The amount an owner may take in cash when surrendering a whole life policy, ending the coverage.

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.

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.

Guaranteed death benefit

The face amount a whole life policy promises to pay the beneficiary whenever the insured dies while the policy is in force.

A whole life premium set at issue that stays the same for the life of the policy, never increasing as the insured ages.

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.

Nonparticipating policy

A whole life policy that pays no dividends and relies solely on its guaranteed values.

A whole life policy on which premiums are paid continuously until the insured's death or the policy's maturity date, producing the lowest annual premium of the whole life variations.

Paid-up nonforfeiture benefit

A benefit, such as reduced paid-up insurance or extended term insurance, that state law requires a lapsed cash-value policy to provide instead of forfeiting the owner's built-up value.

A whole life policy that may pay non-guaranteed policy dividends to the owner.

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.

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.

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.

Single-premium whole life

A whole life policy fully paid up by one lump-sum premium at issue, with no further premiums due.

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.

Adjustable death benefit

A universal life feature letting the owner increase or decrease the policy's face amount within contract limits, distinguishing it from the fixed death benefit of traditional whole life.

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.

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.

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.

Administrative charges deducted from an unbundled policy's account value along with the cost of insurance, at rates that cannot exceed the contract's guaranteed maximums.

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.

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.

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.

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.

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.

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.

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.

Interest-sensitive (current assumption) whole life

A whole life product with a scheduled premium and stated face amount, like traditional whole life, but where the insurer credits current interest and applies current mortality and expense assumptions, periodically redetermining values or premiums within guaranteed bounds.

The risk, distinctive to flexible-premium products, that coverage terminates because the account value cannot cover ongoing monthly deductions and the grace period expires without additional premium.

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.

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.

The cash surrender value or other paid-up values that state law requires a life policy to provide, figured with the mortality table and interest rate stated in the contract, so that an owner who stops paying premiums does not forfeit the value built up.

In indexed universal life, the percentage of the referenced index's movement that is actually counted toward the interest credited to the policy.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Credit life insurance

Decreasing term insurance sold in connection with a loan, with the face amount tracking the declining loan balance.

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.

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.

A term life policy whose face amount and, typically, premium stay the same for the entire term.

A term policy feature letting the owner continue coverage for another term without proving good health, at a premium based on the insured's attained age.

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.

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.

The stated period or attained-age limit during which a convertible term policy's right to exchange for permanent coverage remains available.

