Life Agent

deferred annuity (DA)

annuitization beings in more than 1 year

title 18 section 1033 penalties

10 or 15 years in prison or a civil fine of $50,000 or amount received or offered

Plan F high deductible

$2,240 in 2018

continuing education

24 hours of CE/ license term

Violation of these Workers' Comp fraud laws shall be punished by

1, 2, 3, or 5 years imprisonment and/or a fine not exceeding the greater of $150,000 or 2x value of fraud

California (state) small group

1-100

MAGI Eligibility for cost sharing reductions *CSRs)

138%-250% of FPL

Inpatient Psychiatric care in a freestanding psychiatric hospital is limited to

190 days in a lifetime

license issued with

2-year terms

upon receipt of written demand the original or certified copies of records must be delivered to the commissioner within

30 days

all medicare supplement policies have a

30-day free-look period

Medicare part A (hospital insurance) premiums

40 credits - free 30-39 credits - $232/mo 0-29 credits - $422/mo

Part A Premiums

40 credits = free (premium-free part A) 30-39 credits ($232/mo for 2018) 0-29 credits ($422/mo for 2018)

PPACA (federal) large group

50+

Pre-existing Condition Waiting Period

6-month period after new medicare supplement policy issued (during open enrollment period) during which insurer can deny benefits for insured's out of pocket costs related to pre-existing conditions (if not creditable coverage)

Special enrollment

8-month period beginning month after employment/coverage ends, whichever happens first

Annuities

80% of annuities present value up to maximum of $250,000

Life Insurance death benefit

80% of policy's death benefit up to maximum of $300,000

Life Insurance surrender/withdrawal values

80% of policy's value up to a maximum of $100,000

records shall be made available and open to inspection or examination by the commissioner

AT ALL TIMES

CDI

California Department of Insurance

individual and small group health

an individual or small group health insurance policy shall provide all covered mental health and substance use disorder benefits small group = 1-100 employees

preferred

above average $

Applied to disability policies for hospitals, medical, and surgical expenses insurer shall not fail or refuse to

accept an application for insurance issue insurance to an applicant cancel an insurance policy renew insurance charge a higher rate or premium offer or provide different terms, conditions, or benefits place limitation on coverage on the basis of a person's genetic characteristics that may, under some circumstances, be associated with disability in that person or that person's offspring

acute care

care for conditions requiring a high level of medical monitoring and treatment covered by health insurance

Non-Participating Physician

can accept medicare assignment on a case-by-case basis

basic medial expense policies

can be stand-alone or combined into package

Business Disability Buyout Insurance

can fund buy-sell agreement

Qualifying Conditions for residual disability policy

currently earns at least 20% less than prior income be able to work full-time or part-time continue to be under a physician's care

partial disability

disability that prevents insured from engaging in some of the duties of his usual occupational OR from engaging in the occupation on a full-time basis and makes the insured eligible for a specified percentage (e.g. 50%) of his total disability benefit

the policy's daily benefit and benefit period are used to determine the lifetime benefit

daily benefit x benefit period = lifetime benefit

annuities

deals with the risk of living too long pays while living

level term

face amount remains level for the term of the policy

COB- dependent children

for a dependent child whose parents are married or are living together the plan of the parent whose birthday falls earlier in the calendar year its the primary plan

basic illustration

illustration that shows both guaranteed and non-guaranteed elements

Own-Occupation Definition of Total Disability

inability to performa the material and substantial duties

for life and disability insurance

insurable interest required to exist only at the time contract becomes effective

mutual insurance company

insurance company that is owned by its policyholders who are entitled to share in any profits through reduced premiums and policy dividends

stop-loss insurance

insurance designed to reimburse a self-insurer for losses that exceed an established retention limit dehiring the policy period

Exposure Unit

measure of loss potential used for pricing of insurance (usually $100 or $1000)

for policy owner <60, if individual life policy or annuity returned within the cancellation period, the owner will be refunded

non-variable: all premiums paid + any policy fee variable: account value + any policy fee

non-participating (non-par)

not eligible to receive dividends

Non-admitted Insurer

not entitled to transact insurance in CA by CDI

Expenses

rent/utilities claims employee salaries agent commissions

who else can get coverage?

spouse children (0-26) special needs child

if after a hearing they are found guilty

strike 1- they will pay the penalties & cease and desist from engaging in those methods, acts, or practices found to be unfair strike 2- pay $5,000 or upon to $55,000 if willful strike 3- subsequent violation of Cease & Desist Order can result in suspended pr revoked license up to 1 year

daily benefit

the max. daily amount that will be paid for LTC services

accidental means

unexpected or unforeseen cause of an accidental bodily injury. the mishap itself must be accidental, nit just the resulting injury (not the result and event have to be accidental)

non-mec

withdrawals taxed on FIFO basis policy loans taxed on FIFO

an applicant or licensee must notify the commissioner in writing

within 30 days of learning of a change in background information

fair discrimination (legal)

charging different life insurance or annuity rates based on gender or life expectancy

Unfair Discrimination

charging different life insurance or annuity rates to someone for a reason other than gender or life expectancy

Disability Income Insurance

insurance that provides for periodic payments of benefits to replace insured's income when insured is unable to work due to a covered disability

policy owner must have an insurable interested in the life of the

insured

recurring disability

policy provision that states if insured goes back to work after a disability, and then again suffers from the same disability within a short period of time (usually 3-6 months), it will be considered the same disability and elimination period waived

as of July 1, 2012, every health insurance policy must provide coverage for behavioral health treatment for

pervasive developmental disorder or autism

staff model

physician's, nurses, etc. are employees of HMO may own facilities only deals with its own HMO members

doctors services

physicians & services (outpatient & impatient) physician assistants nurse practitioners social workers physical therapists psychologists

Medicare Supplement Policies

plan A and plan B are not related to medicare plan A and plan B policies

Boycotting

refusal to enter into a business transaction with someone until he complies with certain requirements, conditions, or grants specific concessions

Beneficiary Designation change

you (the policy owner) may make a change while the insured is alive by sending a request

Guaranteed Availability of coverage

you cannot be denied coverage for any reason other than the ability to pay

reciprocal exchange

an unincorporated association overseen by an attorney-in-fact in which each member (subscriber) is an insured and insurer

mistakes happen on an application. to fix it, just make the necessary change(s)

and have the applicant/proposed insured initial the change(s)

Registered Domestic Partners

group health policies must provide equal coverage for the registered domestic partner of an employee to the same extent, and subject to the same terms and conditions, as provided to a spouse of an employee

non-cancelable

coverage cannot be canceled (coverage can usually terminate at specified age, such as 65) premiums cannot be changed

Adult Children

coverage for children covered as a dependent under a parent's group health coverage can typically remain covered through age 25 (i.e. until they turn 26 years old)

extension of benefits

coverage provided for at least 12 months following discontinuance of the plan

creditable prescription drug coverage

coverage that's expected to pay, on average, act least as much as medicare's standard prescription drug coverage could include drug coverage from: current or former employer or union individual health coverage TRICARE Indian health services department of veterans affairs

30-year term life

coverage will end at end of 30-year term insured risks outliving coverage even if renewable, premium will be incredibly expensive

agents wanting to submit applications for QHPs through covered California must first complete all

covered California agent agreements and certification requirements pass the exam with 80%+ recertification is required every 5 years following initial certification

earned surplus

funds earned by insurance company after all looses and expenses have been paid

applies to life and disability: insurers cannot refuse to accept an application or to issue or cancel a policy under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every

gender identity/gender expression ancestry/national origin/race/color religion sex/gender

the beauty of group life

generally, no underwriting approval or evidence of insurability required if enrollment is done during plan's open enrollment period

group life

gets certificate of insurance - issued to each covered employee employer owns and controls the master policy they are in charge of enrolling employees, record keeping, and paying premiums employer & insurer are parties to group insurance contract

in-network

getting care from within the network lower deductibles, copays (if any) & coinsurance

Examples of Qualifying Life Events include

getting married or divorced, including entering into domestic partnership losing coverage through job losing coverage under parent's plan upon turning 26 years old change in residency (e.g. moving to CA from another state) having a child, adopting, foster care child becoming a citizen, national or lawfully present individual increase or decrease in income other events on case-by-case basis determined by covered CA (triggers 60-day special enrollment period)

Life & Disability Analyst Requirements

good business & general reputation licensed 5 years as Life-Only and A&H 'Fit and Proper' (ethically speaking) Pass a qualification exam Must be at least 18 years old

Original Medicare

government health Insurance Part A - hospital insurance Part B - medical insurance Part D - prescription drug coverage Medicare Supplement Insurance (medical policy) - private insurers & optional

Medicare

government health insurance primarily for 65+

Medicare

government health insurance primarily for people 65 and older

insured

subject/object of policy insured's death triggers policy death benefit to be paid out consent/insurable interest required

premium rate=

mortality - investments + expenses

business uses

retirement plans for employees

insured guilty of perjury for

signing a fraudulent claim form

the following managed health plans, in addition to being available as individual plans, can also be designed as group health plans

HMO PPO EPO POS

Implied Authority

Type of authority that is not express, but is customary and necessary so an agent can exercise express authority

Medical Loss Ratio (MLR)

a basic financial measurement used in the PPACA to encourage health plans to provide value to insureds MLR= total claims/total premiums

class designation

a beneficiary designation that groups multiple beneficiaries into one class (e.g. children) as opposed to having to list them each individually by name

home care coverage

a broad term that includes any of the following types of care when provided in the home... hone health care personal care homemaker services hospice (in the home) respite care (in the home)

types of annuities

individual and group

Medi-Cal (medicaid)

joint fed & state insurance program that provides medical, dental, and vision for low income (indigent) state pays administration costs & fed pays claims department of health care services (DHCS) finances and administers medi-cal

policies insuring two lives

joint life policy survivorship life policy

paid-up

no more premium payments have to be made on a policy

coverage provided on

per person basis

level 4

review by the medicare appeals council

underwriting requirements

will vary by insurer

MAGI eligibility for Medical-Cal (adults ages 19-64)

≤138% of FPL

MAGI eligibility for Medi-Cal (children under 19)

≤266% of FPL

Premium

the result of multiplying the applicable number of exposure units by the rate

Rider

addition to a life policy that provides some additional feature or coverage (usually requires addition premium)

cancelable

coverage can be canceled at any time by insurer with notice premiums can be increased

Fully Insured Status

fully insured status obtained when worker has 40 credits (max 4 credits/year)

flexible premium deferred annuity (FPDA)

funded with multiple premiums payments distributions begin in more than 1 year

med supp applications must include

"a rate guide is available that compares the policies sold by different insurers. you can obtain a copy of this rate guide by calling the department of insurance's consumer toll-free telephone number (1-800-297-HELP), by calling the health insurance counseling and advocacy program (HICPA) toll-free telephone number (1-800-434-0222), or by accessing the department of insurance's internet web site"

applies to life insurance and disability income insurers may not unfairly discriminate on the basis of tests of a person's genetic characteristics

"genetic characteristics" means any scientifically or medically identifiable gene or chromosome that is known to be a cause of a disease or disorder that is presently not associated with any symptoms of any disease or disorder

unlawfully acting as an insurer without a certificate of authority can result in a penalty of

$100,000 and/or up to 1 years in jail

What's different about a California Partnership LTC policy?

