Free Life & Health Insurance Exam Flashcards

Life insurance that provides coverage for a specific period (term). If the insured dies during the term, beneficiaries receive the death benefit. No cash value accumulates.

Permanent life insurance with level premiums for life, guaranteed death benefit, and cash value that grows at a guaranteed rate. Also called straight life or ordinary life.

Flexible permanent life insurance that allows policyholders to adjust premiums and death benefits. Cash value earns interest based on current market rates.

Permanent life insurance where cash value is invested in separate accounts (similar to mutual funds). Death benefit and cash value fluctuate based on investment performance.

Term life insurance where the death benefit decreases over time while premiums remain level. Often used for mortgage protection.

Managed care plan requiring members to use network providers and select a primary care physician (PCP) who coordinates care and provides referrals to specialists.

Managed care plan that offers flexibility to see any provider but provides higher benefits for using in-network providers. No referrals required for specialists.

Tax-advantaged savings account paired with a high-deductible health plan (HDHP). Contributions are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are tax-free.

The amount the insured must pay out-of-pocket before the insurance company begins paying benefits. Higher deductibles typically result in lower premiums.

The percentage of covered medical costs the insured pays after meeting the deductible. For example, with 80/20 coinsurance, the insurer pays 80% and the insured pays 20%.

Insurance that replaces a portion of income when an insured is temporarily unable to work due to illness or injury. Typically covers 3-6 months.

Insurance that provides income replacement for extended periods of disability, typically starting after short-term disability ends. May continue until age 65 or for life.

The waiting period before disability benefits begin, similar to a deductible but measured in time. Longer elimination periods result in lower premiums.

Disability definition where the insured is considered disabled if unable to perform the duties of their specific occupation, even if they can work in another field.

Disability definition where the insured is only considered disabled if unable to perform duties of any occupation for which they are reasonably qualified by education, training, or experience.

A contract with an insurance company that provides regular income payments, either immediately or at a future date. Used primarily for retirement income.

An annuity that begins making payments within one year of purchase. Funded with a single premium and provides income for a specified period or for life.

An annuity that accumulates funds during an accumulation phase before beginning payments at a later date. Can be fixed, variable, or indexed.

An annuity that guarantees a minimum interest rate during the accumulation phase and fixed payments during the payout phase. Principal is protected.

An annuity where funds are invested in separate accounts (subaccounts). Returns and payments vary based on investment performance. Considered a security.

Federal law that protects health information privacy and gives special enrollment rights in group health plans. HIPAA once limited pre-existing condition exclusions; since 2014 the ACA prohibits them.

Federal law allowing employees and dependents to continue group health coverage for 18-36 months after a qualifying event (job loss, divorce, etc.) by paying the full premium.

Federal law that expanded health insurance access through marketplaces, Medicaid expansion, essential health benefits requirements, and prohibition of pre-existing condition exclusions.

Federal law that sets standards for employer-sponsored benefit plans, including health insurance and retirement plans. Establishes fiduciary responsibilities.

A health condition that existed before the effective date of coverage. Under the ACA, insurers cannot deny coverage or charge more for pre-existing conditions in individual and group markets.

The process of evaluating risk and determining whether to issue insurance, at what premium, and under what conditions. Considers factors like health, occupation, and lifestyle.

The process of evaluating an applicant's health history, current conditions, and risk factors to determine insurability and appropriate premium rates.

An applicant whose risk profile is higher than standard due to health conditions, occupation, or lifestyle. May be issued a policy with higher premiums or exclusions.

An applicant who presents lower-than-average risk due to excellent health, favorable occupation, and healthy lifestyle. Qualifies for lower premium rates.

A financial or emotional stake in the continued life or health of the insured. Required at the time of application to prevent wagering on lives.

A period after the premium due date during which coverage remains in force even if the premium is unpaid. State law sets the minimum: for life policies, 30 days or one month in Illinois and at least 60 days in California.

A provision stating the insurer cannot contest the validity of the policy after it has been in force for a specified period (usually 2 years), except for nonpayment of premium.

A period (typically 10-30 days) after policy delivery during which the policyholder can return the policy for a full refund of premiums paid, no questions asked.

The person or entity designated to receive the death benefit proceeds from a life insurance policy upon the insured's death.

The period (usually 2 years from policy issue) during which the insurer can investigate and deny claims based on material misrepresentations in the application.

Insurance coverage provided to a group of people under a single master policy, typically through an employer. Usually less expensive than individual coverage.

The insurance contract issued to an employer or group that outlines the coverage terms. Individual members receive certificates of insurance, not policies.

A document provided to each group insurance participant summarizing their coverage under the master policy. Not an insurance contract itself.

The right to convert group coverage to an individual policy without evidence of insurability when leaving the group, usually within 31 days of termination.

A group insurance plan where both the employer and employees share the cost of premiums. Requires minimum participation (usually 75%) to prevent adverse selection.

Hospital insurance that covers inpatient hospital care, skilled nursing facility care, hospice, and some home health care. Premium-free for most people who paid Medicare taxes.

Medical insurance covering physician services, outpatient care, preventive services, and medical equipment. Requires monthly premium payment.

Prescription drug coverage provided through private insurance companies approved by Medicare. Helps cover the cost of prescription medications.

Private insurance policies that help pay Medicare cost-sharing (deductibles, coinsurance, copays). Standardized plans labeled A through N.

Joint federal-state program providing health coverage to low-income individuals and families. Eligibility and benefits vary by state.

A transaction where new life insurance or annuity is purchased and existing coverage is surrendered, lapsed, or reduced. Requires specific disclosure forms and procedures.

An illegal practice where an agent induces a policyholder to replace existing coverage through misrepresentation or incomplete comparison of policies.

The unethical practice of replacing insurance policies primarily to generate commissions for the agent, without regard to the policyholder's best interests.

The illegal practice of returning part of the premium or giving anything of value to an applicant as an inducement to purchase insurance.

A legal duty to act with loyalty and care in another person's best interest. Annuity best-interest rules are different: a producer must not place the producer's or insurer's financial interest ahead of the consumer's, and California's statute says this creates no fiduciary relationship.