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Cash surrender value: The amount an owner may take in cash when surrendering a whole life policy, ending the coverage. — Types of life insurance policies · Taught in Traditional whole life products, Nonforfeiture law
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. — Types of life insurance policies · Taught in Traditional whole life products, Nonforfeiture law
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. — Types of life insurance policies · Taught in Traditional whole life products
Guaranteed death benefit: The face amount a whole life policy promises to pay the beneficiary whenever the insured dies while the policy is in force. — Types of 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. — Types of life insurance policies · Taught in Traditional whole life products
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. — Types of life insurance policies · Taught in Traditional whole life products
Nonparticipating policy: A whole life policy that pays no dividends and relies solely on its guaranteed values. — Types of life insurance policies · Taught in Traditional whole life products
Ordinary whole life: A whole life policy on which premiums are paid continuously until the insured's death or the policy's maturity date, producing the lowest annual premium of the whole life variations. — Types of life insurance policies · Taught in Traditional whole life products
Paid-up nonforfeiture benefit: A benefit, such as reduced paid-up insurance or extended term insurance, that state law requires a lapsed cash-value policy to provide instead of forfeiting the owner's built-up value. — Types of life insurance policies · Taught in Traditional whole life products, Nonforfeiture law
Participating policy: A whole life policy that may pay non-guaranteed policy dividends to the owner. — Types of life insurance policies · Taught in Traditional whole life products
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. — Types of life insurance policies · Taught in Traditional whole life products
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. — Types of life insurance policies · Taught in Traditional whole life products
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. — Types of life insurance policies · Taught in Traditional whole life products, Nonforfeiture law
Single-premium whole life: A whole life policy fully paid up by one lump-sum premium at issue, with no further premiums due. — Types of life insurance policies · Taught in Traditional whole life products
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. — Types of life insurance policies · Taught in Traditional whole life products
Adjustable death benefit: A universal life feature letting the owner increase or decrease the policy's face amount within contract limits, distinguishing it from the fixed death benefit of traditional whole life. — Types of life insurance policies · Taught in Interest- and market-sensitive 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
Expense charges: Administrative charges deducted from an unbundled policy's account value along with the cost of insurance, at rates that cannot exceed the contract's guaranteed maximums. — Types of 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products, 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products, Premium payment modes and grace period, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement, Modes of premium payment, Individual life policy provisions, free look, and grace period, HMO nonrenewal, cancellation, and enrollment
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products, Individual life policy provisions, free look, and grace period
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. — Types of 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
Interest-sensitive (current assumption) whole life: A whole life product with a scheduled premium and stated face amount, like traditional whole life, but where the insurer credits current interest and applies current mortality and expense assumptions, periodically redetermining values or premiums within guaranteed bounds. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
Lapse risk: The risk, distinctive to flexible-premium products, that coverage terminates because the account value cannot cover ongoing monthly deductions and the grace period expires without additional premium. — Types of 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products, Individual life policy provisions, free look, and grace period
Nonforfeiture values: The cash surrender value or other paid-up values that state law requires a life policy to provide, figured with the mortality table and interest rate stated in the contract, so that an owner who stops paying premiums does not forfeit the value built up. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of 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. — Types of 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in 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. — Types of life insurance policies · Taught in Interest- and market-sensitive life products
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. — Types of life insurance policies · Taught in Term life insurance types
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. — Types of life insurance policies · Taught in Term life insurance types, Term life renewability and convertibility features, Group life insurance conversion and contribution
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. — Types of life insurance policies · Taught in Term life insurance types
Credit life insurance: Decreasing term insurance sold in connection with a loan, with the face amount tracking the declining loan balance. — Types of life insurance policies · Taught in Term life insurance types, Credit life insurance
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. — Types of life insurance policies · Taught in Term life insurance types, Credit life insurance
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. — Types of life insurance policies · Taught in Term life insurance types
Level term: A term life policy whose face amount and, typically, premium stay the same for the entire term. — Types of life insurance policies · Taught in Term life insurance types
Renewable: A term policy feature letting the owner continue coverage for another term without proving good health, at a premium based on the insured's attained age. — Types of life insurance policies · Taught in Term life insurance types
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. — Types of life insurance policies · Taught in Term life insurance types
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. — Types of life insurance policies · Taught in Term life renewability and convertibility features
Conversion window: The stated period or attained-age limit during which a convertible term policy's right to exchange for permanent coverage remains available. — Types of life insurance policies · Taught in Term life renewability and convertibility features
Convertibility: A term policy provision letting the owner exchange term coverage for a permanent plan without evidence of insurability, within a stated conversion window. — Types of life insurance policies · Taught in Term life renewability and convertibility features
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. — Types of life insurance policies · Taught in Term life renewability and convertibility features
Renewability: A term policy provision letting the owner continue coverage for another term at the end of the current one without evidence of insurability. — Types of life insurance policies · Taught in Term life renewability and convertibility features
Accumulation phase: The period of a deferred annuity before income begins, during which the contract's value grows as interest or earnings are credited. — Types of life insurance policies · Taught in Annuity premium and timing structures
Annuity: A contract that protects against outliving one's money by converting premiums into a stream of income, the mirror image of life insurance. — Types of life insurance policies · Taught in Annuity premium and timing structures
Annuity date: The future date named in a deferred annuity contract on which income payments are scheduled to begin, also called the maturity date. — Types of life insurance policies · Taught in Annuity premium and timing structures
Deferred annuity: An annuity whose income payments begin on a future annuity date, with the contract growing during an accumulation phase until then. — Types of life insurance policies · Taught in Annuity premium and timing structures
Immediate annuity: An annuity whose income payments begin within about one payment interval after purchase. — Types of life insurance policies · Taught in Annuity premium and timing structures
Payment mode: The frequency chosen for annuity income payments, such as monthly, quarterly, semiannual, or annual; less frequent modes produce larger individual payments. — Types of life insurance policies · Taught in Annuity premium and timing structures
Payout phase: The stage of an annuity, beginning at annuitization, during which money flows out to the annuitant as income. — Types of life insurance policies · 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. — Types of life insurance policies · Taught in Annuity premium and timing structures
Single premium: An annuity funding method in which one lump sum funds the contract at issue and no further payments are made. — Types of life insurance policies · Taught in Annuity premium and timing structures
Annuitant: The measuring life under an annuity contract whose age and sex determine the amount of each payment. — Types of life insurance policies · Taught in Annuity classification and payout options
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. — Types of life insurance policies · Taught in Annuity classification and payout options, Third-party ownership of life insurance
Fixed amount: An annuity payout option under which a chosen payment amount continues until the fund and its interest are exhausted. — Types of life insurance policies · Taught in Annuity classification and payout options
Fixed annuity: An annuity that credits interest declared by the insurer, subject to a guaranteed minimum, with the insurer carrying the investment risk. — Types of life insurance policies · 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. — Types of life insurance policies · Taught in Annuity classification and payout 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. — Types of life insurance policies · Taught in Annuity classification and payout options
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. — Types of life insurance policies · Taught in 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. — Types of life insurance policies · Taught in Annuity classification and payout options
Owner: The party to an annuity contract who pays premiums and controls the contract. — Types of life insurance policies · Taught in Annuity classification and payout options
Period certain: An annuity payout option paying equal amounts for a set number of years regardless of whether the annuitant is still living. — Types of life insurance policies · Taught in 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. — Types of life insurance policies · Taught in Annuity classification and payout options, Owner's rights
Straight life (life only): An annuity settlement option paying income for the annuitant's lifetime only, with nothing paid after death, producing the largest periodic payment for a given amount of money. — Types of life insurance policies · Taught in Annuity classification and payout options
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. — Types of life insurance policies · Taught in Annuity classification and payout options
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. — Types of life insurance policies · Taught in Combination and survivorship life plans
Combination plan: A life insurance contract that packages permanent insurance with term insurance, such as a family plan. — Types of life insurance policies · Taught in Combination and survivorship life plans
Family plan: A combination policy with a permanent base policy on the primary insured plus level term riders covering the spouse and children, often with a conversion right for the children's coverage. — Types of 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. — Types of 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. — Types of life insurance policies · Taught in Combination and survivorship life plans