$100,000 lifetime benefits for every dollar that a CA Partnership LTC policy pays out in benefits... that's one more dollar that will be protected from the "spend down" requirements of Madi-Cal

Standard monthly Part B premium

$134 in 2018 but those with higher modified adjusted gross incomes pay more >85k for individual >170k for couple

premature withdrawal <59 1/2

10% IRS tax penalty applied to taxable portion of any annuity withdrawal prior to age 59 1/2

Punishment of misrepresentation

$25,000 fine and/or up to 1 year in jail, license suspend for up to 3 years and the insurer can have their certificate of authority suspended

right to cancel life policy (<60)

10-30 days return period shall not be lass than 10 days nor more than 30 days can be returned by mail or other delivery method notice must appear on front of policy jacket or cover page

the coalition against insurance fraud estimates that insurance fraud steals at least

$80 billion every year across all lines of insurance

critical illness

% of death benefit advanced if insured has a covered critical illness (e.g. cancer, heart attack, stroke, etc.)

terminal illness

% of death benefit advanced if insured terminally ill and has limited life expectancy (e.g. 6-24 months)

consumer report

*Any Written, Oral, or Other Communication* of *ANY INFORMATION by a Consumer Reporting Agency that bears on a consumer's*: - Creditworthiness; - Credit Standing; - Credit Capacity; - Character; - General Reputation; - Personal Characteristics; or - Mode of Living. that is used or expected to be used in connected with an insurance transaction

Disability policies (including Disability income) shall contain a notice of claim provisions such as follows

*Notice of claim* Written notice of claim must be given to the insurance company within 20 days after the occurrence of the event on which the claim is based

according to california state law a small group is

1-100 FT employees

PPACA (federal) small group

1-50

terms range from

1-year term life 5-year term life 10-year term life 15-year term life 20-year term life 25-year term life 30-year term life

it is unlawful to do any of the following

1. make a knowingly false or fraudulent material statement or material representation for the purpose of: obtaining or denying any worker's compensation discouraging an injured worker from claiming benefits or pursuing a claim obtaining or denying any of the benefits or reimbursements provided in the return-to-work program discouraging an employer from claiming any of the benefits or reimbursement provided in the return-to-work program 2. present a knowingly false or fraudulent written or oral material statement in support of, or in opposition to, a claim for compensation 3. knowingly assist, abet, conspire with, or solicit a person in an unlawful act under the section

an insurable interest, with reference to life and disability insurance, is...

1.an interest based upon a reasonable expectation of: pecuniary (financial) advantage through the continued life, health, or bodily safety of another person AND consequent loss by reason of that person's death or disability 2.a substantial interest engendered by love and affection in the cade of individuals closely related by blood or law

personal insurance planning process

1.identify your goals and priorities 2.gather your data 3.analyze data and create a plan 4.implement your personalized plan 5.review and monitor your plan

California (state) large group

101+

according to california state law a large group is

101+ employees

violation penalties for not including the word insurance or license number

1st offence - $200 2nd offence - $500 3rd + offence - $1,000

replacement commissions

1st year commission for a replacement LTC policy is calculated as follows replacement policy premium - original policy premium = difference in premium x 1st year commission % = adjusted agent commission if difference is ≤$0, then renewal commission will be paid

limited lines auto insurance agent needs

20 hours

Patient Protection & Affordable Care Act (PPACA)

2010 federal law that resulted in a major regulatory overhaul of the private health insurance industry and public health insurance programs in an effort to expand access to insurance coverage (aka Affordable Care Act ACA and Obamacare)

owner can rescind life settlement within

30 days of being executed by all parties and owner has received all required disclosure OR 15 days from receipt by the owner of the proceeds (i.e. money) of the life settlement... whichever is sooner

records shall be maintained for a minimum period of

5 years following policy delivery

Lifetime Reserve Days

60 additional days that medicare will pay for during your lifetime when you're in a hospital for more than 90 days. for each lifetime reserve day medicare pays all covered costs that exceed the daily copay deductibles and copays apply to each benefit period

parking lot rule

60+ normally... during the 30-day cancellation period, the premium for an individual variable life insurance policy or an individual variable annuity contract may be invested only in fixed-income investments and money-market funds

Special Enrollment Period PPACA

60-day period following a qualifying life even during which and individual can enroll in a health plan, change plans, or apply for premiums subsidies even if outside open enrollment period

initial enrollment period

7 month period surrounding 65th bday

Insurance Broker

A person who, for compensation and on behalf of another person, transacts insurance other than life, disability, or health insurance with, but not on behalf of, an admitted insurer

Investigative Consumer Report

A report similar to consumer report, but one that also provides information on the consumer's character, reputation and habits. Obtained through personal interviews with the person's neighbors, friends, associates, acquaintances, or others

10 Standardized Plans (A-N)

A-N

CIGA

CA Insurance Guarantee Association

CLHIGA

CA Life & Health Insurance Guarantee Association

training myst consist of topics related to LTC services and insurance, including:

CA regulations and requirements Available LTC services and facilities Changes or improvements in services or facilities alternatives to purchase of private of LTC insurance (these hours are part of total hours needed)

training must consist of topics related to LTC services and insurance, including

CA regulations and requirements available LTC services and facilities changes or improvements in services or facilities alternatives to purchases of private LTC insurance

Cal-COBRA

CA state law requiring non-government employers with -19 employers to extend group health benefits to covered employees and depends for up to 36 months after a qualifying event 110% for individuals covered under federal COBRA, cal-cobra may also be used to extend health coverage for a combined period of up to 36 months

with multiple license

CE courses for any of the license types can be used

Disability "The Class"

CIC 100 insurance in this state is divided into the following classes (6) Disability disability insurance includes insurance appertaining to injury, disablement or death resulting to the insured from accidents, and appertaining to disablements resulting to the insured from sickness includes- health, long-term care, workers' comp, disability income, specified disease, medicare supplement, accident only

Casualty

Casualty licenses can transact insurance coverage against legal liability, including that for death, injury, disability, or damage to real or personal property

waiver of premium

DI policy provision that waives policy premiums while the insured is disabled as defined in the policy

HMO

DMHC (department of managed heath care)

POS

DMHC (department of managed heath care)

CDI

DOI

Commissioner

DOI

DOI

Department of Insurance

Variable insurance products are regulated by three different entities

FINRA (Financial Industry Regulatory Authority) State Dept. of Insurance SEC (Securities and Exchange Commission)

Disability Income Insurance ( 2 years or less)

Every policy of disability income insurance that is of a short-term limited duration of 2 years or less, that is issued, amended, or rented on or after July 1, 2014, and that provides disability income benefits shall provide coverage for disability caused by severe mental illnesses EX: schizophrenia, schizophrenia disorder, OCD, panic disorder, bulimia, autism, bipolar disorder, anorexia, & major depressive disorder

GLBA (Gramm-Leach-Bliley Act)

Federal law that impacts collection, disclosure, and protection of consumers' nonpublic personal information

Health Insurance Portability & Accountability Act (HIPAA)

Federal law that regulates handling of patient medical records and information

consumer privacy protection laws

GLBA Cal-GLBA-SB1 IIPPA HIPAA

distribution methods

HICAP CDI's toll-free telephone number CDI's website

Health Insurance Counseling & Advocacy Program (HICAP)

HICAP is a state and federally funded program that provides free assistance to medicare beneficiaries, their representatives (e.g. family), and people who will soon be eligible for Medicare concerning: medicare Medicare advantage (Part C) medicare supplement insurance Medi-Cal (medicaid) long-term care insurance

HICAP access

HICAP provides by phone or in person

service type plans (managed care)

HMO (health maintenance organization) PPO (preferred provider organization) EPO (exclusive provider organization) POS (point of service)

IPA model (independent practice association)

HMO contracts with a number of physicians in independent practice may also see non-HMO members

Group Model

HMO contracts with an independent group medical practice primarily provide services for HMO members

network model

HMO contracts with more than one independent group medical practice primarily provide services for HMO members

Materiality

Measure of the estimated effect that the presence or absence of an item of information may have on the accuracy or validity of a statement.

Part C

Medicare Advantage

Apparent Authority

Occurs when an agent exceeds his express authority in an action but the customer has a justifiable belief that the agent is authorized to do the act in question

open (annual enrollment)

October 15-December 7 each year can join, switch, or drop during Part D open enrollment period (coverage begins on January 1)

employer mandate

PPACA requirement employers with 50+ FTEs provide health insurance to full-time employees and their dependents or pay a penalty (employer shared responsibility payment)

employer mandate

PPACA requirement that employers with 50+ FTEs provide health insurance to FTE and their depends OR pay a penalty (employer shared responsibility payment) employer must offer minimum essential coverage that is "affordable" and that provides "minimum value" to their full-time employees (and their dependents) OR pay and employer shared responsibility payment (penalty) to the IRA

guaranteed issue

PPACA rule that requires individual and group health plans to permit enrollment regardless of the insured's health status, age, gender or other factors myst be made available during open enrollment period (and special enrollment period for those with a qualifying life event) applied to most types of health insurance that include minimum essential coverage (MEC)

Metal Tiers

PPAVA establishes four different mental tiers of coverage (bronze, silver, gold, and platinum) for individual and small group plans which represent the share of health care expenses the plan covers (actuarial value)

Explanation of Benefits (EOB)

Part D

Earned Premium

Portion of premium that represents coverage already provided and that belongs to insurer

Part D

Prescription drugs

Medicare Advantage

Private insurance Part C - combines part A, B, and usually D set up like HMOs, PPOs, and PFFSs Part D can only be added to PFFS if not included may cover claims to a different extent may reduce out-of-pocket expenses may include additional health benefits may include optional and/or value added services/benefits can't use or be sold medicare supplement insurance

Insurance Information & Privacy Protection (IIPPA)

State law that establish standards for the collection, use and disclosure of info gathered in connection with insurance transactions

