| Terms |
Definitions |
|
MCR
|
Medicare
|
|
HMO
|
Health Maintenance Organization
|
|
guaranteed renewable
|
only guarantees coverage
|
|
Who does solictors represent?
|
The agent.
|
|
SS reduction beyond 3 years
|
5/12
|
|
renown
|
widespread and high repute; fame.
|
|
Medicaid
|
healthcare plan for low-income people that is funded by both state and federal funds
|
|
Underwriting
|
Process of selecting and classifying applicants for insurance.
|
|
Fine art, jewelry, collectables, etc are insured with an endorsement floater on a ______ value basis
|
Agreed
|
|
Director
|
The chief executive and administrative officer of the Insurance Department.
|
|
Self-insurance:
|
Retention program in which the employer self-funds or pays part or all of its losses.
|
|
A commonly used cost containment measure for emergency hospital care under a major medical expense plan is
|
Deductible
|
|
stress
|
importance or significance attached to a thing; emphasis:
|
|
sorrow
|
distress caused by loss, affliction, disappointment, etc.; grief, sadness, or regret.
|
|
PROBATE
|
Getting deceased persons name off of property
use TOD, POD transfer upon death or Paid upon death
|
|
T/F Long-term care policies can not contain renewability clauses described as "guaranteed renewable"
|
False
|
|
Physical Hazard
|
Physical condition that increases the frequency or severity of loss.
|
|
A SS disability beneficiary is covered under Medicare after entitlement to disability benefits for ___ months or more.
|
24
|
|
Accidental Bodily Injury
|
Unplanned, unforeseen traumatic injury to the body.
|
|
The alpha numeric combination assigned to the person named on the ID card
|
Contract Number
|
|
indemnity policies
|
Protection or security against damage or loss. medical expense policies are indemnity policies designed to pay health care providers
|
|
imminent
|
likely to occur at any moment; impending:
|
|
stiffness
|
rigid or firm; difficult or impossible to bend or flex:
|
|
universal life insurance
|
allows policyholders to change the terms of the policy as their needs change
|
|
What is Adhesion?
|
Life and health policies are considered contracts of adhesion.
The company wrote it; they are stuck with it; they must adhere to it. - one author
|
|
Annuitization
|
Process by which you convert part or all of the money in a qualified retirement plan or non-qualified annuity contract into a stream of regular income payments, either for you lifetime or the lifetimes of you and your join annuitant. Once you choose to annuitize, the payment schedule and the amount is generally fixed and can't be altered
|
|
Fortuitous Loss
|
Loss that is unforeseen and unexpected by the insured and occurs as a result of chance.
|
|
Ordinary Life Insur. Policy
|
It is essentially
individual life insurance in which an agent collects the first premium with the
application and thereafter, premiums are mailed directly to the insurance
company that issued the policy.
|
|
SS benefit is reduced ___ for every ___ above threshold of ____ at full retirement age.
|
$37,680
|
|
Coercion
|
An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance.
|
|
Oral Surgery
|
Operative treatment of the mouth such as extractions of teeth and related surgical treatment.
|
|
Nonrenewal
|
A termination of a policy by an insurer on the anniversary or renewal date.
|
|
Hospital expense insurance:
|
Individual health insurance that pays for medical expenses incurred while in a hospital.
|
|
The charge which the physician or other provider usually charges for specific services
|
Customary Charge
|
|
Reimbursement is directly sent from the payer to the provider
|
Assignment of benefits
|
|
therapist
|
a person trained in the use of physical methods, as exercises, heat treatments, etc., in treating or rehabilitating the sick or wounded or helping patients overcome physical defects.
|
|
deductible
|
the amount for which the insured is liable on each loss, injury, etc., before an insurance company will make payment:
|
|
LIMITED PAYMENTS
|
Cost more however after so many years its paid
|
|
Liability Coverage
|
3rd party only.You cannot be liable to yourself.Always built into homeowners policy.
|
|
Approved for Reinsurance
|
Indicates the company is approved (or authorized) to write reinsurance on risks in this state. A license to write reinsurance might not be required in these states
|
|
Loss Reduction
|
Measures that reduce the severity of a loss after it occurs.
|
|
Absolute assignment
|
means the insured gives up right to change beneficiary.
|
|
Death Benefit
|
The amount payable upon the death of the person whose life is insured.
|
|
Blanket Medical Insurance
|
A policy that provides benefits for all medical costs, including doctor visits, hospitalization, and drugs.
|
|
Basic Hospital Expense Insurance
|
Coverage that provides benefits for room, board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
|
|
Major medical insurance:
|
Health insurance designed to pay a large proportion of the covered expenses of a catastrophic illness or injury.
|
|
A list of charges or allowance that have accepted for specific medical services
|
fee schedule
|
|
waiver of premium
|
built into a DI policy,not an option
|
|
FEDERAL TAX PROVISIONS OF
ANNUITY CONTRIBUTIONS
AND WITHDRAWALS
|
Income tax aspects of annuities
PREMIUM PAYMENTS - Premiums pd into a nonqualified annuity are generally NOT DEDUCTIBLE
Premiums pd into qualified annuities such as IRAs ARE DEDUCTIBLE subject to IRS rules.
