An insurer's own authorization, filed with the state insurance department, letting a licensed producer act as its agent; it is separate from and in addition to the producer's license.

Mixing premiums or claim money, which a producer holds in a fiduciary capacity for the insurer or consumer, with personal or general operating funds.

A specially licensed broker who may place coverage with eligible unauthorized insurers when the coverage cannot be obtained from authorized insurers.

The trust relationship under which a producer holds premiums, return premiums, and claim money that belong to the insurer or consumer, not to the producer.

A licensed producer who represents one or more insurers and acts on their behalf. In most states an agent must also be appointed by each insurer it represents.

A producer who represents the insured, not the insurer. A broker shops the market for the client, holds a broker's license and is never appointed by insurers.

The umbrella term in New York for anyone licensed to sell, solicit or negotiate insurance for compensation. It covers insurance agents, title insurance agents and insurance brokers, plus intermediaries such as excess line brokers. Adjusters and consultants are licensed separately and are not producers.

Life and accident and health agent

A New York agent licensed under Insurance Law 2103(a) for life insurance, variable life and variable annuity products, and accident and health insurance, including HMO contracts and legal services insurance.

A category of insurance business, such as life, accident and health, or HMO, that a producer license authorizes the holder to transact.

Property and casualty agent

A New York agent licensed under Insurance Law 2103(b) to sell accident and health, property, casualty, personal lines or any line other than life and variable products.

A permanent cancellation of a producer's license, ordered by the state's insurance regulator as discipline after notice and an opportunity for a hearing.

A natural person named in a firm's or corporation's license who may act under it, only in the licensee's name. Corporations may name only officers and directors; firms and associations only members. Their authority ends if the entity's license is revoked or suspended.

Superintendent of Financial Services

The head of the New York Department of Financial Services, who licenses producers and insurers, issues rules and orders, and may refuse to renew, suspend or revoke licenses after notice and a hearing.

A limited, short-term license some states issue. Each state sets who qualifies and how long it lasts, and one use is keeping a book of business alive after a licensee's death, disability or military service.

Biennial licensing period

The two-year cycle on which New York producer licenses run. For an individual it is tied to the licensee's date of birth; the license must be renewed each cycle or it lapses.

Applying extra credit hours from one period to the next. New York's continuing education rule does not allow it: excess hours earned in one biennial period do not reduce the next period's requirement for the same class of license.

Coursework a licensed producer must complete each renewal period, usually including an ethics component, as a condition of keeping the license in force. Each state sets the hours and topics.

Life settlement broker

A licensed professional who shops a policy owner's policy to multiple buyers on the owner's behalf, owing the owner a duty to act in their interest.

Limited or specialty license

A producer license authorizing only a narrow, defined class of insurance business, such as small-face-amount funeral life insurance or credit-related coverage, rather than a full line of authority.

A New York license held by a producer who lives and keeps an insurance office in another state. A non-resident can satisfy New York continuing education with an equivalent home-state requirement.

The process the Superintendent must follow, with a hearing held at least ten days after notice, before refusing to renew, suspending or revoking a producer's license.

Revocation of a non-resident license without a full hearing, allowed after the home state suspended, revoked or refused to renew the home license. The Superintendent must first give ten days' written notice, and must reinstate the license if the home action is reversed.

A temporary loss of a producer's license, ordered by the state's insurance regulator as discipline after notice and an opportunity for a hearing.

An insurer with no certificate of authority or license to do business in the state, also called nonadmitted. It generally may not deal with the public there except through a licensed surplus lines agent or broker, and helping it otherwise is generally prohibited.

A sworn complaint that a licensed producer or any aggrieved person may file with the Superintendent, setting out facts that show grounds to revoke or suspend a producer's license.

A yearly financial report an insurer files with the Superintendent, which is paired with periodic examinations of the insurer's books.

An insurer holding a certificate of authority or license from a state's insurance regulator to transact insurance in that state, also called admitted. An insurer without one is unauthorized.

The minimum financial resources an insurer must hold before licensing and keep afterward, so it can pay claims years after collecting premium.

Certificate of authority

The authorization an insurance company must hold from a state's insurance regulator to do the business of insurance in that state; a company holding one is described as authorized or admitted.

Conservation proceeding

A proceeding in which the Superintendent takes control of a financially hazardous insurer to preserve its assets; it is one of three steps with rehabilitation and liquidation.

Department of Financial Services

The name some states give the agency that oversees insurance, and its duties vary. New York's, headed by the Superintendent, regulates insurance and banking. Florida's, headed by the elected Chief Financial Officer, houses agent licensing and discipline.

Financial examination

A periodic review of an insurer's books and finances by the Superintendent's staff to check solvency and compliance.

Health claims payment report

A quarterly and annual report health insurers, Article 43 corporations and HMOs file on claims received, paid, pended and denied, due within 45 days after each period ends.

A DFS operating assessment an insurer must pay; if unpaid 30 days after the due date the Superintendent may suspend the license, and reinstates it if paid within 90 days of the suspension notice.

The last-resort proceeding that winds up an insolvent insurer, ending its business and distributing its assets to creditors and policyholders.

A court-supervised proceeding in which the state's insurance regulator manages a troubled insurer to restore it to financial health. It fits an insurer whose condition is not yet hopeless, as distinguished from liquidation.

Funds an insurer sets aside for unpaid claims and future policy obligations, so it can meet them when due.

An early-warning solvency test that compares an insurer's capital with the risks it takes, so regulators can step in before it becomes hazardous.

Unfair claims practices

Claim-handling conduct regulators prohibit: misrepresenting policy provisions, failing to acknowledge and investigate claims promptly, failing to pay once liability is clear, and forcing claimants to sue by offering substantially less than owed.

Cease-and-desist order

A commissioner's order directing a person to stop a prohibited insurance practice; it is prospective and can be paired with other sanctions.

An unfair trade practice under state insurance law: making or circulating false or maliciously critical statements about an insurer or anyone in the business of insurance, intended to injure its reputation or business.

An unfair trade practice already prohibited by a section that Insurance Law article 24 lists by number, such as advertising (2122), misrepresentation (2123) and rebating (2324, 4224). It leads to a cease and desist order.

Any other unfair or deceptive practice that the Superintendent decides, after a hearing, is unfair. It is the catch-all that lets a practice be stopped even if it is on no list; continuing violations go to court through the attorney general.

An unfair trade practice under state insurance law: untrue, deceptive, or misleading statements about insurance made to the public in print, mail, broadcast, online, or any other medium.

An unfair trade practice under state insurance law: an untrue statement of material fact, a misleading half-truth, a misstatement of law, or a failure to disclose a legally required fact about a policy.

A prescription for pre-exposure prophylaxis to prevent HIV. Under section 4224 a life or health insurer may not refuse, limit or surcharge coverage solely because the applicant was prescribed it.

Giving, offering, or promising anything of value not stated in the policy as an inducement to buy, keep, or renew insurance; prohibited whether offered or knowingly accepted.

The New York Insurance Law section that governs rebating and inducements in property and casualty insurance, with a $25 gift safe harbor and a $500 penalty per violation. It does not apply to policies subject to section 4224.

The New York Insurance Law section that governs rebating and unfair discrimination for life insurance, annuities and accident and health insurance, including bans on refusing or surcharging solely for disability or a PrEP prescription.

Making false or misleading statements or comparisons to induce a person to lapse, surrender, or convert existing insurance; an unfair trade practice under state insurance law.

Unfair discrimination

Charging different rates or offering different terms to individuals of the same class and essentially the same expectation of life or hazard; prohibited under state insurance law.

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953 terms from the New York exam outline, sorted by exam module. Flip a card for its definition and the lessons that teach it.