CA Financial Information Privacy Act (Cal-GLBA-SB1)

State law that provides greater privacy protections for consumers' non-public personal information than does the Federal GLBA

CA Financial Information Privacy Act (Cal-GLBA-SB1)

State law that supersedes requirements of GLBA w/ stonier protections for consumers

Producer's Responsibilities

Submit completed app that accurately represents applicant's answers Perform inspections to ascertain condition of property to be insured

Individual Mandate

The PPACA individual mandate required each individual to: maintain minimum essential coverage (MEC) for each month; OR obtain an exemption; OR pay a tax penalty

Applies to Life, Annuity and Disability Benefits (Ind. or Group)

The insurer shall not refuse to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of blindness or partial blindness

Disability Types

Total- Own-Occupation Definition Total- Any-Occupation Definition Residual Permanent Partial Presumptive Total- Dual Defintion Temporary

if fiduciary funds are not handles using options above, the the fiduciary funds shall be maintained in any of the following

U.S. government bonds and treasury certificates, bonds and other obligations of this state or of any local agency or district of the state of CA certificates of deposit (DCs) repurchase agreements revenue bonds and other obligations payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State of CA

no lapse guarantee

UL rider that guarantees policy will remain in force for a guaranteed period (e.g. insured's life) even if policy's cash value drops to zero for less than zero minimum premium will be required in order for no lapse guarantee to remain i effect loans and withdrawals typically restricted

The California department of insurance has jurisdiction over entities that provide coverages designed to pay for heath care providers' service and expenses

UNLESS the health care providers are appropriately licenses or certified by other government agencies

McCarran-Ferguson Act (Public Law 15)

a 1945 federal law that exempts business of insurance from most federal regulation, leaving insurance to be regulated primarily at the state level

Gramm-Leach-Bliley Act

a 1999 federal law with various privacy provisions that apply to companies offering consumers financial products or services regarding the collection, disclosure, and protect of consumers' nonpublic personal information

Essential Health Benefits

a comprehensive package of 10 items and services that must be included with all health insurance plans offered in the individual and small group markets, both inside and out of health benefit exchange (covered CA), as a result of the PPACA

Essential Health Benefits

a comprehensive package of 10 items and services that must be included with all health insurance plans offered in the individual and small group markets, both inside and outside of the health benefits exchanges (covered CA), as a result of the PPACA

pre-existing condition

a condition for which someone has sough medical advice, diagnosis or treatment prior to coverage beginning under a disability policy: exclude coverage for pre-existing condition(s) increase premiums decline application

Contracts of Adhesion

a contract in which one party (insurer) has substantially more power than the other (applicant/insured) in creating the contract

Conditional Contact

a contract that requires the prior performance of some condition in order to be enforceable. A conditional contract remains conditional an performance under its terms is suspended until the required condition is met

covered California for small business

a covered california program that offers small group health and dental plans for small businesses with 1-100 full-time employees (previously SHOP program) offers competitively priced health and dental insurance plans from private insurance companies 4 different levels of standardized health benefits- bronze, silver, gold, platinum 4 different levels of standardized health benefits- bronze, silver, gold, platinum full-time employees must be offered 70% participation requirement part-time employees may be offered employer must contribute at least 50% of cost towards lowest premium available for employee-coverage

per stirpes

a deceased beneficiary's share of proceeds are passed down the bloodline to his/her heirs

corridor deductible

a deductible paid after benefits from basic medical expense policy are exhausted and before benefits from a supplemental major medical policy begin

Modified Adjusted Gross Income (MAGI)

a definition of income created by the PPACA used in evaluating eligibility for Medi-Cal (medicaid) and cost sharing reductions (CSRs) MAGI= household income

Notice of Information Practices

a disclosure form provided to insurance applicants and policyholders that covers the types of personal information that may be collected, the types of sources and investigative techniques that may be used to collect such information and their rights to information privacy

Misrepresentation

a false or misleading statement (terms of a policy, benefits, dividends, financial condition of insurer, purpose of inducing a policyholder to lapse, forfit, or surrender insurance)

Misrepresentation

a false or untrue representation

surrender charge

a fee charged by a life insurer for early termination of a policy to recuperate costs incurred with issuing policy, including agent commissioner and underwriting expenses

surrender charge/period

a fee charged by a life insurer for early termination of a policy to recuperate costs which insured with issuing policy, including agent commissions and underwriting expenses

annuity

a financial contract written by an insurance company that provides for a series of payments, either for a specific period of time or for the lifetime of an individual primarily used to save money for retirement earnings accumulate tax-deferred various distribution options available

market value adjustment (MVA) annuity

a fixed annuity that can have its value adjusted up or down in reposes to changes in interest rates on bonds when annuity withdrawals exceed a certain amount or if fully surrendered (in addition to surrender charge) annuitant with MVA annuity is accepting the interest rate risk usually borne by the insurer MVA annuities will offer slightly higher interest rates compared to non-MVA annuities if MVA annuity surrendered early and bond rates have risen, then annuity value will be adjusted downward to compensate insurer for increase in bond rates

blanket insurance

a form of group disability insurance in which the insured of a class are automatically covered without specifically naming the persons covered

blanket life insurance

a form of group insurance in which the insureds of a class are automatically covered without having to apply for for enroll for the coverage

Disclosure Authorization Form

a form or statement which authorizes the disclosure of personal or privileged information about an individual to an insurance institution, agent, or insurance-support organization

self-insured plan

a group disability plan (e.g. group health) in which employer assumes the financial risks for providing benefits to its employees (aka self-funded plan) employer asks as insurer in self-insured p=lan

contributory

a group health plan in which employees pay all or part of the premiums

non-contributory

a group health plan in which employees pay no part of the premiums as they're paid entirely by the employer

contributory

a group life plan in which employees pay all or part of the premiums (75% participation requirement)

non-contributory

a group life plan in which employees pay no part of the premiums as they're paid entirely by the employer

incontestability

a group life policy shall provide that the validity of the policy shall not be contested after it has been in force for 2 years

misstatement of age

a group policy may contain a misstatement of age provision in the following form: if the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased as the correct age

risk retention group

a group self-insurance plan that is formed to provide liability coverage (no property insurance) for its owners, all of whom share a similar type of liability exposure

qualified health plan (QHP)

a health plan that meets specific guidelines as defined by the PPACA to ensure a standard level of quality. all plans offered through covered CA and federal health benefits exchanges must be QHPs

Qualified Health Plan (QHP)

a health plan that meets specific guidelines as defined by the PPACA to ensure a standard level of quality. all plans offered through covered California and federal health benefit exchanges must be QHPs

applies to life and disability: insurer shall not refuse to issue or sell or renew any life or disability insurance solely by reason of the fact that the person to be insured carries a gene which may, under some circumstances, be associated with disability in that person's offspring, but which causes no adverse effects on the carrier

a higher premium rate or charge cannot be made against the insured lesser coverage or benefits cannot be imposed upon insured

Medi-Cal (Medicaid)

a joint federal & state insurance program that provides medical, dental and vision for low income (indigent)

large group health

a large group health insurance policy shall provide all covered mental health and substance use disorder benefits large group = 101+ employees

Buy-Sell Agreement

a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business (e.g. disability), or chooses to leave the business

buy-sell agreement

a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business (living partners obligated to buy from the deceased partner's estate and they are obligated to sell to the living partner)**life insurance can be used to fund

upon receiving notice of a claim, every insurer shall immediately, but no more than 15 calendar days after receipt of the claim, provide the insured with

a legible reproduction of subdivisions (h) and (i) of Section 790.03 of the CIC along with a written notice containing the following language in at least 10-point type: website help number or go to insurance company to get it free of charge

nursing home

a licensed facility that provides nursing care to this who are chronically ill or can't do one or more ADLs

internal replacement

a life policy or annuity is replaced by a new one within the same company

formulary

a list of prescription drugs covered by a prescription drug plan (PDP) (aka drug list) insurance companies required to file annually to CMS (center for medicare and medicaid services) generally the higher the Tier the more the beneficiary has to pay at least two drugs must be included in each treatment category

mortality rate

a measure for the number of deaths in a particular population, per unit of time typically expressed in units of death per 1,000 individuals per year

federal poverty level (fpl)

a measure of income level issued annually by the department of health and human services used to determine eligibility for certain programs and benefits

reinsurance

a mechanism for spreading risk between two or kore insurers in which one insurer (reinsurer) agrees to pay for losses that exceed the other insurer's (ceding company) established retention limit

DMV Report (MVR)

a motor vehicle report (MVR) from the DMV that provides information about a driver's driving history, including traffic violations and accidents

DMV Report (MVR report)

a motor vehicle report (mvr) from the department of motor vehicles (dmv) provides information about a drivers driving history, including traffic violations and accidents

Insurance solicitor

a natural person employed to aid an insurance agent or insurance broker in transacting insurance coverage on the direct or consequential loss or damage to property of every kind (no life, disability, or health) must be appointed by a agent or broker

individual life and annuity contracts for senior citizens (60+) shall have printed on the front of the policy jacket or on the coverage page

a notice regarding the cancellation period ("free look" or "right to return" period) free look period shall not be less than 30 days can be returned to company or agent

Limited lines auto insurance agent

a person authorized to transact automobile insurance

Fiduciary

a person in a special position of trust and confidence, especially when: handling client's money & advising on financial matters

life settlement broker

a person licensed to act on behalf of an owner of a life insurance policy to negotiate a life settlement contract between the owner and a life settlement provider represents only owner, not provider owes fiduciary duty to owner paid a fee, commission or other valuable consideration by owner

spendthrift

a person who spends money recklessly or wastefully

Insurance Agent

a person who transacts insurance, other than life, disability, or health insurance, on behalf of an admitted insurer

Grace-period

a prescribed period of days after the premium due date, during which an insurance contract is in force and the premium may be paid without penalty

life insurance illustration

a presentation or depiction that includes non-guaranteed elements of a life policy over a period of years into the future

Warranty

a promise made by an insurance applicant to do certain things or to satisfy certain requirements, OR, it is a statement of fact that is declared to be true by the insurance applicant

Estoppel

a relinquishment of a right that results when someone's words or behavior cause another to rely, to his detriment, on those words or behavior. Estoppel bars a party from asserting any rights inconsistent with his words or behavior

assisted living facility (residential care facility for the elderly)

a residential living arrangement for people 60+ that provides personal care for people who need some help with activities of daily living (ADLs), but don't need the level of care that nursing homes give ambulating transferring continence toileting eating dressing bathing

