Life Insurance (My struggles)
How many days written notice must insurance commissioner give to producer regarding a hearing of unfair practice
10 days notice
% required for noncontributory plans?
100% of eligible employees
Within how many days after receiving notice of claim should the company supply a claim form?
15 days after receiving notice of claim
Insurer may request a hearing within ___ days of policy being rejected
20
How many employees required for employers to offer COBRA
20 or less; can continue coverage for 18 months after termination
How many credits to obtain fully insured status?
40 credits, 10 years of work
How many days of no action upon reinstatement request until policy automatically reinstated?
45 days
If company wants to cancel policy, within how many days must they notify insured?
45 days written notice to insured 10 days if bc of unpaid premiums
One becomes eligible for SS disability after having been disabled for
5 months
SS disability waiting period
5 months
Currently insured requirements
6 credits in last 13 quarter period
When can an insured take legal action against company after submitting proof of loss
60 days after
% required for contributory plans?
75% of eligible employees
Most Major Medical policies contain a
lifetime max benefit that limits insurer's total exposure
Traditional IRA tax
limited amount contribution per year; interest is tax-deferred until withdrawal; prior to 59 1/2 are assessed addititonal 10%
Equity Index Universal
minimum guaranteed fixed interest rate; company general account; accumulations tied to stock index like s&p 500
PPOs
more flexible in that given more providers; prearranged discount prices for referalls; fee-for-service
Health Reimbursement Arrangements
must be established by employer; reimburse employees for out-of-pocket medical expenses and health premiums tax free
Risk Retention Group
mutual companies form by group of people in same industry
Variable Whole Life
offset inflation; policy invested in insurer's separate accounts in stock, bond, money market, etc.; fixed premiums, minimum death benefit, cash values not guaranteed
When issued a conditional receipt, when does coverage begin?
one collection of premium, approval of app, and policy is issued.
What policy falls under replacement regulations
ordinary life
Return of Premium Rider
pays total amount of premiums paid into policy plus face if insured dies within certain time
Guaranteed Insurability rider
permits buying additional payment for coverage at specific times without submitting insurability
Tax treatment of cash values
portion that exceeds premium is taxable cash value grows tax free
CAWL or Interest-Sensitive Life policy
premiums can reflect insurer's changing assumption with regard to its death, investment, and expense facts; usually a MEC
Typical tax of individual life insurance premiums
premiums generally not deductible
HMOs
prepaid; deliver services at own health care facility; doctos and physicians are providers who participate in HMO (salaried employees of HMO); stress preventative care; have to have 25 or more employees
Part D
prescription drug plan
Tax of proceeds paid AT DEATH
proceeds to beneficiary tax free as lump sum
legal action is not designed to protect
producer
What are annuities
provide stream of income for guaranteed period of time to protect against risk of living too long
Basic Medical Expense
provides benefits without satisfying deductible hospital, surgical, and nonsurgical benefits lower than actual expenses incurred amount of claim based on terms in policy have a max coverage per days may not pay for full amount of stayed
Part B
provides medical insurance for required doctors' services, outpatient, and services not covered by A
National Association of Insurance commissioners
recommends appropriate laws and regulations and responsible for creation of Advertising Code and Unfair Trade Practice Act
Rules governing life insurance and annuity replacements were created to
reduce misrepresentation
Medical Expense Insurance plans are considere
reimbursement plans
In qualified retirement plan, yearly distributions to an employees acount are
restricted to a max level set by IRS
Guaranteed Insurability Rider
right to purchase additional disabilicy without insurability
1944 US v SE Underwriters Association
ruled insurance transaction across state lines are interstate commerce and are subject to federal regulation; did not affect power of states to regulate insurance
Hospital Indemnity pays
stated amoun per day of day of hospitalization
If IRA participant receives distribution prior to 59 1/2,
subject to ordinary income and 10% penalty tax
Flexible Savings Acount
tax advantaged through cafeteria plan
Qualified Annuity
tax deferred plan; max limits set by IRS
Health Savings Account
tax favored; for under 65 for high qualified deductible plan; 100% of health plan deductible can be made to HSA; earnings grow tax-free and withdrawals can be made tax-free; distributions for anything other than medical expenses are taxable and penalty of 20%
A sole proprietor may use a ___ only if employees are included
Keogh pension plan
How are SS benefits calculated?