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Appointment: An insurer's own authorization, filed with the state insurance department, letting a licensed producer act as its agent; it is separate from and in addition to the producer's license. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, The law of agency: the insurer as principal and express, implied, and apparent authority
Commingling: Mixing premiums or claim money, which a producer holds in a fiduciary capacity for the insurer or consumer, with personal or general operating funds. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134), New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194), The law of agency: the insurer as principal and express, implied, and apparent authority, Collecting the initial premium and issuing the receipt
Excess line broker: A specially licensed broker who may place coverage with eligible unauthorized insurers when the coverage cannot be obtained from authorized insurers. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Fiduciary capacity: The trust relationship under which a producer holds premiums, return premiums, and claim money that belong to the insurer or consumer, not to the producer. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134), New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194), The law of agency: the insurer as principal and express, implied, and apparent authority, Collecting the initial premium and issuing the receipt
Insurance agent: A licensed producer who represents one or more insurers and acts on their behalf. In most states an agent must also be appointed by each insurer it represents. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136)
Insurance broker: A producer who represents the insured, not the insurer. A broker shops the market for the client, holds a broker's license and is never appointed by insurers. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194), The law of agency: the insurer as principal and express, implied, and apparent authority
Insurance producer: The umbrella term in New York for anyone licensed to sell, solicit or negotiate insurance for compensation. It covers insurance agents, title insurance agents and insurance brokers, plus intermediaries such as excess line brokers. Adjusters and consultants are licensed separately and are not producers. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136)
Life and accident and health agent: A New York agent licensed under Insurance Law 2103(a) for life insurance, variable life and variable annuity products, and accident and health insurance, including HMO contracts and legal services insurance. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136)
Line of authority: A category of insurance business, such as life, accident and health, or HMO, that a producer license authorizes the holder to transact. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136)
Property and casualty agent: A New York agent licensed under Insurance Law 2103(b) to sell accident and health, property, casualty, personal lines or any line other than life and variable products. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136)
Revocation: A permanent cancellation of a producer's license, ordered by the state's insurance regulator as discipline after notice and an opportunity for a hearing. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Sub-licensee: A natural person named in a firm's or corporation's license who may act under it, only in the licensee's name. Corporations may name only officers and directors; firms and associations only members. Their authority ends if the entity's license is revoked or suspended. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Superintendent of Financial Services: The head of the New York Department of Financial Services, who licenses producers and insurers, issues rules and orders, and may refuse to renew, suspend or revoke licenses after notice and a hearing. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Temporary license: A limited, short-term license some states issue. Each state sets who qualifies and how long it lasts, and one use is keeping a book of business alive after a licensee's death, disability or military service. — Insurance regulation · Taught in New York producer licensing: process, definitions, and license types (Ins. Law 2101-2109, 2136), New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Biennial licensing period: The two-year cycle on which New York producer licenses run. For an individual it is tied to the licensee's date of birth; the license must be renewed each cycle or it lapses. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Carry-forward: Applying extra credit hours from one period to the next. New York's continuing education rule does not allow it: excess hours earned in one biennial period do not reduce the next period's requirement for the same class of license. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Continuing education: Coursework a licensed producer must complete each renewal period, usually including an ethics component, as a condition of keeping the license in force. Each state sets the hours and topics. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Life settlement broker: A licensed professional who shops a policy owner's policy to multiple buyers on the owner's behalf, owing the owner a duty to act in their interest. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134), Life settlements, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Limited or specialty license: A producer license authorizing only a narrow, defined class of insurance business, such as small-face-amount funeral life insurance or credit-related coverage, rather than a full line of authority. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Non-resident license: A New York license held by a producer who lives and keeps an insurance office in another state. A non-resident can satisfy New York continuing education with an equivalent home-state requirement. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Notice and hearing: The process the Superintendent must follow, with a hearing held at least ten days after notice, before refusing to renew, suspending or revoking a producer's license. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Summary revocation: Revocation of a non-resident license without a full hearing, allowed after the home state suspended, revoked or refused to renew the home license. The Superintendent must first give ten days' written notice, and must reinstate the license if the home action is reversed. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Suspension: A temporary loss of a producer's license, ordered by the state's insurance regulator as discipline after notice and an opportunity for a hearing. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Unauthorized insurer: An insurer with no certificate of authority or license to do business in the state, also called nonadmitted. It generally may not deal with the public there except through a licensed surplus lines agent or broker, and helping it otherwise is generally prohibited. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134), New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117), New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74), New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Verified complaint: A sworn complaint that a licensed producer or any aggrieved person may file with the Superintendent, setting out facts that show grounds to revoke or suspend a producer's license. — Insurance regulation · Taught in New York license maintenance, continuing education, and disciplinary actions (Ins. Law 2103, 2110, 2127, 2132, 2134)
Annual statement: A yearly financial report an insurer files with the Superintendent, which is paired with periodic examinations of the insurer's books. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Authorized insurer: An insurer holding a certificate of authority or license from a state's insurance regulator to transact insurance in that state, also called admitted. An insurer without one is unauthorized. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Capital and surplus: The minimum financial resources an insurer must hold before licensing and keep afterward, so it can pay claims years after collecting premium. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Certificate of authority: The authorization an insurance company must hold from a state's insurance regulator to do the business of insurance in that state; a company holding one is described as authorized or admitted. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Conservation proceeding: A proceeding in which the Superintendent takes control of a financially hazardous insurer to preserve its assets; it is one of three steps with rehabilitation and liquidation. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Department of Financial Services: The name some states give the agency that oversees insurance, and its duties vary. New York's, headed by the Superintendent, regulates insurance and banking. Florida's, headed by the elected Chief Financial Officer, houses agent licensing and discipline. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Financial examination: A periodic review of an insurer's books and finances by the Superintendent's staff to check solvency and compliance. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Health claims payment report: A quarterly and annual report health insurers, Article 43 corporations and HMOs file on claims received, paid, pended and denied, due within 45 days after each period ends. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Insurer assessment: A DFS operating assessment an insurer must pay; if unpaid 30 days after the due date the Superintendent may suspend the license, and reinstates it if paid within 90 days of the suspension notice. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Liquidation: The last-resort proceeding that winds up an insolvent insurer, ending its business and distributing its assets to creditors and policyholders. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Rehabilitation: A court-supervised proceeding in which the state's insurance regulator manages a troubled insurer to restore it to financial health. It fits an insurer whose condition is not yet hopeless, as distinguished from liquidation. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments, Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Reserves: Funds an insurer sets aside for unpaid claims and future policy obligations, so it can meet them when due. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Risk-based capital: An early-warning solvency test that compares an insurer's capital with the risks it takes, so regulators can step in before it becomes hazardous. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Unfair claims practices: Claim-handling conduct regulators prohibit: misrepresenting policy provisions, failing to acknowledge and investigate claims promptly, failing to pay once liability is clear, and forcing claimants to sue by offering substantially less than owed. — Insurance regulation · Taught in New York Superintendent's powers and insurer regulation: certificate of authority, solvency, claim practices, and agent appointments
Cease-and-desist order: A commissioner's order directing a person to stop a prohibited insurance practice; it is prospective and can be paired with other sanctions. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Defamation: An unfair trade practice under state insurance law: making or circulating false or maliciously critical statements about an insurer or anyone in the business of insurance, intended to injure its reputation or business. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Defined violation: An unfair trade practice already prohibited by a section that Insurance Law article 24 lists by number, such as advertising (2122), misrepresentation (2123) and rebating (2324, 4224). It leads to a cease and desist order. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78), New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Determined violation: Any other unfair or deceptive practice that the Superintendent decides, after a hearing, is unfair. It is the catch-all that lets a practice be stopped even if it is on no list; continuing violations go to court through the attorney general. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
False advertising: An unfair trade practice under state insurance law: untrue, deceptive, or misleading statements about insurance made to the public in print, mail, broadcast, online, or any other medium. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Misrepresentation: An unfair trade practice under state insurance law: an untrue statement of material fact, a misleading half-truth, a misstatement of law, or a failure to disclose a legally required fact about a policy. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating, New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
PrEP prescription: A prescription for pre-exposure prophylaxis to prevent HIV. Under section 4224 a life or health insurer may not refuse, limit or surcharge coverage solely because the applicant was prescribed it. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Rebating: Giving, offering, or promising anything of value not stated in the policy as an inducement to buy, keep, or renew insurance; prohibited whether offered or knowingly accepted. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating, New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Section 2324: The New York Insurance Law section that governs rebating and inducements in property and casualty insurance, with a $25 gift safe harbor and a $500 penalty per violation. It does not apply to policies subject to section 4224. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Section 4224: The New York Insurance Law section that governs rebating and unfair discrimination for life insurance, annuities and accident and health insurance, including bans on refusing or surcharging solely for disability or a PrEP prescription. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Twisting: Making false or misleading statements or comparisons to induce a person to lapse, surrender, or convert existing insurance; an unfair trade practice under state insurance law. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating, New York life insurance and annuity replacement (Ins. Law 2123; Reg 60), Replacement of health insurance, New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Unfair discrimination: Charging different rates or offering different terms to individuals of the same class and essentially the same expectation of life or hazard; prohibited under state insurance law. — Insurance regulation · Taught in New York unfair and prohibited practices: misrepresentation, false advertising, defamation, unfair discrimination, and rebating
Captive agent: An agent who places business with one insurer group. It is not exempt from Regulation 194; the exemption is for captive insurance companies, not captive agents. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Compensation: Anything of value received based in whole or in part on sales. Under Regulation 194 a sales-award dinner counts; a training lunch or meeting not tied to sales does not. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Controlled business: Insurance a licensee writes on their own life, property or interests, or those of relatives, an employer or a business they control. Some is lawful, but a license may not be obtained or used principally to write it. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Fee memorandum: A written memorandum signed by the person charged that states the amount, or how it is figured, of a fee for reviewing, appraising or advising on a policy, annuity or pension plan. It must be kept at least three years after the services are fully performed. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Initial disclosure: The prominent written disclosure Regulation 194 requires every purchaser to receive, describing the producer's role, who pays the producer and that compensation can vary. A signature is not required, and a producer paid nothing must still give it. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Managing general agent: A wholesale intermediary an insurer authorizes to appoint and supervise agents in a territory, and sometimes to underwrite. With no direct sales contact with the purchaser it falls outside Regulation 194; if it solicits the purchaser directly it must disclose. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194), Insurer types, admitted and domicile status, financial ratings, and distribution systems
Misappropriation: Using premiums or claim funds held in a fiduciary capacity for the producer's own purposes, such as agency expenses; grounds for discipline and possible criminal charges. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194), Collecting the initial premium and issuing the receipt
Regulation 194: The New York regulation (11 NYCRR Part 30) requiring producers to disclose compensation. Every purchaser gets a prominent initial written disclosure; the compensation amount is disclosed only on request, except for title agents. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Title insurance agent: A producer licensed to sell title insurance. Unlike other producers, a title agent must disclose the amount the title insurer will pay it at the time of application, whether or not the applicant asks. — Insurance regulation · Taught in New York licensee regulation: controlled business, commissions, fiduciary duty, records, and compensation transparency (Reg 194)
Aiding an unauthorized insurer: Acting as agent for, or helping, an insurer without a New York license by soliciting, delivering policies or collecting premiums. Section 2117 forbids it except through licensed excess line placement and reinsurance. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Civil penalty for fraud: The Superintendent may levy up to $5,000 plus the amount of the claim for each fraudulent insurance act, on top of criminal liability. It reaches anyone, including licensees and their employees. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Financial Frauds and Consumer Protection Unit: The DFS unit that is the qualified agency to enforce Insurance Law article 4. Its employees may be designated peace officers, and cases are referred to district attorneys and the attorney general. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Fraud prevention plan: A plan that auto, workers' compensation and accident and health insurers writing 3,000 or more policies a year must file with the Superintendent. It provides for a special investigations unit and for training and law-enforcement cooperation. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Fraud warning: A written notice, in a form the Superintendent approves, required on all commercial and accident and health applications and on all claim forms, stating that a knowingly false filing is a crime with a civil penalty. Auto forms carry their own notice. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Fraudulent insurance act: Insurance fraud as defined in Penal Law 176.05: knowingly and with intent to defraud filing an application or claim containing materially false information, or concealing a material fact to mislead. An honest mistake is not one. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Insurance Frauds Prevention Act: Article 4 of the New York Insurance Law, which creates a framework for detecting, reporting, investigating and punishing insurance fraud. Its findings single out arson for insurance fraud as especially damaging. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Reporting immunity: Protection from civil liability for furnishing information about suspected insurance fraud to law enforcement, the Department's fraud unit or the National Insurance Crime Bureau, unless the person acted with fraud or bad faith. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Special investigations unit: A full-time unit, separate from underwriting and claims, that investigates suspected insurance fraud for an insurer; the insurer may instead contract with an outside investigative provider. — Insurance regulation · Taught in New York Insurance Frauds Prevention Act and aiding unauthorized insurers (Ins. Law 401-405, 2117)
Certification of compliance: The annual Part 500 filing due April 15, signed by the highest-ranking executive and the CISO, certifying material compliance or acknowledging noncompliance with a remediation timeline. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Chief Information Security Officer: The person a covered entity designates to run its cybersecurity program; the CISO reports in writing at least annually to the senior governing body. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Consumer: Under Regulation 169, an individual who seeks or obtains an insurance product for personal, family or household purposes. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Covered entity: A term whose meaning depends on the law. Under the federal HIPAA Privacy Rule, a health plan, health care clearinghouse or health care provider. Under New York's Part 500 cybersecurity rule, any person licensed under its Insurance, Banking or Financial Services Law, who must keep a risk-based cybersecurity program. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Cybersecurity incident: An event that has occurred and must be reported to the superintendent within 72 hours of the entity determining it occurred. Unsuccessful attempts that never gain access are not themselves such an incident. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Gramm-Leach-Bliley Act: The federal law declaring that every financial institution, including insurers, has a continuing obligation to respect customers' privacy and protect the security and confidentiality of their nonpublic personal information. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Insurance customer: A consumer with a continuing relationship with the insurer, such as a policyholder. A customer gets an initial privacy notice when the relationship begins and an annual notice while it continues. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Limited exemption: A Part 500 exemption for entities meeting any one test: fewer than 20 employees and contractors, under $7.5 million revenue, or under $15 million assets. It never removes the 72-hour notice or the April 15 filing. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Nonaffiliated third party: A company not under common control with the insurer. Disclosing a consumer's financial information to one requires notice and an opt-out chance, and account numbers may not be shared with one for its marketing. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Nonpublic personal information (NPI): The financial, health, and identifying information an applicant provides that is not publicly available, protected under the Gramm-Leach-Bliley Act's notice, choice, and safeguards duties. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Opt-in: Health information may not be disclosed without the individual's authorization, except for core insurance functions such as underwriting, claims administration and fraud investigation. It is stricter than the opt-out rule for financial information. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Opt-out: The consumer's right, after notice and a reasonable chance, to stop an insurer sharing nonpublic personal financial information with a nonaffiliated third party. Exceptions cover processing a transaction, service providers, fraud prevention and legal compliance. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Part 500: The DFS cybersecurity regulation (23 NYCRR Part 500), which applies to anyone licensed under the Insurance Law, including producers. It governs how information and systems are protected, not who may receive information. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Privacy notice: A notice describing what nonpublic personal information is collected, what is shared and with whom, and how it is protected. Customers receive it at the start of the relationship and annually. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Regulation 169: The New York regulation (11 NYCRR Part 420) on the privacy of consumer financial and health information, New York's version of the federal Gramm-Leach-Bliley privacy rules. It applies to every DFS licensee, including agents and brokers. — Insurance regulation · Taught in New York consumer privacy (Reg 169) and DFS cybersecurity requirements (23 NYCRR 500)
Adverse action notice: The notice an insurer must give when it declines coverage or charges more because of a consumer report. It names the reporting agency, says the agency did not make the decision and explains the right to a free report within 60 days and to dispute errors. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent, Sources of insurability and HIPAA privacy disclosures
Business of insurance: For 18 U.S.C. 1033, writing insurance or reinsuring risks, including the activities of officers, directors, agents and employees of those who do so, when interstate commerce is affected. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent
Consumer report: A report on a consumer's credit history and similar data. Underwriting insurance is a permissible purpose for obtaining one. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent, Sources of insurability and HIPAA privacy disclosures
Embezzlement: Willfully taking or misappropriating an insurer's money, premiums or other property. Under section 1033 it carries up to 10 years, or up to one year if $5,000 or less. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent
Fair Credit Reporting Act: The federal law requiring consumer reporting agencies to handle credit, personnel and insurance information with confidentiality, accuracy, relevancy and proper use, and fairly to the consumer. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent, Sources of insurability and HIPAA privacy disclosures, Completing the health insurance application
Investigative consumer report: A report covering a person's character, general reputation, personal characteristics and mode of living, often gathered through interviews with neighbors, friends or associates. Its disclosure rules are stricter than for an ordinary consumer report. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent, Underwriting: insurable interest, medical information, and risk classification, Sources of insurability and HIPAA privacy disclosures
Medical Information Bureau: A member-insurer exchange that files coded impairment information from prior applications and checks it on new ones as a lead for further investigation, not proof of a condition. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent, Underwriting: insurable interest, medical information, and risk classification, Sources of insurability and HIPAA privacy disclosures, Completing the health insurance application
Nature and scope disclosure: On the consumer's written request, the full written description of an investigative consumer report's nature and scope, due within five days after the request was received or the report first requested, whichever is later. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent
Prohibited person: Someone convicted of a felony involving dishonesty or breach of trust, or of a section 1033 offense. They may not willfully engage in the business of insurance without a regulator's written consent, on pain of up to five years. — Insurance regulation · Taught in Fair Credit Reporting Act and federal insurance fraud crimes, including the 18 U.S.C. 1033 consent
Avoidance: Handling risk by not doing the activity that creates it. It is the only method that removes a risk entirely, though it is often impractical. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Direct loss: The immediate physical damage to property, such as the burned building itself. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Exposure: The state of being open to loss, and the unit used to measure it, such as vehicles, payroll or property value. Insurers count exposure units to predict losses and price coverage. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Hazard: A condition that increases the chance a peril will strike or makes a loss worse when it does. A hazard is not itself the cause of loss. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Indirect loss: A loss that follows from the direct damage, such as lost rent, lost profits or extra living costs during repairs; also called consequential loss. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Loss: An unintended, unexpected reduction in value, which is what a policy pays for. A direct loss is the immediate damage; an indirect or consequential loss follows from it. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Moral hazard: Dishonesty or bad character that makes a loss more likely, such as setting a fire to collect on the policy or inflating a claim. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Morale hazard: Carelessness or indifference to loss because insurance exists, such as not locking a car because it is insured. There is no intent to defraud, only lack of care. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Peril: The cause of a loss, such as fire, windstorm, theft, collision, illness or death. A policy that lists what it covers is usually listing perils. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Physical hazard: A tangible condition of a person or property that increases the chance or size of a loss, such as oily rags, faulty wiring, icy steps or a history of heart disease. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Pure risk: A risk with only two possible outcomes, loss or no loss, such as a house that may burn. Only pure risk is insurable. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk, Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Reduction: Handling risk by lowering the chance or size of a loss without removing it, through measures like smoke detectors, sprinklers, alarms or safety training; also called loss control. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Retention: Handling risk by accepting it and paying any loss yourself. It can be planned, as with a deductible or self-insurance, or unplanned; best for small, predictable losses. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Risk: Uncertainty about whether a loss will happen. If a loss is certain it is a cost, not a risk. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Sharing: Handling risk by spreading a loss across a group so each member bears part of it, as in partnerships and mutual arrangements. Insurance itself rests on sharing. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Speculative risk: A risk with three possible outcomes: loss, no loss or gain, as in gambling or buying stock. Insurance does not cover it because it is meant to restore, not to let anyone profit. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk, Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Standard risk: A life insurance applicant who meets the normal standards and is charged the standard rate. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk, Underwriting: insurable interest, medical information, and risk classification
Substandard risk: An applicant with impaired health or a dangerous job who may be accepted at an extra charge. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk, Underwriting: insurable interest, medical information, and risk classification
Transfer: Handling risk by shifting the financial consequence of a loss to another party. Buying insurance is the classic transfer; hold-harmless clauses in contracts are another. — General insurance · Taught in Risk, exposure, hazard, peril, and loss, and the methods of handling risk
Accredited reinsurer: A reinsurer not authorized in New York that shows it meets the state's solvency standards and holds a certificate of recognition from the superintendent, so a ceding insurer can take credit for reinsurance placed with it. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Adverse selection: The tendency of healthier insureds to shop for new underwritten policies instead of renewing, leaving a less healthy pool that renews, which is priced into renewal rates. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance, Underwriting: insurable interest, medical information, and risk classification, Term life renewability and convertibility features
Assuming insurer: The reinsurer that takes on part of the ceding insurer's risk. Its obligation is triggered only when the ceding insurer itself incurs a loss under the policies it wrote. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Catastrophic loss: A loss that strikes a large share of the exposure units at the same time. Insurable risks should not be catastrophic, which is why war and nuclear hazards are commonly excluded. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Ceding insurer: The insurer that originally wrote the policy and passes part of the risk to a reinsurer. It stays fully responsible to its insured even if the reinsurer fails to pay. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Excess of loss reinsurance: Reinsurance in which the reinsurer pays only losses above the ceding insurer's retention, up to an agreed limit. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Facultative reinsurance: Reinsurance negotiated one risk at a time, as for a single unusually valuable property. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Homogeneous exposure units: A large number of similar people or properties, which lets an insurer predict losses for the group. It is the first element of an insurable risk. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Law of large numbers: The larger the number of similar exposure units, the more closely actual losses match predicted losses. It is the foundation of premium rates. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Pooling: The arrangement in which many people each pay a relatively small, certain premium and the pool pays the few who suffer a covered loss. It works only if the risk has the characteristics of an insurable risk. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance, The annuity principle
Proportional reinsurance: Reinsurance, such as quota share and surplus share, in which premiums and losses are shared with the reinsurer in an agreed ratio. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Reinsurance: An arrangement in which one insurer transfers part of the risk it has written to another insurer. It is a contract between insurers; the policyholder deals only with the original insurer. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Retrocession: Reinsurance of a reinsurer: a reinsurer transfers part of the risk it assumed to another reinsurer. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Surplus to policyholders: An insurer's financial cushion, the excess of its assets over its liabilities. One purpose of reinsurance is to protect it. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Treaty reinsurance: An automatic reinsurance agreement covering a whole class of business, as opposed to negotiating each risk separately. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance
Underwriting: The insurer's process of evaluating and classifying applicants so the risks it accepts resemble the average risks its rates assumed, using applications, medical information, inspections and waiting periods within legal limits. — General insurance · Taught in Elements of insurable risk, adverse selection, the law of large numbers, and reinsurance, Underwriting: insurable interest, medical information, and risk classification