Health Insurance Portability and Accountability Act (HIPAA)

a set of federal laws designed to protect the privacy of patients' medical records and other health information maintained by various 'covered entities'. Provides patients with both access to their medical records and significant control over how their personal health information is used and disclosed

comprehensive major medical policy

a single major medical contract that covers most medical expenses - deductibles, coinsurance, out-of-packet max (stop loss limit)

modified endowment contract (MEC)

a special tax qualification given to a life policy that has been funded with more money than allowed under federal tax laws (i.e. it has failed the 7 pay test) primarily concerns universal life

with respect to those employees validly insured under the prior carrier's policy on the date of discontinuance

a succeeding carrier's replacement policy shall nit reduce or exclude benefits on the basis that a condition giving rise to benefits preexisted the effective date of the succeeding carrier's policy

with respect to those employees validly insured under the prior carrier's policy on the date of discontinuance

a succeeding carrier's replacement policy shall not reduce or exclude benefits on the basis that a condition giving rise to benefits preexisted the effective date of the succeeding carrier's policy

Inspection Report

a supplement to the information in the life or disability application that an underwriter may order as part of the underwriting process that includes information such as personal information age verification employment health hazardous activities habits description of work travel financial profile income profile

inspection reports

a supplement to the information to the information in a life insurance application that an underwriter may order as part of the underwriting process that includes information such as personal information age verification employment health hazardous activities habits description of work travel financial profile income profile

lump-sum death payment

a surviving spouse or child may receive a special lump-sum death payment if they meet certain requirements for $255

monthly benefits

a survivors monthly benefit amount is based on the earnings of the person who died

Agency

a system of marketing insurance in which the insurer (principal) appoints and independent contractor (agent) to act on its behalf in selling its products and representing it to the public

coverage provided under a group disability policy must provide

a totally disabled employee benefits for covered expenses directly relating to the condition causing total disability for a period of not less than 12 months following discontinuance of the group plan by the employer (master policy owner) (extension of benefits)

Aleatory Contract

a type of contract in which performance is based upon a contingent or unknown event and that provides for unequal exchange between parties

fraternal insurer

a type of mutual insurer with some type of social organization in existence based on religion, occupation, national or ethnic heritage, etc., that makes insurance available to its members- typically life, health, or disability insurance

inactive license

a valid and current license for which all appointments (NOAs) have been terminated and, if acting as a broker, the bond required to be posted by broker has been cancelled

standard marker insurer

admitted insurer that offers rates for insured who have an average or better than average loss exposure

community-based care

adult daycare respite care (outside the home) hospice care (outside the home)

assignment

accept medicare's "approved amount" only bill beneficiary for deductibles and coinsurance submit claims directly too medicare be paid by Medicare

acceptable delivery methods

acceptable delivery of a policy starts clock ticking for the right to cancel registered or certified mail first-class mail, with a signed, written receipt of delivery personal delivery, with signed and dated delivery receipt any other reasonable means determined by commissioner

acceptable delivery methods

acceptable delivery of policy starts clock ticking for the right to cancel registered or certified mail first-class mail, with a signed, written receipt of delivery personal delivery, with signed and dated delivery receipt any other reasonable means determined by commissioner

acceptable delivery methods

acceptable delivery of the policy starts clock ticking for the right to cancel registered or certified mail first-class main, with a signed, written receipt of delivery personal delivery, with signed and dated delivery receipt any other reasonable means determined by the commissioner

limited insurance policies

accident only travel accident hospital income specified (dread) disease hospital confinement indemnity credit disability critical illness

annuity phases

accumulation phase annuitization phase (liquidation/distribution phase)

agent's are prohibited from doing any of the following with a non-admitted insurer

act as an agent advertise aid them in transacting insurance UNLESS it is a surplus line brokers (but they still have their limitations)

agents are prohibited from doing any of the following with a non-admitted insurer

act as an agent advertising aiding to transact insurance

Agent's responsibility to insurance company

act in accordance with agency contract act for benefit of insurer account for all property, including money, that comes into his possession disclose all pertinent information about applicants/insured

Agent's Responsibilities to insured/applicant

act in the best interest of applicant/insured be knowledgable about features/provisions of policies clearly explain policy coverages and features collect and account for all premiums paid by insured

prohibited acts with non-admitted insurers

acting as agent for non-admitted insurer advertising non-admitted insurer in any way aiding a non-admitted insurer to transact insurance

Activities of Daily Living (ADLs)

activities used as measures for rating an individual's need for LTC benefits ex ambulating bathing continence dressing eating toileting transferring

Parts A & B Common Exclusions

acupuncture deductibles/ coinsurance / co-payments dental care & dentures cosmetic surgery custodial care / long-term care hearing aids and hearing exams prescription drugs routine food care routine eye care/ eyeglasses routine physical exams private duty nursing first 3 pints of blood in calendar year

the persons attending a meeting with a senior shall end all discussions and leave the home of the senior immediately

after being asked to leave by the senior

no insurer shall discriminate in its claims settlement practices based upon the claimant's

age gender religion income race language territory of the property of person insured nation origin sexual orientration ancestry physical disability

premium factors

age geography tobacco use family size

Disability Income Rating Factors

age/gender job classification health (past & present) avocations (hobbies)

Process for making changes to CA Code of Regulations (CCR)

agency (CDI) must public a notice of proposed regulatory change at least 45 days prior to agency's hearing on proposed change agency (CDI) must formally adopt proposed regulatory change(s) and prepare file "rule making file" Agency (CDI) submits rule making file to CA's Office of Administrative Law (OAL) for review OAL must approve or disapprove proposed regulatory change(s) within 30 days If approved, OAL forwards rule making file to secretary of state for filing and publications in CCRs. (if not approved, OAL returns rule making file to agency (CDI) with state of reasons. Agency then has 120 days to correct deficiencies and resubmit to OAL)

claims communication

agent has 15 days to respond to the claim to the claimant agent has to immediately transmit notice of claim to insurance company insurer has 15 days to acknowledge receipt & begin investigation agent has 21 days to respond to inquiry to DOI

replacement duties

agent must present applicant with notice regarding replacement level applicant with original or copy of all printed communications used for presentation submit copy of "notice regarding replacement" with application to replacing insurer"

if effective date in not known

agent must provide circumstances under which coverage will be effective if there exists conditions precedent

Captive (exclusive) Agency agreement

agent represents only one insurer

standalone notice format 16-bold type

agent's full name/ license # mailing address / telephone #

violation of replacement rules can result in administrative penalties of

agent: 1st violation - $1,000 2nd+ violation - $5,000-$50,000 insurer: 1st violation - $10,000 2nd violation - $30,000-$300,000 commissioner may suspend or revoke the license of any person or entity that violates replacement rules

Special Lines Surplus Line Broker can do

aircraft insurance insurance on property or operations of railroads engaged in interstate commerce various types of transportation risks, including insurance against perils of navigation, transit or transportation upon hulls, freights, or disbursements

Individual DI Policy

an individual disability income policy is one that is purchased by an individual on their own and is not coverage provided through an employer

if the 60+ individual variable life policy or variable annuity returned within 30-day cancellation period, the owner will be refunded

all premiums paid + any policy fee (under parking lot rule) OR account value + any policy fee (under specific request rule)

Per CIC 1871.1, insurers and their agents, which they are investigating suspected fraud claims, shall have access to

all relevant public records that are require to be open for inspection under the government code, and any regulations thereunder

Company's responsibility to agent

allow agent to act in accordance with the terms of agent's contract pay compensation/commission agreed upon in contract indemnify agent for any losses or damages suffered occurring on account of agency relationship

guaranteed insurability rider

allows additional insurance to be purchases without evidence of insurability (E of I) at specified ages of insured and after certain qualifying events

special enrollment

allows individuals who previously declined enrollment in a group health plan to enroll for coverage in the plan regardless of the plan's open enrollment period (type 1- loss of eligibility for other coverage) (type 2- certain life events, including: marriage, birth, adoption/placement for adoption)

automatic enrollment

already receiving SS retirement benefits- automatic enrollment starting 1st day of the month individual turns 65 under 65 and disabled - automatic enrollment after receiving SS disability benefits for 24 months ASL - automatic enrollment the month SS disability benefits begin medicare card sent in mail 3 months before 65th birthday or 25th month of disability

IMPLIED DECLARATIONS

also applies to employing P&C broker-agents that file NOAs on behalf of insurance solicitors

Participating Physician

always accepts medicare assignment

essential health benefits include

ambulatory patient services (aka outpatient care) emergency services hospitalization maternity & newborn care mental health & substance use disorder services prescription drugs rehabilitative & habilitative services and devices laboratory services preventive & wellness services (incl. chronic disease management) pediatric services, incl. dental & vision care

an incomplete or deficient action notice filed with the DOI, shall require the filing of an

amended, complete action notice, together with the necessary filing fee

annual deductible

amount beneficiary must pay each year before Part D plans begin to pay its share of covered drugs deductible amounts may vary by plan, but no plan may have deductibles that is higher than $405 in 2018

copays/coinsurance

amount beneficiary must pay towards covered prescriptions after deductible satisfied

face amount

amount of insurance provided by a life policy -level, increasing, decreasing

usual, customary, and reasonable

amount paid under policy for a medical service is based on what providers in the same geographic ares usually charge for the same or similar medical service

cold lead rule #1

an advertisement or other device designed to produce leads based on a response from a potential insured that is directed towards persons 65 years of age or older shall prominently disclose that an agent may contact the applicant if that is the fact

cold lead device generation

an agent or broker who contacts a consumer as a result of receiving information generated by a cold lead device, shall immediately disclose the fact to the consumer

cold lead rule #2

an agent who makes contact with a person as a result of acquiring that person's name from a lead generating device shall disclose that fact in the initial contact with the person

life insurance creates

an immediate estate

accidental bodily injury

an injury to the body (the result of an accident), if external origin, unintentional and unforeseen by the injured person (on the result has to be accidental)

insurance services office (ISO)

an insurance advisory organization that develops policy forms (i.e. insurance policy language) for use in the standard market ISO is leading supplier of statistical, actuarial, underwriting, and claims data to insurance industry when it comes to life insurance there are no standard life policies

surplus lines broker

an insurance producer with a specialty license to place insurance with non-admitted insurers, covering risks other than aircraft and certain marine and transportation risks

Surplus Line Broker

an insurance producer with a specialty license to place insurance with non-admitted insurers, covering risks other than aircraft and certain marine and transportation risks.