Accidental death and dismemberment (AD&D): A rider that adds a schedule of benefits for accidental death or dismemberment, paying a principal sum for death or major loss and a capital sum for lesser losses. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death 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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Disability income and accidental death and dismemberment policies
Double indemnity: The nickname for an accidental death benefit equal to the policy's face amount, doubling the total payable if death is accidental. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death 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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Disability income and accidental death and dismemberment policies, Individual and group long-term care insurance, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods, Disability classifications: total, partial, recurrent, and residual
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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Health policy riders
Option date: A scheduled date under a guaranteed insurability rider on which the owner may purchase additional coverage without evidence of insurability. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Dependent children benefits
Principal sum: The full scheduled amount payable under an AD&D rider for accidental death or a major loss. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, 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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders, Health policy riders
Waiver of monthly deduction / cost of insurance: The universal life equivalent of a waiver of premium rider, waiving the monthly cost-of-insurance deduction while the insured is disabled. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death 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. — Policy riders, provisions, options, and exclusions · Taught in Waiver, guaranteed-insurability, payor, and accidental-death riders
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. — Policy riders, provisions, options, and exclusions · Taught in Term, other-insured, and long-term-care riders, Dependent children benefits
Decreasing term rider: A term rider whose additional death benefit declines over time, often matched to an amortizing mortgage or shrinking income-replacement need. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Term, other-insured, and long-term-care riders
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. — Policy riders, provisions, options, and exclusions · Taught in Term, other-insured, and long-term-care riders, Underwriting: insurable interest, medical information, and risk classification, Third-party ownership of life insurance, Insurance contract law and insurable interest
Level term rider: A term rider providing a flat additional death benefit for a stated period. — Policy riders, provisions, options, and exclusions · Taught in Term, other-insured, and long-term-care riders
Living benefit: A policy benefit, such as an LTC rider payout, that the insured can access while still alive rather than only at death. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Term, other-insured, and long-term-care riders
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. — Policy riders, provisions, options, and exclusions · Taught in Return-of-premium, disability, and cost-of-living riders, Health policy riders
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. — Policy riders, provisions, options, and exclusions · Taught in 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. — Policy riders, provisions, options, and exclusions · Taught in Return-of-premium, disability, and cost-of-living riders
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. — Policy riders, provisions, options, and exclusions · 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
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. — Policy riders, provisions, options, and exclusions · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Policy delivery and explaining the contract to the client, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement, Individual life policy provisions, free look, and grace period
Expectancy: The limited interest a revocable beneficiary holds in policy proceeds while the insured is alive, which is not a vested right and can be changed by the owner at any time. — Policy riders, provisions, options, and exclusions · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights
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. — Policy riders, provisions, options, and exclusions · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights, Individual life policy provisions, free look, and grace period
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. — Policy riders, provisions, options, and exclusions · 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
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. — Policy riders, provisions, options, and exclusions · Taught in Core contract provisions: entire contract, insuring clause, free look, consideration, owner's rights
Class designation: A beneficiary designation naming a group, such as 'my children,' rather than specific individuals, useful when the group's membership may change. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Primary and contingent beneficiaries
Contingent (secondary) beneficiary: A beneficiary paid only if no primary beneficiary survives the insured. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Primary and contingent beneficiaries
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. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules
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. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Mandatory provisions III: physical exam, legal actions, and beneficiary/occupation changes, Owner's rights
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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Primary and contingent beneficiaries
Revocable beneficiary: A beneficiary the owner may change at any time without the beneficiary's permission. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Primary and contingent beneficiaries
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. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules
Specific designation: A beneficiary designation naming an individual by full name and relationship. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules
Spendthrift clause: A policy provision restricting a beneficiary from assigning or pledging installment proceeds and shielding those proceeds from the beneficiary's creditors. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Beneficiary designation rules, Primary and contingent beneficiaries
Automatic premium loan: A policy provision, if elected, that pays an overdue premium out of the policy's cash value to prevent a lapse. — Policy riders, provisions, options, and exclusions · Taught in Premium payment modes and grace period
Modal premium: The dollar amount actually billed to the policyowner under the chosen premium payment mode. — Policy riders, provisions, options, and exclusions · Taught in Premium payment modes and grace period, Modes of premium payment
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. — Policy riders, provisions, options, and exclusions · Taught in Premium payment modes and grace period
Premium payment mode: How often the policyowner pays premiums, such as annual, semiannual, quarterly, or monthly. — Policy riders, provisions, options, and exclusions · Taught in Premium payment modes and grace period, Modes of premium payment
Nonforfeiture provision: The provision guaranteeing that a cash-value policy's built-up value cannot simply be forfeited on lapse, letting the owner choose cash surrender, reduced paid-up insurance, or extended term insurance. — Policy riders, provisions, options, and exclusions · Taught in Reinstatement, policy loans, and nonforfeiture options
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. — Policy riders, provisions, options, and exclusions · Taught in Reinstatement, policy loans, and nonforfeiture options, Individual life policy provisions, free look, and grace period
Absolute assignment: A transfer that permanently and completely conveys all of the owner's policy rights to another party. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits, Third-party ownership of life insurance
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. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits, Tax treatment of life insurance premiums, proceeds, and MECs
Collateral assignment: A transfer of only enough policy interest to secure a debt, with any remaining death benefit going to the named beneficiary. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits, Owner's rights
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. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Incontestability clause: A provision barring the insurer from contesting a policy for misstatements in the application after it has been in force for two years during the insured's lifetime, except for nonpayment of premium. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
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. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
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. — Policy riders, provisions, options, and exclusions · Taught in Dividends, incontestability, assignment, suicide, and accelerated death benefits
Aviation exclusion rider: A rider limiting or excluding coverage for death arising from higher-risk flying, such as acting as pilot or crew, while still generally covering fare-paying commercial passengers. — Policy riders, provisions, options, and exclusions · Taught in Policy exclusions: war, aviation, and dangerous occupation
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. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Policy exclusions: war, aviation, and dangerous occupation, Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
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. — Policy riders, provisions, options, and exclusions · Taught in Policy exclusions: war, aviation, and dangerous occupation, Health policy riders
Results clause: A war exclusion that denies a death claim only if death actually results from an act of war or military conflict. — Policy riders, provisions, options, and exclusions · 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. — Policy riders, provisions, options, and exclusions · Taught in Policy exclusions: war, aviation, and dangerous occupation
Clean sheeting: Deliberately omitting known adverse information from an application to get a policy issued or rated better, treated as misrepresentation rather than salesmanship. — Completing the application, underwriting, and delivering the policy · Taught in Application mechanics: signatures, changes, and incomplete applications
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. — Completing the application, underwriting, and delivering the policy · Taught in Application mechanics: signatures, changes, and incomplete applications
Strike and initial: The proper method of correcting an application error before submission: draw a single line through the wrong answer, write the correct answer nearby, and have the applicant initial the change. — Completing the application, underwriting, and delivering the policy · Taught in Application mechanics: signatures, changes, and incomplete applications
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. — Completing the application, underwriting, and delivering the policy · Taught in Collecting the initial premium and issuing the receipt, Initial premium collection and receipt consequences
Cash on delivery: An application submitted with no premium collected at signing, meaning there is no receipt and no interim coverage until the policy is delivered and the initial premium is paid. — Completing the application, underwriting, and delivering the policy · 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. — Completing the application, underwriting, and delivering the policy · Taught in Collecting the initial premium and issuing the receipt, Mandatory provisions I: entire contract, incontestability, grace period, reinstatement, Initial premium collection and receipt consequences
Health information authorization: A form permitting release of an applicant's medical, pharmacy, and consumer reporting information for underwriting, stating who may release it, to whom, for what purpose, and for how long. — Completing the application, underwriting, and delivering the policy · Taught in Replacement and point-of-sale disclosures (HIPAA, HIV consent)
