Maine Life & Health Insurance Exam Practice Flashcards

Vocabulary-style flashcards derived from the Maine Life & Health Insurance Exam study sheet, covering core terms, policy types, health coverage, Medicare, annuities, ethics, and specific Maine statutory rules.

Premium

The payment for insurance.

Policy

The insurance contract.

Insurer

The insurance company.

Insured

The person covered by the insurance policy.

Producer

A licensed insurance agent/producer.

Valid Contract Elements

Agreement (offer and acceptance), consideration, competent parties, and legal purpose.

Applicant Consideration

Generally includes the premium and statements or application information provided by the applicant.

Insurer Consideration

The promise to perform or pay according to the terms of the contract.

Risk

The uncertainty of loss.

Hazard

A condition that increases the chance or severity of a loss.

Peril

The cause of a loss.

Physical Hazard

A hazard resulting from a physical condition.

Moral Hazard

A hazard resulting from intentional dishonesty.

Morale Hazard

A hazard resulting from carelessness or indifference.

Underwriting

The process of evaluating and classifying risk.

Adverse Selection

The tendency of higher-risk people to be more likely to seek insurance.

Representation

A statement believed to be true.

Warranty

A statement guaranteed to be true.

Material Misrepresentation

False or concealed information important enough to affect underwriting.

Insurable Interest

In life insurance, a requirement intended to prevent wagering or gambling on human lives; it generally must exist when the policy is issued.

Indemnity

The principle that aims to restore an insured financially after a covered loss rather than create a profit from it.

Term Life

Temporary protection for a specified period that offers pure death protection and generally contains no cash value.

Renewable Term

A term policy that may renew without new evidence of insurability, subject to contract terms.

Convertible Term

A term policy that may convert to permanent coverage subject to conversion provisions.

Decreasing Term

A type of term insurance featuring a declining death benefit.

Whole Life

Permanent coverage with level/predictable premiums, a guaranteed death benefit, and guaranteed cash value.

Universal Life

Permanent coverage featuring cash value, flexible premiums, and a death benefit that may be adjustable.

Variable Life

Permanent insurance using separate-account investment options where values fluctuate and the policyowner generally bears the investment risk.

Revocable Beneficiary

A beneficiary designation that can generally be changed by the owner.

Irrevocable Beneficiary

A beneficiary designation where the beneficiary generally must consent to changes affecting their vested rights.

Grace Period

The time allowed to make a late premium payment while coverage generally remains in force.

Free Look

A specific period to review and return a newly delivered policy for a refund.

Deductible

The amount the insured generally pays before plan benefits are provided under the policy.

Copay

A fixed dollar amount used for health insurance cost sharing.

Coinsurance

A cost-sharing mechanism expressed as a percentage split.

HMO (Health Maintenance Organization)

Network-centered health plan that commonly uses Primary Care Physician (PCP) coordination and may require referrals.

PPO (Preferred Provider Organization)

A health plan providing greater provider flexibility; commonly has no Primary Care Physician (PCP) or referral requirement.

Elimination Period

The waiting period before disability income benefits begin.

Benefit Period

The duration for which disability income benefits may be paid.

Activities of Daily Living (ADLs)

Bathing, dressing, toileting, transferring, continence, and eating.

COBRA

A law allowing eligible people to temporarily continue employer-sponsored group coverage after qualifying events.

Formulary

A health or drug plan's list of covered prescription drugs.

Medicare Part A

Primarily covers inpatient hospital care, skilled nursing facility care, hospice, and certain home health services.

Medicare Part B

Covers physician services, outpatient care, preventive/diagnostic services, and durable medical equipment.

Medicare Part C (Medicare Advantage)

Private Medicare-approved alternative for receiving Part A and Part B benefits; often includes Part D.

Medicare Part D

Prescription drug coverage provided through private Medicare-approved plans.

Medigap

Private Medicare Supplement coverage designed to help pay costs left by Original Medicare.

Medicaid

A joint federal-state program based on financial and other eligibility requirements.

Longevity Risk

The risk of outliving one's assets; the primary risk annuities are designed to address.

Annuitant

The person whose life expectancy is used in determining benefit payments for an annuity.

Accumulation Phase

The phase of an annuity when money goes in and grows.

Annuitization

The phase of an annuity when accumulated value is converted into an income stream.

LIFO (Last-In, First-Out)

The rule for nonqualified annuity withdrawals before annuitization, where earnings are considered withdrawn first.

$59\frac{1}{2}$ Rule

The age threshold before which taxable premature distributions generally face a $10\%$ federal tax penalty.

Twisting

Using misleading information to induce a policy replacement or change for improper advantage.

Rebating

An improper inducement such as personally giving back part of a commission to induce a purchase.

Maine Resident Producer Age Requirement

$18$ years old.

Maine Licensing-Information Change Reporting

Changes must generally be reported to the Superintendent within $30$ days.

Maintenance of Maine Producer License

Full-lines producers generally require $24$ Continuing Education (CE) credits every $2$ years, including at least $3$ ethics credits.

Maine Medicare Cross-Selling Rule

At a Medicare-specific appointment, other products may only be solicited if the consumer requests it and products are identified in writing at least $48$ hours prior.