Special Lines Surplus Line Broker

an insurance producer with a specialty license to place the following types of insurance with non-admitted insurers

an insurer cannot escape the condition of insolvency by being able to provide for all its liabilities and for reinsurance of all outstanding risks

an insurer must also be possessed of additional assets equivalent to such aggregate "paid-in capital" required by this code after making provision for all such liabilities and reinsurance

Fraud

an intentionally false representation or concealment of a material fact with the intent and result that it be acted upon by another party

administrator

an outside company that performs various aspects for managing and employer's group insurance plan(s), including collecting premiums and adjusting and settling claims (aka third party administrator or TPA) may collect and handle premiums may adjust and settle claims of covered employees certificate of registration from CDI required to act as an administrator

administrator

an outside company that performs various aspects of managing an employer's self-funded group insurance plan(s), including collecting premiums and adjusting and settling claims (aka third party administrator to TPA) may collect and handle premiums may adjust and settle claims or covered employees certificate of registration from CDI required to act as an administrator

HICAP is administered by the California Department of Aging

and operated locally by area agencies on aging

basic life illustration

annual MEC limit

Part B has

annual deductible coinsurance (usually medicare pays 80% and beneficiary pays 20%) there is no annual out-of-pocket maximum for part B claims

immediate annuity (IA)

annuitization begins within 1 year

life with period certain

annuity payments are made for annuitant's lifetime, but if annuitant dies before period certain is up, remaining payments made to beneficiary (the longer the period certain, the lower the annuity payment)

life-only

annuity payments made as long as the annuitant lives. payments cease upon annuitant's death. (aka pure annuity or straight annuity) provides highest payout amount because it has the least guarantees

period certain (fixed period)

annuity payments made for a fixed period of time (e.g. 5, 10, 15, 20, 25 years). if annuitant dies before the fixed period is up, remaining payments will be made to beneficiary

life income with refund option

annuity payments made for annuitant's lifetime, but if the annuitant dies before total accumulated value of annuity prior to annuitization has been paid out the beneficiary will receive the remainder

surrender charges

annuity surrender charge schedule surrender charge is in addition to any penalty that applied to withdrawals <59 1/2

joint-and-survivor annuity

annuity that covers two annuitants jointly and pays out until the last annuitant (survivor) dies

joint-life annuity

annuity that covers two annuitants jointly and stops paying out after the first annuitant dies

temporary insurance agreement

another term for a binding receipt for a life insurance application, but usually contains a dollar limit and time

section 1729.2 "background information" includes

any admission, or judicial finding or determination, of fraud, misappropriation or conversion of funds, misrepresentation, or breach of fiduciary duty misdemeanor or felony conviction filing of felony criminal charges admin action regarding professional or occupational license a bankruptcy, only if it discharges any insurance premiums or fiduciary funds owed to any company

special needs child

any child over the age of majority who is both: incapable of self-sustaining employment by reason of an intellectual disability or physical handicap AND chiefly dependent upon the employee for support and maintenance

Condition Precedent

any event or act that must take place or be performed before the contractual right will be granted

Condition Subsequent

any event or act that serves to cancel a contractual right

proof of claim

any evidence or documentation that provides evidence of a claim that reasonably supports the magnitude or the amount of the claimed loss

types of life policies

any life insurer may issue life, disability, term, and endowment insurance on the group plan, with or without annuities, and with premium rates less than the usual rates for such insurance most common is 1-year term life (annually renewable term)

cost sharing devices

any mechanism used in a disability policy that forces insured to share in some of the costs of their covered losses deductibles copayments coinsurance

cost sharing device

any mechanism used in a disability policy that forces insured to share in some of the costs of their covered losses deductibles copayments coinsurance

reduction (loss control, loss prevention)

any method that reduces the severity of loss or likelihood of loss from occurring (e.g. sprinklers to reduce fire risk)

third party claimant

any person asserting a claim against any person or the interests insured under an insurance policy

first party claimant

any person asserting a right under an insurance policy as a named insured

claim forms provided by an insurer to any person making a claim for accident, injury, death, or other noticed or claimed loss, must include the following statement regarding false or fraudulent claims

any person who knowingly presents false or fraudulent claim for the payment of a loss is guilty of a crime and maybe be subject to fines and confinement in state prison

claimant

any person who makes a claim in attempt to recover damages sustained. (can insure someone acting on behalf of injured party, such as an attorney, adjuster, or family member)

automatic premium loan (APL)

any premium not paid by the end of its grace period will be paid by charging it as a policy loan if you requested it in writing and the maximum loan value is sufficient to cover the premium

managed care

any techniques used by insurers to contain costs capitation preventive care case management gatekeeper

replacement

any transaction in which a new individual life insurance policy or annuity is to be purchased and existing individual life insurance policy or annuity will be lapsed, forfeited, surrendered, or otherwise terminated

evidence of insurability (E of I)

anything an insurer requires from an applicant for life or disability insurance that is used to help determine whether our not the applicant qualifies for the insurance applied for: answer to applicant questions medical history questionnaire- blood sample, urine sample, hearth rate, height, blood pressure, weights electrocardiogram (ECG or EKG)

the same license may be used after a membership change in a copartnership until action taken by commissioner on application described below IF the following requirements are met

app for registration of change in membership filed within 30 days of change above application is signed by a general partner someone who exercised agency powers in old copartnership must remain in new copartnership

required signatures

applicant insured policy owner agent NOT beneficiary

illustrations must be signed and dated by both the

applicant and the agent

applicant

applies for a life insurance policy on: his own life OR on the life of another person (e.g. spouse, minor child)

consumer driven health plan (CDHP)

arrangement in which a product such as a MSA or HSA is used to pay routine healthcare expenses directly by insured with a HDHP in place to protest against a catastrophic medical expenses uses MSA (medical savings account) or HSA (health savings account) is used to pay routine healthcare expenses directly by insured + HDHP (high deductible health plan) which is used to protect against catastrophic medical expenses

split dollar life insurance

arrangement in which employer and employee 'split' the premiums, cash values and death benefits for a life policy used to retain key employees marker larger death benefit affordable can provide additional retirement income guaranteed to receive contributions

risk sharing

arrangement in which members of a group agree to collectively cover the losses of any of its members

Disability

as of June 30, 2018, the maximum coverage is $574,490

Disability Benefit Amount

as there might be income from other sources in addition to DI insurance, insurers do not want to incentivize an insured to "remain" disabled when they can really work by allowing their total income during disability to be too high DI insurers will typically only issue DI benefit amounts in the 50-70% of gross average earned income

Under original medicare, a provider has two options for reimbursement for services/goods provided to beneficiary

assignment non-assignment

homemaker services

assistance with activities necessary for a person to remain in his residence, that is provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary term under medical direction light housekeeping laundry limited personal care grocery shopping meal preparation shopping

retention

assuming all or part of a risk (i.e. self-insure). Viable strategy for small risks where cost to insure is greater than total losses sustained AND where losses are highly predictable (e.g. not carrying physical damage coverages on auto policy)

currently insured status

at least 6 credits to their name

renewal notice emailed or mailed by CDI

at least 60 days before expiration date of license

Representations may be made

at the time of or before issuance of the policy

The insurer or agent must provide a notice of information practices to an applicant no later than

at the time of policy delivery when personal information collected only from the applicant, an insured under the policy, or from public records OR at the time the collection of personal information is initiated when personal information is collected from a source other than the applicant, an insured under the policy, or public records

for life an disability insurance insurable interest is only required to exist

at the time the contract becomes effective... but does not need to exist at the time the loss occurs

conservation

attempt by existing insurer or its agent to dissuade a policy owner from the replacement of existing life insurance or annuity

an admitted insurer can transact any class of insurance for which it is

authorized by its articles or incorporation (charter) and admitted to transact by the commissioner

Medical Enrollment

automatic enrollment need to sign up

cost of living rider (COLA)

automatically increase monthly benefit amount paid out for a disability income claim in conjunction with increases in consumer price index (CPI) without requiring E of I

cost of living rider (COLA)

automatically increases policy face amount in conjunction with increases in consumer prince index (CPI) without requiring evidence of insurability (E of I) premiums will increase with increases in policy face amount

automatic increase provision

automatically increases policy's pre-disability benefit amount by a specified percentage each year (e.g. 5%) without requiring E of I

sections on a life insurance application

available products/plans app submission guidelines important forms supplemental applications forms and buyer's guide proposed insured's information plan information section owners information - if the policy owner is someone other than insured beneficiary information other coverage information comments rider on other proposed insured non-medical underwriting questions finances family history medical underwriting questions comments section for medical underwriting section for "yes" questions agreement section producer statement producer's report (agent's statement) payment information payor information checking/savings account info for premium payments authorization for account withdrawals authorization to disclose personal/medical information third party notice request form temporary life insurance agreement notice of AIDS/HIV testing and consent for testing notice regarding replacement

standard

average $$

corporation

business entity with an unlimited life and owned by stockholders

CIC & CCR identify many unethical and illegal practices

but they are not a complete guide to ethical behavior

Indemnity Type Plans

basic medial major medical with these plans insureds choose their own doctors, hospitals and other health care providers insureds usually have to pay providers out of their own pocket and then complete a claim form and submit it to insurer for payment

Principle of Indemnity

basic principle of insurance that says the goal of insurance is to restore one back to his previous condition that existed before the loss

credit

basic unit based on income used in determining whether a worker is insured under social security programs (aka quarter of coverage) 1 credit = $1,320 4 credits max/year 40 credits = "fully insured"

a qualified health plan (QHP) must

be certified by each exchange in which offered provide essential health benefits defined by PPACA be offered by a health insurance issuer that: is licensed and in good standing in each state it offered QHPs, offers at least one silver and one gold level QHP, charged same premium rate inside and outside of exchanges, and complies with regulations developed by exchanges and HHS secretary

Insurers will require an application for insurance to

be fully completed be signed by the applicant and agent include initial premium if coverage bound by agent possibly include inspection reports/pictures of property to be insured

applies to life and disability: premium price charge differentials

because of the sex of any individual when based on objective, valid, and up-to-date statistics; and actuarial data or sound underwriting practices are allowed, unless otherwise prohibited by law EXCEPTION a health insurance policy issued, amended, or renewed on or after January 1, 2011, shall not be subject to premium prices, or charge differentials because of a person's sex, gender identity or gender expression

Representations can be altered or withdrawn

before the execution of the contract, but not afterwards

Benefit Period

begins the day admitted to hospital or SNF and ends when no impatient hospital or covered skilled care in a SNF has been received for 60 consecutive days

reasons licensing app could be denied or permanent license could be suspended or revoked

being convicted (not just charged) of any felony convicted (not just charged) of a misdemeanor involving insurance law being unqualified to perform duties lacking integrity/ good business reputation lying on license app or about a policy exposed public to loss due to incompetence violated or allowed employee to violate CIC acted as agent before had insurance license submitted fraudulent educational certificate refused a professional, occupational or vocational license or had such a license suspended or revoked by any licensing authority WITH A HEARING

substandard

below average $$$

annuity beneficiary taxation

beneficiaries of an annuity will be responsible for income taxes on it. the taxation will depend on how the beneficiary takes the annuity benefits (e.g. lump sum vs. annual distributions)

