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MI Pre-Insurance Lic
Q-Z - Vocabulary Words
| Term | Definition |
|---|---|
| Qualified Plan | A retirement plan that has been approved by the IRS; therefore, receives favorable tax treatment. |
| Rating | A premium classification given to a proposed insured. |
| Rated | A person who, according to underwriting standards is considered a higher than average risk. |
| Reasonable and Customary Charge | The cost for a health care service paid by the insurer that is calculated based on an average of the going rates of an identical or very similar service in a defined geographic area. AKA - UCR |
| Rebating | An illegal act of returning part of the commission or premium, or offering anything of value (other than the promises contained in the policy) to a person as an inducement to buy insurance. |
| Recurrent Disability Provision | A disability income provision that specifies after a period of time if the same disabling condition reoccurs, the stated benefit will be paid w/out an elimination period. The re-occurrence will be treated as a continuation of the prior claim. |
| Reduced Paid Up Insurance | A nonforfeiture option that allows the policyowner to use the cash values of a lapsed permanent policy, as a net premium, to purchase another whole life policy with a reduced face amount, but permanent protection. |
| Referral | The process through which a member under a managed care plan is authorized by his or her primary care physician to see a specialist for the diagnosis or treatment of a specific condition on a covered basis. |
| Refund Annuity | A contract offered provides stipulated payments at regular intervals for the life of the annuitant, an additional provision that states if the annuitant dies before all premiums are returned the remaining premium will be paid to a beneficiary. |
| Reimbursement | The payments of a health insurance policy based on actual medical expenses incurred, as opposed to a stated amount. |
| Reinstatement | The act of putting a lapsed policy back in force by providing evidence of insurability and paying past due premiums. |
| Renewable Term | A term life policy that may be renewed for the same specified number of years without evidence of insurability. |
| Replacement | The purchase of a new policy and letting an existing policy becomes terminated or surrendered. IL insurance law has strict disclosure requirements an agent must follow. |
| Representation | A statement that one believes to be materially and substantially true. |
| Reserve | Funds required by law that are held by the insurance company to help fulfill future claims. |
| Residential Care | Provision of room, board and custodial care to the elderly. |
| Residual Disability Benefit | Disability income payment based on the proportion of missing employer income. |
| Respite Care | A policy benefit meant to provide a primary caregiver with a short term rest period. Typically found in long-term care policies. |
| Revocable Beneficary | The recipient of a life or accident policy whose interest in the policy can be revoked or cancelled by the policyowner. |
| Rider | An attachment or endorsement whose significance takes precedence over the policy. The supplemental agreement could expand and add coverage, or exclude and waive coverage. |
| Risk | Uncertainty of loss. |
| Risk Selection | The responsibility of the underwriter to determine which risks are insurable and acceptable to the insurance company. |
| Schedule | A list of medical services, usually surgical procedures, at a specified amount payable. |
| Scheduled Premium | A fixed premium payable at a set interval of time. |
| Separate Account | The investment choice offered by life insurers for variable contracts. Since the policyowner assumes the premium investment risk, these accounts are separate from the insurer's general account. |
| Service Organizations | Provider of health coverage by contracting with a group of doctors, clinics and hospitals to provide health services to subscribers, AKA - members, premiums paid in advance. |
| Settlement | The policy benefit or claim paid by the insurance company. |
| Settlement Options | Various methods by which the beneficiary of a life insurance policy can receive the policy proceeds usually determined by the policyowner. |
| Single Premium | A life insurance policy or annuity that is paid in full with one premium at the beginning of the contract. |
| Skilled Nursing Care | A level of health care that is prescribed and performed by skilled medical personnel, such as an RN or physician. |
| Social Insurance | A term used to describe state and/or federal government insurance programs. |
| Social Security | The federal program that is formally called Old Age, Survivors & Disability Income Insurance, but commonly known as SS. It provides benefits for retirement, death and disability. |
| Special Risk Class | Applicants who cannot qualify for standard insurance rates due to existing health impairments. Policies are issued with rated-up premiums or exclusions riders. |
| Standard Risk | A person who, according to an insurance company's underwriting standards, is considered an average risk. |
| Step Rate Premium | A premium that increases typically each year for the life of the policy. |
| Stock Insurer | An insurance company owned by stockholders |
