Traditional Exam Reviewer for Life Insurance

These flashcards cover key vocabulary, legal concepts, and insurance policy provisions based on the Traditional Exam Reviewer transcript.

Single premium policy

A policy under which only one premium payment is required.

Policy fee

A fixed amount added to the premium of a given policy regardless of policy size.

Conversion factor

A factor used to multiply or divide the annual premium to calculate premiums for other modes of payment.

Enrollment card

A form filled out by an employee in an employer-employee group instead of a personal application for insurance.

Conversation privilege

A facility that allows an employee's group coverage to be changed to an individual policy if they leave the company.

Applicant-owner

The status of a person, such as a father, who enters into a life insurance contract on behalf of another, such as his child.

Insurable interest

A requirement for life insurance validity that must exist at the inception of the policy.

Automatic premium loan

A provision in a permanent life insurance policy that prevents it from lapsing for non-payment by using the cash value to pay the premium.

Convertible feature

A policy provision allowing term insurance to be changed to a permanent insurance policy without evidence of insurability.

Absolute assignment

An arrangement where the assignee acquires all the rights and interests of the original policyholder.

Participating plan

An insurance plan that entitles the policyowner to receive dividends as a return of excess premiums.

Non-forfeiture values

The three values in a permanent policy consisting of cash surrender value, paid-up insurance, and extended term insurance.

Term insurance

An insurance plan offering maximum protection for moderate means, providing protection only without savings elements.

Permanent plan

An insurance plan which offers both protection and a savings element that builds up cash values.

Term rider

A term insurance coverage added to a permanent life insurance plan.

Waiver of premium

An optional rider that stops further premium payments if the insured suffers a total and permanent disability.

Payor's benefit

A benefit providing a waiver of premium in the event of the death or disability of the person paying the premiums for a minor insured.

Juvenile policy

A policy where the proposed insured is a minor.

Rated policy

A policy for which higher than standard premium rates are payable based on risk factors.

Anti-selection

A situation occurring when the insurance company accepts more than its share of poor risks or when persons in poor health seek to buy insurance.

Representation

Statements made by an applicant in the application forms, rather than absolute guarantees or warranties.

Medical impairment bureau

A source used by insurance companies to access confidential medical information on applicants.

Annuity plan

A contract that represents a purchase of income rather than life insurance protection.

Policy reserves

Funds held by the insurance company to meet future obligations to policyowners.

Mutual companies

Insurance companies that are owned by their policyowners.

Stock companies

Insurance companies that are owned by stockholders.

Twisting

The unethical practice of persuading a policyowner to surrender or lapse a policy in one company to replace it with a policy in another company.

Rebating

The prohibited practice of an agent giving false information or offering premium discrimination against policyholders.

Knocking

The unethical practice of making derogatory remarks about competing underwriters or companies.

Overloading

Selling a person more insurance than what is warranted by their financial sources.

Extended term insurance

A non-forfeiture option under which full insurance coverage is maintained for a specified period after premiums are discontinued.

Actuary

The official who makes calculations regarding mortality, interest, and loading to arrive at premium rates.

Loading

The difference between gross and net premiums used to pay insurance overhead expenses, commissions, and taxes.

Life expectancy

The average number of years that persons at a given age will live as shown by a mortality table.