Participating Claims Example (Original Medicare)

beneficiary pays deductible/coinsurance to participating physician participating physician bills CMS for approved amount CMS will send payment to provider know that the medicare claim is started when provided bills medicare

Non-Participating claims example (original-medicare- assignment not accepted)

beneficiary pays entire amount physician will bill CMS for approved amount CMS sends payment for beneficiary medicare claim is started when provider bills medicare

Rehabilitation Benefit

benefit in many DI policies that encourages a disabled insured to return to work by paying to rehabilitate him to return to his old original occupation or for some new type of work insurer may require a rehabilitation plan to be approved in writing in advance

Losses not covered

bodily injury or property damage fraudulent acts employment-related matters false advertising failure to protect clients' personally identifiable info patent infringement or theft of trade secrets

names that cannot be disapproved by commissioner

bona fide natural name Life Agents - CLU p&C Broker-Agents - CPCU

to get a medicare supplement policy, a person must have

both Medicare part A and part B

B-N (not E, H, I, J)

broader coverage plans E, H, I, and J are no longer sold, but if someone already has one they can generally keep it

whole life policy

bundled policy (not flexible- fixed)

Risk Classification

classification system used by life and disability insurers that takes into account factors such as tobacco use, high, weight, medical history, family history, occupation and hobbies to determine life insurance rates. the most common classes include: substandard (below average), standard (average), and preferred (above average)

insurers not allowed to use pretext interview UNLESS

can be used while investigating a claim where criminal activity, fraud, material misrepresentation or material nondisclosure is suspected

non-assignment

can charge more "approved amount" but no more than "limiting amount" (15% more) can bill beneficiary for entire amount of services/goods provided (but possibly limited to "limited amount") submit claims directly to medicare beneficiary will be paid by Medicare since beneficiary already paid provider

special enrollment

can join, switch, or drop medicare drug plan in certain special situations such as: move out off service area have medicaid live in an institution (e.g. nursing home)

Independent Agents

can represent one or more insurer

Property

can transact insurance coverage on the direct or consequential loss or damage to property of every kind

guaranteed renewable

cannot be cancelled premiums can be increased, but by class only

non-cancelable

cannot be cancelled premiums cannot be increased

PFFS (private fee-for-service) least restrictive

care can be received from any doctor, other health care providers, or hospital as long as they agree to treat you

PPO is in the middle

care can be received in or out of network, but beneficiary will pay higher out-of-pocket costs outside

chronic care

care for conditions of a continuous (chronic) nature and might involve medical treatment, but frequently involved non-medical care assisted living, nursing home, home not covered by health insurance

HMO is most restrictive

care must be received from within network to be covered. primary care doctor required

alternatives to doing a life settlement

cash surrender policy loan/withdrawal adjust premiums accelerated benefits

what can happen at maturity

cash value paid out creating taxable distribution some policies may have maturity extension rider

reduced paid-up

cash value used as a single premium payment to fully pay up policy with a reduced face amount

extended term

cash value used as a single premium to buy term insurance with same face amount as the whole life policy

outpatient & diagnostic services

certain blood tests urinalysis some screening tests CT scans MRIs EKGs X-rays PET scans

Group Disability Income

certificate of insurance issued to each covered employee employer owns and controls the master policy they're in charge of enrolling employees, record keeping, paying premiums. employer & insurer are parties to group insurance contract

HICAP's volunteer counselors are trained to assist with

choosing/enrolling in medicare health plans, including PDPs filing medicare claims and appeals comparing med spell and LTC policies

people eligible for medicare

citizens & legal residents 65+ in U.S. for at least 5 years permanently disabled & received SS disability for 24 months end stage renal disease Lou Gehrig's disease

Americans with Disabilities Act (ADA)

civil rights law that protects against disability-based discrimination in employment, governmental and commercial activities, transportation, and telecommunications an individual with a disability is a person who has a physical or mental impairment that substantially limits one or more major life activities employers may not fire or refuse to hire a qualified applicant who has a disability, OR who has a dependent with a disability, in order to avoid potential increases in health insurance costs

risk classification

classification system used by life insurers that takes into account factors such as tobacco use, height, weight, medical history, family history, occupation and hobbies to determine life insurance rates. the most common class include preferred standard substandard

life illustration requirements

clear label name, age, sex of insured initial death benefit company product name, generic name, and form # dividend option if applicable page # with relationship to total # of pages name of insurer name & address of agent of producer

need to sign up

close to 65 and not receiving SS retirement benefits - contact social security 3 months before turning 65 or apply online at socialsecurity.gov end stage renal disease - contact social security for assistance with enrolling

solicitation

cold calling quotes mailings

transaction of matters

collecting premiums adding new car to auto policy adding newborn to health policy address change claims

family protection policy

combines whole life policy with a level term rider to cover breadwinner

family policy

combines whole life policy with term riders to cover all family members in a single packaged policy

HMOs can be pwned by

commercial insurers local communities employers governments unions

1st year commission limit

commission limited to 200% if 2nd year commission

replacement

commissions paid for replacement med supp policy cannot be greater than renewal commission normally paid

marketing

communicates the value of a product/service to customers, for the purpose of selling it

major medical

comprehensive supplemental

SS Retirement Program

compulsory for most workers provides minimum floor of income based of earnings history fully insured status required (i.e. 40 credits) reduced retirement benefits available as early as age 62 "full retirement age" depends on worker's year of birth (earliest is 65 years old)

Insurer can rescind an insurance policy when there is

concealment, an intentional and fraudulent omission, if representation is false in material point, & the violation of a material warranty

original medicare

consists of parts A & B and is managed by the federal government (fee-for-service plan)

How it works

consumers must purchase QHP through covered California to obtain premium tax credits covered CA estimates premium tax credit and advances to insurer if you choose insurer uses premium tax credit to reduce monthly premium premium tax credit will be reconciled with federal tax return if insured opts not to take monthly credit

Express Warranty

contained in writing and made a part of the policy

separate account

contains various "mutual fund-like" accounts called sub accounts used to provide investment choices for insurer's variable insurance products separate meaning separate from insurer's General Account

Bilateral Contract

contract in which each party exchanges a promise for a promise

life settlement

contract in which life policy owner assigns ownership to provider in exchange for a sum of money that is less than policy's death benefit, but more than its cash surrender value

Life settlement

contract in which life policymaker (owner) assigns ownership to Provider in exchange for a sum of money that is less than policy's death benefit, but more than its cash surrender value

Unilateral Contract

contract in which only one party makes a promise in exchange for a specific act of the other party

qualified annuity

contribution limits will apply 10% penalty on distributions made before age 59 1/2

After-tax

contributions made with after-tax dollars

non-qualified

contributions made with after-tax dollars distributions will be partially taxed

non-qualified

contributions made with after-tax dollars distributions with be partially taxed (no contribution limits) (10% penalty on distributions <59 1/2)

Pre-tax

contributions made with pre-tax dollars

qualified

contributions made with pre-tax dollars distributions will be 100% taxable

qualified

contributions made with pre-tax dollars distributions will be 100% taxable (contribution limits will apply) (10% penalty on distributions <59 1/2)

reasons app or license could be denied/suspended/revoked without right to hearing

convicted (not just charged) of any felony convicted (not just charged) of a misdemeanor involving insurance law professional, occupational or vocational licensing app denied within last 5 years professional, occupational or vocational license revoked or suspended within last 5 years

notice to applicant regarding replacement of accident and sickness or LTC care insurance

copy signed by insured and agent/producer and submitted to insurer IF replacement is involved

A

core

stock insurance company

corporation which issues shares of stock to stockholders (shareholders/investors) who are the owners of the company and entitled to share in the profits by way of stock dividends

outline of coverage

cover page premium info disclosures charts of each plan must be provided when applicant is presented to prospective applicant and acknowledgment of receipt of the outline must be obtained from the applicant

how is HIPAA information protected

covered entities must have safeguards in place to protect your health information and ensure they do not use or disclose your health information improperly covered entities must reasonably limit uses and disclosures to the minimum necessary to accomplish their intended purpose covered entities must have procedures in place to limit who can view and access your health information as well as implement training programs for employees about how to protect your health information business associates also must put in place safeguards to protect your health information and ensure they do not use or disclose your health information improperly

Individual Life Insurance

covered one life, but survivorship and joint-life covered

travel accident insurance

covers accidental death or injury resulting from accidents occurring while a fare-paying passenger on a common carrier

skilled nursing facility care

covers full-time skilled nursing or rehabilitation staff needed to manage, observe, and evaluate one's care 100 days covered by medicare 3-day inpatient stay required

credit disability (credit health)

covers loan payment to a specific creditor of the insured if the insured becomes disabled as defined in the policy

home health care

covers part-time or intermittent skilled nursing care and/or physical therapy, speech language pathology services, and continued occupational services

home health care

covers part-time or intermittent skilled nursing care and/or physical therapy, speech-language pathology services, continued occupational services (covered under part B only if no Part A coverage)

single premium immediate annuity (SPIA)

funded with one lump sum premium payment distributions begin within 1 year flexible premium deferred annuity (FPDA)

option 1 - level death benefit UL

death benefit = basic amount less insurance has to be purchased as account value grows account value will grow faster nevus expenses will be lower compared to option 2

option 2 - increasing death benefit UL

death benefit = basic amount + account value insurance amount remains level cost of insurance (mortality) charges will be higher compared to option 1

life insurance taxation - death benefit proceeds

death benefit proceeds are not taxable to the beneficiary however... any earnings generated by the death benefit proceeds are taxable as income (periodic interest payments made to beneficiary will be taxable income)

mortality

death, especially on a large scale

mortgage (life) redemption insurance

decreasing term life insurance designed to have face amount mirror outstanding mortgage balance death benefit can be used to pay off mortgage balance

efforts to combat fraud

department of insurance has an internal fraud division (required by law) each insurance company had their own fraud units

Long-term care insurance personal worksheet

describes premiums for policy. also asks about source and amount of income and amount of savings and investments

