California Life & Health Insurance: Key Concepts (Chapters 1-15)

Flashcards cover key terms and concepts from general insurance, life basics, policy provisions, riders, group plans, Medicare, LTC, health concepts, and California regulations. Fill-in-the-blank prompts reinforce definitions and core ideas.

The organization that coordinates state insurance regulators and provides research and recommendations but has no legal authority to enact insurance laws is the __ (NAIC).

National Association of Insurance Commissioners

In California, an insurer organized under California laws is called a __ insurer.

Domestic

An insurer organized under the laws of another state is a __ insurer.

Foreign

An insurer organized under laws outside the United States is an __ insurer.

Alien

An insurer authorized to transact insurance in California by a certificate of authority from the CDI is called an __ insurer.

Admitted (Authorized) Insurer

Surplus Line Insurance refers to coverage not obtainable from admitted insurers, typically used when the risk is too great or difficult to underwrite and is placed with a __ insurer.

Nonadmitted (Unauthorized) Insurer

Reinsurance is a device in which a primary insurance company can transfer risk to a __ insurer.

Reinsurer

An __ Agent represents more than one insurer.

Independent

An exclusive or Captive Agent represents a __ insurer or a group of insurers.

Single (exclusive/captive)

A __ acts as intermediary between insurers and the purchaser to obtain insurance, and may charge a service fee.

Broker

A marketing system that does not use an agent is called __.

Direct Response

Online direct sales use the internet to sell policies directly; aggregators collect price information to compare costs, and this is known as __ Direct Sales.

Online

In the Law of Agency, the insurer is the __.

Principal

A fiduciary must avoid commingling premiums and remit premiums to the insurer; this duty is called __.

Fiduciary Duty

When a refund of premiums is due, the refund may be offset by amounts owed to the insurer; this is called __.

Premium Offsets

Underwriting is the process of selecting, classifying, and rating a risk to protect against __.

Adverse Selection

For life insurance, insurable interest must exist between the policyowner and the insured at the time of __ and policy issuance.

application

California law requires a life insurer to provide a copy of the NAIC Buyer’s Guide to Life Insurance to all prospective insureds prior to accepting the applicant's initial __.

premium

A basic life illustration must include the date prepared, issue age, and the number of years the policy will be in force; this is referred to as the __ period.

Illustration/coverage period (date prepared, issue age, years in force)

In Level Term, the death benefit remains __ throughout the term.

level

A premium payment method where the entire cost is paid in a lump sum at the time of purchase is called __.

Single Premium

The Spouse Rider, also called the Other Insured Rider, provides Level Term coverage on the life of the insured’s __.

Spouse

The Insuring Clause is the insurance company’s promise to pay the policy’s __.

Death benefit

The Entire Contract Clause describes the parts making up the entire contract, including the policy, riders, amendments, and a copy of the __.

Application

Within the first __ years of a policy, the insurer may contest a claim for misrepresentation or fraud.

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