CASH ACCUMULATIONS - Nat persons not taxable
Nonnatural persons - interest is taxable
LOANS - will incur tax & penalty
10% Premature Distribution Tax - 10% will be taxable also under the age of 59 1/2 will pay 10% penalty with some exceptions (death, disability)
Withdrawals - LIFO Last in First Out - withdrawals are recd as interest out first. (for persons over the age of 59 1/2 the tax penatly does not apply.
Section 1035A Exchange
|
|
Acceleration Clause
|
The part of a contract that says when a loan may be declared due and payable
|
|
Increas. Term Insur.
|
policy starts with little or no value and grows over time
|
|
up to ___ of SS benefit may be taxed (based on MAGI)
|
85%
|
|
Home Health Services
|
A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
|
|
Health maintenance organization (HMO):
|
Organized system of health care that provides comprehensive health services to its members for a fixed prepaid fee.
|
|
Temporary Licenses for non-producer
|
typically allowed to provide service for insureds during transition period
|
|
any occupation
|
cannot do any job for which you are suited
|
|
T/FThe industry's application of the "law of large numbers" is beneficial to insureds because it enables the insurers to increase the accuracy of their predictions for the loss experience of an individual insured
|
False, predictions are for large numbers only. Predictions can be made for a group of exposure units
|
|
True or False: Key person Insurance insures the employee's retirement plan.
|
False (Chapter 1 retention question)
|
|
Cease and Desist Order
|
A demand of a person to stop committing an action that is in violation of a provision.
|
|
Guaranteed replacement cost:
|
In the event of a total loss, the insurer agrees to replace the home exactly as it was before the loss even though the replacement cost exceeds the amount of insurance stated in the policy. Homeowners 2 policy (broad form):
|
|
deals with the prevention of health care fraud and abuse of patients on medicare and medicaid
|
Health Insurance Portability and Accountablity Act (HIPAA)
|
|
Some long-term care benefits are covered under Medicare. What is a close benefit of those conditions.
|
Nursing home health cre is provided limited coverage
|
|
The type of life insurance policy which will pay the face amount to a beneficiary if the insured dies during the policy's term, or will pay the face amount to the insured who is living at the end of this period of time is a/an
|
endowment policy. This is the definition of an endowment policy.
|
|
What is Third Party Ownership?
|
A policy owned by one person insuring the life of another person. (See pg 8)
|
|
What is whole life?
|
a death benefit until age 100, -a high premium, but every payment has a cash equity that is paid out plus interest to equal face value.
|
|
If an insurer pays an insured $25,000 in lost wages, $45,000 fo physicians visits and hospital cost and $15,000 for physical therapy treatments and later discovers that the claim was fraudulent, the insured may be fined as much as
|
a. $25,000
b. $60,000
c. $85,000
d. $170,000
|
|
If a Medicare recipienthas both parts A and B:
|
the B premium is greater than A
|
|
What is true about Term insurance
|
It contains no cash value, it is helpful for temporary insurance needs and it pays the death benefit if the insured dies within the protection period. These are the characteristics of term insurance
|
|
If william is entitled to a seamless delivery of indemmity and medical benefits that cover both on and off the job injuries, and sickness, he is covered by:
|
24-hour coverage, and in conjuction with workers compensaiton coverage provides coverage that is seamless
|
|
What costs are experienced by society as a result of pure risk?
|
Pure risks are damaging because their is no offsetting gain such as with speculative risks. There are also indirect losses such as productivity and profits.
|
|
T/F The conformity wtih state statutes provision states that the policy must conform to the minimum requirements ofhte laws of the state where the agent resides, should there be a conflict.
|
False. It depends where the policy was written
|
|
Laura, while working, is in a serious car accident. She is in the hospital for a long period of time because of the injuries sustained from this accident. Her medical bills will NOT be paid by her group non-occupational health plan. Why?
|
She was involved in a job-related accident. Workers compensation would pay her bills
|
|
All of the following statements about social security disability benefits are ture except:
|
a. benefits are based upon the level of the worker's eranings up to the time of disability
b. Benfits will continue only as long as the recipient cannot work at all
c.Benefits are designed to replace the entire amount of the worker's earnings
d. Worker's must be totally and permanently disabled for at least 5 months to be eligible for benefits
|
|
What is the probation period in a disability policy?