| Stop Loss Provision | In major medical expense policies, a stated dollar limit to the policyowner's maximum out-of-pocket expenses. Once this limit is reached for the policy year, the insurer pays 100% of remaining expenses. |
| Subrogation | A process by which an insurance company seeks reimbursement from a claimant for a claim it paid because a third party also paid that claimant. This process prevents collecting from both an insurance company and a third party. |
| Subscriber | Another name for the policyowner under a BC/BS plan. |
| Substandard Risk | A person who, according to an insurance company's underwriting standards, is considered a higher risk due to medical history, occupation or dangerous habits. |
| Suicide Clause | A provision in a life insurance policy that states if the insured commits suicide within the 1st 2 years of the effective date - the policy is void. |
| Supplementary Major Medical Policy | A type of traditional medical expense insurance designed to reimburse the policyowner for out-of-pocket medical expenses. |
| Surrender | To give up a permanent life insurance policy. |
| Survivorship Life Policy | An insurance contract covering two or more lives that pays policy proceeds upon the death of the second or last insured. The policy is terminated. |
| Term Life Insurance | A policy that provides protection only for a stated number of years. If the insured dies within that period of time, the beneficiary receives the proceeds. |
| Third Party Ownerhsip | A policy owned by someone other than the insured. |
| Time Limit On Certain Defenses | A limit to the period of time that the company has to deny a claim after the policy has been in force for a set number of years, usually two years. |
| Total Disability | An illness or injury that prevents an insured from working his own occupation or any occupation. |
| Underwriter | An insurance company employee who has been trained to evaluate prospective applicants for insurance policies. |
| Underwriting | The process through which the underwriter evaluates risk and determines premium category. |
| Uniform Simultaneous Death Act | A model law that states if the insured and sole beneficiary die at the same time (that is, it cannot be determined which person lived longer) it is presumed that the insured outlived the beneficiary. Common disaster provision. |
| Unilateral | An insurance contract provision that states only one party to the contract, the insurance company, makes an enforceable promise. |
| Uninsurable Risk | A person rejected by the underwriters because of risk factors. |
| Universal Life | Flexible premium life policy, generally pays greater interest on cash value growth than a traditional whole life policy. Premiums deposited into a cash value fund & monthly deductions pay for annual renewal term coverage & company expenses. |
| Utilization Review | A common practice with managed care health plans that determines the appropriateness and cost effectiveness of a health care procedure. |
| Valued Contract | An insurance policy that pays a stated amount if the loss occurs, as opposed to a reimbursement contract. |
| Variable Annuity | An annuity that does not guarantee the interest rate on premiums or the amount of premiums received. It allows for payments to keep pace with inflation |
| Variable Contracts | Allows policyowner to assume the premium investment risk with the possibility of greater cash values and the chance to keep pace with inflation. Contracts are regulated as insurance and securities - requires dual license procedures for the producer. |
| Variable Life Insurance | A type of permanent life insurance that guarantees coverage for life and a minimum death benefit, but no guarantee of cash value. Death benefit and cash value will fluctuate. |
| Variable Universal Life Insurance | A flexible premium life policy that combines aspects of both variable life and universal life ins. |
| Viatical Settlement | A written sales agreement between a viatical settlement provider and a terminally ill policyowner/insured. Policyowner sells policy for an amount less than the death benefit but more than cash value. |
| Waiting Period | A period of time before the employee becomes eligible for coverage . Disability insurance its another name for elimination period. |
| Waiver | To give up a right or privilege. |
| Waiver of Premium | A rider or provision whereby the insurer gives up the right to receive premium yet keeps the policy in force after the insured has been totally disabled for a specified period of time. |
| Warranty | A statement that one guarantees to be materially and substantially true. |
| Whole Life Insurance | A permanent life policy that guarantees the death benefit, premium and cash values. Also called straight whole life insurance. |
| Workers Compensation | Mandatory insurance purchased by almost all employers to cover an employee's injury, disability, death or medical expenses due to occupational causes. |
| Worksite Insurance Plans | A voluntary plan offered by an employer that allows employees to pick and choose among various types of insurance coverages, such as medical expense, dental, vision, life, disability income, critical illness and long term care. |
Created by:
Rosemj42
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