuity, allowing those contributions to earn tax-deferred interest.

Acquired Immunodeficiency Syndrome (AIDS)

A serious, incurable illness caused by the human immunodeficiency virus (HIV) that weakens the immune system.

Activities of Daily Living (ADLs)

Essential tasks that individuals perform on a daily basis, such as eating, bathing, dressing, and moving about independently.

Actual Cash Value (ACV)

The value of property calculated by taking its replacement cost and subtracting depreciation to determine the amount necessary to pay damages or settle property loss.

Actual Charge

The precise amount that a healthcare provider bills for a specific service or medical supply.

Actuary

A professional equipped with expertise in the statistical and mathematical aspects of insurance, responsible for calculating the financial risks and probabilities associated with insurance policies.

Adhesion

A type of insurance contract that is presented on a non-negotiable 'take-it-or-leave-it' basis, where the insured must accept the terms as is, with any uncertainties interpreted in favor of the insured.

Adjustable Life

A flexible life insurance policy that allows policyholders to modify the face amount, premium costs, protective coverage duration, and payment frequency.

Adjuster

An insurance company representative who investigates the parameters of a claim and negotiates the amount to be paid for the insurance claim.

Administrator

An individual appointed legally to manage the financial affairs and estate of a deceased person.

Admitted Insurer

An insurance company that has received authorization and a license to operate and engage in insurance transactions in a specific state.

Adult Day Care

A structured program designed for adults with impairments, providing health and social services in a safe environment outside of their homes.

Adverse Selection

A phenomenon whereby individuals who are at a higher risk of loss are more likely to seek out insurance coverage, leading to an imbalance in the insurer's risk pool.

Agency

A business operation or office engaged in the sale of insurance products.

Agent

A licensed professional authorized to sell, negotiate, or execute insurance contracts on behalf of an insurance company.

Agent's Authority

The specific powers granted to an insurance agent as detailed in their contractual agreement with the agency.

Aleatory

A contract where the exchange of benefits is unequal; in insurance, the premiums paid by the insured are not typically equal to the payout from the insurer in the event of a loss.

Alien Insurer

An insurance company that is incorporated outside of the United States.

Alzheimer's Disease

A degenerative brain condition that severely affects memory and cognitive functions, leading to significant disability.

Ancillary

Referring to supplementary services provided by a healthcare facility, such as diagnostic tests (e.g., x-rays) and treatments, excluding basic room and board.

Annual Statement

A comprehensive financial report that insurance companies are mandated to submit annually to each state’s insurance regulatory body.

Annuity

A financial contract that provides periodic income payments to an individual over a designated timeframe or for life.

Apparent Authority

A situation where an individual or agent appears to possess authority based on their actions, statements, or the circumstances created by their employer.

Applicant

A person or entity seeking insurance coverage by applying to an insurer.

Application

A formal document containing information necessary for the underwriting process; any questions unanswered post-policy approval are waived by the insurer.

Approved Amount

The reasonable amount that Medicare designates for payment of services covered under part B.

Assignment

The process of legally transferring ownership rights of a life insurance policy from one individual to another.

Attained Age

The age of the insured person as of a specific date.

Attending Physician's Statement (APS)

A document typically provided by the applicant's healthcare provider containing information pertinent to the individual's health and medical history.

Authorized Insurer

An insurer that holds a certificate of authority allowing it to conduct business and offer insurance in a specific state.

Avoidance

A risk management strategy that involves intentionally steering clear of potential hazards (e.g., a person may opt out of air travel to avoid plane crash risks).

Back-End Load

A fee imposed when withdrawing funds from an annuity or life insurance policy, typically applicable at the time of sale or transfer.

Basic Hospital Expense Insurance

Insurance that covers essential hospital-related costs like room, board, and other miscellaneous expenses for a stipulated number of days.

Basic Illustration

A proposal or ledger that demonstrates the projected performance of a life insurance policy, detailing both guaranteed and non-guaranteed results.

Basic Medical Expense Insurance

Coverage that pays for outpatient medical services, including doctor visits and emergency room treatment, subject to specified limits.

Beneficiary

The individual designated to receive benefits or proceeds from an insurance policy upon the death of the insured.

Benefit Period

The designated span of time during which insurance benefits are payable for a specific illness or treatment.

Binder (Binding Receipt)

A temporary contract that provides immediate insurance coverage until the premium is paid.

Birthday Rule

A method for determining which parent's health insurance plan is primary for a dependent child, based on which parent's birthday occurs first in the calendar year.

Blanket Medical Insurance

An insurance policy that covers a broad range of all medical expenses, such as visits to doctors, hospital stays, and prescription medications.

Boycott

An unfair business practice where one party refuses to engage in a transaction or relationship until specific conditions are agreed upon.

Broker

An intermediary who assists clients in purchasing insurance policies and negotiating insurance contracts on their behalf.

Buy-Sell Agreement

A legal contract that outlines the process for handling ownership interests in a business if an owner dies or becomes disabled.

Buyer's Guide

A booklet containing information about various insurance policies and concepts designed to help consumers make informed decisions.