|
The period of time the insured must wait before certain illnesses or injuries are covered.
|
|
If a person was in violation of Section 770 of the CA Insurance Code, what action would the insurance Commissioner most liely take if the viiolation delath with loans on the security of real or personal property?
|
Issue a cease and desist order for a violation of more than one transaction.
|
|
IND
|
Indemnity Plan
|
|
Umbrella
|
doubles or triples coverage
|
|
detrimental
|
causing detriment; damaging; harmful.
|
|
Exclusion
|
circumstances or situations not covered
|
|
HIPPA
|
health insurance portability and accountability act
|
|
conceivable
|
capable of being conceived; imaginable.
|
|
Medicare does NOT cover:
|
private duty nursing
|
|
Long Term Care Policy Issues
|
Coverage
Term
Elimnation Period
Taxability of Payor
Amount of Benefits
Def of Disability
Residual Benefit
|
|
Reserve
|
An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.
|
|
Reduction
|
Lessening the possibility or severity of a loss.
|
|
The systematic reimbursement to a health care provider based on the number of patients contractuallly in the physician's care, reguardless of diagnoses or services rendered, is called
|
Capitation
|
|
basic medical
|
paid the doctor,limiting visitsyear and visit
|
|
purported
|
to present, esp. deliberately, the appearance of being; profess or claim, often falsely:
|
|
ocean marine insurance
|
coverage for ships at sea
|
|
A device for the transfer of individual risk to a company is called:
|
Insurance
|
|
Actuary
|
A specialist in the mathematics of insurance who calculates rates, reserves dividends and other statistics (Americanism: in most countries the individual is known as mathematician)
|
|
Primary Insurance Policy
|
carrier who insures you first
|
|
No-fault plans may be pure, expanded, or modified. T/F
|
T
|
|
Alien Insurer
|
An insurance company that is incorporated outside the United States.
|
|
Contributory
|
A group insurance plan that requires the employees to pay part of the premium.
|
|
Guaranteed renewable:
|
Continuance provision of a health insurance policy under which the company guarantees to renew the policy to a stated age, and whose renewal is at the insured's option. Premiums can be increased for broad classes of insureds.
|
|
is a requirement for some health insurance plans to obtain permission for a service or procedure before its done
|
Pre-authorization
|
|
rescue
|
to free or deliver from confinement, violence, danger, or evil.
|
|
sprain
|
To overstrain or wrench the ligaments of an ankle, wrist, or other joint so as to injure without fracture or dislocation.
|
|
coverage
|
protection provided against risks or a risk, often as specified:
|
|
Uninsured/Underinsured Motorist Coverage
|
This coverage provides benefits to you, your passengers or relatives living iwith you if a motorist without insurance is legally liable for injuries to you or your passengers, or for damage to your car
|
|
If a worker is now earning only $25,000 a year working part time ($35,000 a year less than he earned a couple of years ago) and is earning less because of a disability, this disability would normally be called partial.
|
|
|
Annual Administrative Fee
|
Charge for expenses associated with administering a group employee benefit plan
|
|
Objective Risk
|
Relative variation of actual loss from expected loss.
|
|
The first ___ days of skilled nursing home are paid by Medicare
|
20
|
|
Principal Amount
|
The full face value of a policy.
|
|
Standard Risk
|
An applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.
|
|
Recurrent Disability
|
A policy provision that specifies the period of time during which the recurrence of an injury or illness will be considered a continuation of a prior period of disability.
|
|
Apparent Authority
|
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
|
|
Disability-insured:
|
Status of an individual who is insured for disability benefits under the Old-Age, Survivors, and Disability Insurance (OASDI) program.
|
|
Which of the following is an example of diagnosis?
|
Tonsillitis
|
|
Any situation that presents the possibility of a loss is known as
|
A loss exposure
|
|
preferred provider organization PPO
|
A comprehensive health-care plan offered to corporate employees that allows them to choose their own physicians and hospitals within certain limits.
|
|
fracture
|
the breaking of a bone, cartilage, or the like, or the resulting condition.
|
|
insurable interest
|
a person's right to take out insurance on another person because that person can show he or she would suffer financial loss or hardship in the event of the death of the insured
|
|
Prepaid application (with money)
|
The customer submits the application along with the settlement ($) of the first premium. (offer)
The company issues and delivers the policy exactly as requested.