Admitted insurer: An insurer holding a certificate of authority in the state, so it may transact the lines named on it. A domestic, foreign or alien insurer can each be admitted. Also called authorized. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Alien insurer: An insurer organized under the laws of another country, such as a Swiss or Japanese insurer, which is alien in every state. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Demutualization: The conversion of a mutual insurer into a stock company, for example to raise capital by selling shares. The reverse is mutualization. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Direct writing: Selling through an insurer's own salaried employees, or directly by mail, phone or internet with no agent. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Domestic insurer: An insurer organized under the laws of the state in question. Domicile is judged from the viewpoint of the state you are standing in. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Exclusive agency system: Agents represent one insurer or its group, and the insurer owns the expirations. It includes the career agency system common in life insurance. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Financial rating: An independent opinion of an insurer's financial strength and ability to pay claims, from services such as A.M. Best, Standard & Poor's, Moody's and Fitch. Ratings are opinions, not guarantees that any claim will be paid. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Foreign insurer: An insurer organized under the laws of another U.S. state. An Ohio insurer is domestic in Ohio and foreign in every other state. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Fraternal benefit society: A lodge-system membership organization that writes life and health benefits for its members. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Independent agency system: Agents represent several insurers, and the agent, not the insurer, owns the expirations: the renewal records and client list. Also called the American agency system. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Lloyd's association: Individual underwriters or syndicates who join under a common name, each accepting a share of a risk through an attorney-in-fact and liable only for the share agreed. The members, not Lloyd's itself, insure the risk. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Mutual company: An insurer owned by its policyholders rather than by outside shareholders. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Nonadmitted insurer: An insurer with no certificate of authority in a state. It generally may not solicit there, but can reach residents through surplus lines brokers for risks admitted insurers will not write, usually without guaranty fund protection. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Nonparticipating policy: A whole life policy that pays no dividends and relies solely on its guaranteed values. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems, Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Traditional whole life products
Participating policy: A whole life policy that may pay non-guaranteed policy dividends to the owner. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems, Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Traditional whole life products, Dividends, incontestability, assignment, suicide, and accelerated death benefits, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Policy dividends: Non-guaranteed distributions a participating whole life policy may pay, which the owner can take in cash, use to reduce premiums, buy paid-up additions, or leave to accumulate. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems, Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Life insurance premium factors: mortality, investment return, expense, and premium mode, Traditional whole life products, Dividends, incontestability, assignment, suicide, and accelerated death benefits, Tax treatment of life insurance premiums, proceeds, and MECs
Reciprocal (interinsurance) exchange: An organization in which subscribers insure one another through an attorney-in-fact rather than through a traditional insurance company. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Risk retention group: A liability insurer owned by members in the same industry or profession, who pool their own liability risk. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Stock insurer: An insurer owned by stockholders who supplied its capital. Profits can be paid to stockholders as dividends, and its policies are typically nonparticipating: policyholders are customers, not owners. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Surplus lines broker: A licensed broker who places coverage for risks that admitted insurers will not write with nonadmitted insurers; also called an excess line broker in New York. — General insurance · Taught in Insurer types, admitted and domicile status, financial ratings, and distribution systems
Actual authority: Express authority plus implied authority: what the principal really intended to grant, as opposed to apparent authority. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Agency contract: The agreement between an insurer and a producer, also called the appointment or producer agreement, that creates the agency and sets the producer's express authority. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Apparent authority (insurance): The appearance of authority created by the principal's own conduct, which a reasonable third party relies on even though no actual authority exists. Also called ostensible authority or authority by estoppel. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Authority to bind coverage: A written agreement setting out the terms, conditions and limitations of a producer's power to put coverage in force on the insurer's behalf. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Estoppel (insurance): A legal bar that stops a party from asserting a right or denying a fact when the other side reasonably relied on that party's words or conduct. It is why an insurer cannot deny an agent's apparent authority or take back a right it appeared to give up. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority, Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Express authority: Authority the principal actually and deliberately grants, usually in writing in the agency contract, such as the lines the agent may sell, the territory and binding limits. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Implied authority: Unwritten authority that is reasonably necessary to carry out the express authority, such as explaining a policy or delivering it. It is still actual authority. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Principal (insurance): The person who authorizes another to act for it. For an insurance agent the principal is the insurer; for a broker it is the client. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Producer errors and omissions insurance: Coverage that protects a producer against liability for mistakes in the course of business, which matters because an agent who exceeds authority can be personally liable. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority, New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Ratification (insurance): Approving an unauthorized act after the fact, such as keeping the premium on a policy the agent had no authority to bind. It makes the act binding as if it had been authorized. — General insurance · Taught in The law of agency: the insurer as principal and express, implied, and apparent authority
Aleatory contract: A contract in which the values exchanged by the parties are unequal and depend on an uncertain event such as chance. — General insurance · Taught in Insurance contract law and its unique characteristics
Competent parties: One of the four required contract elements, meaning each party to the contract has the legal capacity to enter into it. — General insurance · Taught in Insurance contract law and its unique characteristics
Concealment: An applicant's failure to disclose a material fact known to the applicant and that the applicant had a duty to reveal, which can support rescission of the policy. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Conditional contract: A contract in which the insurer's duty to perform depends on certain conditions being met, such as premiums being current or proof of loss being furnished. — General insurance · Taught in Insurance contract law and its unique characteristics
Consideration: The thing of value each side gives up to form the contract; for the applicant it is the premium and the statements made, and for the insurer it is the promise to pay benefits. — General insurance · Taught in Insurance contract law and its unique characteristics, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Contract of adhesion: A contract, like an insurance policy, whose wording is written entirely by one party (the insurer) and simply accepted or declined by the other, so genuine ambiguity is read against the insurer. — General insurance · Taught in Insurance contract law and its unique characteristics
Entire contract provision: The provision stating that the policy, the attached application, and any attached riders or endorsements make up the whole agreement, so nothing outside those documents binds either party. — General insurance · Taught in Insurance contract law and its unique characteristics, Application mechanics: signatures, changes, and incomplete applications, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Completing the health insurance application, Policy delivery and explaining the contract, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement, Health policy riders
Fortuitous event: An event largely beyond either party's control, in which the insured has a material interest that would be harmed. It is what makes an insurance contract different from a wager. — General insurance · Taught in Insurance contract law and its unique characteristics
Fraud (insurance): An intentional misrepresentation or concealment of a material fact, made to deceive, that the other party relies on to its harm. It makes a contract voidable by the innocent party and is also a crime. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Insurable interest: A financial or relational stake in the continued life of an insured, required at the time coverage is written, including when a rider insures a life other than the primary insured. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, Underwriting: insurable interest, medical information, and risk classification, New York limits on life insurance on minors (Ins. Law 3207), Life settlements, New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Insurer counteroffer: A policy issued other than as applied for, such as with a rating, a smaller face amount, or an exclusion. The client must accept it, usually by signing an amendment, before it is in force. — General insurance · Taught in Insurance contract law and its unique characteristics, Collecting the initial premium and issuing the receipt, Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Legal purpose: One of the four required contract elements, meaning the agreement may not be used for an unlawful or wagering objective. — General insurance · Taught in Insurance contract law and its unique characteristics
Material fact (insurance): A fact that, had the insurer known it, would have led it to decline the risk or charge more. Only a material misstatement justifies rescission. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, Application mechanics: signatures, changes, and incomplete applications, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204)
Offer and acceptance: The contract element under which the applicant offers to contract by submitting a completed application with premium, and the insurer accepts by issuing the policy as applied for. — General insurance · Taught in Insurance contract law and its unique characteristics
Personal contract: A contract between the insurer and a specific person based on that person's individual risk characteristics, so ownership changes hands only by assignment rather than by handing over the document. — General insurance · Taught in Insurance contract law and its unique characteristics
Representation: A statement made by an applicant in or with an application that is believed to be true; a material misrepresentation can support rescission during the contestable period. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, Application mechanics: signatures, changes, and incomplete applications, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), Completing the health insurance application
Rescission: Cancelling a contract from the start so both sides are returned to their original positions, which an insurer may do for a material misrepresentation or concealment. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Unilateral contract: A contract in which only one party makes a legally enforceable promise; in insurance, only the insurer is bound once premium is paid. — General insurance · Taught in Insurance contract law and its unique characteristics, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Utmost good faith: The principle that each party to an insurance contract may rely on the honesty of the other, requiring truthful answers from the applicant and fair dealing from the insurer. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Voidable contract: A contract that is valid until the innocent party chooses to cancel it, as opposed to a void contract, which was never valid. — General insurance · Taught in Insurance contract law and its unique characteristics
Waiver: The voluntary, intentional giving up of a known right, such as knowingly accepting a late premium without objection. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, Application mechanics: signatures, changes, and incomplete applications, Completing the health insurance application
Warranty: A statement in an insurance application guaranteed to be true rather than merely believed true; warranties are rare in modern life and health contracts. — General insurance · Taught in Insurance contract law and its unique characteristics, Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, Application mechanics: signatures, changes, and incomplete applications, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204)
Contract of indemnity: A contract that pays the measured loss, as most property, casualty and health expense coverage does, subject to limits and deductibles. — General insurance · Taught in Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Material misrepresentation: A false representation by the applicant. It lets the insurer rescind or deny a claim only if it is material; an immaterial mistake, such as a wrong middle initial, does not void a policy. — General insurance · Taught in Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), Completing the health insurance application
Principle of indemnity: The principle that insurance restores the insured to the financial position held just before the loss, no better and no worse, so the insured cannot profit from a loss. — General insurance · Taught in Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Subrogation: The right of an insurer that has paid a covered loss to step into the insured's place and pursue recovery from the party responsible for the loss, up to the amount it paid. — General insurance · Taught in Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Valued contract: A contract that pays a stated amount instead of the measured loss, as life insurance does, because a human life cannot be measured in dollars. — General insurance · Taught in Contract legal concepts: indemnity, utmost good faith, representations, warranties, concealment, fraud, waiver, and estoppel
Attending physician's statement: Medical records the insurer requests from an applicant's own physician to clarify health history, obtainable only with a valid signed authorization. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Sources of insurability and HIPAA privacy disclosures
Field underwriter: The licensed agent who takes an insurance application and is responsible for gathering complete, accurate information and transmitting it faithfully to the insurer. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Completing the health insurance application
Flat extra: A temporary additional premium charged per thousand of coverage for a substandard risk expected to improve or end after a stated period. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Policy exclusions: war, aviation, and dangerous occupation
Mortality: The expected rate of death at each age, taken from mortality tables. It is the premium factor that raises the premium: the higher the probability of death, the higher the premium. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Life insurance premium factors: mortality, investment return, expense, and premium mode
Mortality table: A table showing the expected rate of death at each age, which lets a life insurer estimate how much money it will need for death claims and place a price on the risk. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Life insurance premium factors: mortality, investment return, expense, and premium mode, The annuity principle
Numerical rating system: An underwriting method that starts at 100 for standard, adds debits for unfavorable factors and subtracts credits for favorable ones to find the applicant's class. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification
Preferred risk: An applicant better than average, with excellent health and habits, who receives the lowest rates, often split into tobacco and non-tobacco classes. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification
Producer's report: The report in which the producer records what they observed about the applicant and how the sale arose, completing the application as the field underwriter. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Sources of insurability and HIPAA privacy disclosures, Application mechanics: signatures, changes, and incomplete applications, Completing the health insurance application
Risk classification: The underwriting process of sorting an applicant into a mortality-based class such as preferred, standard, substandard, or declined and postponed. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Life insurance premium factors: mortality, investment return, expense, and premium mode
Stranger-originated life insurance: A policy bought with the primary purpose of selling it to a third-party investor who has no insurable interest in the insured. States prohibit it, and some treat it as fraud. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Life settlements, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78), New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Table rating: A method of pricing a substandard risk by charging a percentage above the standard premium based on the degree of extra mortality risk. — Life insurance basics · Taught in Underwriting: insurable interest, medical information, and risk classification, Policy exclusions: war, aviation, and dangerous occupation
Blackout period: The gap that begins when the youngest child turns 16 and the surviving spouse's parent Social Security benefit ordinarily stops, lasting until survivor benefits can resume as early as age 60. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Social Security benefits (disability and retirement)
Buy-sell agreement: An arrangement between business partners, often funded by joint life insurance, giving a surviving partner the cash to buy out a deceased partner's business interest. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Business uses of health insurance: key person, overhead expense, and disability buy-out
Capital liquidation: An assumption in converting an income need to a lump sum that lets survivors spend both interest and principal over a defined period, producing a smaller face amount. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Capital retention: An assumption in converting an income need to a lump sum that funds income entirely from earnings so the principal remains intact, producing a larger face amount. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Credit life insurance: Decreasing term insurance sold in connection with a loan, with the face amount tracking the declining loan balance. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Term life insurance types, Credit life insurance: individual versus group
Cross-purchase plan: A buy-sell funding arrangement in which each business owner personally owns a life insurance policy on each of the other owners. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Business uses of health insurance: key person, overhead expense, and disability buy-out
Dependency period: The years from a death until the youngest child is grown and out of school, during which the family needs income. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Entity plan: A buy-sell funding arrangement in which the business itself owns a life insurance policy on each owner, rather than the owners insuring each other. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Business uses of health insurance: key person, overhead expense, and disability buy-out
Executive bonus plan: A plan in which the employer pays the life insurance premium as deductible bonus compensation to a select executive, and the bonus is taxable to the employee. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Qualified and nonqualified retirement plans
Final expenses: The clean-up fund: funeral costs, last medical bills, estate settlement costs and estate taxes. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Human life value approach: A needs-analysis method that estimates a client's future earnings to retirement, subtracts self-consumption and taxes, and discounts the remainder to a present value. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Key person insurance: A policy an employer applies for, owns, pays for, and is beneficiary of, insuring the life of a valuable employee whose death would harm the business. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Needs analysis: Determining how much and what kind of life insurance is needed by comparing the family's or business's needs with the resources already available from savings, group coverage and Social Security. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Needs approach: A needs-analysis method that totals immediate cash needs and ongoing income needs, then subtracts existing resources to find the coverage gap. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Readjustment period: The one or two years after a death when the family continues to receive roughly its full income while adjusting to a new standard of living. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses
Split-dollar arrangement: A nonqualified arrangement in which an employer and employee share the costs and benefits of a life insurance policy. — Life insurance basics · Taught in Life insurance needs analysis for individuals and businesses, Qualified and nonqualified retirement plans
Annual renewable term: A term policy consisting of successive one-year terms the owner may renew each year without new evidence of insurability, at a rising premium. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Term life insurance types, Term life renewability and convertibility features
Cash value: The savings element of permanent insurance that builds over time and that the owner can borrow against or receive on surrender. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Term life insurance types, Term life renewability and convertibility features
Conversion privilege: The right to convert coverage to an individual permanent policy without evidence of insurability within a limited window. It is most often used when group life coverage ends, and many term policies offer it too. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611), Group life insurance conversion and contribution
Decreasing term: A term life policy whose face amount declines on a set schedule while the premium usually stays level, designed to match a shrinking need like a mortgage. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Term life insurance types, Combination and survivorship life plans, Credit life insurance: individual versus group
Dividend accumulation: A dividend option under which the insurer holds the dividends and credits them with interest. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Dividends, incontestability, assignment, suicide, and accelerated death benefits, Life policy settlement options
Group certificate: The document a member of a group plan receives describing the coverage; members do not receive a policy of their own. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Group life insurance conversion and contribution, Credit life insurance: individual versus group, Group disability income: short-term and long-term disability compared with individual plans, Group health insurance and COBRA, New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Group life insurance: A single master policy issued to a sponsor such as an employer, with each member covered under a certificate. Members are usually covered without individual evidence of insurability if they join when first eligible. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Group life insurance conversion and contribution
Incontestability: A standard policy provision that bars the insurer from contesting or voiding a life policy for misstatements in the application after the policy has been in force for a specified period, typically two years. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Dividends, incontestability, assignment, suicide, and accelerated death benefits, Policy exclusions: war, aviation, and dangerous occupation, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), Waiver, guaranteed-insurability, payor, and accidental-death riders, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Level term: A term life policy whose face amount and, typically, premium stay the same for the entire term. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Term life insurance types, Combination and survivorship life plans, Credit life insurance: individual versus group
Limited-pay whole life: A whole life policy with premiums compressed into a set number of years or to a stated age, after which the policy is paid up but lifetime coverage continues. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Traditional whole life products, Premium payment modes and grace period
Master policy: The single contract issued to a group sponsor such as an employer or association, under which each covered person receives a certificate rather than an individual policy. It is used for group life, group health and other group plans. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Group life insurance conversion and contribution, Credit life insurance: individual versus group, Group disability income: short-term and long-term disability compared with individual plans, Individual and group long-term care insurance, Group health insurance and COBRA
Paid-up additions: A dividend option that uses the dividend to buy small amounts of additional paid-up permanent insurance, with no new evidence of insurability. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Traditional whole life products, Dividends, incontestability, assignment, suicide, and accelerated death benefits
Permanent insurance: Coverage designed to last the insured's whole life while premiums are paid, combining a death benefit with a cash value that builds over time. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating
Single-premium whole life: A whole life policy fully paid up by one lump-sum premium at issue, with no further premiums due. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Traditional whole life products
Term life insurance: Life insurance that pays a death benefit only if the insured dies within a stated period, builds no cash value, and expires if the insured outlives the term. — Life insurance basics · Taught in Life policy classifications: group versus individual, permanent versus term, participating versus nonparticipating, Term life insurance types, Term life renewability and convertibility features
FINRA: The self-regulatory organization overseeing broker-dealers. A producer selling variable products must be a registered representative of a FINRA member firm, subject to its suitability and supervision rules. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Fixed life insurance: Traditional life insurance, such as whole life, backed by the insurer's general account. The insurer guarantees the death benefit, premium and cash values and bears the investment risk, so it is regulated as insurance only. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Free look: A provision giving the policyowner a stated number of days after policy delivery to examine the contract and return it for a full premium refund, with the clock starting at delivery. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74), New York life insurance and annuity replacement (Ins. Law 2123; Reg 60), New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
General account: The insurer's pool of investments backing its traditional, guaranteed products. Reserves for guaranteed minimum death benefits on variable life policies must be held here. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Prospectus: The disclosure document that must be delivered to the buyer of a variable contract no later than the sale, required by federal securities law. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Interest- and market-sensitive life products
Registered representative: A person registered with a FINRA member broker-dealer, typically after passing the Series 6 or 7 exam, who may sell securities such as variable life and variable annuities. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Regulations 47 and 77: The New York regulations issued under section 4240: Regulation 47 for variable annuities and Regulation 77 for variable life. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Section 4240: The New York Insurance Law section that governs separate accounts for variable life and variable annuities and gives the superintendent sole state authority over their issuance and sale. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Separate account: An account, distinct from the insurer's general account, that holds a variable policy's cash value and is invested according to the owner's chosen subaccounts, exposing the owner to investment risk. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Interest- and market-sensitive life products
Statement of methods of operation: The filing describing how an insurer will run its separate accounts, which the superintendent must approve before the insurer may sell separate account contracts in New York. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77)
Subaccounts: The investment divisions within a variable policy's separate account, each investing in a distinct portfolio, among which the owner allocates the policy's cash value. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Interest- and market-sensitive life products
Variable annuity: An annuity that places value in separate-account subaccounts the owner selects, so values and payments rise and fall with investment results and the owner bears the investment risk. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Annuity classification and payout options
Variable life: A life insurance product with a fixed premium and a guaranteed minimum death benefit whose cash value is held in the insurer's separate account and rises or falls with the performance of selected subaccounts. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Interest- and market-sensitive life products
Variable universal life: A life insurance product combining universal life's flexible premiums with variable life's separate-account investing, generally without a guaranteed cash value tied to subaccount performance. — Life insurance basics · Taught in Fixed versus variable life, and SEC, FINRA, and New York regulation of variable products (Ins. Law 4240, Regs 47 and 77), Interest- and market-sensitive life products
Assumed interest rate: The rate of return the insurer assumes it will earn on premiums before claims are paid. It lowers the premium: a higher assumed rate means a lower premium. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode
Avocation: A hobby or leisure activity, such as scuba diving or motorcycle racing, that an underwriter may treat as a hazardous risk requiring an exclusion rider or rated premium. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode, Policy exclusions: war, aviation, and dangerous occupation
Cost of insurance: The mortality charge deducted from an unbundled policy's account value, usually monthly, to pay for the pure death-benefit protection; it cannot exceed the contract's guaranteed maximum rate. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode, Interest- and market-sensitive life products
Expense loading: Each policy's share of the insurer's operating costs, such as commissions, salaries, underwriting and premium taxes, added to the net premium. It varies most among companies. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode
Gross premium: The net premium plus the expense loading; the amount the policyowner is actually billed. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode
Lapse rate: The proportion of policies that terminate for nonpayment. A policy that lapses before the insurer recovers its early issue costs forces those costs onto remaining policyholders. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode
Mode factor: A pricing adjustment the insurer applies to the annual premium for more frequent payment modes, making the total paid over a year higher than the single annual premium. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode, Premium payment modes and grace period
Net premium: The pure cost of the death protection: the mortality cost minus assumed interest earnings. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode
Premium payment mode: How often the policyowner pays premiums, such as annual, semiannual, quarterly, or monthly. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode, Premium payment modes and grace period
Single premium: An annuity funding method in which one lump sum funds the contract at issue and no further payments are made. — Life insurance basics · Taught in Life insurance premium factors: mortality, investment return, expense, and premium mode, Premium payment modes and grace period, Annuity premium and timing structures
Buyer's Guide: A generic, insurer-neutral disclosure document explaining the basic kinds of life insurance and how to compare costs among similar policies; every applicant receives the same one. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Cost index: A measure that lets buyers compare the cost of life insurance policies over a period such as 10 or 20 years, shown in the preliminary information and policy summary. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Equity index account: An account in an annuity or life policy linked to an external index. The required bold disclosure must say it does not participate directly in the equity market and explain the formula, participation rate and cap. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Illustration: A presentation of a policy's projected values over time under stated assumptions, separating guaranteed from non-guaranteed amounts. Non-guaranteed results are not contractual promises. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Non-guaranteed elements: Illustrated values such as projected dividends, current interest rates, or non-guaranteed cash values that are not promised and may not be realized. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Policy Summary: A disclosure document specific to the proposed contract, naming the insurer and producer and showing the premiums, death benefits, cash values, and charges for that particular policy. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Preliminary information: Written, policy-specific disclosure given at or before application: producer and insurer names, generic policy name, face amount and premium, guaranteed cash values at years 10 and 20, loan rate and cost indexes. It also tells the applicant of the at least ten-day right to return. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Regulation 74: The Superintendent's regulation setting standards for life insurance and annuity illustrations and disclosure formats, written under section 3209(k) and consistent with the NAIC illustration model. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Section 2122: The New York Insurance Law section on producer advertising: an ad naming an insurer must give its full name and principal U.S. office, must not call attention to an unauthorized insurer, and a financial-condition ad must conform to section 1313. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74), New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Section 3209: The New York Insurance Law section that controls what a life, annuity or funding agreement buyer must receive and when: producer identification, buyer's guide, preliminary information and policy summary or illustration. Credit life and group life are outside it unless specifically included. — Life insurance basics · Taught in New York life insurance advertising, policy summary, buyer's guide, and illustrations (Ins. Law 2122, 3209; Reg 74)