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. — Completing the application, underwriting, and delivering the policy · Taught in Replacement and point-of-sale disclosures (HIPAA, HIV consent), Replacement of health insurance, Replacement duties for life insurance
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. — Completing the application, underwriting, and delivering the policy · Taught in Replacement and point-of-sale disclosures (HIPAA, HIV consent), Replacement duties for life insurance
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. — Completing the application, underwriting, and delivering the policy · Taught in Replacement and point-of-sale disclosures (HIPAA, HIV consent), Policy delivery and explaining the contract to the client, Replacement of health insurance, Agent duties and commission sharing, Replacement duties for life insurance
Anti-money-laundering (AML) program: A written program a covered insurer must maintain, built on a designated compliance officer, ongoing training, internal policies and controls including customer identification, and independent testing. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
Integration: The final money-laundering stage, in which laundered money re-emerges looking legitimate, such as a policy payout appearing to be clean insurance proceeds. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
Layering: The money-laundering stage in which transactions obscure the origin of illicit funds, a stage cash-value life insurance and annuities are attractive for because value can be surrendered, exchanged, or borrowed against. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
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. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
Opt-out (GLBA): The consumer's right under the Gramm-Leach-Bliley Act to a reasonable opportunity to decline having nonpublic personal information shared with nonaffiliated third parties, before such sharing occurs. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
Placement: The first stage of money laundering, in which illicit funds first enter the financial system. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
Suspicious activity reporting: The confidential process of escalating a transaction that shows money-laundering red flags to the carrier, without telling the customer that a report was made or considered. — Completing the application, underwriting, and delivering the policy · Taught in USA PATRIOT Act, anti-money-laundering, and Gramm-Leach-Bliley privacy
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. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification, Sources of insurability and HIPAA privacy disclosures
Flat extra: A temporary additional premium charged per thousand of coverage for a substandard risk expected to improve or end after a stated period. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification
Risk classification: The underwriting process of sorting an applicant into a mortality-based class such as preferred, standard, substandard, or declined and postponed. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification
Substandard (rated): A risk classification for higher-than-average expected mortality, priced with a table rating, a temporary flat extra, or an exclusion rider rather than a decline. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification
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. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification
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. — Completing the application, underwriting, and delivering the policy · Taught in Underwriting: insurable interest, medical information, and risk classification, Unfair trade practices I: claims handling, advertising, and misrepresentation, Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination, Agent duties and commission sharing
Actual delivery: Personal delivery of the issued policy by the producer directly to the owner, allowing the contract to be explained and questions answered. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client
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. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client
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. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Exclusion rider: A form attached to an issued policy that permanently excludes coverage for a specified condition or risk the underwriter identified. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client
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. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client, Owner's rights
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. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client
Premium rating: An increased premium the underwriter charges because the insured was classified as a higher-than-standard risk. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client
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. — Completing the application, underwriting, and delivering the policy · Taught in Policy delivery and explaining the contract to the client, Policy delivery and explaining the contract
Aleatory contract: A contract in which the values exchanged by the parties are unequal and depend on an uncertain event such as chance. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics, Insurance contract law and insurable interest
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. — Completing the application, underwriting, and delivering the policy · 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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics
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. — Completing the application, underwriting, and delivering the policy · 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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics, Insurance contract law and insurable interest
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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics, Insurance contract law and insurable interest
Legal purpose: One of the four required contract elements, meaning the agreement may not be used for an unlawful or wagering objective. — Completing the application, underwriting, and delivering the policy · 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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics
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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics, Insurance contract law and insurable interest
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. — Completing the application, underwriting, and delivering the policy · Taught in Insurance contract law and its unique characteristics, Insurance contract law and insurable interest
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. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance, 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. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance, Life insurance needs analysis for individuals and businesses
Insured: The person whose death triggers payment of the death benefit; the insured must consent to coverage but holds no policy rights unless also the owner. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance
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. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance
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. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance, Owner's rights
Third-party ownership: An arrangement in which someone other than the insured owns the life insurance policy on that insured's life. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance, Owner's rights
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. — Retirement and other insurance concepts · Taught in Third-party ownership of life insurance, Tax treatment of life insurance premiums, proceeds, and MECs
Chronically ill: A defined health status under which viatical settlement proceeds are excludable from gross income subject to statutory limits. — Retirement and other insurance concepts · Taught in Life settlements
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. — Retirement and other insurance concepts · Taught in Life settlements
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. — Retirement and other insurance concepts · Taught in Life settlements
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. — Retirement and other insurance concepts · Taught in Life settlements
Reportable policy sale: A life settlement transaction that triggers narrowed tax exclusion of the death benefit and information reporting requirements for the buyer. — Retirement and other insurance concepts · Taught in Life settlements
Rescission window: A period after a life settlement closes during which the owner may cancel the transaction, a required consumer protection. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Life settlements
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. — Retirement and other insurance concepts · Taught in Life settlements
Certificate of insurance: The document each person covered under a group policy receives as evidence of coverage, because the sponsor, not the individual, holds the master policy. It applies to group life and group health plans. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Group life insurance rules
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. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Group health insurance and COBRA
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. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Dependent children benefits
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. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Individual life policy provisions, free look, and grace period
Imputed income: The taxable value of employer-provided group term life coverage above $50,000, computed from the IRS uniform premium table and included in the employee's income. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution
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. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Group life insurance rules
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. — Retirement and other insurance concepts · Taught in Group life insurance conversion and contribution, Group health insurance and COBRA
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. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans, Tax treatment of premiums and proceeds
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. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans
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. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans, Tax treatment of premiums and proceeds
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. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans
Rollover: A transfer of a qualified plan distribution to another eligible plan or individual retirement arrangement within a permitted window, avoiding current taxation. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans
Split-dollar arrangement: A nonqualified arrangement in which an employer and employee share the costs and benefits of a life insurance policy. — Retirement and other insurance concepts · Taught in Qualified and nonqualified retirement plans
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. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Life insurance needs analysis for individuals and businesses
Coverage gap: The difference between total capital needed and existing resources, representing the amount of additional life insurance recommended. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Life insurance needs analysis for individuals and businesses
Key person coverage: Life insurance a business owns on an employee whose death would cost it profits, recruiting expense, or credit standing, with the business as applicant, owner, and beneficiary. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Life insurance needs analysis for individuals and businesses
Covered earnings: Wages and self-employment income subject to Social Security payroll tax, used to compute a worker's average lifetime earnings for benefit purposes. — Retirement and other insurance concepts · Taught in Social Security retirement benefits
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. — Retirement and other insurance concepts · Taught in Social Security retirement benefits, Social Security benefits (disability and retirement)