Cafeteria Plan

A benefits package allowing employees to choose from various healthcare options that fit their individual needs.

Capital Amount

The predetermined percentage of the principal value of a policy paid to the insured if they lose a limb or appendage.

Carriers

Insurance entities responsible for processing claims and making benefit payments as outlined in the insurance policy.

Cash Value

The monetary value available to the policyholder upon surrendering the insurance policy before its maturity.

Cease and Desist Order

A legal demand that requires an individual or organization to stop engaging in behavior that violates legal provisions.

Certificate

A formal statement or booklet that verifies the existence of a particular insurance policy and outlines its coverage.

Certificate of Authority

A regulatory document granting permission to an insurance company to conduct business and specifying the types of insurance it is authorized to transact.

Certificate of Insurance

A formal document confirming the issuance of an insurance policy, detailing the extent and types of coverage provided.

Claim

A formal request for compensation or payment from the insurance provider as outlined in an insurance contract.

Co-pay

A fixed fee that the insured must pay for certain medical services upfront, with the insurer covering the remaining cost.

Coercion

An unethical practice where an insurer applies physical or mental pressure to persuade an individual to purchase insurance.

Coinsurance

An agreement in which both the insurer and the insured share the responsibility of paying a percentage of a potential loss.

Coinsurance Clause

A contractual provision specifying the proportion of losses that both the insurer and insured will cover according to pre-agreed terms.

Commingling

An illegal practice where a fiduciary improperly merges their personal funds with trust or client funds.

Commission

The payment provided to agents or brokers as compensation for their services in selling insurance policies.

Commissioner (Superintendent, Director)

The highest-ranking official in a state insurance department, overseeing the regulation of insurance practices.

Comprehensive Major Medical

An extensive insurance plan that combines basic healthcare coverage with major medical expenses, featuring low deductibles and cap limits.

Comprehensive Policy

A health insurance plan offering a full range of health services, including preventive care, regular check-ups, immunizations, and medical treatments.

Concealment

The deliberate withholding of important information that, if shared, could influence the insurer's decision on the policy.

Conditional Contract

A contract requiring both involved parties to fulfill specific obligations or conditions for the agreement to remain enforceable.

Consideration

The valuable exchange required in a contract, where the insured's consideration consists of premium payments and truthful application representations, and the insurer's consideration is the promise to cover losses.

Consideration Clause

The specific section of an insurance policy outlining what each party must provide in exchange for the contract terms.

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986

A federal law that mandates the continuation of group health benefits for up to 18 months for employees who leave their jobs or lose eligibility, and for 36 months for dependents in specific situations.

Consumer Reports

Reports detailing a consumer's credit, character, and habits, compiled from employment records and other public data.

Contract

A legally binding agreement between parties that outlines conditions, benefits, and obligations.

Contributory

An insurance plan requiring group participants, such as employees, to contribute to the cost of premiums.

Controlled Business

A license held primarily for the purpose of insuring the owner, their family, or related entities, rather than the general market.

Convertible

A life insurance policy that can be converted into another type of policy at the choice of the policy owner, typically without proving insurability.

Coordination of Benefits

A system that determines primary insurance coverage when a person is insured by multiple policies, to prevent overpayment of claims.

Countersignature

The endorsement of an insurance policy by a licensed agent, which confirms the policy's validity.

Coverage

The scope of protection provided by an insurance policy against specific risks and perils.

Credit Life Insurance

A specialized insurance designed to pay off an individual's debt in the event of their death.

CSO Table

The Commissioner's Standard Ordinary Table, a tool used in life insurance for predicting death probabilities.

Custodial Care

Assistance with daily living activities provided to individuals who require help, often in a long-term care setting.

Death Benefit

The total amount payable upon the death of the insured, as defined in the life insurance policy.

Decreasing Term

A type of life insurance featuring a death benefit that gradually decreases over time while maintaining a level premium.

Deductible

The amount that an insured must pay out-of-pocket before the insurance coverage kicks in for a covered claim.

Defamation

The act of making damaging statements about another person or organization in the context of insurance, aiming to harm their reputation.

Dependent

An individual who relies on another person for financial support and care, typically within a family context.

Director (Commissioner, Superintendent)

The chief administrator of a state's insurance department, responsible for regulatory oversight.

Disability

A physical or mental impairment that hinders an individual's ability to perform their job or daily activities.

Disability Income Insurance

An insurance product that pays benefits to an insured individual who is unable to work due to illness or injury.

Disclosure

The requirement to provide full information regarding an insurance policy, including the identity of the producer or representative involved.

Domestic Insurer

An insurance company that operates in the state where it was incorporated.

Domicile of Insurer

The legal location of an insurer's incorporation and where it is authorized to conduct business.

Dread (Specified) Disease Policy

A specialized insurance policy with high coverage limits for specific illnesses named in the contract, such as particular cancers.

Dual Choice

A federal mandate for employers with 25 or more staff members, who must allow employees to select between an HMO plan and an indemnity plan.

Earned Premium

The portion of the insurance premium that represents the coverage already provided to the policyholder.

Effective Date

The official date on which an insurance policy begins to provide coverage.