Guaranty assessment: A charge on surviving member insurers, generally in proportion to New York premiums written in the relevant account over the three preceding calendar years, used to fund a failed insurer's covered claims. The corporation holds no prefunded pool. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Guaranty association: A state-created association that every insurer licensed for the covered lines must join, which pays certain policyholder claims of an impaired or insolvent member insurer up to limits set by law. Producers may not use its existence to induce a sale. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Impaired insurer: A member insurer of a state guaranty association placed under a court order such as rehabilitation or conservation, but not finally found insolvent. Each state's guaranty law defines the term. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Life and Health Insurance Company Guaranty Corporation: The not-for-profit corporation created by Insurance Law article 77 and supervised by the superintendent, which protects policyholders of failed life and health insurers. Membership is mandatory for member insurers and it is funded by assessments after a failure. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Member insurer: An insurer that, as a condition of being licensed in a state to write life, health, accident, or annuity business there, must belong to that state's guaranty association. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Resolution facility: A not-for-profit entity the guaranty corporation may form to run off a failed domestic insurer's business. It may not issue new policies. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Unallocated group annuity: A group annuity contract that does not guarantee benefits to specific named individuals. Guaranty protection for it is capped at $1,000,000. — Life insurance basics · Taught in Life Insurance Company Guaranty Corporation of New York (Ins. Law art. 77)
Best interest standard: The duty of a producer recommending an annuity, and in some states life insurance, to act in the consumer's best interest, based on the consumer's profile information. It is a standard of conduct, not a guarantee of outcome. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Captive producer disclosure: The prominent written disclosure a captive producer must give before recommending, when limiting recommendations to one insurer, so the consumer knows the arrangement. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
In-force transaction: A change to an existing policy that does not generate new sales compensation, such as exercising an option under an annuity. Regulation 187's duties reach it. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Prudent person standard: The level of care, skill, prudence and diligence a producer must exercise in a recommendation, that of a prudent person acting in a like capacity. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Recommendation: A statement or act that the consumer could reasonably read as advice and that results, or is intended to result, in entering into or refraining from a transaction. General factual information, advertisements and education are not recommendations. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Regulation 187: The New York regulation (11 NYCRR Part 224) that applies the best interest standard to recommendations about life insurance, annuities, fraternal benefit certificates and group certificates, including in-force transactions. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Regulation 199: The New York regulation barring a producer from using a senior-specific certification or professional designation in a way that misleadingly implies special training in advising seniors. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Replacement: A sale in which new coverage is purchased and existing coverage is lapsed, surrendered, reduced, converted, or borrowed against in connection with the transaction, triggering replacement disclosure duties. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199), New York life insurance and annuity replacement (Ins. Law 2123; Reg 60), Replacement of health insurance
Senior-specific designation: A certification or professional designation combining words like senior, elder or retirement with certified, specialist or advisor. Using one that was not earned, does not exist, is self-conferred or comes from a mere marketing outfit is prohibited. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Suitability information: Information about the consumer's financial situation, needs and objectives that a producer must make reasonable efforts to obtain before recommending a sale. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
System of supervision: The insurer's duty under Regulation 187 to monitor producers, make sure they are trained and maintain procedures to prevent financial exploitation and abuse. — Life insurance basics · Taught in New York best interest standard for life and annuity sales (Reg 187) and senior-specific designations (Reg 199)
Definition of Replacement: The form shown to the applicant at application, before any replacement question, explaining what counts as a replacement. In some cases the shorter Important Replacement Notice is used instead. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Disclosure Statement: A comparison of the existing coverage with the proposed coverage in a replacement. If the final terms differ from an initial statement, the insurer prepares a revised statement marked as revised on its first page. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Existing insurer: The insurer of the coverage being replaced. It is told of the proposed replacement so it can contact the owner. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Extended free look: The 60-day period the replacing insurer must give the owner in a replacement, during which the new policy can be returned for a refund. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Important Notice Regarding Replacement: The notice an applicant receives when a replacement is involved, signed on the date the application is completed or presented, alongside a list of every policy or contract to be replaced. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Incomplete comparison: Comparing policies in a way that omits information, made to induce someone to lapse, forfeit or surrender coverage. It is the practice commonly called twisting. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Internal replacement: A replacement in which the new and existing contracts are issued by the same insurance company; it still triggers the full replacement duties. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Regulation 152: The New York record-retention regulation under which completed replacement documents are kept as part of the application file. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Regulation 60: The New York regulation (11 NYCRR 51) that governs replacement of individual life insurance policies and annuity contracts. It sets the forms, their order and the duties of the producer, replacing insurer and existing insurer. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Replacing insurer: The insurer issuing the new policy in a replacement. It must notify each existing insurer within the deadline the state sets and follow that state's other replacement rules, such as any extended free look. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Section 2123: The New York Insurance Law section that forbids misrepresenting a policy's terms, benefits or dividends and making an incomplete comparison to induce a lapse or surrender, and requires replacements to follow the Superintendent's regulation. — Life insurance basics · Taught in New York life insurance and annuity replacement (Ins. Law 2123; Reg 60)
Application: The applicant's written answers about age, health, occupation and habits. A true copy attached to the policy becomes part of the contract, and the answers are representations. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures, Application mechanics: signatures, changes, and incomplete applications, Policy delivery and explaining the contract to the client, Completing the health insurance application
HIPAA: The federal law whose Privacy Rule bars covered entities from releasing protected health information for underwriting without the individual's written authorization. Knowing wrongful disclosure is a federal crime with tiered penalties. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
HIPAA authorization: A signed, revocable written permission naming who may disclose what health information, to whom, for what purpose and until when, which a life insurer needs before covered entities release records for underwriting. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures, Application mechanics: signatures, changes, and incomplete applications, Completing the health insurance application
HIPAA covered entity: A health plan, or a health care provider that conducts standard electronic transactions such as billing a health plan, bound by the HIPAA Privacy Rule. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Notice of information practices: A notice in the application packet explaining what information the insurer collects, from whom, and to whom it may be disclosed; the producer delivers it and gets signatures at application. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures
Paramedical exam: A health check done by an examiner rather than a physician, recording height, weight, blood pressure and blood and urine specimens; full physician exams are used as age and face amount rise. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures
Permissible purpose: A legally allowed reason to obtain a consumer report. Underwriting insurance the consumer applied for is one; curiosity about someone else is not. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures
Protected health information: Individually identifiable health information held by a HIPAA covered entity. It may not be released for life insurance underwriting without the individual's written authorization. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Sources of insurability: The places an underwriter learns about an applicant: the application, the producer's report, medical exams and Attending Physician's Statements, the MIB, and consumer and investigative consumer reports. — Life insurance basics · Taught in Sources of insurability and HIPAA privacy disclosures
Administrative insertion: A notation the insurer may add to an application for administrative purposes only, clearly marked so it is not attributed to the applicant. No one else may alter an answer without the applicant's written consent. — Life insurance basics · Taught in Application mechanics: signatures, changes, and incomplete applications
Incomplete application: An application with an unanswered question. The insurer normally returns it to the producer; if it issues the policy anyway, it waives the missing information and cannot later contest the policy because of it. — Life insurance basics · Taught in Application mechanics: signatures, changes, and incomplete applications
Policy amendment: A signed change to the application or policy for terms the insurer changed after underwriting, such as a different rating, lower face amount or exclusion. The applicant signs it, usually at delivery. — Life insurance basics · Taught in Application mechanics: signatures, changes, and incomplete applications, Policy delivery and explaining the contract to the client
Policyowner: The person who holds all contractual rights and duties under a life policy, including paying premiums, naming beneficiaries, and surrendering or assigning the contract. — Life insurance basics · Taught in Application mechanics: signatures, changes, and incomplete applications, New York limits on life insurance on minors (Ins. Law 3207), Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Beneficiary designation rules
Proposed insured: The person whose health, habits, and personal history are disclosed on a life insurance application and who becomes the insured if the policy is issued. — Life insurance basics · Taught in Application mechanics: signatures, changes, and incomplete applications
Adverse underwriting decision: Declining coverage as applied for, or offering it at a higher than standard rate. When it rests on an HIV test result, the individual elects in writing who receives the specific results. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Age nearest birthday: The rating basis for backdating limits: the insured's age at the birthday nearest the application date, not the delivery date. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Backdating: Dating a life policy earlier than the application so the insured is rated at a younger age and pays a lower premium. In New York a policy may not be dated more than six months before the application if that lowers the premium. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Burial insurance: A policy marketed as payable for funeral or burial expenses. New York bars making benefits payable to a designated funeral director or paying funeral directors commissions to sell it, so families keep the freedom to shop. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
HIV-related test: A test an insurer may require in connection with an accident and health application, permitted only on a uniform, nondiscriminatory basis tied to the coverage applied for. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Saving age: The practice of backdating a policy to a date before the insured's last birthday counted for rating, so the insured pays a lower premium for life. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Section 2611: The New York Insurance Law section that requires written informed consent before an insurer may request or require an HIV related test, and sets what must be done after an adverse underwriting decision based on one. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Section 3208: The New York Insurance Law section that limits backdating of life policies to six months before the application date if it lowers the premium, binds producers as well as insurers, and bars burial policies payable to a designated funeral director. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Written informed consent: The signed disclosure, obtained before a specimen is collected, explaining that an HIV-related test will be performed, why, and who may receive the result. — Life insurance basics · Taught in New York policy backdating limits and HIV testing consent rules (Ins. Law 3208, 2611)
Approval-type receipt: A conditional receipt under which no coverage is in force until the insurer approves the application; the receipt only acknowledges the premium and starts underwriting. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Binding receipt (temporary insurance agreement): A premium receipt under which coverage attaches immediately for a stated maximum amount and a limited number of days, regardless of how underwriting later turns out. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Conditional receipt (insurability type): A premium receipt stating that coverage takes effect on a stated trigger date only if underwriting later finds the proposed insured insurable exactly as applied for; if declined or rated, there was never any coverage and the premium is refunded. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt, Completing the health insurance application, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement
Initial premium: The first premium, collected with the application. Collecting it is what makes interim coverage possible and shows the applicant is serious. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Insurability (approval-of-insurability) receipt: A conditional receipt under which coverage takes effect retroactive to the receipt date if the applicant proves insurable as of that date, even if approval paperwork finishes later. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Interim coverage: Coverage in force between the application and policy delivery. It exists only if the initial premium was collected and a receipt issued. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Premium receipt: The receipt a producer gives when accepting the initial premium; its wording decides when coverage starts, and the producer must explain it to the applicant. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt
Statement of continued good health: A signed statement obtained at delivery confirming there has been no change in the insured's insurability since the application, when the insurer conditions the policy on that fact. — Life insurance basics · Taught in Collecting the initial premium and issuing the receipt, Policy delivery and explaining the contract to the client, Completing the health insurance application, Policy delivery and explaining the contract
Actual delivery: Personal delivery of the issued policy by the producer directly to the owner, allowing the contract to be explained and questions answered. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Constructive delivery: Delivery of the policy other than in person, such as mailing it to the owner, where the insurer or producer relinquishes control by an approved method. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Delivery: The transfer of the policy to the owner, often the moment coverage takes effect. It may be personal, by mail or constructive. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Delivery receipt: A document the owner signs at policy delivery establishing the date they took possession of the policy, which can start the free-look period. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Free-look period: A stated period after delivery during which the owner may examine the policy and return it for a full refund of premium. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Policy delivery and explaining the contract, Replacement of health insurance, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Grace period: The window after a missed premium or insufficient account value during which a policy stays in force, giving the owner time to pay before coverage lapses. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Annuity premium and timing structures, Policy delivery and explaining the contract
Incontestable clause: A provision that after a policy has been in force two years during the insured's lifetime, the insurer can no longer contest it for misstatements in the application. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement
Suicide clause: A provision excluding death by suicide during a stated period after the policy date, usually no more than two years, with the usual remedy being a refund of the premiums paid. — Life insurance basics · Taught in Policy delivery and explaining the contract to the client, Dividends, incontestability, assignment, suicide, and accelerated death benefits
Cost-of-living rider: A rider that periodically increases the death benefit to track an inflation index, usually without new evidence of insurability but for added premium at attained age. — Life insurance policies · Taught in Term life insurance types, Return-of-premium, disability, and cost-of-living riders
Face amount: The death benefit stated on the face of the policy, paid to the beneficiary if the insured dies while coverage is in force. — Life insurance policies · Taught in Term life insurance types
Increasing term: A term life policy whose face amount rises over the term according to a schedule or index, often used as a rider to keep pace with inflation. — Life insurance policies · Taught in Term life insurance types, Return-of-premium, disability, and cost-of-living riders
Lapse: The termination of coverage that occurs when a life policy's premium remains unpaid after the grace period ends and no nonforfeiture option applies. — Life insurance policies · Taught in Term life insurance types, Term life renewability and convertibility features, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options
Level premium term: Term coverage whose premium is fixed for a multi-year period such as 10, 20 or 30 years; afterward the policy expires or renews at a much higher rate based on the insured's age. — Life insurance policies · Taught in Term life insurance types
Mortgage protection: Decreasing term insurance whose benefit declines in step with a mortgage balance while the premium stays level, so it pays off the loan if the borrower dies. — Life insurance policies · Taught in Term life insurance types, Term, other-insured, and long-term-care riders
Return of premium term: Level term with a higher premium that refunds the premiums paid if the insured survives the term. It is still term: no loanable cash value builds, and the refund is usually lost or reduced if it lapses early. — Life insurance policies · Taught in Term life insurance types, Return-of-premium, disability, and cost-of-living riders
Return-of-premium rider: A rider, usually on term life, that refunds the premiums paid if the insured is still living when the level term period ends; lapsing or surrendering early typically forfeits some or all of the refund. — Life insurance policies · Taught in Term life insurance types, Return-of-premium, disability, and cost-of-living riders
Attained age: The insured's current age at a given point, such as renewal, used as the basis for calculating a new premium rather than the age at original issue. — Life insurance policies · Taught in Term life renewability and convertibility features, Group life insurance conversion and contribution, Waiver, guaranteed-insurability, payor, and accidental-death riders
Attained-age conversion: Converting term to permanent insurance with the premium based on the insured's age at conversion. No back payment is due, but the premium is higher because the insured is older. — Life insurance policies · Taught in Term life renewability and convertibility features
Conversion period: The window in which the conversion privilege must be used, such as before a certain age or within the first several policy years. — Life insurance policies · Taught in Term life renewability and convertibility features
Convertible: A term policy feature letting the owner exchange the term coverage for a permanent policy without evidence of insurability, within limits stated in the contract. — Life insurance policies · Taught in Term life renewability and convertibility features, Combination and survivorship life plans, Term, other-insured, and long-term-care riders
Evidence of insurability: Proof of insurability, such as health history, a medical exam or a questionnaire, that an insurer may require from an applicant for individual coverage or from employees who enroll late in a group plan. — Life insurance policies · Taught in Term life renewability and convertibility features, Group life insurance conversion and contribution, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, Return-of-premium, disability, and cost-of-living riders
Original age conversion option: A conversion option that computes the new permanent policy's premium as if it had been issued at the original policy date, typically requiring a lump-sum payment for the difference in past premiums. — Life insurance policies · Taught in Term life renewability and convertibility features
Renewable term: Term coverage the owner may renew at the end of each term without evidence of insurability. The premium rises at each renewal based on attained age, and renewals usually stop at a stated age. — Life insurance policies · Taught in Term life renewability and convertibility features
Cash surrender value: The amount an owner may take in cash when surrendering a whole life policy, ending the coverage. — Life insurance policies · Taught in Traditional whole life products, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, Tax treatment of life insurance premiums, proceeds, and MECs
Economatic whole life: A participating whole life base with supplemental coverage funded by dividends, usually decreasing term plus paid-up additions. If dividends fall short, the supplemental coverage can drop substantially. — Life insurance policies · Taught in Traditional whole life products, Combination and survivorship life plans
Extended term insurance: A nonforfeiture option that uses a policy's cash value to buy term insurance for the original face amount, but only for a limited period. — Life insurance policies · Taught in Traditional whole life products, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Graded premium whole life: A plan like modified whole life, but the premium steps up gradually each year for several years before it levels off. — Life insurance policies · Taught in Traditional whole life products
Guaranteed cash value: The savings element inside a whole life policy that accumulates over time from the excess of early premiums over the current cost of protection. — Life insurance policies · Taught in Traditional whole life products
Indeterminate premium whole life: Non-participating whole life whose current premium reflects the insurer's current estimates and may be adjusted, but never above the maximum guaranteed premium stated in the policy. — Life insurance policies · Taught in Traditional whole life products
Level premium: A whole life premium set at issue that stays the same for the life of the policy, never increasing as the insured ages. — Life insurance policies · Taught in Traditional whole life products
Maturity age: The age, typically 121 on current mortality tables (100 on older policies), at which a whole life policy's cash value equals its face amount and the policy endows, paying the face amount to the living insured. — Life insurance policies · Taught in Traditional whole life products
Modified endowment contract (MEC): A life insurance contract that fails the 7-pay test by being overfunded, causing living distributions to be taxed income-first with a possible penalty. — Life insurance policies · Taught in Traditional whole life products, Tax treatment of life insurance premiums, proceeds, and MECs
Modified whole life: Whole life with a lower premium for the first few years, often three to five, and a higher-than-regular premium afterward. It suits buyers who expect their income to grow. — Life insurance policies · Taught in Traditional whole life products, Combination and survivorship life plans
Nonforfeiture: The guarantee that a life policyowner keeps the value accumulated in a cash-value policy even if premium payments stop. — Life insurance policies · Taught in Traditional whole life products, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Reduced paid-up insurance: A nonforfeiture option that converts a policy's cash value into a smaller permanent face amount with no further premiums due. — Life insurance policies · Taught in Traditional whole life products, Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Seven-pay test: A statutory test that a life insurance contract fails if cumulative premiums paid in the first seven years exceed what a seven-year paid-up policy would require, creating MEC status. — Life insurance policies · Taught in Traditional whole life products, Tax treatment of life insurance premiums, proceeds, and MECs
Straight life: Whole life with premiums paid for the whole of life or to maturity age. It has the lowest annual premium of the whole life plans. — Life insurance policies · Taught in Traditional whole life products
Whole life insurance: Permanent coverage for the insured's entire life, with premiums, death benefit and cash values stated in the policy at issue, based on long-term estimates of expense, interest and mortality. — Life insurance policies · Taught in Traditional whole life products
Cap: In indexed universal life, the maximum interest rate the insurer will credit in a given crediting period, regardless of how much the referenced index gains. — Life insurance policies · Taught in Interest- and market-sensitive life products
Current assumption whole life: Interest-sensitive whole life in which the insurer sets the premium and may raise or lower it as its experience changes. The death benefit does not fluctuate and a minimum cash value is guaranteed. — Life insurance policies · Taught in Interest- and market-sensitive life products
Current interest rate: The interest rate an insurer actually declares and credits to a policy's account value today; it can change over time and is not contractually guaranteed beyond the policy's guaranteed minimum. — Life insurance policies · Taught in Interest- and market-sensitive life products
Excess interest whole life: Interest-sensitive whole life with a fixed premium that must be paid when due; interest above the guarantee builds cash value. — Life insurance policies · Taught in Interest- and market-sensitive life products
Flexible premium: A premium structure, used in universal life, that lets the owner pay more or less than a scheduled amount within contract limits, rather than a fixed amount on a fixed schedule. — Life insurance policies · Taught in Interest- and market-sensitive life products, Premium payment modes and grace period, Annuity premium and timing structures
Floor: In indexed universal life, the minimum interest rate the insurer will credit in a crediting period, often zero percent, which protects the account value from losses when the referenced index declines. — Life insurance policies · Taught in Interest- and market-sensitive life products
Guaranteed minimum interest rate: The lowest crediting rate a policy's contract promises regardless of how low the current declared rate falls; only this figure, not projected current rates, is contractually guaranteed. — Life insurance policies · Taught in Interest- and market-sensitive life products
Increasing death benefit option: A universal life death benefit choice under which the beneficiary receives the face amount plus the policy's accumulated account value, so the total payout rises as the account value grows. — Life insurance policies · Taught in Interest- and market-sensitive life products
Indexed universal life: A universal life product that credits interest under a formula tied to an external market index, without the owner being directly invested in or receiving dividends from that index. — Life insurance policies · Taught in Interest- and market-sensitive life products
Level death benefit option: A universal life death benefit choice under which the beneficiary receives the face amount only, with the account value effectively absorbed into that fixed payout rather than added to it. — Life insurance policies · Taught in Interest- and market-sensitive life products
Partial withdrawal: Taking part of a universal life policy's cash value permanently, without repaying it. It reduces the cash value and, under Option B, the death benefit; unlike a loan, it is not repaid. — Life insurance policies · Taught in Interest- and market-sensitive life products, Reinstatement, policy loans, and nonforfeiture options
Participation rate: In indexed universal life, the percentage of the referenced index's movement that is actually counted toward the interest credited to the policy. — Life insurance policies · Taught in Interest- and market-sensitive life products
Unbundled design: A policy structure that shows premiums, cost of insurance, expense charges, and credited interest as separate, visible components of the account value, rather than blending them into one fixed premium. — Life insurance policies · Taught in Interest- and market-sensitive life products
Universal life: A permanent life insurance product with flexible premiums and an adjustable death benefit, where premiums fund an account value from which cost of insurance and expenses are deducted and interest is credited. — Life insurance policies · Taught in Interest- and market-sensitive life products
Combination plan: A life insurance contract that packages permanent insurance with term insurance, such as a family plan. — Life insurance policies · Taught in Combination and survivorship life plans
Family income policy: Whole life plus decreasing term. If the insured dies during the stated family income period measured from issue, the beneficiary receives monthly income for the rest of that period, and the whole life face amount is paid as well. — Life insurance policies · Taught in Combination and survivorship life plans
Family maintenance policy: Whole life plus level term. If the insured dies within the stated period, monthly income runs for the full period measured from the date of death. — Life insurance policies · Taught in Combination and survivorship life plans
Family policy: A single contract combining permanent insurance on the primary insured with term coverage on the spouse and children. — Life insurance policies · Taught in Combination and survivorship life plans
Joint life (first-to-die): A policy covering two insureds that pays the face amount when the first of them dies, after which coverage under that contract ends for the survivor unless the contract grants a purchase or conversion option. — Life insurance policies · Taught in Combination and survivorship life plans
Multiple protection policy: A policy that pays a multiple of the face amount, such as double or triple, if death occurs during a stated period, typically to a set age like 65, and only the base face amount after that. — Life insurance policies · Taught in Combination and survivorship life plans
Survivorship (second-to-die): A policy covering two insureds that pays nothing at the first death and pays the death benefit only after both insureds have died, with premiums generally continuing after the first death. — Life insurance policies · Taught in Combination and survivorship life plans
Beneficiary: The person or entity named in a policy or contract to receive its death benefit or other proceeds when the insured, or the annuitant under an annuity, dies. — Life insurance policies · Taught in New York limits on life insurance on minors (Ins. Law 3207), Credit life insurance: individual versus group, Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Beneficiary designation rules, The annuity principle, Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Competent minor: A minor above 14 years and 6 months, whom New York treats as able to contract for, own and exercise every right under a life policy on their own life or on someone in whom they have an insurable interest. — Life insurance policies · Taught in New York limits on life insurance on minors (Ins. Law 3207)
Excess insurance on a minor: Insurance over the limit, which is not valid and not payable as a death claim while it is excess. On demand or at the child's death, the insurer refunds premiums less dividends, with interest, and the excess ends. — Life insurance policies · Taught in New York limits on life insurance on minors (Ins. Law 3207)
Non-dependent exception: The rule that the child insurance limit does not apply when the person who effectuates the policy and pays the premiums has an insurable interest in the child and the child is not dependent on that person for support. — Life insurance policies · Taught in New York limits on life insurance on minors (Ins. Law 3207)
Section 3207: The New York Insurance Law section that sets when a minor can buy and control a life policy, at 14 years and 6 months, and caps the insurance that can be placed on a younger child's life. — Life insurance policies · Taught in New York limits on life insurance on minors (Ins. Law 3207)
Contributory plan: A group plan, life or health, in which members pay part of the premium, usually by payroll deduction. Insurers typically require a minimum participation percentage to guard against adverse selection. — Life insurance policies · Taught in Group life insurance conversion and contribution, Group disability income: short-term and long-term disability compared with individual plans, Group health insurance and COBRA
Experience rating: Readjusting group premiums at the end of a policy year based on the group's claims, retroactive only for that year. — Life insurance policies · Taught in Group life insurance conversion and contribution, New York community rating and the definition of small group (Ins. Law 4317; Reg 145), Group health insurance and COBRA, Workers' compensation
Formula precluding individual selection: A schedule such as a flat amount, a multiple of salary or a job-class schedule that sets each member's amount of group insurance, which is why group coverage can be written without evidence of insurability. — Life insurance policies · Taught in Group life insurance conversion and contribution
Group conversion window: The 31 days after group life coverage ends in which a member must apply and pay the first premium for an individual conversion policy. Group coverage continues through it, so a death inside the window pays the convertible amount. — Life insurance policies · Taught in Group life insurance conversion and contribution
Noncontributory plan: A group plan paid entirely by the employer or sponsor, life or health. Because no member pays, insurers generally require 100 percent of eligible members to be covered, which removes the adverse-selection risk. — Life insurance policies · Taught in Group life insurance conversion and contribution, Group disability income: short-term and long-term disability compared with individual plans, Group health insurance and COBRA
Certificate holder: A person covered under a group policy who receives a certificate as evidence of coverage rather than a policy of their own. — Life insurance policies · Taught in Credit life insurance: individual versus group
Creditor: The lender in a credit life arrangement, who is the beneficiary of the coverage and, in group credit life, also the policyholder. — Life insurance policies · Taught in Credit life insurance: individual versus group