Earnings test: A rule that temporarily withholds part of a Social Security benefit claimed before full retirement age if the beneficiary's work earnings exceed an annual limit. — Retirement and other insurance concepts · Taught in Social Security retirement benefits
Full retirement age (FRA): The age, set by year of birth, at which a worker receives an unreduced Social Security retirement benefit. — Retirement and other insurance concepts · Taught in Social Security retirement benefits, 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. — Retirement and other insurance concepts · Taught in Social Security retirement benefits
Survivor benefit: A Social Security benefit paid to a deceased worker's eligible survivors based on that worker's earnings record. — Retirement and other insurance concepts · Taught in Social Security retirement benefits
Taxable wage ceiling: The annual limit above which earnings are neither taxed for Social Security nor counted toward the retirement benefit calculation. — Retirement and other insurance concepts · Taught in Social Security retirement 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. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
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. — Retirement and other insurance concepts · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
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. — Retirement and other insurance concepts · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
Section 1035 exchange: A tax-free exchange of one life insurance or annuity contract for another of the same type, with MEC status carrying over to the new contract. — Retirement and other insurance concepts · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
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. — Retirement and other insurance concepts · 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. — Retirement and other insurance concepts · Taught in Tax treatment of life insurance premiums, proceeds, and MECs
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. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, Disability classifications: total, partial, recurrent, and residual
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. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, Disability classifications: total, partial, recurrent, and residual
Own occupation: A disability definition that pays benefits if the insured cannot perform the duties of their own specific job. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, 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. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, Disability classifications: total, partial, recurrent, and residual
Recurrent disability: A provision treating a relapse within a stated period as a continuation of a prior claim, so no new elimination period applies. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, 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. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies, Disability classifications: total, partial, recurrent, and residual
Schedule of losses: A list in an AD&D policy stating the percentage of the principal sum payable for each covered type of loss. — Types of health and accident insurance policies · Taught in Disability income and accidental death and dismemberment policies
Basic medical expense insurance: First-dollar medical coverage with no deductible but low, stated benefit maximums for hospital, surgical, and physicians' expenses. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
Comprehensive major medical: A single policy combining basic and catastrophic protection under one deductible and one coinsurance percentage. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
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. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
Integrated deductible: A deductible in a comprehensive major medical plan that credits amounts already paid under basic-type benefits. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
Stop-loss (out-of-pocket maximum): The point at which the insured's coinsurance payments reach a set amount, after which the plan pays remaining covered charges in full. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
Supplemental (superimposed) major medical: A major medical policy layered on top of an existing basic medical plan, paying after the basic benefits are exhausted. — Types of health and accident insurance policies · Taught in Basic and major medical expense insurance
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. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans
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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans
Health maintenance organization (HMO): A tightly managed care structure requiring a gatekeeper primary care physician, network-only coverage, and flat copayments. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans, HMO definitions and evidence of coverage
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. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans
Preferred provider organization (PPO): A managed care structure with no gatekeeper, allowing any provider but paying higher benefits for using preferred, discounted network providers. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans
Primary care physician (PCP): The physician a managed care member selects who coordinates care and, in an HMO, must authorize referrals to specialists. — Types of health and accident insurance policies · Taught in Managed care structures: HMO, PPO, and POS plans, Managed care concepts
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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Consumer-directed health accounts: FSA, HDHP/HSA, and HRA
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. — Types of health and accident insurance policies · Taught in Medicare supplement policies, Rights of renewability, Small group health insurance
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. — Types of health and accident insurance policies · Taught in Medicare supplement policies
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. — Types of health and accident insurance policies · Taught in Medicare supplement policies, Texas Medicare supplement standards
Open enrollment window: A protected period tied to enrolling in Medicare Part B during which an eligible Medicare supplement applicant cannot be declined or surcharged for health history. — Types of health and accident insurance policies · Taught in Medicare supplement policies
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. — Types of health and accident insurance policies · Taught in Medicare supplement policies, Texas Medicare supplement standards
Standardized plans: Medicare supplement coverage sold under lettered plans, where every insurer offering a given letter must provide the same core benefit package. — Types of health and accident insurance policies · Taught in Medicare supplement policies
Certificate of coverage: The document an individual insured under a group health plan receives summarizing benefits, exclusions, and rights, since the employer holds the master contract. — Types of health and accident insurance policies · Taught in Group health insurance and COBRA
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. — Types of health and accident insurance policies · Taught in Group health insurance and COBRA
Election period: The 60-day window a qualified beneficiary has to elect COBRA continuation coverage after being notified of a qualifying event. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Group health insurance and COBRA
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. — Types of health and accident insurance policies · Taught in Individual and group long-term care insurance
Benefit trigger: The documented condition, such as inability to perform activities of daily living or severe cognitive impairment, that must be met before long-term care benefits begin. — Types of health and accident insurance policies · Taught in Individual and group long-term care insurance
Comprehensive long-term care policy: A long-term care policy covering both facility-based and home-based care under one contract. — Types of health and accident insurance policies · Taught in Individual and group long-term care insurance
Inflation protection: A long-term care policy option that increases the benefit amount over time so coverage keeps pace with rising care costs. — Types of health and accident insurance policies · Taught in Individual and group long-term care insurance
Annual maximum benefit: A dollar cap on what a dental plan will pay for an insured within a calendar year, distinct from an out-of-pocket maximum. — Types of health and accident insurance policies · Taught in Dental, vision, and specified-disease policies
Expense-incurred benefit: A specified-disease benefit design that pays scheduled amounts for specific treatment items such as hospital days, radiation, or chemotherapy. — Types of health and accident insurance policies · Taught in Dental, vision, and specified-disease policies
Lump-sum (critical illness style) benefit: A specified-disease benefit design that pays a stated amount upon positive diagnosis, usable by the insured for any purpose. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Dental, vision, and specified-disease policies
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. — Types of health and accident insurance policies · Taught in Dental, vision, and specified-disease policies, Other provisions I: insuring clause, free look, consideration, probationary and elimination periods
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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Dental, vision, and specified-disease policies
Accident-only policy: A policy that pays only for loss resulting from accidental bodily injury, excluding sickness entirely. — Types of health and accident insurance policies · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · 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. — Types of health and accident insurance policies · Taught in Worksite, hospital indemnity, short-term medical, and accident policies
Reinstatement provision: The mandatory provision describing how a lapsed policy may be restored to force, by accepting late premium or approving a reinstatement application. — Health policy provisions, clauses, and riders · Taught in Mandatory provisions I: entire contract, incontestability, grace period, reinstatement
Facility-of-payment clause: An optional provision letting the insurer pay up to $1,000 to a relative when benefits are payable to an estate or an incapacitated person. — Health policy provisions, clauses, and riders · 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. — Health policy provisions, clauses, and riders · 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. — Health policy provisions, clauses, and riders · 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. — Health policy provisions, clauses, and riders · Taught in Mandatory provisions II: claim notice, forms, proof of loss, and payment of claims
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. — Health policy provisions, clauses, and riders · Taught in Mandatory provisions III: physical exam, legal actions, and beneficiary/occupation changes
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. — Health policy provisions, clauses, and riders · Taught in Mandatory provisions III: physical exam, legal actions, and beneficiary/occupation changes
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. — Health policy provisions, clauses, and riders · Taught in Mandatory provisions III: physical exam, legal actions, and beneficiary/occupation changes
Copayment: A flat dollar charge the insured pays per office visit or prescription, as distinct from a percentage-based coinsurance split. — Health policy provisions, clauses, and riders · Taught in 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. — Health policy provisions, clauses, and riders · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
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. — Health policy provisions, clauses, and riders · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Preexisting condition: A condition for which the insured received diagnosis, care, or treatment, or that manifested itself, before the coverage's effective date. — Health policy provisions, clauses, and riders · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Waiver of premium rider: A rider that keeps a health policy in force without premium payments while the insured remains totally disabled, after a waiting period. — Health policy provisions, clauses, and riders · Taught in Other provisions II: waiver of premium, exclusions, preexisting conditions, coinsurance, deductibles