Primary insurance amount full amount unless retires early
have conversion periods that vary according to contract
term life policies
What is included in Insuring Clause?
the basic promise to pay specified benefits to designated person, the circumstances of which they'll be paid; any promise the insurer makes
what determines benefits paid in SS Disability Income
the percentage of PIA
Inducing an insured through misrepresentation is called
twisting
How long does the insured have to submit proof of loss form?
typically 90 days
fees charged by healthcare professionals
usual, customary, and reasonable
Reinstatement Period
usually allowed up to 3 years after policy lapse
Family Income Policies
whole life, decreasing term; benefit decreases as soon as policy begins
Family maintenance policy
whole life, level term; begins at death
If withdrawal made to a qualified rollover plan,
withdrawal not subjected to 10% penalty
Roth IRA tax
withdrawals are income tax free contributions subject to limits but not tax deductible interest not taxable if withdrawal is qualified
Within how many days should an insured send a Notice of Claim to insurer?
within 20 days after occurrence of loss
Tax of SS benefits
benefits subject to federal income tax if annual income greater than $25,000
Employee tax on qualified plan
contributions not taxed until withdrawn interest on contribution is tax deferred until withdrawn contributions cannot exceed max limits by IRS early withdrawls are penalty taxed and income taxed unless dies or disabled
Part A
coveres inpatient care in hospitals skilled nursing hospice and home care drugs administered in inpatient max of 100 days covered for skilled nursing no dental
Blanket Life
covers group exposed to same hazard such as passengers on airplane
When does binding receipt coverage begin?
date of application whether or not insurable
Tax Treatment of proceeds from Individual Life Insurance
death benefit - tax free as lump sum; installments are tax free minus the interest (interest in taxed) premiums are not tax deductible
Basic hospital/surgical expense claims are
determined by terms of policy
In MS, an element of insurance contract would be
determining how much coverage is needed
a 401k sent in one lump sum and rolled into IRA..
distribution is subject to federal tax income and withholding
cross purchase plan
each partner buys, pays premiums, and is beneficiary of policy on each other;
Tax of group life insurance:
employee paid premiums are non tax-deductible employer paid is tax deductible proceeds are tax free if in lump sum proceeds in installments are subject to tax on interest portion
Family Plan Policies
family head covered by permanent insurance and spouse/children covered as level term life riders (family term riders)
Adjustable Life
flexibility with face amount protection and premium paid with your changing needs; term and whole life combo
Universal
flexible premium that adjusts face amount; investments go to cash value; no minimum death benefits; minimum interest rate
Medical Savings Account
for employees of small employers; tax free accounts with banks
Long term care in mississippi must be
guaranteed renewable
Waiver of Premium Rider generally included with
guaranteed renewable or noncancelable individual disability policies
Social Security benefits are based mainly on
how long a person has worked
Part C
include service providers (hmos, ppos) does not cover long term care
What is included in Consideration?
initial premium, completed application, and how much and often of premium paid
1860 Paul v Virginia
insurance transactions across state lines are not interest commerce
Income tax of annuity
interest earned on principal is taxed as income withdrawal prior to 59 1/2 are taxable as ordinary income
1999 Financial Services Modernization Act
law repealed the Glass-Steagall Act
Tax for terminally ill
accelerated benefit is received tax free
1945 McCarran and Ferguson Act
act stating federal government can regulate insurance industry but will not exercise the right if industry is regulated effectively on state level
1905 The Armstrong Investigation Act
act that gave authority to states to regulate insurance
reimbursement long term pay
actual covered expenses up to a daily amount
A Cost of Life rider gives the insured
additional death benefits
Stop-Loss
after insured paid specific amount, insurer will pay 100% of the remainder
Cost of Living Rider
allows face amount to be adjusted to account for inflation
Blue Cross
benefits are on service basis (paid to medical treatment directly); prepaid plans in that subscribers pay a set fee to cover medical services; nonprofits
Disability Buy-Sell Plan tax
benefits are tax-free and premiums not tax deductible
Key Person Disability Insurance tax
benefits are tax-free and premiums not tax deductible
someone drawing totally disability receive benefits with what taxation
$0
If a company is 80% vested
$20 of funds forfeited
What is included in Owner's Rights Provision?
- defines person who may name and change beneficiaries, select options, and recieve financial benefits from policy
Universal life tax
- withdrawn prior to 59 1/2 subject to 10% penalty tax - taxed when cash distributed
In what instance will a dividend be subject to taxation?
When the policyowner chooses to let dividends sit and accumulate, the interest would be taxable
What does Policy face contain?
a summary of policy and coverage provided; identifies the insured, term of policy, and how it can be renewed