Debtor: The borrower in a credit life arrangement, who is the insured person whose death triggers the benefit. — Life insurance policies · Taught in Credit life insurance: individual versus group
Group credit life: Credit life written as one master policy held by the creditor, with each eligible borrower receiving a certificate. Little or no underwriting is needed, it is cheaper and more common, and it has no conversion privilege. — Life insurance policies · Taught in Credit life insurance: individual versus group
Individual credit life: Credit life written as a separate policy owned by the borrower, who applies individually, with the creditor as beneficiary or assignee for the debt. It usually costs more per dollar and is the less common form. — Life insurance policies · Taught in Credit life insurance: individual versus group
Consideration clause: The provision describing the exchange of value in a life policy: the applicant's completed application and initial premium in return for the insurer's promise to pay benefits. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Insuring clause: The provision naming the insured and the insurer and stating the insurer's core promise to pay the stated proceeds to the beneficiary upon due proof of the insured's death. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Irrevocable beneficiary: A beneficiary with a vested interest in the policy whom the owner generally cannot change, or take actions reducing that interest, without the beneficiary's written consent. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Beneficiary designation rules, Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Owner's rights: The set of contractual rights held by the policyowner while a policy is in force, including naming or changing beneficiaries, assigning the policy, accessing cash value, and exercising policy options. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights
Policy loan: A loan an owner takes against a whole life policy's cash value; any unpaid loan and interest reduce the amount paid to the beneficiary at death. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Reinstatement, policy loans, and nonforfeiture options, Tax treatment of life insurance premiums, proceeds, and MECs
Revocable beneficiary: A beneficiary the owner may change at any time without the beneficiary's permission. — Life insurance policy provisions, options, and riders · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Beneficiary designation rules, Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Automatic premium loan: A policy provision, if elected, that pays an overdue premium out of the policy's cash value to prevent a lapse. — Life insurance policy provisions, options, and riders · Taught in Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options
Premium notice: A notice insurers typically mail before each due date stating the amount, the due date and the consequence of not paying within the grace period. — Life insurance policy provisions, options, and riders · Taught in Premium payment modes and grace period
Reinstatement: A provision letting the owner restore a lapsed policy's original contract by furnishing evidence of insurability, paying overdue premiums with interest, and settling any outstanding policy loan. — Life insurance policy provisions, options, and riders · Taught in Premium payment modes and grace period, Reinstatement, policy loans, and nonforfeiture options, New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Contestable period: The time after a policy is issued during which the insurer may challenge and rescind it for material misrepresentation or concealment in the application. — Life insurance policy provisions, options, and riders · Taught in Reinstatement, policy loans, and nonforfeiture options, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), Replacement of health insurance
Loan value: The amount the owner may borrow against a policy, essentially the cash value minus interest that will accrue to the next premium due date. — Life insurance policy provisions, options, and riders · Taught in Reinstatement, policy loans, and nonforfeiture options
Standard Nonforfeiture Law for Life Insurance: The state law, based on a model adopted in every state, requiring a life policy to provide a cash surrender value or a paid-up nonforfeiture benefit once premiums have been paid for the period stated in the policy. — Life insurance policy provisions, options, and riders · Taught in Reinstatement, policy loans, and nonforfeiture options
Absolute assignment: A transfer that permanently and completely conveys all of the owner's policy rights to another party. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Accelerated death benefit: A benefit paying part of the face amount to the owner while the insured is still living, upon a qualifying event such as terminal illness, reducing the death benefit left for the beneficiary. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits, Term, other-insured, and long-term-care riders, Tax treatment of life insurance premiums, proceeds, and MECs, Life settlements, Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Assignment: The method by which ownership or rights in a life insurance policy are transferred under the policy's own terms, rather than by simply handing over the document. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Collateral assignment: A transfer of only enough policy interest to secure a debt, with any remaining death benefit going to the named beneficiary. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Divisible surplus: The portion of a participating insurer's surplus apportioned and credited annually to policyowners as dividends, reflecting a return of an overcharge in premium. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Misstatement of age: A standard policy provision requiring the death benefit to be adjusted to what the premiums paid would have purchased at the insured's correct age, if the age was stated incorrectly on the application. — Life insurance policy provisions, options, and riders · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits, New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204), New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Aviation exclusion: An exclusion for death resulting from aviation activity other than as a fare-paying passenger on a regularly scheduled commercial airline. It targets private and student pilots, crew and specialized flying. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation
Exclusion: A permanent contract provision denying payment for a narrow list of causes of death, enforceable only if written into the policy or an attached rider. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation, Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Exclusion rider: A form attached to an issued policy that permanently excludes coverage for a specified condition or risk the underwriter identified. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation, Policy delivery and explaining the contract
Hazardous occupation: A job or hobby carrying risk far above average, such as commercial diving or auto racing. The underwriter can decline the applicant, rate the policy with an extra premium or issue an exclusion rider. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation
Home area: For permitted war exclusions, the fifty states, the District of Columbia and Canada. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation
Results clause: A war exclusion that denies a death claim only if death actually results from an act of war or military conflict. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation
Status clause: A war exclusion that denies a death claim based solely on the insured's status as an active-duty military member during a war or declared conflict, regardless of how death occurred. — Life insurance policy provisions, options, and riders · Taught in Policy exclusions: war, aviation, and dangerous occupation
Proof of death: The documents, typically a claim form and a certified copy of the death certificate, that the insurer requires before paying a death benefit. — Life insurance policy provisions, options, and riders · Taught in New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204)
Sections 3203 and 3204: The New York Insurance Law sections requiring standard provisions in individual life policies and setting the entire contract, application-attachment, representation and application-alteration rules. — Life insurance policy provisions, options, and riders · Taught in New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204)
Standard policy provisions: The contract terms state law requires in life insurance policies, including the grace period, incontestability, reinstatement, and misstatement of age, which apply regardless of how the policy credits interest. — Life insurance policy provisions, options, and riders · Taught in New York required life policy provisions: misstatement of age, statements of the applicant, and proof of death (Ins. Law 3203-3204)
Class designation: A beneficiary designation naming a group, such as 'my children,' rather than specific individuals, useful when the group's membership may change. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Common disaster clause: A policy clause, also called a time clause, requiring the beneficiary to outlive the insured by a stated period, such as 14 or 30 days, to collect, which keeps proceeds from passing through the beneficiary's estate. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Contingent (secondary) beneficiary: A beneficiary paid only if no primary beneficiary survives the insured. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Per capita: A method of splitting proceeds among a class of beneficiaries under which only surviving members share, and a deceased member's portion is redistributed among the survivors. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Per stirpes: A method of splitting proceeds among a class of beneficiaries under which a deceased member's share passes down to that member's own descendants. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Primary beneficiary: The beneficiary first in line to be paid the death benefit if living at the insured's death. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Recording method: The rule under which a change of beneficiary takes effect when the insurer records the owner's written request. A will cannot override the designation on the policy. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Simultaneous death: A situation where the insured and beneficiary die in the same event with the order of death unclear, in which the insured is presumed to have survived so proceeds pass to the contingent beneficiary. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Specific designation: A beneficiary designation naming an individual by full name and relationship. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Tertiary beneficiary: A third layer of beneficiary designation used as deeper backup if neither the primary nor contingent beneficiary survives. — Life insurance policy provisions, options, and riders · Taught in Beneficiary designation rules
Fixed amount: An annuity payout option under which a chosen payment amount continues until the fund and its interest are exhausted. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Fixed period: A settlement option paying principal and interest in equal installments over a chosen length of time. The time is fixed and the payment is calculated; extra interest makes each payment larger. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Interest-only settlement option: A settlement option in which the insurer keeps the principal and pays the beneficiary only the interest it earns, at no less than a guaranteed minimum rate. The interest is taxable. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Joint and survivor: An annuity settlement option covering two annuitants, under which income continues to the survivor, often at a reduced percentage, after the first annuitant dies. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options, The annuity principle, Annuity classification and payout options
Life income: A settlement option that converts proceeds into an income the beneficiary cannot outlive, based on the proceeds, the beneficiary's age and, where the law permits, sex. More guarantees mean a smaller payment. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Life settlement: The sale of an existing life insurance policy by its owner to a third party for a cash payment greater than the cash surrender value but less than the death benefit. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options, Life settlements, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78), New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Life with period certain: An annuity settlement option paying lifetime income, with payments continuing to a beneficiary for the remainder of a stated period if the annuitant dies early. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options, Annuity classification and payout options
Life with refund: An annuity settlement option paying lifetime income with a guarantee that at least the amount applied is returned to the beneficiary, as installments or a lump sum. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options, The annuity principle, Annuity classification and payout options
Lump sum: The entire face amount paid in one payment, less policy loans and plus dividend accumulations or paid-up additions. It is the default settlement mode and death proceeds are generally not taxable income. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Period certain: An annuity payout option paying equal amounts for a set number of years regardless of whether the annuitant is still living. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options, The annuity principle, Annuity classification and payout options
Settlement option: A way for the policy owner or beneficiary to take policy proceeds other than as one lump sum, such as interest only, a fixed period, a fixed amount, or a life income. In an annuity the same idea sets how accumulated value is turned into income. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Spendthrift clause: A policy provision restricting a beneficiary from assigning or pledging installment proceeds and shielding those proceeds from the beneficiary's creditors. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Straight life income: A life income option paying the highest amount per dollar, with payments stopping at the beneficiary's death and nothing refunded. — Life insurance policy provisions, options, and riders · Taught in Life policy settlement options
Accidental death and dismemberment: A rider paying a principal sum for accidental death and a capital sum for loss of limbs or sight, usually the full principal sum for two members and half for one. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Worksite, hospital indemnity, short-term medical, and accident policies, Disability income and accidental death and dismemberment policies, Health policy riders
Accidental death benefit: A rider paying an additional amount on top of the face amount if death results from accidental bodily injury, independent of all other causes, within a stated time limit. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
Any occupation: A stricter disability definition that pays benefits only if the insured cannot work in any gainful occupation for which they are reasonably suited. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies
Capital sum: A percentage of the principal sum payable under an AD&D rider for a lesser loss, such as one hand or the sight of one eye. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Worksite, hospital indemnity, short-term medical, and accident policies, Disability income and accidental death and dismemberment policies
Disability income rider: A rider that pays the insured a monthly income, often a percentage of the face amount, as a living benefit for as long as total disability continues. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders
Double indemnity: The nickname for an accidental death benefit equal to the policy's face amount, doubling the total payable if death is accidental. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Disability income and accidental death and dismemberment policies
Guaranteed insurability rider: A rider letting the owner buy specified additional coverage on scheduled option dates or qualifying life events with no evidence of insurability, priced at attained age. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders, Health policy riders
Juvenile policy: A policy on a child's life, usually owned and paid for by a parent or guardian called the payor. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
Option date: A scheduled date under a guaranteed insurability rider on which the owner may purchase additional coverage without evidence of insurability. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
Own occupation: A disability definition that pays benefits if the insured cannot perform the duties of their own specific job. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies
Payor benefit rider: A rider on a juvenile policy that waives premiums until the child reaches a stated age if the adult paying for the policy dies or becomes totally disabled. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders
Principal sum: The full scheduled amount payable under an AD&D rider for accidental death or a major loss. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Worksite, hospital indemnity, short-term medical, and accident policies, Disability income and accidental death and dismemberment policies
Rider: An amendment attached to a life policy that adds a benefit, usually for extra premium, and which has no existence independent of the base policy. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders, Health policy riders
Total disability: A disability classification, defined by the policy, under which the insured cannot perform the duties of his or her own occupation or of any occupation reasonably suited to education and experience, normally paying the full monthly benefit. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders, Disability classifications: total, partial, recurrent, and residual, Occupational versus non-occupational classification
Waiver of monthly deductions: The universal life counterpart of waiver of premium: it waives the monthly cost-of-insurance and expense deductions from the cash value during total disability. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders
Waiver of premium: A rider under which the insurer pays the policy's premiums while the insured remains totally disabled past a waiting period, waiving the premium but not paying cash to the insured. — Life insurance policy provisions, options, and riders · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Return-of-premium, disability, and cost-of-living riders, Health policy riders, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Consumer Price Index: The inflation measure to which a cost-of-living rider ties its coverage increases. — Life insurance policy provisions, options, and riders · Taught in Return-of-premium, disability, and cost-of-living riders
Activities of daily living (ADLs): Basic self-care tasks such as bathing, dressing, transferring, toileting, continence, and eating, used to determine long-term care benefit eligibility. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders, Individual and group long-term care insurance
Children's term rider: A rider added to a parent's life policy that covers all eligible children for one premium at the same level term amount, with newborn or adopted children added at no extra cost. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Decreasing term rider: A term rider whose additional death benefit declines over time, often matched to an amortizing mortgage or shrinking income-replacement need. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Elimination (waiting) period: The waiting period after an insured becomes disabled, or incurs a covered loss, before benefits begin. It applies to disability income, long-term care and waiver-of-premium provisions. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders, Policy delivery and explaining the contract, Replacement of health insurance, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods, Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, Individual and group long-term care insurance
Family income rider: A decreasing term rider that, if the insured dies during the rider period, pays monthly income to the family for the remainder of that period, measured from the policy's start. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Family maintenance rider: A level term rider that pays monthly income for a full fixed number of years measured from the date of death, if death occurs within the rider period. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Family rider: An other-insured rider that bundles term coverage on both a spouse and children under one policy. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Level term rider: A term rider providing a flat additional death benefit for a stated period. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Long-term-care rider: A rider that converts part of a life policy's death benefit into a living benefit paying for qualified long-term-care services, reducing the death benefit by amounts paid out. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Other-insured rider: A rider that extends term coverage under the same policy to a person other than the primary insured, such as a spouse or child. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Spouse term rider: An other-insured rider providing level term coverage on the primary insured's spouse, typically ending at a stated age or upon termination of the marriage. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Term rider: A rider adding temporary death benefit on the same insured covered by the base permanent policy, expiring at the end of its stated period while the base policy continues. — Life insurance policy provisions, options, and riders · Taught in Term, other-insured, and long-term-care riders
Accumulation phase: The period of a deferred annuity before income begins, during which the contract's value grows as interest or earnings are credited. — Annuities · Taught in The annuity principle, Annuity premium and timing structures, Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits, Annuity classification and payout options
Annuitant: The measuring life under an annuity contract whose age and sex determine the amount of each payment. — Annuities · Taught in The annuity principle
Annuitization: Converting an annuity's accumulated value into a stream of income payments under a chosen income option. — Annuities · Taught in The annuity principle, Annuity premium and timing structures, Annuity classification and payout options, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Annuity: A contract that protects against outliving one's money by converting premiums into a stream of income, the mirror image of life insurance. — Annuities · Taught in The annuity principle
Deferred annuity: An annuity whose income payments begin on a future annuity date, with the contract growing during an accumulation phase until then. — Annuities · Taught in The annuity principle, Annuity premium and timing structures, Annuity classification and payout options
Immediate annuity: An annuity whose income payments begin within about one payment interval after purchase. — Annuities · Taught in The annuity principle, Annuity premium and timing structures, Annuity classification and payout options
Longevity risk: The financial risk of outliving one's money, which an annuity addresses by turning a sum into income that cannot be outlived. — Annuities · Taught in The annuity principle, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Owner: The party to an annuity contract who pays premiums and controls the contract. — Annuities · Taught in The annuity principle
Payout phase: The stage of an annuity, beginning at annuitization, during which money flows out to the annuitant as income. — Annuities · Taught in The annuity principle, Annuity premium and timing structures, Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits, Annuity classification and payout options
Scientific liquidation: Systematically spending down principal and interest on a schedule calculated so the money lasts exactly as long as the annuitant does. Life insurance creates an estate; an annuity liquidates one. — Annuities · Taught in The annuity principle
Straight life annuity: A life annuity whose payments stop at the annuitant's death, so it pays the highest income per dollar of premium. If the annuitant dies early, little of the premium may ever come back. — Annuities · Taught in The annuity principle, Annuity classification and payout options
Survivorship benefits: The money of annuitants who die early that stays in the pool and helps fund payments to those who live longer, also called mortality credits. Each life annuity payment includes principal, interest and survivorship benefits. — Annuities · Taught in The annuity principle
Cash surrender benefit: The cash a deferred annuity must offer in place of the paid-up annuity if it allows lump-sum settlement. The insurer may defer paying it up to six months after demand. — Annuities · Taught in New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Market value adjustment: A surrender formula that raises or lowers the cash value with market interest rates; for such a contract the free-look refund may be the cash surrender value plus all fees and charges deducted. — Annuities · Taught in New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Paid-up annuity benefit: The benefit an annuity must provide if payments stop, so the holder keeps a reduced income based on what has been paid in. — Annuities · Taught in New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Section 3219: The New York Insurance Law section listing the standard provisions every individual annuity must contain: 31-day grace, two-year incontestability, entire contract, misstatement of age or sex, annual dividends, nonforfeiture options, three-year reinstatement and a 10-to-30-day free look. — Annuities · Taught in New York required annuity contract provisions (Ins. Law 3219, 4220, 4223)
Standard Nonforfeiture Law for Annuities: Section 4223 of the Insurance Law, which guarantees that money paid into an annuity is not forfeited if payments stop. Section 4220 is the older law and governs only contracts issued before 4223 took effect. — Annuities · Taught in New York required annuity contract provisions (Ins. Law 3219, 4220, 4223), Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Deferred income annuity: A paid-up deferred annuity that uses each premium to buy a fixed future income beginning on a set date. It keeps no account value and costs much less than an immediate annuity for the same income. — Annuities · Taught in Annuity premium and timing structures, Annuity classification and payout options
Flexible premium deferred annuity: A deferred annuity funded by varying amounts at varying times. There is no flexible premium immediate annuity, because deposits cannot be made before income starts within a year. — Annuities · Taught in Annuity premium and timing structures
Maturity date: The date stated in a deferred annuity when income payments begin, unless the owner picks an earlier one. — Annuities · Taught in Annuity premium and timing structures
Periodic premium: An annuity funding method in which the owner pays a set amount on a set schedule, such as monthly or annually. — Annuities · Taught in Annuity premium and timing structures
Qualified longevity annuity contract: A deferred income annuity bought within an IRA that lets the owner defer the start of income, often to around age 85. — Annuities · Taught in Annuity premium and timing structures, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Single premium deferred annuity: An annuity bought with one lump sum whose income begins at a later date. — Annuities · Taught in Annuity premium and timing structures
Single premium immediate annuity: An annuity bought with one lump sum that begins income within 12 months. Single premium never tells you the timing, but immediate always means the premium was single. — Annuities · Taught in Annuity premium and timing structures
Tax-deferred: Describes growth, such as cash value in a permanent life policy or earnings in a deferred annuity, that is not taxed while it stays inside the contract. — Annuities · Taught in Annuity premium and timing structures, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits, Tax treatment of life insurance premiums, proceeds, and MECs
Account value: The accumulated fund inside a universal life or variable policy or a deferred annuity, increased by premiums and credits and reduced by charges. An annuity's can be withdrawn subject to surrender charges. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Annuity death benefit: The amount paid to the beneficiary if the owner or annuitant dies before annuitization, typically the greater of account value or premiums paid less withdrawals. Surrender charges generally do not apply to it. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Bonus annuity: An annuity that credits extra interest in the first year, often paid for with a higher or longer surrender charge. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Early withdrawal penalty: The federal 10 percent additional tax on taxable withdrawals before age 59 and a half, separate from any insurer surrender charge. Exceptions include death, disability and a series of substantially equal periodic payments. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Earnings-first taxation: The rule that withdrawals from a non-qualified annuity come out as taxable gain, ordinary income, before any tax-free return of premium. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Free withdrawal provision: A contract feature letting the owner take a set amount each year, commonly 10 percent of the account value, with no surrender charge. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Full surrender: Cashing in a whole annuity for its cash surrender value, which ends the contract. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Highest anniversary value: An enhanced variable annuity death benefit equal to the highest account value on any contract anniversary. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Partial surrender: Taking out only part of an annuity's account value, also called a partial withdrawal, which leaves the contract in force. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Surrender charge: A declining percentage penalty, often starting near 7 percent and falling to zero, deducted when money is taken out early. It lets the insurer recover acquisition costs such as the producer's commission. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Surrender charge period: The years over which a surrender charge declines until it reaches zero. On a flexible premium contract each new premium may start its own schedule, and replacing an annuity starts a new one. — Annuities · Taught in Deferred annuity surrender and withdrawal charges, nonforfeiture, and death benefits
Assumed investment return: The benchmark rate used to set variable annuity payments once annuitized: payments rise when performance beats it, stay level when they match it and fall when they lag it. — Annuities · Taught in Annuity classification and payout options
Cash refund: A life with refund feature paying the beneficiary in one lump sum the difference between the premium and the payments already received. — Annuities · Taught in Annuity classification and payout options
Commutation provision: A feature of some immediate annuities that lets the payee exchange remaining payments for a lump sum. — Annuities · Taught in Annuity classification and payout options
Exclusion ratio: A calculation that divides the investment in an annuity contract by the expected return to determine the tax-free portion of each annuitized payment. — Annuities · Taught in Annuity classification and payout options, Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Fixed annuity: An annuity that credits interest declared by the insurer, subject to a guaranteed minimum, with the insurer carrying the investment risk. — Annuities · Taught in Annuity classification and payout options
Indexed annuity: An annuity that credits interest based on the performance of an external index, usually subject to a floor and a cap or participation limit. — Annuities · Taught in Annuity classification and payout options
Installment refund: A life with refund feature that continues payments to the beneficiary until the total paid equals the premium. — Annuities · Taught in Annuity classification and payout options
Investment in the contract: The total after-tax premiums paid into a policy, which forms the basis recovered tax-free before gain is taxed on distribution. — Annuities · Taught in Annuity classification and payout options
Joint life annuity: An annuity paying two annuitants that stops at the first death. Because nothing continues to the survivor, it pays more than a joint and survivor option. — Annuities · Taught in Annuity classification and payout options
Non-guaranteed index annuity: An index-linked annuity, also called a registered index-linked, buffer or structured annuity, that can lose principal. — Annuities · Taught in Annuity classification and payout options
Benefit base: The amount, typically the premiums paid, on which a guaranteed withdrawal benefit is calculated. Withdrawing more than the allowed percentage reduces the guarantee. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Cost basis: The after-tax money paid into a policy, annuity or plan. It comes back tax-free on distribution, and only the earnings above it are taxed. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits, Tax treatment of life insurance premiums, proceeds, and MECs
Guaranteed minimum accumulation benefit: A living benefit rider guaranteeing the account value will be at least a stated amount after a set period. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Guaranteed minimum income benefit: A living benefit rider guaranteeing a minimum base on which annuitization income is calculated. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Guaranteed minimum withdrawal benefit: A living benefit rider, sold mainly on variable annuities, guaranteeing the owner may withdraw a set percentage of a benefit base each year until it is recovered, even if poor markets drive the account value to zero. A lifetime version continues for life. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Living benefit: A policy benefit, such as an LTC rider payout, that the insured can access while still alive rather than only at death. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Non-qualified annuity: An annuity bought with after-tax dollars. The premiums are the owner's cost basis and come back tax-free, and there is no federal limit on how much can be put in. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Qualified annuity: An annuity that funds an IRA or employer plan. Contributions are usually pre-tax, so every dollar paid out is taxable, contribution limits apply and required minimum distributions begin. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Required minimum distribution: The amount a retirement account owner must withdraw each year once past the required beginning age, currently 73 or 75 depending on birth year. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits, Qualified and nonqualified retirement plans
Systematic withdrawals: Regular withdrawals taken instead of annuitizing. They keep the account accessible but can deplete it. — Annuities · Taught in Personal uses of annuities: tax deferral, retirement income, education funds, and guaranteed minimum withdrawal benefits
Cost-recovery (FIFO) basis: A tax rule for non-MEC policy withdrawals under which amounts up to the investment in the contract come out tax-free before any gain is taxed. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Group term life tax rule: Employer-paid group term life premiums are deductible to the employer, and the cost of the first $50,000 of coverage is not taxable income to the employee; the cost of coverage above $50,000 is taxable. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Incidents of ownership: Rights an insured holds over a policy, such as the power to change the beneficiary, which cause the death proceeds to be included in the insured's gross estate. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