Benefit maximum: A ceiling on what a plan will pay, expressed as a scheduled amount, a per-period or per-condition limit, a visit cap, or an aggregate contract maximum. — Health policy provisions, clauses, and riders · Taught in Other provisions III: eligible expenses, copayments, preauthorization, and benefit maximums
Eligible expense: A charge the policy actually promises to pay toward, meaning it is a listed benefit, incurred while coverage is in force, medically necessary, and within the allowable amount. — Health policy provisions, clauses, and riders · Taught in Other provisions III: eligible expenses, copayments, preauthorization, and benefit maximums
Preauthorization: Required insurer approval before certain non-emergency services, such as inpatient admission or surgery, that confirms medical necessity but does not guarantee payment. — Health policy provisions, clauses, and riders · Taught in Other provisions III: eligible expenses, copayments, preauthorization, and benefit maximums, Managed care concepts, HMO out-of-network claims
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. — Health policy provisions, clauses, and riders · Taught in Health policy riders
Social insurance supplement rider: A rider paying a benefit until, or unless, social insurance disability benefits begin. — Health policy provisions, clauses, and riders · Taught in Health policy riders
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. — Health policy provisions, clauses, and riders · Taught in Rights of renewability
Class rating: Raising the premium for an entire group of insureds sharing a characteristic, such as occupation, rather than singling out one insured; permitted under guaranteed renewable policies. — Health policy provisions, clauses, and riders · 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. — Health policy provisions, clauses, and riders · Taught in Rights of renewability
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. — Health policy provisions, clauses, and riders · Taught in Rights of renewability
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. — Health policy provisions, clauses, and riders · Taught in Rights of renewability
Renewal provision: The policy clause stating who may end an accident and health policy's coverage, on what grounds, and whether the premium may change at renewal. — Health policy provisions, clauses, and riders · Taught in Rights of renewability
End-stage renal disease: A kidney condition requiring dialysis or a kidney transplant that extends Medicare entitlement to a person regardless of age. — Social insurance · 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. — Social insurance · 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. — Social insurance · 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. — Social insurance · 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. — Social insurance · 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. — Social insurance · 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. — Social insurance · 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. — Social insurance · Taught in Medicare Parts A, B, C, and D, Texas Medicare supplement standards
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. — Social insurance · Taught in Medicaid
Estate recovery: The requirement that states seek repayment from a deceased Medicaid recipient's estate for certain amounts the program paid on the recipient's behalf. — Social insurance · Taught in Medicaid
Look-back period: The statutory window before a Medicaid application during which asset transfers made for less than fair market value are reviewed and can trigger a penalty period of ineligibility. — Social insurance · Taught in Medicaid
Mandatory eligibility groups: The categories of low-income applicants, such as children, pregnant women, and the aged, blind, and disabled, that federal law requires every state Medicaid program to cover. — Social insurance · Taught in Medicaid
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. — Social insurance · 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. — Social insurance · Taught in Medicaid
Spousal impoverishment protection: Federal rules that shield a portion of a couple's income and resources for the spouse who remains at home when the other spouse enters a nursing facility and applies for Medicaid. — Social insurance · Taught in Medicaid
State plan: A state's federally approved plan for administering its Medicaid program, under which the state receives a matching share of its expenditures from the federal government. — Social insurance · Taught in Medicaid
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. — Social insurance · 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. — Social insurance · Taught in Social Security benefits (disability and retirement)
Fully insured: A Social Security insured status generally requiring one quarter of coverage for each year after 1950 or age 21 up to retirement, death, or disability; forty quarters makes the status permanent and it is the gateway to retirement benefits. — Social insurance · Taught in Social Security benefits (disability and retirement)
Maximum family benefit: The cap on the total monthly amount payable to a worker and dependents from a single earnings record, regardless of how many family members otherwise qualify. — Social insurance · 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. — Social insurance · Taught in Social Security benefits (disability and retirement)
Quarters of coverage: The units of Social Security credit a worker earns from covered wages, with a maximum of four earned in any calendar year, used to determine insured status. — Social insurance · Taught in Social Security benefits (disability and retirement)
Retirement earnings test: A rule that can reduce Social Security benefits paid to a worker who continues to earn income before reaching full retirement age. — Social insurance · 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. — Social insurance · Taught in Social Security benefits (disability and retirement)
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. — Other insurance concepts · Taught in Disability classifications: total, partial, recurrent, and residual
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. — Other insurance concepts · Taught in Disability classifications: total, partial, recurrent, and residual
Family policy: A single contract combining permanent insurance on the primary insured with term coverage on the spouse and children. — Other insurance concepts · Taught in Dependent children benefits
Limiting age: The age at which a dependent child's coverage under a plan normally ends, subject to extensions for full-time students or children incapable of self-support. — Other insurance concepts · Taught in Dependent children benefits
Automatic premium withdrawal: A collection method in which the insurer debits the policyowner's bank account each period, commonly the only way a true monthly mode is offered and usually the least costly frequent mode. — Other insurance concepts · Taught in Modes of premium payment
List billing: A collection arrangement in which the insurer sends one combined statement covering many individual policies to an employer or association, which remits a single payment. — Other insurance concepts · Taught in Modes of premium payment
Allowable expense: The amount, rather than the provider's full billed charge, against which combined payments from coordinating health plans are measured and capped. — Other insurance concepts · 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. — Other insurance concepts · 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. — Other insurance concepts · 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. — Other insurance concepts · 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. — Other insurance concepts · Taught in Nonduplication and coordination of benefits
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. — Other insurance concepts · Taught in Occupational versus non-occupational classification
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. — Other insurance concepts · Taught in Occupational versus non-occupational classification
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. — Other insurance concepts · Taught in Tax treatment of premiums and proceeds
EPO (exclusive provider organization): A managed care plan that, like an HMO, covers only network providers, but typically imposes fewer referral requirements. — Other insurance concepts · Taught in Managed care concepts
HMO (health maintenance organization): A managed care plan under which care must generally come from network providers, usually through a primary care physician gatekeeper, with no coverage for out-of-network care except emergencies. — Other insurance concepts · Taught in Managed care concepts
POS (point of service) plan: A managed care plan under which the member chooses at the point of service whether to use the primary care physician and network for maximum benefits or self-refer outside the network for higher cost sharing. — Other insurance concepts · Taught in Managed care concepts
PPO (preferred provider organization): A managed care plan that covers both in-network and out-of-network care at two different benefit levels, usually paying network providers on a discounted fee-for-service basis. — Other insurance concepts · Taught in 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. — Other insurance concepts · Taught in Managed care concepts
Assigned risk plan: A residual market pool that provides workers' compensation coverage to employers who cannot obtain it in the voluntary insurance market. — Other insurance concepts · 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. — Other insurance concepts · 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. — Other insurance concepts · Taught in Workers' compensation
Experience modification factor: An adjustment applied to a larger employer's workers' compensation premium that lowers it for better-than-average loss experience and raises it for worse. — Other insurance concepts · 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. — Other insurance concepts · Taught in Workers' compensation
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. — Other insurance concepts · Taught in Workers' compensation
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. — Other insurance concepts · Taught in Subrogation
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. — Other insurance concepts · Taught in Subrogation
Waiver of subrogation: An agreement made before a loss, common in construction contracts and leases, in which the insurer gives up its subrogation rights against a specified party, generally acceptable when the policy permits it. — Other insurance concepts · Taught in Subrogation
Agent's statement: A section of the application, or a separate report, containing the agent's own observations and disclosures about the applicant, which is not shown to the applicant to complete. — Field underwriting procedures · Taught in Completing the health insurance application
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. — Field underwriting procedures · Taught in Completing the health insurance application
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. — Field underwriting procedures · Taught in Sources of insurability and HIPAA privacy disclosures
Minimum necessary: The privacy principle of requesting only the health information underwriting actually needs and using it only for the disclosed purpose. — Field underwriting procedures · Taught in Sources of insurability and HIPAA privacy disclosures
Producer's report: A separate statement the agent sends to the underwriter describing how well the agent knows the applicant and any observations about health, habits, or finances not shown on the application; it is not part of the contract. — Field underwriting procedures · Taught in Sources of insurability and HIPAA privacy disclosures
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. — Field underwriting procedures · Taught in Initial premium collection and receipt consequences
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. — Field underwriting procedures · Taught in Initial premium collection and receipt consequences
Statement of good health: A declaration obtained at policy delivery confirming the applicant's health is unchanged from what the application described, required when no premium was collected with the application. — Field underwriting procedures · Taught in Initial premium collection and receipt consequences
