North Carolina Life & Health Insurance Study Quiz Practice Flashcards

Vocabulary-style flashcards covering life and health insurance concepts including Social Security, group plans, annuities, and retirement accounts based on the North Carolina practice test.

Key person policy

A type of insurance policy categorized as a Third-party contract.

Social Security Funding

Funded by employees, employers, and self-employed individuals; the Federal Government does NOT fund it.

Fully insured (Social Security)

The status achieved when an individual earns $40$ quarters of coverage.

Primary Insurance Amount (PIA)

The factor that determines the retirement benefit amount for an individual.

Group insurance renewability

Most of these insurance plans are annually renewable.

Grace period (group life)

The period allowed for premium payment in group life insurance policies, which is $31$ days.

Noncontributory group plan

A group insurance plan where $100\%$ of eligible employees must be covered.

Annuity income payment

Payouts of guaranteed monthly income that begin once the contract matures and the annuity period starts.

Fixed dollar annuity

An annuity where the money is invested in the General account.

Variable annuity

An annuity where the monies are invested in a Separate account.

Equity Index Annuity

An annuity where the monies are linked to an index in the general account.

Straight life annuity

An annuity that provides the largest monthly income to a single annuitant.

TSA (Tax Sheltered Annuity)

A plan typically purchased by employees of non-profit organizations and public schools where benefits are fully subject to taxation.

IRA (Individual Retirement Account)

A retirement account classified as a tax-qualified retirement plan.

Keogh or SEP plan

Retirement plans designed primarily for self-employed individuals.

Policy dividends

Payments to policyholders that are generally not taxable because they represent a return of excess premium.

Replacement Laws

Laws intended to reduce misrepresentation and protect consumers during the insurance process.

Conservation

An attempt by an insurer to prevent the replacement of an existing policy.

Viatical settlement

A process involving the selling of an insurance policy for immediate cash.

Whole life policy cash value

The savings element of a whole life policy that increases steadily over time.

Endowment (Whole life)

The point at which the cash value of a whole life policy equals the death benefit.