LIFO treatment: The tax treatment of withdrawals and loans from a modified endowment contract: gain comes out first, as ordinary income, before any tax-free return of basis, with a 10 percent additional tax before age 59 and a half. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Tax-deferred inside buildup: The growth of a life insurance policy's cash value that is not currently taxed as long as the contract meets the statutory definition of life insurance. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Transfer-for-value rule: A federal tax rule that limits the income-tax exclusion of death proceeds when a policy is transferred for valuable consideration, unless a statutory exception applies. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Viatical settlement: The sale of a life insurance policy by an owner who is terminally or chronically ill, typically for an offer closer to the face amount because life expectancy is short. — Federal tax considerations for life insurance and annuities · Taught in Tax treatment of life insurance premiums, proceeds, and MECs, Life settlements
Deferred compensation: A nonqualified arrangement in which an employer promises to pay an employee a benefit in the future, taxed to the employee only when actually or constructively received. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Defined benefit plan: A qualified pension plan that promises a stated benefit at retirement; the employer bears the investment risk. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Defined contribution plan: A qualified plan, such as profit-sharing, money purchase, stock bonus or 401(k), that promises only what the account grows to; the employee bears the investment risk. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Determination letter: An IRS letter a sponsor may request confirming that a plan is qualified; sponsors of pre-approved plans often rely on the provider's opinion letter. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Direct rollover: Moving retirement money trustee-to-trustee with no tax and no withholding. Every qualified plan must offer it. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Elective deferral: Employee salary contributions to a qualified plan, limited each year under section 402(g). — Qualified plans · Taught in Qualified and nonqualified retirement plans
ERISA: The federal law imposing reporting and fiduciary rules on most private-sector qualified plans; governmental plans and most church plans are exempt. — Qualified plans · Taught in Qualified and nonqualified retirement plans, ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Highly compensated employee: A higher-paid employee in whose favor a qualified plan's contributions or benefits may not discriminate. Governmental plans are exempt from this rule. — Qualified plans · Taught in Qualified and nonqualified retirement plans, ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Indirect rollover: A payout to the owner, who has 60 days to deposit it in another retirement plan. A qualified plan withholds 20 percent, and an IRA owner may do only one IRA-to-IRA indirect rollover in any 12 months. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Nonqualified plan: A retirement arrangement that does not meet Internal Revenue Code qualification requirements, allowing design freedom and discrimination in favor of selected employees but delaying the employer's tax deduction. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Qualified joint and survivor annuity: The form in which a defined benefit plan must pay a vested married participant unless the spouse consents in writing to another form. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Qualified plan: A retirement plan that meets Internal Revenue Code requirements for coverage, participation, vesting, and nondiscrimination, earning favorable tax treatment. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Salary continuation plan: A nonqualified employer arrangement that continues paying a selected employee's salary, often into retirement or disability, without IRS approval. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Vesting: The schedule on which an employee's right to employer contributions becomes nonforfeitable. Qualified plans must meet minimum vesting standards. — Qualified plans · Taught in Qualified and nonqualified retirement plans
Broker's fiduciary duty (life settlements): The duty a life settlement broker owes only to the owner, to follow the owner's instructions and act in the owner's best interest. — Life settlements · Taught in Life settlements, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Chronically ill: A defined health status under which viatical settlement proceeds are excludable from gross income subject to statutory limits. — Life settlements · Taught in Life settlements
Financing entity: An accredited investor that supplies the money a life settlement provider uses to buy policies. — Life settlements · Taught in Life settlements
Gross offer: The total amount a provider offers for a policy, from which broker commission and other compensation are paid, leaving the net amount to the owner. Both must be disclosed. — Life settlements · Taught in Life settlements
Life settlement intermediary: A registered marketplace that relays offers between owners, brokers and providers. It may not represent anyone or act as a provider or broker. — Life settlements · Taught in Life settlements, New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Life settlement provider: The licensed buyer that contracts with the policy owner, takes ownership of the policy, pays remaining premiums, and collects the death benefit. — Life settlements · Taught in Life settlements
Life settlement rescission right: The owner's right to rescind a life settlement until 15 days after receiving the proceeds, which are paid in one lump sum within three business days after the provider receives the insurer's acknowledgment of the transfer. — Life settlements · Taught in Life settlements
Settled policy: A policy that has been sold to a provider in a life settlement. — Life settlements · Taught in Life settlements
Terminally ill: A defined health status, certified by a physician, that generally makes viatical settlement proceeds fully excludable from the insured's gross income. — Life settlements · Taught in Life settlements
Article 78: The New York Insurance Law article, called the life settlements act, that governs life settlement transactions, including disclosures, privacy and prohibited practices. — Life settlements · Taught in New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Life settlement disclosure: The separate signed document the owner receives, no later than signing, covering alternatives, taxes, creditors, public assistance, the rescission right, lost policy rights and the gross offer, net amount and every party's compensation. — Life settlements · Taught in New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Life settlement privacy: The rule that no one may disclose the identity of the insured or owner, or the insured's financial or medical information, except with prior written consent of both or in response to a government investigation. — Life settlements · Taught in New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Section 2137: The New York Insurance Law section licensing life settlement brokers, whether individuals, firms, associations or corporations. Entity licenses work through named sub-licensees, each at least 18 and acting only in the licensee's name. — Life settlements · Taught in New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Section 7814: The life settlement section listing prohibited practices: requiring a post-settlement medical exam, price-fixing, referral fees to the owner's advisers and broker compensation without a license. Violations are defined violations under article 24. — Life settlements · Taught in New York life settlement brokers: licensing, advertising, privacy, and prohibited practices (Ins. Law 2137, art. 78)
Pre-arranged transfer: An arrangement or agreement, made at or before issuance, to transfer the policy's ownership or benefits to another person. — Life settlements · Taught in New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Section 7815: The New York Insurance Law section that bans stranger-originated life insurance, defined as any act, practice or arrangement at or before issuance creating a policy for the intended benefit of someone with no insurable interest. A violation is a defined violation under article 24. — Life settlements · Taught in New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Stranger financing: Buying insurance with resources or guarantees from a person who could not lawfully have initiated the policy, such as premium financing from an investor who will end up with the policy. — Life settlements · Taught in New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Trust scheme: A trust or similar arrangement used to buy policies for the intended benefit of another person in a way that violates New York's insurable interest laws. — Life settlements · Taught in New York prohibition of stranger-originated life insurance (Ins. Law 7815)
Accident: An unforeseen, unintended, unexpected event that causes bodily injury. Accident coverage is narrower and cheaper than sickness coverage. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions
Accidental bodily injury: The broader definition of accident, also called accidental results, requiring only that the result be unintended. Modern policies almost always use it. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods, Disability income and accidental death and dismemberment policies
Accidental means: The narrower definition of accident, requiring both the cause and the result to be unintended. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods, Disability income and accidental death and dismemberment policies
Comprehensive major medical: A single policy combining basic and catastrophic protection under one deductible and one coinsurance percentage. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Basic and major medical expense insurance
Dental expense insurance: Coverage for preventive, basic and major dental care, usually separate from medical coverage. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Dental, vision, and specified-disease policies
Disability income insurance: Coverage that replaces part of earnings when injury or sickness keeps the insured from working, paying a periodic benefit after an elimination period. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Disability income and accidental death and dismemberment policies, Occupational versus non-occupational classification, Business uses of health insurance: key person, overhead expense, and disability buy-out
Indemnity basis: Paying a fixed amount per day or per procedure regardless of actual cost; compare reimbursement, which repays actual bills, and service, where care is provided directly as in an HMO. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Worksite, hospital indemnity, short-term medical, and accident policies
Limited coverage: A policy covering only specified accidents, diseases or benefit amounts, such as hospital indemnity or accident-only. It must be clearly labelled limited so buyers do not mistake it for full coverage. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Dental, vision, and specified-disease policies
Long-term care insurance: Coverage for the help people need with everyday activities when they cannot care for themselves, delivered in a nursing facility, assisted living, adult day care, or the insured's home. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Individual and group long-term care insurance
Medicaid: The jointly funded federal-state medical assistance program under Title XIX of the Social Security Act that pays for medical care for people with limited income and resources, based on financial need rather than earned coverage. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Individual and group long-term care insurance, New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144), Medicaid, Child Health Plus and Healthy New York (Ins. Law 4326)
Medical expense insurance: Coverage that pays the cost of care, including hospital, surgical, physician and major medical coverage, on a reimbursement, service or indemnity basis. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Basic and major medical expense insurance
Medicare: The federal health program for people 65 and over and certain disabled people. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Nonduplication and coordination of benefits, Medicaid, Medicare Parts A, B, C, and D
Preexisting condition: A condition for which the insured received diagnosis, care, or treatment, or that manifested itself, before the coverage's effective date. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Worksite, hospital indemnity, short-term medical, and accident policies, Replacement of health insurance, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care, ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Sickness: Illness or disease. Disability policies traditionally cover sickness first manifesting after the policy takes effect; comprehensive major medical under the Affordable Care Act cannot exclude pre-existing conditions. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions
Workers' compensation: A statutory, no-fault insurance system that pays medical, income, death and burial, and rehabilitation benefits to employees injured, disabled, or killed arising out of and in the course of employment, including occupational disease. — Accident and health insurance basics · Taught in Accident and health basics: perils, types of losses and benefits, classes of coverage, and common exclusions, Occupational versus non-occupational classification, Workers' compensation, New York State Disability Benefits Law, Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Accident-only policy: A policy that pays only for loss resulting from accidental bodily injury, excluding sickness entirely. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Blanket accident policy: A policy covering a changing group, such as a team's players or a school's students, without naming each person. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Guaranteed issue: Coverage offered to all applicants without health questions. Worksite enrollment often uses simplified or guaranteed issue. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies, ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Hospital indemnity policy: A policy paying a fixed dollar amount per day or admission of hospital confinement, regardless of actual charges incurred, paid directly to the insured. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Portable coverage: Coverage the employee can keep by paying the insurer directly after leaving the job, as many worksite policies allow. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies, Group disability income: short-term and long-term disability compared with individual plans
Scheduled benefit: A benefit paid according to a fixed dollar allowance listed for each procedure or service, rather than as a percentage of billed charges. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Short-term (limited-duration) medical policy: Individually underwritten, expense-incurred coverage for a short defined term, meant to bridge a coverage gap, and generally nonrenewable. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Worksite marketing: A distribution method, not a product type, in which an insurer offers coverage to employees at the workplace, typically employee-paid through payroll deduction. — Accident and health insurance basics · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Annual maximum: The most a dental plan pays per person per year. It caps what the plan pays, the reverse of major medical's out-of-pocket cap on what the insured pays. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Basic dental services: The middle tier of a dental plan, covering fillings, simple extractions and often root canals, commonly paid around 80 percent after the deductible. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Capitation: A payment method in which a managed care organization pays a provider a fixed amount per enrolled member per month regardless of services used. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies, Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Dental HMO: A prepaid dental plan that pays its dentists a set fee per member, called capitation, and requires the member to use the assigned dentist. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Dental indemnity plan: A plan that pays toward any dentist, either from a fixed schedule of dollar amounts for each procedure or on a reasonable-and-customary basis. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Dental PPO: A dental plan that pays more when the insured uses network dentists. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Major dental services: The costliest tier of a dental plan, covering crowns, bridges and dentures, commonly paid around 50 percent after the deductible. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Missing tooth clause: A dental plan clause that may exclude replacing a tooth lost before coverage began. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Orthodontia: Dental work to straighten teeth, which when covered usually has its own lifetime maximum. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Predetermination of benefits: The practice of submitting a proposed dental treatment plan to the insurer for an estimate of covered benefits before work begins. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Preventive dental services: The first tier of a three-tier dental plan, covering cleanings, routine exams and X-rays, commonly paid at or near 100 percent, often with no deductible. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Specified-disease (dread disease) policy: A policy that pays benefits only when the insured is diagnosed with a disease named in the contract, such as cancer. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Vision insurance: Limited coverage for routine eye care: periodic exams and corrective lenses, frames or contacts, limited by frequency and dollar allowance. It does not cover medical treatment of eye disease or injury. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies
Waiting period: A delay after enrollment before certain benefits are payable, such as dental basic or major services, to stop people buying coverage only when they already need the work. — Accident and health insurance basics · Taught in Dental, vision, and specified-disease policies, Replacement of health insurance
Invitation to contract: An advertisement that invites the reader to apply, so it must disclose the policy's exceptions, reductions and limitations, such as waiting periods and renewal terms. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Invitation to inquire: An advertisement that only invites the reader to ask for more information. It may stay brief but must not mislead. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Limited-benefit notice: A prominent notice on narrow policies, such as accident-only, specified disease or hospital indemnity, that the coverage is limited and is not major medical or comprehensive coverage. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Outline of coverage: A required disclosure that summarizes a health policy's benefits, limits, exclusions and renewability. It is delivered to applicants for accident and health coverage, along with the Medicare buyer's guide for a Medicare supplement. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions, New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), Medicare supplement policies, New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Regulation 34: The New York accident and health advertising regulation, following the national model: ads must be truthful and not misleading, and an ad inviting the reader to apply must disclose exceptions, reductions and limitations. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Section 3217: The New York Insurance Law section directing the Superintendent to set minimum standards, including full and fair disclosure, for the form, content and sale of accident and health policies, aimed at standardization, ending misleading or deceptive provisions and eliminating coverage so limited it has no substantial economic value. — Accident and health insurance basics · Taught in New York accident and health marketing: advertising (Reg 34), outline of coverage, limited-benefit notices, and errors and omissions
Impairment (exclusion) rider: A rider permanently excluding loss arising from a named condition or body part, letting the insurer accept an applicant it would otherwise decline. — Accident and health insurance basics · Taught in Policy delivery and explaining the contract, Health policy riders
Rated policy: A policy issued with an extra premium charged to offset a higher-risk hazard, such as a dangerous occupation or aviation activity, instead of an exclusion rider or decline. — Accident and health insurance basics · Taught in Policy delivery and explaining the contract, Health policy riders
Churning: Repeatedly replacing a client's coverage to generate fresh first-year commissions rather than to serve the client's interest. — Accident and health insurance basics · Taught in Replacement of health insurance, New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Medicare supplement (Medigap): Private insurance sold to a person already enrolled in Original Medicare that pays some or all of the deductibles, coinsurance, and copayments Medicare leaves behind. — Accident and health insurance basics · Taught in Replacement of health insurance, New York community rating and the definition of small group (Ins. Law 4317; Reg 145), Medicare supplement policies
Replacement notice: A required disclosure form comparing existing and proposed coverage on facts when a sale involves replacing in-force insurance, signed, dated, and copied to the applicant and the replacing insurer. — Accident and health insurance basics · Taught in Replacement of health insurance, New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Community rating: Pricing in which everyone covered under the same policy form pays the same premium regardless of personal characteristics such as age. States differ on whether they require it and which characteristics it reaches. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145), New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Coverage tier: A standard premium category, such as individual or family, whose premium relativities the Superintendent may set under community rating. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145)
Large group: A group of 101 or more, which is not community rated and may be experience rated on its own claims history. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145)
Regulation 145: The New York regulation through which DFS implements the community rating and small group rules of Insurance Law sections 3231 and 4317. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145)
Sections 3231 and 4317: The parallel New York Insurance Law sections requiring community rating for individual and small group hospital and medical coverage, section 3231 for commercial insurers and 4317 for not-for-profit corporations. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145)
Small group: In New York, a group health policy covering one to 100 employees or members, not counting spouses and dependents, for policies issued or renewed on or after January 1, 2016. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145), New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235), New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Stop-loss insurance: Insurance protecting a self-funded plan against catastrophic or aggregate claims. New York bars insurers from selling it to small groups, apart from narrow grandfather exceptions. — Accident and health insurance basics · Taught in New York community rating and the definition of small group (Ins. Law 4317; Reg 145), ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Health policy grace period: The minimum days to pay each premium after the first: 7 for weekly, 10 for monthly and 31 for all other premium modes. The policy stays in force and a covered loss in the grace period is paid. — Individual health insurance policy general provisions · Taught in Mandatory provisions I: entire contract, incontestability, grace period, reinstatement
Mandatory provisions: The provisions every individual accident and health policy must contain in the statute's words, or in wording the regulator approves as no less favorable to the insured or beneficiary. — Individual health insurance policy general provisions · Taught in Mandatory provisions I: entire contract, incontestability, grace period, reinstatement, Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Reinstatement of a health policy: Restoration of a lapsed policy when the insurer accepts a late premium without an application, or, if it requires an application and issues a conditional receipt, when it approves it or the 45th day passes without written disapproval. Accidents are covered at once; sickness only if it begins more than 10 days later. — Individual health insurance policy general provisions · Taught in Mandatory provisions I: entire contract, incontestability, grace period, reinstatement
Cancellation provision: Ending coverage before the term is over. Under the optional cancellation provision, within the first 90 days the insurer may cancel by written notice effective not less than 10 days later, refunding the pro-rata unearned premium. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Conformity with state statutes: An optional provision under which any provision conflicting on the effective date with the law of the insured's state of residence is automatically amended to meet that state's minimum requirements. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Illegal occupation: An optional exclusion: the insurer is not liable for a loss to which the insured committing or attempting a felony, or being engaged in an illegal occupation, was a contributing cause. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Insurance with other insurers: An optional provision under which, if the insured has other valid undisclosed coverage, the insurer pays only its proportionate share of the loss and refunds the premium for the excess. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Intoxicants and narcotics: An optional exclusion for a loss sustained in consequence of the insured being intoxicated or under the influence of a narcotic, unless the narcotic was taken on a physician's advice. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Optional provisions: Provisions an insurer may include in an individual health policy but need not. If used, they must follow the statutory wording or approved wording no less favorable to the insured, under the proper caption. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Other insurance in this insurer: An optional provision under which excess coverage over the insurer's maximum, held in several of its own policies, is void and the premiums for it are refunded. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Relation of earnings to insurance: The average earnings clause: if total disability benefits from all valid loss-of-time coverage exceed the greater of earnings at disability or the prior two-year average, the insurer pays a proportionate share. It affects only loss-of-time benefits. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings, Disability income and accidental death and dismemberment policies
Short-rate cancellation: A refund method used when the insured cancels, returning less than a pro rata share of the unearned premium to reflect the insurer's costs. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Unpaid premium provision: An optional provision allowing the insurer to deduct any premium then due and unpaid from a claim payment. — Individual health insurance policy general provisions · Taught in Other health policy provisions: other benefits, unpaid premium, cancellation, conformity, illegal occupation, intoxicants, and relation of earnings
Probationary period: A period after a specified-disease policy is issued during which a diagnosis is generally not covered, to prevent buying coverage for a condition already present. — Individual health insurance policy general provisions · Taught in Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
Cancellable: A renewability category in which the insurer may terminate coverage during the policy term on the notice and terms stated in the policy, and may change the premium; the weakest renewability position for the insured. — Individual health insurance policy general provisions · Taught in Rights of renewability
Conditionally renewable: A renewability category in which the insurer may decline renewal only for reasons stated in the policy that are unrelated to the insured's health, such as reaching a stated age; premiums may still change. — Individual health insurance policy general provisions · Taught in Rights of renewability
Guaranteed renewable: A renewability feature under which the insurer must keep renewing the policy while premiums are paid and may not cancel it because of claims or worsened health, though it can raise premiums for a whole class of insureds. Medicare supplement policies must be guaranteed renewable. — Individual health insurance policy general provisions · Taught in Rights of renewability, Disability income and accidental death and dismemberment policies, Individual and group long-term care insurance, New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), Medicare supplement policies
Limiting rider: A rider that excludes or limits coverage. An insurer may not demand one as a condition of renewing individual medical expense coverage. — Individual health insurance policy general provisions · Taught in Rights of renewability
Market withdrawal: When an insurer leaves the individual market entirely. It must give at least 180 days' notice to the regulator and each covered person and may not re-enter that market for five years. — Individual health insurance policy general provisions · Taught in Rights of renewability, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Network plan: A health plan delivering benefits through a defined set of providers; coverage may be non-renewed if the insured no longer lives, resides or works in the service area, applied uniformly. — Individual health insurance policy general provisions · Taught in Rights of renewability, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Noncancellable: A renewability category in which the insurer must renew coverage to a stated age and the premium is fixed in the contract, so long as premiums are paid on time; the strongest position for the insured. — Individual health insurance policy general provisions · Taught in Rights of renewability, Disability income and accidental death and dismemberment policies, Group disability income: short-term and long-term disability compared with individual plans
Optionally renewable: A renewability category in which the insurer must let the current term run out but may decline to renew at the renewal date for any reason, and may raise the premium. — Individual health insurance policy general provisions · Taught in Rights of renewability
Period of time policy: A policy written for a single stated period, such as a short-term medical or travel accident policy, with no renewal right; the insurer cannot cancel during the period. — Individual health insurance policy general provisions · Taught in Rights of renewability
Product discontinuance: When an insurer withdraws a whole class of individual medical policies. It must give the regulator and each covered person at least 90 days' notice and offer every other individual product it sells. — Individual health insurance policy general provisions · Taught in Rights of renewability, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Benefit period: The length of time disability income benefits can continue, ranging from short-term weeks or months to long-term years or a stated age. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies
Partial disability: A disability classification in which the insured can perform some but not all occupational duties or cannot work full time, typically paying a flat reduced benefit for a short stated period. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual
Presumptive disability: A provision paying full disability benefits without the usual test, upon severe losses such as sight, hearing, speech, or use of limbs. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies
Recurrent disability: A provision treating a relapse within a stated period as a continuation of a prior claim, so no new elimination period applies. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual
Residual (partial) disability: A provision paying a reduced benefit when an insured returns to work at lower earnings than before the disability. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual
Split definition of disability: A total disability definition applying own occupation for an initial period, commonly two to five years, and any occupation afterward. It balances cost against early-claim protection. — Disability income and related insurance · Taught in Disability classifications: total, partial, recurrent, and residual, Disability income and accidental death and dismemberment policies, Group disability income: short-term and long-term disability compared with individual plans
Claim forms: The forms an insurer normally uses for proof of loss, which it must furnish within 15 days of notice; otherwise the claimant may submit written proof of the occurrence, character and extent of the loss. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Facility-of-payment provision: A provision letting the insurer pay a relative or a person who advanced funeral costs when no valid beneficiary claim exists. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Legal Actions provision: The mandatory provision setting the window for suing the insurer, barring suit until 60 days after proof of loss and after an outer limit commonly three years from when proof was due. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Notice of claim: The mandatory provision requiring the insured to give the insurer written notice of a covered loss within 20 days of its occurrence. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Payment of claims: The rule on who receives benefits: a death benefit goes to the designated beneficiary or, if none, the insured's estate; accrued unpaid benefits may go to either at the insurer's option; all other benefits are paid to the insured. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Payment to providers: An optional provision letting the insurer pay hospital, nursing, medical or surgical benefits directly to the provider unless the insured requests otherwise in writing by the time proof of loss is filed; in practice an assignment of benefits. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Physical Examination and Autopsy provision: The mandatory provision allowing the insurer, at its own expense, to examine the insured as often as reasonably required while a claim is pending, and to order an autopsy where not forbidden by law. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Proof of loss: The substantive documentation of a claim, generally due within 90 days after the date of loss or the end of each period for periodic benefits. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Time of payment of claims: The mandatory provision requiring benefits to be paid immediately upon receipt of written proof of loss, with periodic benefits paid at least monthly. — Disability income and related insurance · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
Overinsurance: Coverage that could pay an insured more than the actual loss or earnings, which weakens the incentive to avoid a claim. Overlapping policies can cause it, and disability insurers cap the monthly benefit at about 60 to 70 percent of earned income to prevent it. — Disability income and related insurance · Taught in Disability income and accidental death and dismemberment policies
Tax treatment of disability income: Benefits are tax-free when the insured paid the premium with after-tax dollars. When the employer pays and the premium is not included in the employee's income, benefits are taxable; when the cost is shared, the employer-funded portion is taxable. — Disability income and related insurance · Taught in Disability income and accidental death and dismemberment policies, Group disability income: short-term and long-term disability compared with individual plans, Business uses of health insurance: key person, overhead expense, and disability buy-out
Additional monthly benefit: A disability rider paying an extra amount for a short period, typically the first year, to bridge the wait before Social Security disability benefits begin. — Disability income and related insurance · Taught in Health policy riders