IF the company come back with a difference offer (called COUNTER OFFER)
|
|
Define Direct Response Marketing System
|
Purchasing travel accident insurance from a vending machine at an airport. The insured buys directly from the company without the services of an agent
|
|
Valued Policy
|
Policy taht pays the face amount of insurance if a total loss occurs.
|
|
Secondary Insurance Policy
|
Kicks in when primary doesn't cover all costs
|
|
Comprehensive Major Medical
|
A combination of basic coverage and major medical coverage that features low deductibles, high maximum benefits, and coinsurance.
|
|
Risk, Pure
|
The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change.
|
|
Nonoccupational disability:
|
The accident or illness must occur off the job.
|
|
The amount that must be paid by a subscriber before an insurer begins to pay for medical services
|
Deductible
|
|
an insurance company that bids for a contract with cms to handle the medicare program in a specific
|
fiscal intermediary
|
|
elbow
|
the bend or joint of the human arm between upper arm and forearm.
|
|
What are the five essential parts of a contract?
|
Offer
Acceptance
Consideration
Legal Capcity or legally competent parties
Legal purpose
|
|
What is pure risk?
|
The difference between the cash value and the face value. (See pg 5)
|
|
Under ACV, losses are settled by _______
|
replacement cost less depreciation.
|
|
Utmost Good Faith
|
The fair and equal bargaining by both parties in forming the contract, where the applicant must make full disclosure of risk to the company, and the insurance company must be fair in underwriting the risk.
|
|
Reasonable and customary charges:
|
Payment of physicians' normal fees if they are reasonable and customary, such as a fee that does not exceed the 80th or 90th percentile for a similar procedure performed by physicians in the area.
|
|
Under a disability income insurance policy with an "own occupation" clause, an employee who can no loonger perform the tasks of the jog held at the time of injury is considered:
|
a. Gainfully disabled
b. totally disabled
c. Presumptively disabled
d. Medically disabled
|
|
What does consideration consist of?
|
Something of value, such as money, promises, property or service.
|
|
"service" type health care providers:
|
pay the provider directly instead of reimbursing the insured.By definition, service providers pay the provider directly
|
|
Hitting a bird or animal is covered by ___________.
|
Other than collision.
|
|
Chartered Life Underwriter (CLU):
|
An individual who has attained a high degree of technical competency in the fields of life and health insurance and has passed eight professional examinations administered by The American College.
|
|
Which statement is ture regarding participating in a group health insurance plan
|
A non-contributory group health plan must cover all elegible members
|
|
What result in fraud?
|
It is an act of deception or cheating in order to financially benefit yourself at the expense of another.
|
|
Change in Net Premiums Written (IRIS)
|
The annual percentage change in Net premiums Written. A company should demonstrate its ability to support controlled business growth with quality surplus growth from strong internal capital generation.
|
|
An annuity, purchased for saving money to be used int he future, is an example of a:
|
non-qualiied plan. annuities are used to accumulate money for the future. The word "non-qualified" means that the government does not set the rules as to how it operates.
|
|
What is a fixed policy?
|
The policy has a fixed amount of coverage, benefits and premium. (See pg 10)
|
|
Insurance commonly deals with what types of risks?
|
Insurance is concerned mainly with the economic problems created by pure risks where there is only the potential for loss or no loss.
|
|
When will coverage start if the application is prepaid, but the company uses no form of Interim Insuring Agreement?
|
Coverage will not begin until the agent delivers the policy to the applications.
|
|
T/F When referrig to group insurance participation, non-contributory requires 100% coverage and contributory requires 75% coverage
|
True. This is the definition of non-contributory and contributory coverage
|
|
Cash value policies containloan provisions stating the insruace company willlend an amount that cannot be more than the cah value minus interest to the next policy anniversry. Which can also be found in these provisions?
|
The owner can pay back the loan in full or in part at any time and the interest rate is specified in the contract. These are characteristics of how loans work on permanent policies. The #2 choice only occurs upon death of hte insured, and is not loaned, but taken out of the proceeds.
|
|
A gift of a policy to a family member causes a ____ but not a ______.
|
taxable gift
transfer for value
|
|
social insurance supplement or Social security rider
|
Any of various forms of insurance in which a government is an insurer, esp. such insurance that provides assistance to disabled or unemployed workers and to aged persons. pays what SS denies
|
|
Name two elements of "non-medical" applications
|
A medical exam may not be needed, but Answers to application questions could trigger a requirement to have a physical exam performed. Therefore, underwriting always reserves the right to ask any potential insured to take a physical.
|
|
The best life insurance policy for the payment of federal estate taxes for a 50-year old couple with illiquid assets is:
|
A joint and last-to-die life insurance policy owned by an irrevocable trust
|
|
T/F The medical information bureau is a source of information available to the underwriting departments of insurance companies. Along with other sources of information, it helps insurers in making decisions whether to insure or not
|
True. The MIB's sole purpose is to hep underwriting departments assess risks so the company can decide if a policy should be issued or not
|
|
What age is it that minor can sign for themselves?
|
Age 15
They also must authorized a contract
|