Medicare Summary Notice (MSN)

detailed notice sent to a medicare beneficiary quarterly describing services and cost of services provided under Part A, Part B, and Part C for that quarter snapshot of recent claims annual deductible status list of health care provider visits claim status for each claim fraud information appeal claim instructions definitions & instructions

actuarial

develops rates based on the detailed analyses of: operating expenses claims estimates investment earnings estimates

agents selling accelerated death benefits must be able to describe the following differences between benefits provided under SDB and benefits provided under LTC insurance

difference between benefits afforded to an insured differences between benefit eligibility criteria whether an elimination period applied and a description of the eliminated period benefits under the ADB or LTC insurance if benefits are never needed the benefits under the ADB or LTC if benefits are needed restrictions on benefit amounts tax treatment of benefits and premiums income and death benefit considerations

Group DI Taxation

disability benefits for which the employee paid with after-tax dollars will be tax-free disability benefits for which the employer (sponsor) paid with pre-tax dollars will be taxable

disability business overhead expense

disability income policy designed to reimburse a business owner for overhead expenses up to specified amount during owner's disability

negotiations preliminary to execution

discussing benefits, terms, conditions

sickness

disease or illness

an organization ceases to exist as an entity eligible to hold a license upon

dissolution of a corporation dissolution of or change in membership of a copartnership (partnership) termination if an association exception: may continue to transact under license if certain conditions met, application filed and fees paid within 30 days

reduced premium

dividend applied to current premium in order to reduce it

cash

dividend paid out in cash to policy owner

accumulation at interest

dividend retained by insurer in a special account that earns interest (like savings account)

paid-up additions

dividend used as a single premium to purchase paid-up whole life insurance

one-year term

dividend used to purchase 1 year term policy

physician's visit expense

doctor's hospital visits doctor's office visits

Part B Benefits

doctors services outpatient & diagnostic services home health care hospice care

Utmost Good Faith

doctrine that says each party is legally entitled to rely upon the representations and declarations of the other and that each party has a duty to reveal all material information relating to the contract in question

≤49 FT employees

does not apply employer mandate

Non-Admitted Insurers

does not have to be approved ("admitted") by the state from and rates do no have to be approved does not pay into Guarantee Association CIGA will not apply to liquidation

regulation of non-admitted insurers (E&S Lines Insurers)

does not have to be approved by the state forms and rates do not have to be approved does not pay into Guarantee Association (CIGA) CIGA will not pay out in case of insurer insolvency policyholder cannot appeal to CDI

COLA

during disability

all insurers, brokers, agents, and others engaged in the transaction of insurance owe a prospective insured who is 65 years of age or older, a...

duty of honesty good faith fair dealing

every licensee and every applicant for a license shall immediately notify the commissioner (CDI or DOI) using an electronic service approved by the commissioner for any change in his or her

e-mail address residence address principal business address mailing address IMMEDIATELY

In an agency relationship

each party is deemed to have knowledge of the other

HICAP services

educational services (community education and outreach events) consumer advocacy legal assistance

Late Enrollment Penalties Part B

effective when individual does not buy part B when first eligible premium increased by an additional 10% for each full 12-month period that individual could have had part B, but didn't sign up no penalty for part b (and part a if you have to buy it) if special enrollment period applies

Late Enrollment Penalties Part A

effective when individual is not eligible for premium-free part A and does not buy Part A when first eligible premium increased by 10% at time of enrollment. increased premium will be effective for twice the number of years individual could have had part A, but didn't sign up

Insurance Commissioner

elected position by citizens of CA serves as head of department of insurance role is to enforce insurance laws 2 term max (1 term = 4yrs)

participating (par)

eligible to receive dividends

HMO exception

emergency care received outside of HMO network generally will be covered

certificate of insurance

employee gets that and it spells out what the policy is

extension of benefits may terminate when

employee is no longer totally disabled OR succeeding carrier elects to provide replacement coverage to disabled employee w/o limitation

extension of benefits may terminate when

employee is no longer totally disabled or succeeding carrier elects to provide replacement coverage to dibbled employee w/o limitation

flexible spending account (FSA)

employee-funded spending account that can be used by employee to pay for eligible medical/dental expenses determined by the employer (established by employer) employer determines - contribution limit limitations helps employee to pay for expenses not covered such as - deductibles, copays, coinsurance, OTC medications (with RX) tax-free for eligible expenses (unspent $$ forfeited to employer, if grace period applies to used funds at end of the year)

employer owns and controls master policy

employer & insurer are parties to group insurance contract enrolling employees record keeping paying premiums

single premium deferred annuity (SPDA)

funded with one lump sum premium payment distributions in more than 1 year

50+ FY employees

employer must offer minimum essential coverage that is "affordable" and that provides "minimum value" to their full-time employees (and their dependents) OR pay and employer shared responsibility payment (i.e. penalty) to the IRS

salary continuation plan

employer plan designed to provide additional supplemental retirement income to selected key executives life insurance can be used to informally fund the money row company will need to pay out promised benefits

group term life

employer- premiums it pays are tax-deductible beneficiary- death benefit is tax-free employee- up to $50,000 of coverage can be provided tax-free to employee imputed costs of coverage over $50,000 will be included in employee's income as taxable fine benefit (cost to include on W2)

health reimbursement account (HRA)

employer-funded spending account that can be used by employee to pay for eligible medical/dental expenses determined by the employer employer determines - contribution amounts, eligible medical/dental expenses rollover rules helps employee pay for expenses NOT covered such as- deductibles, copays, coinsurance, OTC medications (with RX)

high pressure tactics

employing any method of marketing having the effect of inducing the purchase of insurance through force, fright, or threat, whether explicit or implied, or undue pressure to purchase insurance

Gramm-Leach-Bliley Act Pretesting Protection

encourages financial institutions implement safeguards against pretexting (i.e. when someone tries to gain access to a consumer's personal information without authority to do so)

rules covering life insurance illustrations exist to

ensure illustrations do not mislead consumers ensure illustrations are understandable by prescribing standard formats to be followed ensure certain required disclosures are specified

State Dept. of Insurance

ensures applicable state insurance laws are being followed by insurers and consumers

An intentional and fraudulent omission in communicating information regarding a warranty by an insured

entities the insurer to rescind

Admitted Insurer

entitled to transact insurance in CA by CDI receives certificate of authority

Health Benefit Exchange

entity intended to create a more organized and competitive market by offering a choice of plans made available by commercial insurers, establishing common rules regarding offerings and pricing, and providing information to help consumers better understand the options available to them California calls its Health Benefit Exchange - covered california Individual and families & small businesses - original name was shop program and the rebranded name is covered california for small business

The purpose of the Insurance Information & Privacy Protection Act is to

establish standards for the collection, use and disclosure of information gathered in connection with insurance transactions by insurance institutions, agents or insurance support organizations maintain a balance between the need for information by those conducting the business of insurance and the public's need for fairness in insurance information practices, including the need to minimize intrusiveness establish a regulatory mechanism to enable natural persons to ascertain what information is being or has been collected about them in connection with insurance transactions and to have access to such information for the purpose of verifying or disputing its accuracylimait the disclosure of information collected in connection with insurance transactions enable insurance applicants and policyholders to obtain the reasons for any adverse underwriting decision

applies to life and disability: insurers shall not consider sexual orientation in their underwriting criterial or utilize marital status, living arrangements, occupation, sex, beneficiary designation, ZIP Codes or other territorial classification within this state, or any combination thereof for the purpose of

establishing sexual orientation OR determining whether to require a test for the presence of HIV where that testing is otherwise permitted by law

HMOs usually include coverage for prescriptions

even though not reward to by law

subsequent training

every life agent who sells annuities shall satisfactorily complete: 4 hours of training prior to each 2-year license renewal training shall consist of: CA law, regulation and requirements prohibited sales practices recognition of indicators that prospective insured may lack necessary short-term memory of judgement fraudulent & unfair trade practices

initial training

every life agent who sells annuities shall satisfactorily complete: 8 hours of training prior to soliciting individual consumers in order to swell annuities

domestic partnerships

every policy issued, amended, delivered, or renewed in California's shall provide coverage for the registered domestic partner of an insured or policyholder that is equal to and subject to the same terms and conditions as the coverage provided to a spouse of an insured or policyholder

relative value unit

every type of surgery is given a point & then in the policy there will be a conversion factor

dental insurance typically includes coverage for

exams cleanings x-rays sealants fillings root canals extractions crowns

fiduciary funds cannot be commingled with other funds

exception- additional funds can be commingled as licensee may deem prudent for the purpose of advancing premiums, establishing reserves for the paying of returns commissions (i.e. chargebacks) or for such contingencies as may arise in her business of receiving and transmitting premium funds

no rate shall be approved or remain in effect which is

excessive inadequate unfairly discriminatory no consideration shall be given to the degree of competition commissioner will consider whether rate mathematically reflects insurance company's investment income

annuity exclusion ratio when working with non-qualified annuity

exclusion ratio = IN (total contributions)/OUT (total expected payout)

RRG are

exemption from multiple-state oversight member control RRGs allowed as federal liability risk retention act limited to commercial enterprises & governmental bodies can only provide liability insurance (no property) not covered by CIGA

policy owner

exercises all policy rights select/change beneficiary transfer ownership make policy changes make policy loans/withdrawals receive policy dividends applicant/policy owner usually same

if conservation undertaken

existing insurer must within 20 days of receiving notice from replacing insurer, furnish policy owner with policy summary for existing policy

Implied Warranty

exists even though it is not in writing and does not appear to be part of the policy. It is understood without being directly stated, to be present by the parties. They are implied by law from the circumstances surrounding the contract

platinum

expect to pay 10%

gold

expect to pay 20%

silver

expect to pay 30%

bronze

expect to pay 40%

Temporary Disability

expected to fully recover

Permanent Disability

expected to last a lifetime

decreasing term

face amount decreases systematically (e.g. annually) premium usually remains constant throughout life of policy not very popular anymore due to competitiveness of level term

Covered Loss Examples

failure to procure coverage failed to adequately explain policy provision failure to adequately identity exposures failure to adequately identify exposures failure to recommend a coverage inaccurate/ incomplete information failure to provide timely notice of a claim to an insurer

claim forms provided by an insurer to any person making a claim for accident, injury, death, or other noticed or claimed loss, must include the following statement regarding false or fraudulent claims Auto Theft Claims:

false representation made on the signed claim for by the insured subject the insured to a penalty of perjury

COBRA (consolidated omnibus budget reconciliation act of 1985)

federal law requiring private employers and state and local governments with 20+ employees to expense group health benefits to covered employees and dependents for 18-36 months following any of the following qualifying events: termination (other than for gross misconduct, 18 months) reduction in work hours (18 months) employer can charge up to 100% of premium + 2% admin fee (102%)