Missing-information letter: A request an underwriter sends back to the field asking for information the submitted application did not include. — Field underwriting procedures · Taught in Submitting the application for underwriting
Misstatement of age or sex provision: A policy clause that adjusts the benefit payable, rather than voiding the policy, when the insured's age or sex was stated incorrectly on the application. — Field underwriting procedures · Taught in Policy delivery and explaining the contract
Pre-existing condition provision: A policy clause limiting or delaying coverage for a health condition that existed before the policy took effect; it restarts under a new policy when coverage is replaced. — Field underwriting procedures · Taught in Replacement of health insurance
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. — Field underwriting procedures · Taught in Insurance contract law and insurable interest
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. — Field underwriting procedures · Taught in Insurance contract law and insurable interest
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. — Field underwriting procedures · Taught in Insurance contract law and insurable interest
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. — Field underwriting procedures · Taught in Insurance contract law and insurable interest
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. — Field underwriting procedures · Taught in Insurance contract law and insurable interest
Commissioner of Insurance: The state official who heads the insurance department (the title varies; New York's is the Superintendent of Financial Services), responsible for licensing and examining producers and insurers, investigating unfair or deceptive conduct, holding hearings, and issuing enforcement orders. — Texas statutes common to life and health insurance · Taught in Commissioner of Insurance: powers, records examination, and investigations
Private cause of action: The right Chapter 541 gives a consumer who sustains actual damages from a prohibited insurance practice to sue independently of the commissioner's administrative enforcement. — Texas statutes common to life and health insurance · Taught in Commissioner of Insurance: powers, records examination, and investigations, Unfair trade practices I: claims handling, advertising, and misrepresentation
Administrative penalty: A monetary sanction the commissioner may impose for a violation of Chapter 541, in addition to or apart from a cease-and-desist order and license discipline. — Texas statutes common to life and health insurance · Taught in Penalties and cease-and-desist orders, License records, renewal, termination, and notification duties
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. — Texas statutes common to life and health insurance · Taught in Penalties and cease-and-desist orders, Unfair trade practices I: claims handling, advertising, and misrepresentation
Emergency cease-and-desist order: A cease-and-desist order the commissioner may issue immediately, before a hearing, when conduct is fraudulent or hazardous and threatens immediate, irreparable public harm. — Texas statutes common to life and health insurance · Taught in Penalties and cease-and-desist orders
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. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types, The Texas Life and Health Guaranty Association, HMO definitions and evidence of coverage
Fraternal benefit society: A lodge-system membership organization that writes life and health benefits for its members. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
Lloyd's plan: An insurance organization form in which individual underwriters join together in a syndicate to write coverage. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
Mutual company: An insurer owned by its policyholders rather than by outside shareholders. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
Reciprocal (interinsurance) exchange: An organization in which subscribers insure one another through an attorney-in-fact rather than through a traditional insurance company. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
Stock company: An insurer organized as a corporation owned by its shareholders. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
Transacting insurance: Engaging in the business of insurance, including soliciting or advertising coverage, negotiating terms, selling or effectuating a contract, collecting premium, and servicing or adjusting a policy. — Texas statutes common to life and health insurance · Taught in Insurance entity definitions: certificate of authority, transacting insurance, and organization types
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. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
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. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
Exemption: Relief from the Texas insurance licensing requirement for a person who neither solicits, negotiates, nor sells insurance and receives no commission for it, such as purely clerical staff. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
General lines license: The standard Texas producer license for a broad category of business, such as life, accident, health, and HMO, or property and casualty. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
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. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education, The Texas Life and Health Guaranty Association
License: A grant of authority from a state insurance department letting a person transact the lines of insurance business it names. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
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. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
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. — Texas statutes common to life and health insurance · Taught in License types, exemptions, appointment, and continuing education
Late-renewal window: A limited period after a Texas license expires during which it may still be renewed for an additional fee; once it closes the holder must apply as a new applicant. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
License termination: The end of a Texas agent license by expiration, surrender by the holder, or suspension or revocation by the commissioner after notice and hearing. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
Notification duty: A Texas licensee's obligation to promptly notify the Department of Insurance in writing of changes such as address, name, felony convictions, or discipline by another regulator. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
Renewal: The process of extending a Texas agent license, issued for a fixed two-year term, before it expires by completing continuing education and filing with the department. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
Reprimand: A lesser disciplinary sanction the commissioner may impose on a Texas licensee instead of suspension or revocation. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
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. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
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. — Texas statutes common to life and health insurance · Taught in License records, renewal, termination, and notification duties
Boycott, coercion, or intimidation: A Chapter 541 prohibition on agreements or acts that unreasonably restrain trade or tend toward monopoly in the business of insurance. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation, Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation
Treble damages: Up to three times actual damages that a court may award under Chapter 541 when the trier of fact finds the prohibited conduct was committed knowingly. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation, Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination
Unfair claim settlement practice: A violation of state claims-handling law, such as failing to settle a claim promptly and fairly once liability is reasonably clear, or refusing to pay without a reasonable investigation. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation
Unfair or deceptive act: Conduct prohibited by a state's unfair trade practices law that misleads, misrepresents, or otherwise treats a consumer unfairly in the business of insurance. — Texas statutes common to life and health insurance · Taught in Unfair trade practices I: claims handling, advertising, and misrepresentation
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination, Agent duties and commission sharing
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination, Agent duties and commission sharing
Fraud and false statements: A Chapter 541 category covering misrepresenting an insurer's financial condition, publishing false financial statements, and making or filing false claims or statements in insurance transactions. — Texas statutes common to life and health insurance · Taught in Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination
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. — Texas statutes common to life and health insurance · Taught in Unfair trade practices II: rebating, fraud, boycott, commingling, and unfair discrimination
Commission sharing: Paying or splitting a commission for selling insurance, which Texas law permits only when the recipient holds the license required for that line of insurance. — Texas statutes common to life and health insurance · Taught in Agent duties and commission sharing
Rebate: Handing part of a commission, a gift, or anything of value not stated in the policy back to the buyer as an inducement to purchase; an unfair practice under Chapter 541. — Texas statutes common to life and health insurance · Taught in Agent duties and commission sharing
Aggregate cap: The overall dollar limit Chapter 463 places on what the guaranty association will pay with respect to any one individual life, on top of separate per-product caps. — Texas statutes common to life and health insurance · Taught in The Texas Life and Health Guaranty Association
Covered policy: A policy, certificate, or annuity contract issued by a member insurer that qualifies for guaranty association protection, subject to statutory dollar caps. — Texas statutes common to life and health insurance · Taught in The Texas Life and Health Guaranty Association
Delinquency proceeding: The legal proceeding triggered when a member insurer is found impaired or insolvent, after which the guaranty association may pay covered claims or transfer business to a solvent carrier. — Texas statutes common to life and health insurance · Taught in The Texas Life and Health Guaranty Association
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. — Texas statutes common to life and health insurance · Taught in The Texas Life and Health Guaranty Association
Post-assessment funding: The guaranty association's funding method: rather than holding a pre-collected fund, it assesses surviving member insurers after an insolvency to raise the money needed to pay covered claims. — Texas statutes common to life and health insurance · Taught in The Texas Life and Health Guaranty Association
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. — Texas statutes for life insurance · Taught in Life insurance marketing, advertising, and the buyer's guide
Nonguaranteed elements: Projected dividends, current interest rates, and illustrated values that must not be presented as guaranteed or shown without equal prominence given to the guaranteed figures. — Texas statutes for life insurance · Taught in Life insurance marketing, advertising, and the buyer's guide
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. — Texas statutes for life insurance · Taught in Life insurance marketing, advertising, and the buyer's guide
Right to return the policy: The unconditional right, triggered when disclosure documents are not provided until delivery, to return a life policy during an examination period for a full premium refund. — Texas statutes for life insurance · Taught in Life insurance marketing, advertising, and the buyer's guide
Total impression standard: The rule that a life insurance advertisement is judged by the overall effect it leaves on an ordinary consumer, so a technically true statement can still be misleading. — Texas statutes for life insurance · Taught in Life insurance marketing, advertising, and the buyer's guide
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. — Texas statutes for life insurance · Taught in Individual life policy provisions, free look, and grace period