Cost of living adjustment: A disability income rider that increases the monthly benefit during a claim, usually tied to the Consumer Price Index and often capped, so inflation does not erode a long disability benefit. — Disability income and related insurance · Taught in Health policy riders
Endorsement: A form attached to a policy, also called a rider, that changes the base contract. It becomes valid only when approved by an insurer executive officer and endorsed on or attached to the policy. — Disability income and related insurance · Taught in Health policy riders
Health return of premium rider: A disability or health rider refunding part of the premiums paid, less claims, if the insured stays claim-free over a stated period. It is expensive. — Disability income and related insurance · Taught in Health policy riders
Rate manual: The document showing the rates, rules and risk classifications used with a policy and its riders, which New York requires to be filed with the superintendent before an accident and health policy is delivered. — Disability income and related insurance · Taught in Health policy riders
Social insurance supplement: A disability rider that pays an extra benefit when Social Security disability or other social insurance pays less than expected or nothing, and reduces as social insurance pays. — Disability income and related insurance · Taught in Health policy riders, Social Security benefits (disability and retirement)
Change of Occupation provision: An optional provision that reduces benefits if the insured moves to a more hazardous occupation, or lowers premium if the insured moves to a less hazardous one. — Disability income and related insurance · Taught in Occupational versus non-occupational classification
Non-occupational coverage: Accident and health coverage that pays only for injury or sickness unrelated to employment, excluding on-the-job losses that are expected to be covered by a work-injury system such as workers' compensation. — Disability income and related insurance · Taught in Occupational versus non-occupational classification, New York State Disability Benefits Law
Occupational coverage: Accident and health coverage, also called 24-hour coverage, that pays for a covered injury or sickness whether it happens on or off the job. — Disability income and related insurance · Taught in Occupational versus non-occupational classification
Occupational risk class: A category into which disability income insurers sort applicants by how hazardous their work is; riskier work can mean a higher premium, limited benefits or a decline. — Disability income and related insurance · Taught in Occupational versus non-occupational classification
Benefit integration: Coordinating a benefit with other income so the total does not exceed a set level; group long-term disability pays the difference between its percentage of earnings and the other income. — Disability income and related insurance · Taught in Group disability income: short-term and long-term disability compared with individual plans
Benefit offset: The reduction of group long-term disability benefits by other income received for the same disability, such as Social Security disability, workers' compensation and state-mandated disability benefits. — Disability income and related insurance · Taught in Group disability income: short-term and long-term disability compared with individual plans
Long-term disability: Group coverage with a 90 to 180 day elimination period, often timed to follow short-term disability, paying about 50 to 66 2/3 percent of monthly earnings, often to age 65, usually for occupational and non-occupational disability. — Disability income and related insurance · Taught in Group disability income: short-term and long-term disability compared with individual plans
Short-term disability: Group coverage with a very short elimination period, often the first day of an accident and the eighth day of a sickness, paying 50 to 70 percent of weekly earnings for about 13 to 26 weeks. It is usually non-occupational. — Disability income and related insurance · Taught in Group disability income: short-term and long-term disability compared with individual plans
Business overhead expense: Reimbursement coverage for a disabled owner's practice that pays actual ongoing costs, such as rent, utilities and non-owner salaries, with a short elimination period and a benefit period usually 12 to 24 months. Premiums are deductible and benefits taxable. — Disability income and related insurance · Taught in Business uses of health insurance: key person, overhead expense, and disability buy-out
Disability buy-out: Coverage that funds a buy-sell agreement so healthy owners can buy a disabled owner's share. It has a long elimination period, often 12 months or more, and pays as a lump sum or installments; premiums are not deductible and benefits are tax-free. — Disability income and related insurance · Taught in Business uses of health insurance: key person, overhead expense, and disability buy-out
Key person disability insurance: Coverage owned, paid for and collected by the business on an employee whose skills drive profits. Benefits offset lost profits and pay to recruit and train a replacement; premiums are not deductible and benefits are tax-free. — Disability income and related insurance · Taught in Business uses of health insurance: key person, overhead expense, and disability buy-out
Basic hospital expense: Basic coverage paying room and board up to a daily limit for a maximum number of days, plus miscellaneous hospital expenses such as lab work, X-rays, drugs and operating room up to a set amount. — Medical plans · Taught in Basic and major medical expense insurance
Basic medical expense insurance: First-dollar medical coverage with no deductible but low, stated benefit maximums for hospital, surgical, and physicians' expenses. — Medical plans · Taught in Basic and major medical expense insurance
Basic surgical expense: Basic coverage paying surgeons' fees from a surgical schedule that lists a maximum for each procedure, often on a relative value basis in which each procedure earns points and the policy pays a set dollar amount per point. — Medical plans · Taught in Basic and major medical expense insurance
Coinsurance: The percentage split, such as 80/20, by which the insurer and insured share covered charges above the deductible. — Medical plans · Taught in Basic and major medical expense insurance, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Corridor deductible: An amount the insured must satisfy that bridges the gap between exhausted basic plan benefits and the start of supplemental major medical benefits. — Medical plans · Taught in Basic and major medical expense insurance, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Deductible: A flat dollar amount of covered expense the insured must pay before the plan begins paying benefits. — Medical plans · Taught in Basic and major medical expense insurance, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
First-dollar coverage: Coverage with little or no deductible and no coinsurance, characteristic of basic plans, which however have low ceilings. — Medical plans · Taught in Basic and major medical expense insurance
Major medical expense insurance: Broad medical coverage with a high overall maximum, a deductible, coinsurance, and a stop-loss, designed for catastrophic claims. — Medical plans · Taught in Basic and major medical expense insurance
Out-of-pocket maximum (stop-loss): The point at which the insured's payments reach a set amount, after which the plan pays 100 percent of remaining covered expenses. — Medical plans · Taught in Basic and major medical expense insurance, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio
Supplemental (superimposed) major medical: A major medical policy layered on top of an existing basic medical plan, paying after the basic benefits are exhausted. — Medical plans · Taught in Basic and major medical expense insurance
Usual, customary and reasonable: The prevailing charge for a service in an area, which major medical plans pay rather than a fixed schedule amount. — Medical plans · Taught in Basic and major medical expense insurance
Calendar-year deductible: A deductible met once per year. A carryover provision lets expenses in the last three months of a year count toward the next year's deductible. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Copayment: A flat dollar charge the insured pays per office visit or prescription, as distinct from a percentage-based coinsurance split. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, Managed care structures: HMO, PPO, and POS plans
Creditable coverage: Prior health coverage that counts for a legal purpose, such as reducing a preexisting condition exclusion under HIPAA's original rules or showing no long gap in coverage. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections, Medicare supplement policies, New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Family deductible: A deductible treated as met for the whole family once a set number of members, often two or three, have met theirs. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Limitation: A provision that covers a service but restricts it, such as a cap on visits. Unlike an exclusion, which denies coverage, or an elimination period, which delays benefits. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Per-cause deductible: A deductible applying separately to each illness or accident rather than once per year. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Preexisting condition look-back period: The time before a policy's effective date in which treatment, advice, diagnosis or symptoms make a condition preexisting. HIPAA limited group exclusions to a six-month look-back. — Medical plans · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles, HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Balance billing: A provider charging a patient the difference between the billed amount and the plan's negotiated payment, generally avoided when using in-network preferred providers. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans
Case management: Coordinating care for expensive, long-term conditions to control cost and quality. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Emergency care: Care needed for a condition of recent onset and enough severity that a prudent layperson would believe immediate treatment is necessary to avoid serious harm. It is defined by the patient's symptoms, not by the final diagnosis or the provider's network status. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans
Exclusive provider organization: A PPO-like plan with no gatekeeper but no out-of-network benefit, covering only network care except emergencies. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Gatekeeper: The role of a primary care physician in controlling a managed care member's access to specialist care through required referrals. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts, New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Group model: An HMO model in which the HMO contracts with one multispecialty medical group to serve its members. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Health maintenance organization (HMO): A tightly managed care structure requiring a gatekeeper primary care physician, network-only coverage, and flat copayments. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts, New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Individual practice association: An HMO model in which the HMO contracts with an association of independent physicians who keep their own offices and also see non-HMO patients, an open panel. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Managed care: An arrangement that combines paying for health care with controlling how it is delivered, through provider networks, primary care gatekeepers, referrals, utilization review, case management and preventive care. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Network model: An HMO model in which the HMO contracts with several medical groups. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans
Point-of-service (POS) plan: A hybrid managed care plan giving HMO-level benefits when care is coordinated through a primary care physician in-network, and reduced indemnity-style benefits for self-referral out-of-network. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Preauthorization: Required insurer approval before certain non-emergency services, such as inpatient admission or surgery, that confirms medical necessity but does not guarantee payment. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Preferred provider organization (PPO): A managed care structure with no gatekeeper, allowing any provider but paying higher benefits for using preferred, discounted network providers. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Primary care physician (PCP): The physician a managed care member selects who coordinates care and, in an HMO, must authorize referrals to specialists. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Provider network: Doctors and hospitals that contract with a plan to follow its rates and rules; members are steered toward them. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Service area: The geographic area in which an HMO's health care services are available and accessible to enrollees. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans
Staff model: An HMO model in which the HMO employs salaried physicians who work in HMO-owned facilities, a closed panel. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Utilization review: The managed care process of testing whether services are medically necessary and delivered in the right setting, through tools such as preauthorization, concurrent review, and retrospective review. — Medical plans · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
Concurrent review: Utilization review during care, such as monitoring the length of a hospital stay. — Medical plans · Taught in Managed care concepts
Credentialing: Reviewing a provider applicant's qualifications before admitting the provider to a plan's network. — Medical plans · Taught in Managed care concepts
Fee-for-service: Paying a provider for each service performed, often at a discounted fee schedule negotiated with the plan. It is typical of PPOs. — Medical plans · Taught in Managed care concepts
Grievance: A member's internal complaint about a contractual denial, as distinct from a utilization review appeal, which challenges a medical-necessity denial. — Medical plans · Taught in Managed care concepts
Network adequacy: The requirement that a plan's provider network be large enough to meet members' health needs and offer an appropriate choice of providers. — Medical plans · Taught in Managed care concepts
Participating provider: A physician or other provider under contract with an HMO or other network plan to treat its enrollees at agreed rates. The contract limits what the provider may bill the enrollee, and state law sets deadlines for paying the provider's claims. — Medical plans · Taught in Managed care concepts
Referral: A primary care physician's approval for a member to see a specialist. Without one, a gatekeeper plan generally will not pay for specialist care, emergencies excepted. — Medical plans · Taught in Managed care concepts
Retrospective review: Utilization review after care is given, by examining claims and records to decide whether the care was medically necessary. — Medical plans · Taught in Managed care concepts
Second surgical opinion: A cost-containment tool requiring a second physician's opinion before elective surgery. — Medical plans · Taught in Managed care concepts
Utilization review appeal: A member's challenge to a medical-necessity denial, with an external appeal available beyond the plan. — Medical plans · Taught in Managed care concepts
Age 29 law: Chapter 240 of the Laws of 2009, which lets young adults stay on or join a parent's coverage through age 29 if they are unmarried, not eligible for employer coverage and live, work or reside in New York. In a group the employer decides whether to buy the benefit. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Baseline mammogram: A mammogram New York requires covered at ages 35 to 39, with annual mammograms after that, and at any age on a physician's recommendation for someone with a prior breast cancer history or an affected first-degree relative. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Dependent child: A natural, step or adopted child covered under a family health plan. The law and the plan set when coverage ends at a limiting age, commonly 26 for medical coverage, and what happens to a child who cannot support themselves. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care, ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, Group health insurance and COBRA
Disabled dependent child: An unmarried child of any age who stays covered as a dependent if incapable of self-sustaining employment because of mental illness, developmental disability or physical handicap that began before the limiting age. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Mandated benefit: A benefit the law requires in every policy of the type described. The buyer cannot decline it; dependent coverage to age 26 is an example. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Mandated offer: A benefit the insurer must make available, but the policyholder decides whether to buy. Dependent coverage through age 29 is an example. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Newborn coverage: A required provision under which a policy covering the insured's family covers a newborn child from the moment of birth, including congenital defects, birth abnormalities, and prematurity, without a waiting period. Keeping the child covered beyond the first weeks may require notice to the insurer and any added premium. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Postpartum home care visit: A covered home visit after early maternity discharge, requested within 48 hours of delivery (96 hours after a caesarean) and delivered within 24 hours, with no deductible, coinsurance or copayment. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care
Preventive care: Routine physicals, immunizations, well-baby and well-child visits and screenings. An HMO's core promise, and under the ACA non-grandfathered plans must cover recommended preventive services with no cost sharing. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care, ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio
Young adult option: Through a parent's group policy, an eligible young adult may continue or elect coverage after aging off. The employee or young adult pays, and the premium cannot exceed 100 percent of the single rate. — Medical plans · Taught in New York mandated health benefits and offers: dependent age limits, disabled and newborn children, and HMO preventive care, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Annual open enrollment period: The annual period, set in advance, in which anyone may enroll in coverage; outside it, enrollment generally needs a qualifying event. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections, ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Business associate: A person who handles protected health information for a covered entity and must also protect it under HIPAA. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Guaranteed availability: The requirement that a small employer carrier offer its plan to any small employer that applies and meets lawful participation and contribution requirements, regardless of health status. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Guaranteed renewability: The federal requirement that coverage be renewed at the insured's option, with nonrenewal only for nonpayment, fraud, participation or contribution violations, market exit, leaving a network service area, or ending association membership. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Health status-related factors: Factors a plan may not use to set an individual's eligibility or premium: health status, medical condition, claims experience, receipt of care, medical history, genetic information, evidence of insurability and disability. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections, New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235), ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Late enrollee: A person who enrolls in a group plan after first becoming eligible; under HIPAA's original rules their exclusion could last up to 18 months. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Minimum necessary: The privacy principle of requesting only the health information underwriting actually needs and using it only for the disclosed purpose. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Notice of Privacy Practices: The notice health plans and providers must generally give individuals, describing how their information is used and their rights to see records and request corrections. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Privacy Rule: The HIPAA rule protecting individually identifiable health information. Use beyond treatment, payment and operations generally needs written authorization. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections
Special enrollment period: A window outside annual open enrollment during which a person may enroll in a Marketplace plan after a qualifying life event such as marriage or loss of coverage. — Medical plans · Taught in HIPAA: eligibility, guaranteed issue, renewability, and privacy protections, ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Actuarial value: The percentage of the average total cost of covered benefits that a plan pays for a standard population. It describes overall generosity and does not predict one person's bills or measure the premium. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Annual and lifetime dollar limits: Caps on total benefits, banned by the ACA for essential health benefits (lifetime limits from 2010, annual limits from 2014), including in grandfathered plans. Non-essential benefits may still be capped. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio
Catastrophic plan: A plan with actuarial value below bronze, sold only in the individual market to people under 30 or with a hardship exemption. It covers preventive care and three primary-care visits before the deductible, and the premium tax credit cannot be used on it. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Essential health benefits: Ten required coverage categories, such as hospitalization and maternity care, that Marketplace plans must include without annual or lifetime dollar caps. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145), Child Health Plus and Healthy New York (Ins. Law 4326)
Grandfathered plan: A plan in existence on March 23, 2010 and not materially changed. A grandfathered individual policy is not bound by the ACA's preexisting condition ban; grandfathered group plans are bound by it. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio
Medical loss ratio: The share of premium an insurer spends on medical care and quality improvement. The ACA minimums are 80 percent for individual and small group and 85 percent for large group, measured over three years, with a rebate to policyholders if missed. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio
Metal tier: A Marketplace plan classification (bronze, silver, gold, platinum) describing the share of covered costs the plan is expected to pay, not the quality of care. — Federal Patient Protection and Affordable Care Act · Taught in ACA market reforms: preexisting conditions, annual and lifetime limits, essential health benefits, and medical loss ratio, ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Advance premium tax credit: The credit taken in advance, estimated from projected income and paid by the Treasury to the insurer each month. At tax time it is reconciled with the actual credit; any excess is added to the tax owed. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Applicable percentage: The share of household income a household is expected to contribute toward the benchmark premium; it rises on a sliding scale with income and is indexed yearly. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Benchmark plan: The second lowest cost silver plan available to a household in its rating area. The credit is the benchmark premium minus the household's expected contribution, capped at the actual premium. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Cost-sharing reduction: A subsidy that lowers deductibles, copayments, coinsurance, and out-of-pocket maximums, available only to income-eligible enrollees in a silver-level plan. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods, ACA individual mandate and employer shared responsibility
Federal poverty line: The income benchmark, by family size, used to decide eligibility for premium tax credits and cost-sharing reductions. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Marketplace: The federally facilitated exchange where individuals shop for and compare individual major medical plans and learn whether they qualify for financial help. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Modified adjusted gross income: Household income for premium tax credit purposes: adjusted gross income plus tax-exempt interest, excluded foreign earned income and non-taxable Social Security benefits. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Navigator: A grant-funded organization that gives fair and impartial information about enrolling in qualified health plans and about premium tax credits and cost-sharing reductions. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Premium tax credit: A subsidy, often advanced monthly, that lowers a Marketplace enrollee's premium based on household income and reconciled on the federal tax return. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods, ACA individual mandate and employer shared responsibility
Qualified health plan: A plan certified to be sold through an exchange. Buyers must live in the service area, be citizens or lawfully present, and not be incarcerated, at any income. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Small Business Health Options Program: The exchange channel through which small employers buy qualified health plans for their employees. — Federal Patient Protection and Affordable Care Act · Taught in ACA exchanges: eligibility, premium tax credits, cost-sharing reductions, metal levels, actuarial value, and enrollment periods
Affordable coverage: Employer coverage whose employee self-only cost does not exceed a set percentage of household income, about 9.5 percent, indexed. Unaffordable coverage can trigger employer payment (b). — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Applicable large employer: An employer that averaged at least 50 full-time employees, counting full-time equivalents, in the preceding calendar year. Related companies are counted together and a seasonal exception exists. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Employer mandate: The requirement in 26 U.S.C. 4980H that an applicable large employer offer adequate coverage to full-time employees or risk an assessable payment. It is still enforced. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Employer payment (a): The assessable payment when an applicable large employer offers no coverage and a full-time employee gets a subsidized exchange plan: $2,000 a year, indexed, times all full-time employees minus 30. It is nicknamed the sledgehammer. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Employer payment (b): The assessable payment when an offered plan is unaffordable or lacks minimum value and a full-time employee gets a premium tax credit: $3,000 a year, indexed, per subsidized employee, capped at payment (a). — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Full-time employee: For the employer mandate, an employee averaging at least 30 hours of service per week; part-time hours divided by 120 add full-time equivalents toward the 50. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Individual mandate: The requirement in 26 U.S.C. 5000A that applicable individuals keep minimum essential coverage each month or owe a shared responsibility payment. The federal penalty has been $0 since 2019. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Minimum essential coverage: Coverage that satisfies the individual mandate: government programs, employer-sponsored plans, individual-market coverage and grandfathered plans. Excepted benefits such as accident-only, disability income and stand-alone dental or vision do not count. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Minimum value: The requirement that employer coverage pay at least 60 percent of covered costs. Coverage lacking it can trigger employer payment (b). — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Shared responsibility payment: The individual mandate payment reported on the federal tax return, now zero, with exemptions for unaffordable coverage, low income, tribal members, short gaps under three months and hardship. — Federal Patient Protection and Affordable Care Act · Taught in ACA individual mandate and employer shared responsibility
Adult day care: Care at a community center during the day, with the insured returning home at night. — Long-term care insurance · Taught in Individual and group long-term care insurance
Assisted living facility: A setting providing housing together with help with activities of daily living and supervision, with less medical care than a nursing home. — Long-term care insurance · Taught in Individual and group long-term care insurance
Chronically ill individual: For a tax-qualified policy, a person certified by a licensed health care practitioner as unable to perform at least 2 of 6 activities of daily living for at least 90 days, or needing substantial supervision because of severe cognitive impairment. — Long-term care insurance · Taught in Individual and group long-term care insurance
Custodial care: Help with activities of daily living such as bathing and dressing, which can be given by people without medical training. It is the care most long-term care claimants need, and ordinary health insurance and Medicare do not pay for it long term. — Long-term care insurance · Taught in Individual and group long-term care insurance
Home health care: Care given at home, one of the settings a modern long-term care policy pays for beyond nursing homes. — Long-term care insurance · Taught in Individual and group long-term care insurance
Intermediate care: Occasional nursing and rehabilitative care, less than daily. — Long-term care insurance · Taught in Individual and group long-term care insurance
Per diem policy: A long-term care policy on an indemnity basis that pays the stated daily amount regardless of the actual cost of care, unlike a reimbursement policy, which pays actual expenses up to the daily limit. — Long-term care insurance · Taught in Individual and group long-term care insurance
Plan of care: A care plan prescribed by a licensed health care practitioner, which tax-qualified long-term care benefits require. — Long-term care insurance · Taught in Individual and group long-term care insurance
Qualified long-term care contract: A tax-qualified policy that covers only qualified long-term care services, is guaranteed renewable and has no cash surrender value. It is treated as accident and health insurance, and benefits are generally income tax free. — Long-term care insurance · Taught in Individual and group long-term care insurance
Respite care: Short-term care that gives a family caregiver a break. — Long-term care insurance · Taught in Individual and group long-term care insurance
Skilled nursing care: Daily care ordered by a physician and given by licensed medical staff such as registered nurses or therapists. — Long-term care insurance · Taught in Individual and group long-term care insurance
Compound inflation protection: Inflation protection raising the benefit each year by a percentage of the current benefit, so increases build on earlier ones. It grows larger over time, costs more and suits younger buyers. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Contingent nonforfeiture: The right, after a substantial premium increase on a policy without a nonforfeiture rider, to lapse and keep a shortened benefit period or reduce coverage to keep the premium level. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Extension of benefits rider: A rider that extends long-term care benefits beyond the base coverage, as on a life and long-term care hybrid that keeps paying care costs after the death benefit has been used up. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Future purchase option: A feature letting the insured buy additional benefit at set intervals at then-current rates without new evidence of insurability. Premiums start lower, each accepted increase raises them, and declining offers can end the right to future offers. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Hybrid plan: A combination plan pairing long-term care coverage with life insurance or an annuity. A life/LTC hybrid accelerates the death benefit to pay for care and pays the rest to beneficiaries; for tax purposes the LTC coverage is a separate contract. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Inflation protection: A long-term care policy option that increases the benefit amount over time so coverage keeps pace with rising care costs. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Restoration of benefits: A rider restoring used-up benefits after a recovery period. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Shared care: A rider linking two policies, usually spouses or partners, so each can draw on the other's unused benefit pool, or a shared pool, once their own is exhausted. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Shortened benefit period: The most common nonforfeiture form: coverage continues with the same daily benefit, but the total benefit pool is cut, often to the sum of premiums paid. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Simple inflation protection: Inflation protection raising the benefit each year by a fixed percentage of the original benefit, so $150 a day with 5 percent simple growth rises by $7.50 every year. — Long-term care insurance · Taught in Long-term care optional benefits (inflation protection, nonforfeiture, shared care) and hybrid plans
Cold-lead advertising: Advertising that hides that an insurance agent will make contact with the respondent; prohibited in long-term care sales. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Long-term care disclosure statement: The statement the insurer must give before the policy is executed or any premium is paid, covering maximum benefits, inflation options, past rate increases and the right at age 65 to name a third party for lapse notices. The applicant signs to acknowledge receipt. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Long-term care free look: A 30-day period during which the buyer may return a long-term care policy for a full premium refund. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Organic brain disorder: A condition such as Alzheimer's disease that a New York long-term care policy must cover even if it excludes mental or nervous disorders. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Regulation 62: The New York regulation (11 NYCRR Part 52) setting long-term care insurance standards on exclusions, suitability, disclosure, prohibited practices and replacement. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Section 1117: The New York Insurance Law section on long-term care insurance, requiring a disclosure statement before the policy is executed or any premium paid and setting plan authorization criteria. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Section 3229: The New York Insurance Law section for Partnership for Long Term Care plans, which bars a pre-existing condition exclusion longer than six months. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62), New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Suitability: The duty to judge whether a long-term care purchase fits the applicant's ability to pay, goals and existing coverage, supported by a personal worksheet on income, savings and handling premium increases. — Long-term care insurance · Taught in New York long-term care regulation: exclusions, suitability, renewability, disclosure, prohibited practices, and replacement (Reg 62)
Dollar-for-dollar protection: Partnership protection for a policy with a nursing home benefit under two years: Medicaid disregards resources equal to the benefits the policy actually paid. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Long-term care tax credit: A New York credit equal to 20 percent of premiums paid in the year for long-term care insurance that qualifies under Insurance Law 1117. A business cannot reduce its tax below the minimum tax with it, and unused credit carries forward. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Medicaid estate recovery: The state's recovery of Medicaid costs from the estate of a recipient who was 55 or older, deferred until after a surviving spouse dies and waived for undue hardship. Assets protected by the Partnership are exempt, except Medicaid paid incorrectly. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144), Medicaid
