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Conditional Receipt

A receipt that may provide temporary insurance coverage if the applicant satisfies the insurer’s underwriting requirements and all policy conditions are met.

Policy Effective Date

The date on which insurance coverage begins according to the policy terms. If no premium is collected with the application, coverage generally begins after approval and policy issuance according to the policy’s effective date.

Policy Delivery

The process of delivering the insurance policy to the policyowner while reviewing important provisions, benefits, exclusions, and answering questions.

Apparent Authority

Authority that exists because the insurer’s actions lead the public to reasonably believe the producer has authority to act.

Express Authority

Authority specifically granted to a producer in the agency contract.

Fiduciary Capacity

A legal obligation requiring producers to handle premiums and client funds honestly and in the best interests of the insurer and client.

Group Life Insurance

Life insurance issued under one master policy that covers members of a group, such as employees of a company.

Master Policy

The insurance contract issued to the employer or sponsoring organization in a group insurance plan.

Contributory Group Life Plan

A group life insurance plan in which employees pay part of the premium. A minimum percentage of eligible employees must usually participate.

Credit Life Insurance

Life insurance designed to pay off an insured debtor’s outstanding loan balance if the insured dies, subject to policy terms.

Policyowner Rights

Rights that include changing a revocable beneficiary, assigning ownership, borrowing against available cash value, and surrendering the policy.

Replacement

Replacing an existing insurance policy with a new one. Replacement should occur only when it is suitable and in the client’s best interest.

Insurance Application

A document used to gather information about the applicant. If attached to or incorporated into the policy, it becomes part of the insurance contract.

Alteration of Contract

Only the insurer—not the producer—has the authority to change or modify policy provisions.

Purpose of State Insurance Regulation

To protect consumers, ensure insurer solvency, and maintain a fair and competitive insurance marketplace.