Miscellaneous

Policy Summary

must be delivered along with the policy and will provide the producers name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years. Premium amounts and surrender values included

Basic Medical Expense Plan

no deductibles, first dollar coverage, low dollar limits. Does not include coverage for catastrophic medical expenses

Reduced Paid Up

nonforfeiture option that would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy

Exceptions from the early distribution rule

not subject to the penalty tax- a loan from the plan, a divorce decree, participants disability, death of participant. Participants debt is subject to penalty tax

Reduction of Premium

option that allows the policyholder to apply policy dividends toward the next years premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year

Social Insurance Supplement (SIS) Rider

pays a disability benefit in an amount close to what social security would pay. If Social Security benefit payments begin, the SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment

Survivorship Life Policy

pays on the last death rather on the first death

Insureds

persons covered by health insurance and receive benefits

Medicare SELECT

policies that are issued in this state must not restrict payment for covered services provided by non network providers if the services are for symptoms requiring emergency care and it is not reasonable to obtain such services through a network provider

Spendthrift Clause

prevents the beneficiary's reckless spending of benefits, and protects the policy proceeds from creditors of the beneficiary or the policy owner

Largest annual premium to smallest annual premium

20-year endowment, 20-pay life, 20-year level term, 20-year decreasing term (the shorter the premium paying period, the larger the premium must be)

401 (k) Distributions

Distributions from 401(k) plans are taxable as ordinary income in the year of the distribution. However, if the distribution is rolled over to a Traditional IRA, taxes are deferred until the required minimum IRA distributions begin (which is generally no later than age 70 1/2). Since this client actually took a distribution (instead of making a trustee-to-trustee roll over), the distribution is subject to 20% withholding tax.

The Health Maintenance Act of 1973

The HMO Act of 1973 granted benefits to HMO's if organized to meet federal government guidelines, funds to solicit members, loan guarantees to cover initial deficits they might incur, and also made it a federal requirement that employers, with 25 or more employees, offer HMO coverage, if available in the area, as an alternative to traditional health insurance plans.

Rebate

a rebate is an illegal act which involves returning something of value to the client as an inducement to buy. Rebates are only allowed if specifically states in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of the premium paid.

Most health insurance policies exclude all of the following except

accidental injury. exclusions- workers compensation, caused by war, or intentionally self inflicted

Change of Occupation provision

allows the insurer to adjust the benefits if the insured changes occupation

Guaranteed Renewable Health Insurance Policy

allows the policyholder to renew the policy to a stated age, with the company having the right to increase the premiums on the entire class. "Coverage is guaranteed, but rates can be adjusted for the entire class"

Subscribers

are people in whose name the contract is issued

Agent qualifications for selling variable life insurance

both state and federal licensing

Joint Life Policy

cover the lives of two insureds, rates are blended. Upon the first death of the insured, the policy ends.

Death benefit under the Universal Life Option B

gradually increases each year by the amount that the cash value increases

Renewal Provision

health insurance provision that describes the insured's right to cancel coverage, Required by HIPPA- The federal health insurance portability act of 1996

Key Person Life Policy

if a corporation is the owner and beneficiary and collects the policy benefit then the benefit is received tax free. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person

Revocable Beneficiary

if someone is named the revocable beneficiary, the insured would be the policy owner and could make changes to the contract

War or Military Service Clause

specifically excludes or limits the insurer's liability for losses caused by war or active military service. If a policy does not have that exclusion, the benefits are paid to the beneficiary, as if the insured died of any other cause

Major Medical Expense Policies

standard coverage- emergency surgery. Exclusions- coverage provided under workers compensation, custodial care, cosmetic surgery

Withdraws from a non qualified annuity

taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2

Disability Benefit Payments

that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable

Annuity contracts are tax deferred

that means that there is no current income taxation upon the growth of the annuity

Withdraws from an annuity during the accumulation phase

the amounts are taxed on a last in first out basis (LIFO)

Free Look period of 10 days

the buyers guide must be deliver to the applicant with the policy

Interest Only Option

the insurance company retains the policy proceeds and pays interest of the proceeds to the recipient (beneficiary) at regular intervals, "the policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age"

$100,000

the most the Insurance Guaranty Association will pay for net cash surrender value

Legal Action

this mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filled with the insurer. This gives the insurer time to evaluate the claim

Continuing Education

if an insured completes the 8 hours required by his residence state to maintain that license, it will also satisfy the CE requirements for his Alabama nonresident license

Equity Indexed Annuities

invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, equity indexed annuities have a guaranteed minimum interest rate. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. These are less risky than variable annuities and earn higher interest rates than fixed annuities

Dental Expense Insurance

is a form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured's teeth. An important feature of a dental insurance plan which is typically not found in a medical expense insurance plan is the inclusion of diagnostic and preventive care (teeth cleaning, fluoride treatment, etc.

Eligibility of members for group health insurance

is determined by conditions of employment.. (hours worked a week, wether or not they are salaried employees)

Health Insurance

it could provide payment for loss of income. Provides coverage for expenses related to health care, loss of income, and disability income

Increasing Term features:

level annual premiums and a death benefit that increases each year over the duration of the policy term

Supplemental Benefits under and HMO plan

long term care, nursing services, home health care, prescription drugs, dental care, vision care, mental health care, and substance abuse services

Marketing Long Term Care procedures

make sure excessive insurance is not sold, every reasonable effort is made to identify an applicants other insurance, comparisons of polices are fair and accurate

HIPPA Requirements

requires that the individual have previous continuous credible health coverage for at least 18 months, The gap of coverage for eligibility is a period of 63 or less days, An individual who doesn't qualify for Medicare may be eligible.

During the period of suspension of an insurer's certificate of authority-

the user must continue to file annual financial reports that are required by the commissioner, pay any fees and taxes as required, and service the in force policies that it has issued. It does not reapply for the certificate of authority

Short Rate Basis

when the insured initiates the cancellation of a policy, the unearned premium will be refunded on a short rate basis

Accidental Bodily Injury definition

will provide broader coverage than a policy that uses the accidental bodily injury definition