Medicaid extended coverage: Medicaid available to a person who is or was covered by a Partnership-approved policy and has exhausted its benefits; the person must still apply and meet income rules. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Medicaid lien: A lien that federal law allows only after a court judgment for benefits incorrectly paid, or on the real property of a person permanently in a nursing home not expected to return home, and not while a spouse or certain children or siblings live there. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Original partnership states: New York, California, Connecticut and Indiana, whose programs were approved before May 14, 1993 and may keep their own design, including New York's total asset model. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Partnership for Long-Term Care: The New York State program created by Social Services Law 367-f under which a person who buys an approved long-term care policy and exhausts its benefits can qualify for Medicaid without spending down protected assets. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144), Medicaid
Regulation 144: The DFS regulation setting minimum benefit standards for Partnership long-term care policies. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
Spend down: Using income or savings to pay for medical or long-term care until they fall to Medicaid's limit, after which Medicaid can cover the remainder. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144), Medicaid
Total asset protection: Partnership protection for a policy with a nursing home benefit of two years or more: Medicaid eligibility is decided without regard to the resource test, so every asset may be kept. — Long-term care insurance · Taught in New York State Partnership for Long-Term Care, Medicaid estate recovery, and the New York LTC tax credit (Reg 144)
COBRA: The federal law generally applying to employers with 20 or more employees that lets qualified beneficiaries continue the same group health coverage temporarily at their own expense. — Group health and blanket insurance · Taught in Group health insurance and COBRA, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145), Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
COBRA premium: What a qualified beneficiary may be charged: up to 102 percent of the plan's cost, the extra 2 percent covering administration, or up to 150 percent during the disability extension months. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Continuation of coverage: Keeping a person on the same group policy after eligibility ends, usually at their own expense, as under COBRA or New York state continuation. — Group health and blanket insurance · Taught in Group health insurance and COBRA, New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Election period: The 60-day window a qualified beneficiary has to elect COBRA continuation coverage after being notified of a qualifying event. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Gross misconduct: The one kind of termination of employment that does not trigger COBRA rights. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Group health insurance: Coverage of many people under one master contract issued to the policyholder, usually an employer, with each employee receiving a certificate. The group, not the individual, is underwritten, and timely enrollees usually need no evidence of insurability. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Policyholder: The employer, union, association, or trust to which the group life master policy is issued and which can amend or terminate it. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Qualified beneficiary: The covered employee, spouse, or dependent child entitled to elect COBRA continuation coverage after a qualifying event. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Qualifying event: An event, such as termination of employment, divorce, or death, that triggers a qualified beneficiary's right to elect COBRA continuation coverage. — Group health and blanket insurance · Taught in Group health insurance and COBRA
Association group: A group made up of the members of a qualifying association. State law sets what qualifies, and the association must generally exist for a purpose other than buying insurance. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Blanket insurance: Coverage of a group whose membership keeps changing, such as students, passengers of a common carrier, sports teams or volunteer firefighters. The insured people are not named and are covered by belonging to the described class when a loss occurs. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Employer group: The first eligible group description in section 4235: the employer or trustees of its fund are the policyholder, insuring all employees or a class defined by employment conditions, with benefits that preclude individual selection. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Group accident and health policy: The insurance contract an employer holds with an insurer, under which the employer serves as the notice hub between the insurer and covered employees. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Section 3221: The New York Insurance Law section requiring group and blanket accident and health policies to contain standard provisions, and requiring continuation, conversion and community-related rules for group medical coverage. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Section 4235: The New York Insurance Law section that defines group accident and health policies and allows delivery only to groups fitting its listed descriptions. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Situs state: The state where a group master policy is delivered to the policyholder, whose law generally governs the policy. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Taft-Hartley trust: A trust set up jointly by employers and a union and run with trustees from both sides, one of the eligible group descriptions. — Group health and blanket insurance · Taught in New York eligible groups, blanket insurance, and group marketing jurisdiction (Ins. Law 4235)
Administrative services only: An arrangement in which an insurer or third-party administrator processes claims, provides a network and runs customer service for a fee while taking no claim risk; it is how a self-insured plan is usually run. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Aggregate stop-loss: Stop-loss that reimburses a self-insured employer when total plan claims pass a set limit, often about 125 percent of expected claims. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
ERISA preemption: ERISA overrides state laws relating to employee benefit plans, but a savings clause leaves states free to regulate insurance and a deemer clause says a self-funded plan is not itself an insurer. So state mandates reach insured plans, generally not self-funded ones. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Family and Medical Leave Act: The federal law for employers with 50 or more employees giving eligible workers up to 12 workweeks of unpaid job-protected leave (26 for military caregivers) while the employer continues group health coverage on the same terms. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Fully insured plan: A funding arrangement in which the employer buys a group policy for a fixed premium and the insurer bears the claim risk. State law, including mandated benefits and premium taxes, applies. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Section 105(h): The Internal Revenue Code rule that a self-insured medical plan may not discriminate in favor of highly compensated individuals; those favored are taxed on the excess benefit. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Self-insured plan: A funding arrangement in which the employer pays claims from its own assets or a trust and bears the risk. It gains cash flow and freedom from state mandates through ERISA preemption but risks a large claim year. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Specific stop-loss: Stop-loss that reimburses a self-insured employer when one person's claims pass a set attachment point. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Summary Plan Description: The document an ERISA plan gives participants explaining benefits, eligibility and claim procedures. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Welfare benefit plan: Under ERISA, a plan providing health, disability, life and similar benefits. A group health plan is one. — Group health and blanket insurance · Taught in ERISA, FMLA, nondiscrimination rules, and group plan funding: fully insured, self-insured, stop-loss, and ASO
Allowable expense: The amount, rather than the provider's full billed charge, against which combined payments from coordinating health plans are measured and capped. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Birthday rule: A common order-of-benefit rule for a dependent child of married or cohabiting parents under which the plan of the parent whose birthday falls earlier in the calendar year pays first. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Coordination of benefits: A policy provision that decides which of two or more health plans covering the same person pays first and how much each contributes, so combined payments do not exceed the allowable expense. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Double recovery: Being paid twice for the same loss, once by one's own insurer and again by the party at fault; subrogation exists to prevent this. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Nonduplication of benefits: A provision stating that a secondary plan will not pay a benefit already paid by another plan; it pays only what it would have paid on its own minus what the primary plan already paid, sometimes nothing. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Order of benefit rules: The sequence for deciding the primary plan: no COB provision first, employee before dependent, the birthday rule, custodial parent for divorced parents absent a decree, active before inactive or continuation coverage, then longer before shorter coverage. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits
Primary plan: Under coordination of benefits, the health plan that pays first and in full as if no other coverage existed, applying its own deductible, coinsurance, and limits. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits, Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Secondary plan: The plan that pays second, covering some or all of what remains but never more than it would have paid as primary. — Group health and blanket insurance · Taught in Nonduplication and coordination of benefits, Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Extension of benefits: Coverage, typically up to 12 months or until the disability ends, for the disabling condition of a person totally disabled when group coverage ends. — Group health and blanket insurance · Taught in New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Group health conversion: The right under section 3221(e) to convert to an individual policy when group coverage ends, with no evidence of insurability, by applying within 60 days. The insurer must offer converted coverage at each metal level including the essential health benefits package. — Group health and blanket insurance · Taught in New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
New York state continuation: Continuation filling the gap for groups too small for COBRA and extending coverage for people whose federal COBRA runs out, generally to a total of 36 months. — Group health and blanket insurance · Taught in New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
NY State of Health: New York's state marketplace, where people who lose group coverage may qualify for financial help, Medicaid or Child Health Plus. — Group health and blanket insurance · Taught in New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Supplementary continuation: New York's added continuation and conversion rights for reserve component and National Guard members called to active duty; if they decline, coverage is suspended rather than lost. — Group health and blanket insurance · Taught in New York group health continuation, extension of benefits, conversion, and small employer coverage (Ins. Law 3221; Reg 145)
Arising out of and in the course of employment: The test for workers' compensation coverage: an injury or disease caused by the job. Off-the-job losses are not covered. — Government insurance plans · Taught in Workers' compensation
Competitive state fund: A state-run workers' compensation fund that competes with private insurers. — Government insurance plans · Taught in Workers' compensation
Employers liability (Part Two): The second part of a workers' compensation policy, written with dollar limits, that pays damages when an employee's work-related injury falls outside the compensation statute and the employer is sued directly. — Government insurance plans · Taught in Workers' compensation
Exclusive remedy: The workers' compensation principle that, in exchange for prompt statutory benefits, an employee generally gives up the right to sue the employer for damages over a covered injury. — Government insurance plans · Taught in Workers' compensation
Monopolistic state fund: A state fund that is the only permitted source of workers' compensation coverage, as in North Dakota, Ohio, Washington and Wyoming. — Government insurance plans · Taught in Workers' compensation
No-fault: A workers' compensation principle under which an injured worker need only show the injury is work-related, without proving the employer was negligent. — Government insurance plans · Taught in Workers' compensation
Permanent partial disability: A lasting partial loss, paid for specific losses such as a hand, foot, eye or finger from a schedule giving a set number of weeks for each body part. — Government insurance plans · Taught in Workers' compensation
Permanent total disability: A classification for a worker who will never be able to work again. — Government insurance plans · Taught in Workers' compensation
Rehabilitation benefits: Workers' compensation medical and vocational rehabilitation to return the worker to employment, including retraining. — Government insurance plans · Taught in Workers' compensation
Self-insurance: A deliberate program in which an organization pays retained losses from resources it sets aside, as when approved large employers pay workers' compensation claims from their own funds. Merely being uninsured is not self-insurance. — Government insurance plans · Taught in Workers' compensation
Temporary partial disability: A classification for a worker who can do some work at reduced earnings while recovering. — Government insurance plans · Taught in Workers' compensation
Temporary total disability: A classification for a worker who cannot work at all for now but is expected to recover. — Government insurance plans · Taught in Workers' compensation
Third-party-over action: A claim against the employer by a party the injured worker sued. In New York it is allowed only for a grave injury or under a written agreement to indemnify. — Government insurance plans · Taught in Workers' compensation
Workers' compensation death benefits: A funeral allowance plus income to the surviving spouse and dependent children when a work injury or disease causes death. — Government insurance plans · Taught in Workers' compensation
Currently insured: A Social Security insured status requiring at least six quarters of coverage in the thirteen-quarter period ending with the quarter of death, disability, or entitlement, supporting certain survivor benefits. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Delayed retirement credits: Permanent increases to the Social Security monthly benefit earned by delaying a claim past full retirement age, up to a cutoff age. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Disability insured: A Social Security insured status layered on fully insured status, generally requiring twenty quarters of coverage in the forty quarters ending with the quarter of disability, with relaxed rules for younger workers. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
FICA: The payroll tax, called self-employment tax for the self-employed, through which workers and employers pay into Social Security. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Full retirement age (FRA): The age, set by year of birth, at which a worker receives an unreduced Social Security retirement benefit. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
OASDI: Old-Age, Survivors, and Disability Insurance, the cash-benefit side of Social Security funded by FICA and self-employment taxes on covered earnings. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Primary insurance amount: The base benefit computed from the worker's average indexed earnings, over the highest 35 years for retirement, from which all benefits are figured. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Social Security credits: Quarters of coverage a worker earns from covered earnings, up to four a year. Forty credits is the most anyone needs to be fully insured, which retirement benefits require. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Social Security disability insurance: The Social Security program paying the worker's full unreduced PIA after a five full month waiting period, ending at death, recovery or full retirement age, with Medicare beginning after 24 months of benefits. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Social Security survivor benefits: Benefits to a surviving spouse at 60 (50 if disabled), a parent caring for the worker's child, and unmarried minor children, plus a small lump-sum death payment. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Spousal benefit: A Social Security benefit paid to a worker's spouse based on the worker's earnings record. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Substantial gainful activity: The level of work activity a worker must be unable to perform, due to a medically determinable impairment expected to last at least twelve months or result in death, to meet Social Security's strict definition of disability. — Government insurance plans · Taught in Social Security benefits (disability and retirement)
Covered employer: A private employer that employs one or more people on each of 30 days in a calendar year and must then provide DBL coverage through the State Insurance Fund, an authorized insurer, approved self-insurance or an approved plan at least as favorable as the statute. — Government insurance plans · Taught in New York State Disability Benefits Law
DBL coordination: DBL is not payable for weeks paid by unemployment insurance or periods paid by workers' compensation; if the employer's carrier contests a compensation claim, DBL pays first and the payer holds a lien on any later award or third-party recovery. — Government insurance plans · Taught in New York State Disability Benefits Law
DBL special fund: A fund paid out by the Workers' Compensation Board chair that pays DBL to a worker disabled within 26 weeks of unemployment after covered employment ends, instead of the former employer's carrier. — Government insurance plans · Taught in New York State Disability Benefits Law
DBL weekly benefit: 50 percent of the average weekly wage over the last eight weeks worked, up to $170 a week, beginning on the eighth consecutive day of disability and lasting no more than 26 weeks in 52, reduced by family leave taken. — Government insurance plans · Taught in New York State Disability Benefits Law
Disability Benefits Law: Article 9 of the New York Workers' Compensation Law, requiring employers to provide short-term cash benefits for disabilities that do not arise from the job, such as off-the-job injury, illness or pregnancy. Workers' compensation covers job-related disability. — Government insurance plans · Taught in New York State Disability Benefits Law
Paid Family Leave: Since 2018, benefits under the same article for time off to bond with a new child, care for a seriously ill family member or meet military-family needs: 67 percent of the average weekly wage for up to 12 weeks, funded by employee payroll deductions. — Government insurance plans · Taught in New York State Disability Benefits Law
State Insurance Fund: A state-run fund through which an employer may meet its DBL or workers' compensation obligation. — Government insurance plans · Taught in New York State Disability Benefits Law
Children's Health Insurance Program: A companion program for uninsured children in families that earn too much for Medicaid. — Government insurance plans · Taught in Medicaid, Child Health Plus and Healthy New York (Ins. Law 4326)
Dual eligible: A person enrolled in both Medicare and Medicaid; Medicaid may pay that person's Medicare premiums, deductibles, and coinsurance and cover services Medicare excludes. — Government insurance plans · Taught in Medicaid
EPSDT: Early and Periodic Screening, Diagnostic and Treatment, a mandatory Medicaid benefit for screening and treating children. — Government insurance plans · Taught in Medicaid
Federal Medical Assistance Percentage: The share of each state's Medicaid costs paid by the federal government; poorer states get a higher share and it is at least half everywhere. — Government insurance plans · Taught in Medicaid
Medicaid look-back period: Review of asset transfers for less than fair value within 60 months before applying for nursing-home Medicaid, which can trigger a penalty period of ineligibility. — Government insurance plans · Taught in Medicaid
Medically needy: An optional Medicaid category allowing an applicant whose income is too high to qualify to become eligible by incurring medical expenses that reduce countable income to the state's eligibility level, a process called spend-down. — Government insurance plans · Taught in Medicaid
Payer of last resort: Medicaid pays after every other legally responsible source: private insurers pay first, and for a dual eligible Medicare pays first. — Government insurance plans · Taught in Medicaid
State plan for medical assistance: A state's Medicaid plan, designed and administered by the state within federal rules and approved by the federal government. — Government insurance plans · Taught in Medicaid
Supplemental Security Income: A federal needs-based program for the aged, blind and disabled; most recipients qualify for Medicaid. — Government insurance plans · Taught in Medicaid
Approved organization: A health plan that contracts with the commissioner of health to provide Child Health Plus coverage to enrolled children. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Child Health Plus: New York's children's health insurance program under Public Health Law 2511, run solely by the Department of Health since 2023. A child with household income at or below 400 percent of the poverty level, not eligible for Medicaid and with no other coverage qualifies for the subsidized premium. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Healthy NY: The program under Insurance Law section 4326, overseen by the Department of Financial Services, offering standardized small-group contracts to qualifying small employers. Every HMO must participate; the contract must insure at least 50 percent of employees and cover the essential health benefits package. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Presumptive eligibility: Treating a newborn as eligible for Child Health Plus if a completed, signed application is filed within 60 days of birth, with enrollment retroactive to the first day of the birth month. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Qualifying small employer: For Healthy NY, an employer with no more than 50 employees, no group health insurance in the prior 12 months and at least 30 percent of employees earning $30,000 or less, a figure adjusted each July 1. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Section 4326: The New York Insurance Law section establishing Healthy NY standardized health insurance contracts for qualifying small employers. — Government insurance plans · Taught in Child Health Plus and Healthy New York (Ins. Law 4326)
Accepting assignment: A doctor's agreement to take the Medicare-approved amount as full payment. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Annual enrollment period: Medicare's annual open enrollment, October 15 to December 7, when beneficiaries can switch between Original Medicare and Medicare Advantage and change Part D plans. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
End-stage renal disease: A kidney condition requiring dialysis or a kidney transplant that extends Medicare entitlement to a person regardless of age. — Government insurance plans · Taught in Medicare Parts A, B, C, and D, Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Initial enrollment period: The window when someone first eligible may enroll. For Medicare, the 7 months beginning 3 months before the month a person turns 65. For a contributory group plan, the period to join without proof of good health. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Late-enrollment penalty: A statutory increase applied to a beneficiary's Part B or Part D premium for enrolling after the eligible enrollment period without other qualifying coverage. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Low Income Subsidy: Also called Extra Help: assistance for Medicare beneficiaries with limited income and resources to pay Part D costs. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
MA-PD plan: A Medicare Advantage plan that bundles in Part D prescription drug coverage along with the Part A and B benefits it delivers. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare Advantage plan: A private plan that replaces the way Original Medicare delivers benefits, unlike a supplement, which sits alongside and pays after Original Medicare. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare benefit period: The measure behind Part A cost sharing: a deductible per benefit period, then daily coinsurance for hospital days 61 to 90, plus 60 lifetime reserve days. Skilled nursing care is limited to 100 days per benefit period. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare Part A: The hospital insurance benefit of Medicare, covering inpatient hospital stays, post-hospital skilled nursing facility care, home health services, and hospice care, usually without a monthly premium for those who qualify through Medicare-taxed work. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare Part B: The voluntary supplementary medical insurance benefit of Medicare, covering physician services, outpatient care, diagnostic tests, durable medical equipment, and preventive services, paid for with a monthly premium and subject to a deductible and coinsurance. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare Part C (Medicare Advantage): A Medicare delivery route, not a separate set of benefits, in which private organizations contract with Medicare to furnish at least Part A and Part B benefits, often with extra benefits, through a managed-care or other approved plan. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Medicare Part D: The voluntary outpatient prescription drug benefit of Medicare, delivered only through private plans, either a standalone drug plan added to Original Medicare or the drug portion of a Medicare Advantage plan. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Original Medicare: Medicare Parts A and B together, under which the government pays providers directly on a fee-for-service basis. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Prescription drug plan: A stand-alone Part D plan added to Original Medicare. — Government insurance plans · Taught in Medicare Parts A, B, C, and D
Consumer-directed health account: An account giving the consumer a pot of tax-favored money for medical care so people weigh costs themselves; FSA, HSA with an HDHP, and HRA are compared by who funds, who owns, what happens to unused money and what coverage is required. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Flexible Spending Account (FSA): An employer-sponsored account funded mainly by employee pre-tax salary reduction for qualified medical expenses, subject to a use-or-lose rule and not portable. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Health Reimbursement Arrangement (HRA): A notional account funded solely by the employer that reimburses substantiated medical expenses tax-free, with terms set by the employer's plan. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Health Savings Account (HSA): An individually owned, portable trust or custodial account that only a qualifying HDHP enrollee may fund, with balances that roll over indefinitely. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
High-deductible health plan (HDHP): A medical plan with a deductible and out-of-pocket maximum within federally prescribed ranges, required for HSA eligibility. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
HSA catch-up contribution: An extra $1,000 contribution that an HSA-eligible individual age 55 or older may make. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Qualified medical expense: A medical, dental, or vision expense eligible for tax-free reimbursement from a consumer-directed health account. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Section 125 cafeteria plan: An employer plan letting employees choose among taxable and qualified benefits with pre-tax salary reduction, through which health FSAs are offered. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Triple tax advantage: The HSA's combination of deductible or excludable contributions, tax-free growth and tax-free withdrawals for qualified medical expenses. Other withdrawals are taxed plus a 20 percent penalty, waived after death, disability or age 65. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Use-or-lose rule: The FSA feature under which amounts not spent by the end of the plan year are generally forfeited, absent a permitted grace period or carryover. — Government insurance plans · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
Loss ratio: The ratio of benefits paid to premiums collected, for which regulators set a minimum for Medigap. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medicare Select: A Medigap policy requiring the insured to use network hospitals and sometimes network doctors, except in an emergency, to receive full benefits, in exchange for a lower premium. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap: The common name for a Medicare supplement policy: private health insurance that pays some or all of Original Medicare's deductibles, coinsurance and copayments. The buyer must be enrolled in Parts A and B, and it pays only after Medicare pays its share of an approved charge. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap open enrollment: Under federal law, the six months beginning with the first month a person is 65 or older and enrolled in Part B, when an insurer cannot refuse any plan or charge more because of health. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap Plan M: A lower-premium plan that pays 50 percent of the Part A deductible and none of the Part B deductible. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap Plan N: A lower-premium plan that does not pay the Part B deductible and adds copays of up to $20 per office visit and up to $50 per emergency room visit, waived if the patient is admitted. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap Plans C and F: Plans that cover the Part B deductible; since January 1, 2020 they cannot be sold to people first eligible for Medicare on or after that date, though existing holders may keep them. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Medigap Plans K and L: Plans that pay hospital coinsurance and extra days in full but only 50 and 75 percent of the other basic cost sharing, and cap the insured's yearly out-of-pocket spending. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Part B excess charges: What a doctor who does not accept assignment may bill above the Medicare-approved amount, which some Medigap plans pay. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies
Standardized plans: Medicare supplement coverage sold under lettered plans, where every insurer offering a given letter must provide the same core benefit package. — Private insurance for senior citizens and special needs individuals · Taught in Medicare supplement policies, New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Duplicate Medigap coverage: Having more than one Medigap policy. A producer must not sell a policy duplicating coverage the applicant already has, and must make reasonable efforts to judge suitability. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Guide to Health Insurance for People with Medicare: The consumer shopping guide a Medigap agent must deliver at application along with the outline of coverage, with a signed acknowledgment of receipt. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
High-pressure tactics: Force, fright or threats used to sell insurance, prohibited in Medigap marketing. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
New York Medigap open enrollment: New York requires Medigap insurers to accept a Medicare enrollee's application at any time of year, with no denial or rate difference based on health, whether eligible by age, disability or end-stage renal disease. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Regulation 193: The New York regulation implementing Insurance Law 3218 for Medicare supplement insurance, setting minimum standards, a loss ratio, uniform plan designation, year-round open enrollment, marketing and compensation rules and disclosure. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Section 3218: The New York Insurance Law section defining Medicare supplement insurance as a policy paying for services not provided by Medicare and directing the superintendent to regulate it. — Private insurance for senior citizens and special needs individuals · Taught in New York Medicare supplement regulation: open enrollment, marketing, compensation, suitability, replacement, and disclosure (Reg 193)
Conditional payment: A payment Medicare may make when a primary payer such as workers' compensation or liability insurance will not pay promptly; it must be reimbursed to the Medicare trust fund when the primary payer settles. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Current employment status: A person, or spouse, who is actively working, is the employer, or is associated with the employer in a business relationship. Retiree coverage is not current employment, so a retiree plan pays after Medicare. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
ESRD coordination period: The 30-month period in which a group health plan pays first for a person entitled to Medicare because of end-stage renal disease, regardless of employer size, and may not treat ESRD patients differently; afterward Medicare is primary. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
ESRD Medicare entitlement: A person of any age, or a spouse or dependent child of an insured worker, with end-stage renal disease who applies; entitlement normally begins the third month after regular dialysis starts, earlier for home-dialysis training or a transplant hospitalization. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Large group health plan: A plan of an employer with 100 or more employees. For a disabled person under 65 covered through current employment, it pays before Medicare; with a smaller employer, Medicare pays first. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Medicare for disabled beneficiaries: A person under 65 on Social Security or Railroad Retirement disability becomes entitled to Part A after 24 months of benefits, in the 25th month. People with ALS are entitled from the first month. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Medicare secondary payer: The federal rules deciding who pays first when a Medicare beneficiary has other coverage; they turn on why the person has Medicare and how big the employer is. Medicare is secondary to workers' compensation, auto, liability and no-fault insurance. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules
Working aged: A worker or spouse aged 65 or older with group health coverage. If the employer has 20 or more employees the group plan pays first and Medicare second; with fewer than 20, Medicare pays first. — Private insurance for senior citizens and special needs individuals · Taught in Medicare for disabled and kidney-failure beneficiaries, working-aged employees, and Medicare secondary payer rules

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