Bona fide group: A group that exists for a purpose other than obtaining insurance, a requirement for eligibility as a group life policyholder. — Texas statutes for life insurance · Taught in Group life insurance rules
Continuation and conversion: Rights and notices that apply when group life coverage would otherwise end with the qualifying relationship, allowing continued or converted coverage. — Texas statutes for life insurance · Taught in Group life insurance rules
Insured member: The individual whose life is covered under a group life plan and who has the right to name and change the beneficiary. — Texas statutes for life insurance · Taught in Group life insurance rules
Policyholder: The employer, union, association, or trust to which the group life master policy is issued and which can amend or terminate it. — Texas statutes for life insurance · Taught in Group life insurance rules
Credit disability insurance: Coverage that makes loan payments during the borrower's disability, distinct from credit life insurance, which pays a death benefit. — Texas statutes for life insurance · Taught in Credit life insurance
Creditor: The lender in a credit life arrangement, who is the beneficiary of the coverage and, in group credit life, also the policyholder. — Texas statutes for life insurance · Taught in Credit life insurance
Debtor: The borrower in a credit life arrangement, who is the insured person whose death triggers the benefit. — Texas statutes for life insurance · Taught in Credit life insurance
Churning: Repeatedly replacing a client's coverage to generate fresh first-year commissions rather than to serve the client's interest. — Texas statutes for life insurance · Taught in Replacement duties for life insurance
Conservation: The existing insurer's opportunity, triggered by the replacement paperwork, to be notified of a proposed replacement and attempt to keep the policyholder's business. — Texas statutes for life insurance · Taught in Replacement duties for life insurance
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. — Texas statutes for life insurance · Taught in Replacement duties for life insurance
Automatic (default) nonforfeiture benefit: The nonforfeiture option a policy applies automatically if the owner does not elect one within the time the contract allows after default. — Texas statutes for life insurance · Taught in Nonforfeiture law
Nonforfeiture: The guarantee that a life policyowner keeps the value accumulated in a cash-value policy even if premium payments stop. — Texas statutes for life insurance · Taught in Nonforfeiture law
Table of guaranteed values: The required schedule in a life policy showing the nonforfeiture benefits and cash surrender values available over a period of years. — Texas statutes for life insurance · Taught in Nonforfeiture law
Chemical dependency: Abuse of, psychological or physical dependence on, or addiction to alcohol or a controlled substance, a condition Title 8 requires covered health plans to treat on the same basis as physical illness. — Texas statutes for accident and health insurance · Taught in Required policy provisions: newborn and chemical-dependency coverage
Congenital defect: A medically diagnosed condition present at birth that must be covered under the Texas newborn coverage mandate. — Texas statutes for accident and health insurance · Taught in Required policy provisions: newborn and chemical-dependency coverage
Group health benefit plan: The type of health coverage principally subject to Title 8's mandate to provide necessary care and treatment for chemical dependency. — Texas statutes for accident and health insurance · Taught in Required policy provisions: newborn and chemical-dependency coverage
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. — Texas statutes for accident and health insurance · Taught in Required policy provisions: newborn and chemical-dependency coverage
Anti-duplication rule: The Texas requirement that a producer not knowingly sell Medicare supplement coverage that duplicates benefits the applicant already has. — Texas statutes for accident and health insurance · Taught in Texas Medicare supplement standards
Open enrollment: The protected window tied to Medicare eligibility during which a Medicare supplement applicant cannot be turned down or surcharged for health history. — Texas statutes for accident and health insurance · Taught in Texas Medicare supplement standards
Standardized benefit plan: A Medicare supplement plan identified by letter whose benefits are the same across every insurer offering it, so shoppers compare price and service rather than fine print. — Texas statutes for accident and health insurance · Taught in Texas Medicare supplement standards
Actuarial justification: The requirement that an adverse underwriting decision based on a positive HIV result rest on sound actuarial principles or actual experience, not stereotype. — Texas statutes for accident and health insurance · Taught in AIDS testing requirements
Confirmatory test: A second, confirming test required before a reactive HIV screening result may be used as the basis for an adverse underwriting decision. — Texas statutes for accident and health insurance · Taught in AIDS testing requirements
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. — Texas statutes for accident and health insurance · Taught in AIDS testing requirements
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. — Texas statutes for accident and health insurance · Taught in AIDS testing requirements
Accident and health baseline: The general Chapter 1201 requirements for policy forms and provisions that apply to a long-term care policy before LTC-specific requirements are layered on top. — Texas statutes for accident and health insurance · Taught in Long-term care regulation
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. — Texas statutes for accident and health insurance · Taught in Long-term care regulation
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. — Texas statutes for accident and health insurance · Taught in Small group health insurance
Small employer: An employer whose number of eligible employees falls within the size range state law sets for the small group health market (commonly up to 50 employees, and up to 100 in some states). An employer with fewer than 20 employees is also outside federal COBRA, so state continuation law covers its employees instead. — Texas statutes for accident and health insurance · Taught in Small group health insurance
Small employer carrier: An insurer that writes health benefit plans for small employers and is subject to the state's small employer market rules while it participates in that market. — Texas statutes for accident and health insurance · Taught in Small group health insurance
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. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
Essential health benefits: Ten required coverage categories, such as hospitalization and maternity care, that Marketplace plans must include without annual or lifetime dollar caps. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
Marketplace: The federally facilitated exchange where individuals shop for and compare individual major medical plans and learn whether they qualify for financial help. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
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. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
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. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
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. — Texas statutes for accident and health insurance · Taught in ACA marketplace, subsidies, and essential health benefits
ACA notice: A federally required, employer-delivered communication to employees covering coverage options, plan summaries, and material plan changes. — Texas statutes for accident and health insurance · Taught in Employer notification responsibilities under the ACA
Continuation and conversion rights: Time-sensitive rights, typically communicated through the employer, that let an employee keep or convert coverage after a group policy or eligibility ends. — Texas statutes for accident and health insurance · Taught in Employer notification responsibilities under the ACA
Eligibility or status change: An event such as a new hire, reduced hours, or termination that the employer must report promptly to the insurer so the plan can be administered correctly. — Texas statutes for accident and health insurance · Taught in Employer notification responsibilities under the ACA
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. — Texas statutes for accident and health insurance · Taught in Employer notification responsibilities under the ACA
Basic health care services: The services an enrolled population might reasonably require to be maintained in good health under an HMO's health care plan. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Enrollee: An individual who is entitled to health care services under an HMO's plan. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Evidence of coverage: The certificate, agreement, policy, or contract an HMO issues to an enrollee setting out the coverage to which the enrollee is entitled. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Health care plan: A plan under which an HMO undertakes to provide, arrange for, pay for, or reimburse health care services, distinguished from pure indemnification by its service-arranging component. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Limited health care service: Under Texas Chapter 843, a service from a closed statutory list that a limited health care service plan arranges on a prepaid basis: mental health, chemical dependency or intellectual disability services, or an organized long-term care service delivery system. Dental and vision care are not on the list. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Service area: The geographic area in which an HMO's health care services are available and accessible to enrollees. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Single health care service plan: A plan under which an HMO undertakes to provide or arrange for only one health care service. — Texas statutes for HMOs · Taught in HMO definitions and evidence of coverage
Cancellation: The ending of a single enrollee's HMO coverage, while the plan and group contract stay in force, permitted only on statutory grounds such as nonpayment or fraud. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Complaint and appeal system: The HMO process an enrollee is directed to when disputing a cancellation, nonrenewal, or other coverage decision. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Group contract termination: The ending of an HMO group contract, which ends coverage for everyone enrolled under it. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Loss of eligibility: A permitted ground for HMO cancellation when an enrollee no longer qualifies as an employee or dependent under a group contract. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Material misuse: Documented misuse of an HMO plan, its providers, or its facilities, a permitted ground for cancelling an enrollee's coverage. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Nonrenewal: An HMO's class-level, end-of-term decision not to continue a plan or contract, distinct from cancelling an individual enrollee. — Texas statutes for HMOs · Taught in HMO nonrenewal, cancellation, and enrollment
Clean claim: A submitted claim containing all required data elements, which starts the prompt-pay deadline for the HMO to pay, deny, or audit it. — Texas statutes for HMOs · Taught in HMO out-of-network claims
Continuity of care: A provision allowing an enrollee to keep receiving ongoing treatment from a provider for a limited period after that provider leaves the HMO's or other plan's network, typically during a pregnancy or a serious ongoing illness. — Texas statutes for HMOs · Taught in HMO out-of-network claims
Cost sharing: The copayment, coinsurance, and deductible an enrollee owes for a covered service, rather than the provider's full billed charge, when the HMO is responsible for the claim. — Texas statutes for HMOs · Taught in HMO out-of-network claims
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. — Texas statutes for HMOs · Taught in HMO out-of-network claims
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. — Texas statutes for HMOs · Taught in HMO out-of-network claims
Prompt-pay law: Subchapter J of Chapter 843, which sets the deadlines (95 days to submit, 30/45 days to pay, deny, or audit) governing HMO claims from participating providers. — Texas statutes for HMOs · Taught in HMO out-of-network claims

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