COBRA

federal law requiring private employers and state and local governments with 20+ employees to extend group health benefits to covered employees and dependents following certain qualifying events permits a child who "ages out" of a group health plan (i.e. turns 26) to continue coverage under the group plan for up to 36 months

Family & Medical Leave Act (FMLA)

federal law that provides employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (group health benefits must be maintained during leave) birth and care of the newborn child of an employee medical leave when the employee is unable to work because of a serious health condition to care for a spouse, child, or parent with a serious health condition placement with the employee of a child for adoption or foster care

Pregnancy Discrimination Act

federal law that requires any health insurance provided by an employer to cover expenses for pregnancy related conditions on the same basis as expenses for other medical conditions pregnancy related expenses must be reimbursed in the same manner as those incurred for other medical conditions no addition or larger deductible can be imposed level of health benefits for spouses of male employees must be the same as benefits for spouses of female employees

Mental Health Parity Act (MHPA)

federal law that requires benefits for mental health conditions and substance use disorder be no more restrictive than benefits for physical health conditions when included as part of a health insurance plan copayments and coinsurance comparable to physical health services criteria for managing care no more stringent than that for physical health services annual or lifetime dollar limits can be no lower than any such limits for medical and surgical benefits PPACA (obamacare) requires most health insurance coverage sold to individuals or offered by small group health plans (1-50 employees) to cover mental health and substance use disorder benefits and comply with the MHPA limits on number of inpatient days or outpatient visits covered no more stringent than limits applied to physical health services large group health plans (51+ employees) not required to offer mental health and substance use disorder benefits, BUT most do (if offered must comply with MHPA)

ERISA (employee retirement income security act)

federal law that sets guidelines for pension companies, insurance companies and private employers in administrating most voluntarily established pension and health plans in order to protect the plan's participants and beneficiaries

buyer's guide discusses how to

find a policy that meets your needs and fits your budget decide how much insurance you need make informed decisions when you buy a policy

any person who knowingly and willfully ovations information about an individual from an insurance institution, agent, or insurance-support organization under false pretenses shall be

fined up to $10k and/or imprisoned for up to 1 year

Association CIGA

fire marine plate glass liability burglary sprinkler team & vehicle automobile aircraft miscellaneous workers' comp common carrier liability boulder & machinery

agents responsibilities

first in life to determine if person might be eligible for desired coverage submits completed application that accurately represents applicant's answers known as field underwriter and acts as eyes and ears of the insurance company

agent's responsibilities

first in line to determine if person might be eligible for desired coverage submits completed application that accurately represents applicant's answers known as a field underwriter and the agent has eyes and ears of the insurer

fixed amount

fixed amounts paid to beneficiary at specified intervals (monthly, quarterly, semi-annually, or annually) until the principal and interest are depleted

what's fueling the annuity

fixed annuity (general account) variable annuity (separate account) indexed annuity (equity-indexed annuity)

coverage provided under a group disability policy must provide a totally disabled employee benefits for covered expenses directly relating to the condition causing total disability for a period of notes than 12 months

following discontinuance of the group plan by the employer (master policy owner)

parking lot rule

for 60+ normally... during the 30-day cancellation period, the premium for an individual variable life insurance policy or an individual variable annuity contract may be invested only in fixed-income investments and money-market funds

non-discrimination

for a group life plan to receive favorable IRS tax treatment, it must NOT discriminate in favor of key employees either as to eligibility or amount or type of insurance

What's different about a California Partnership LTC policy

for every dollar that a CA Partnership LTC policy pays out in benefits... that's one more dollar that will be protected from the 'spend down' requirements of Medi-Cal

Term Life

for temporary needs because it will go away after the term

General (Open) Enrollment

for those who didn't enroll during initial enrollment period (January 1- march 31 each year & coverage begins on july 1)

Dual Eligible SNP

for those who have both medicare and medi-cal (medicaid) "dual eligibles" "medi-medis"

Initial Enrollment

for those who won't be automatically enrolled at 65 7-month period surrounding 65th birthday month

Chronic Condition SNP

for those with one or more severe or disabling chronic conditions Chronic alcohol/ drug dependence Cardiovascular disorders End-stage renal disease (ESRD) HIV/AIDS Lung disorders Mental health Neurological disorders Stroke

Coercion

forcing a person to act or think in a certain way as the result of actual or threatened physical or mental force or persuasion

action notice of appointment

form filed by an insurer that provides notice to the CDI that a licensee has been appointed to act as an agent of that insurer for a particular line or lines of insurance

rejection of inflation protection

form that must be signed by applicant if one of the inflation protection options is not purchased

vision insurance typically includes for

frames lenses annual eye examinations coverage for frames is usually limited to a specific dollar amount

mode

frequency of premium payments annually semi-annually quarterly monthly the higher the frequency, the higher the premium

broadly, dual eligibles fall into one of these groups

full benefit dual eligible partial benefit dual eligible share of costs dual eligible

guaranteed vs. non-guaranteed

guaranteed elements- the premiums, benefits, values, credits or charges that are guaranteed and determined at issue non-guaranteed elements- the premiums, benefits, values, credits or charges that are not guaranteed or not determined at issue

claims

handles and service claims for insureds and third party claimants (claim adjuster)

Workers' Comp Fraud

harms employers by contributing to the high cost of workers' comp insurance and self-insurance and harms employees by undermining the perceived legitimacy of all workers' compensation claims

irrevocable beneficiary

has a vested (current interest) in policy's death benefit policy owner must have written consent from irrevocable beneficiary to: change beneficiary surrender policy make policy loan make withdrawal (UL) do assignment (absolute/ collateral)

standards for determining recommendation suitability

has consumer been reasonable incomes of annuity features including... potential surrender period and surrender charge any potential tax penalties mortality and expense fees investment advisory fees charges for riders limitations on interest returns insurance and investment components market risk have the following questions be considered? will consumer receive a tangible net benefit is the annuity, any underlying sub accounts, and riders appropriate if an exchange or replacement, is it suitable considering surrender charges, surrender period, loss of existing benefits, increased fees, charges for riders, etc. if an exchange, will consumer benefit from product enhancements and improvements has consumer done an exchange or replacement within proceeding 60 months has consumer's suitability info been obtained

full benefit dual eligible

has medicare Parts A, B, and D and Medi-Cal coverage for medicare copays, premiums, coinsurance, & deductibles

revocable beneficiary

has no rights in policy's death benefit until after the insured dies can be changed/removed anytime policy owner wishes

share of costs dual eligible

has same benefits as full benefit dual eligible, but has to "spend down" excess income on medical expenses each month to meet medicaid income cut-offs

Why LTC Insurance

health insurance is not designed to cover ling-term care expenses. health insurance focuses more on acute care, not chronic care personal resources are often used to pay for long-term care. the problem is that personal resources can be quickly depleted because of the high cost of long-0term care don't look to medicare or Medi-Cal

high deductible health plan (HDHP)

health insurance policy that meets special federal guidelines and must be in place in order to contribute to a health savings account (HSA) or medical savings account (MSA) HDHP annual deductible must be satisfied before benefits are provided many HDHPs have a 100% coinsurance level after deductible is satisfied

What rights does HIPPA give me over my health information

health insurers and providers who are covered entities must comply with your right to: ask to see and get a copy of your health records have corrections added to your health information receive a notice that tells you how your health information may be used and shared decide if you want to give your permission before your health information can be used or shared for certain purposes (e.g. marketing purposes) get a report on when and why your health information was shared for certain purposes if you believe your rights are being denied or your health information isn't being protected, you dan file a complaint with your provider or health insurer or with the U.S. government

Covered Entities

health plans - including health insurance companies, HMOs, company health plans, and certain government programs that pay for health care (e.g. Medicare and Medicaid) most health care providers - includes most doctors, clinics, hospitals, psychologists, chiropractors, nursing homes, pharmacies, and dentists health care clearinghouses - entities that process nonstandard health information into a standard

insurer must issue policy during open enrollment regardless of applicants

health status medical conditions receipt of health care claims experience insurers may be able to use medical u/w if outside open enrollment

HMOs provide both

healthcare coverage & healthcare services

level 3

hearing before and administrative law judge

first things first! upon contacting the senior in the home, before making any statement other than a greeting, agent must state that the purpose of the contact is to talk about insurance, or to gather information for a follow-up visit to sell insurance, if that is the case, and state all of the following information

hello, my name is (name). I'm a (title) (e.g. life agent). I represent (insurer) (if known). each person attending a meeting with a senior shall provide the senior with a business card or other written identification stating: name, business address, telephone number, CA license #

A shopper's guide to LTC insurance

helps consumer understand LTC and the insurance options available to pay for it

out-of-network

higher deductibles, copays if any) & coinsurance

every person has an insurable interest in the life and health of

himself any person on whom he depends wholly or in part for education or support any person upon whose life any estate or interest vested in him depends any person under a legal obligation to him for the payment of money or respecting property or services, of which death or illness might delay or prevent the performance

Life Agent

holds life-only agent license and/or A&H agent license earn commissions for selling policies

alternatives should be explored if proceeds needed for minor's heath maintenance, education and support

name a reliable adult set up trust for child

with regard to long-term care insurance, all insurers, brokers, agents, and others engaged in the business of insurance owe a policyholder or a prospective policy holder a duty of

honesty good faith fair dealing

basic medial

hospital expense surgical expense physician's visit expense

Part A

hospital insurance

medicare parts

hospital insurance medical insurance medicare advantage prescription drug

Hospital Expense

hospital room and board lab/x-ray charges operating room

Part A Benefits

hospitalization (inpatient care) skilled nursing facility care home health care hospice care

annuity classifications

how does the money get into the annuity? when does money start to come out of the annuity?

benefit period

how long benefits will last

settlement options

how the life insurance proceeds are paid out

reasons for denying app or revoking/suspending license for organization

if a controlling person has... previously engaged in a fraudulent practice or act or conducted business in a dishonest manner shown incompetency or untrustworthiness in conduct of any business, or has exposed public to those dealing with him to the danger of loss knowingly misrepresented the terms for effect of an insurance policy or contract failed to perform a duty expressly required upon him by a provision of the CIC or has committed an act expressly forbidden by a provision of the CIC has been convicted (not just charged) of a- feeling, misdemeanor involving insurance, public offense involving fraudulent act or act of dishonesty in acceptance, custody, or payment of money or property added or abetted any person in an act or omission that would constitute grounds for suspension, revocation, or refusal of a license issued under the CIC to the person aided or abetted permitted an employee to violate any provision of the CIC violated any provision of law relating to conduct of business that could lawfully be done only under authority conferred by an insurance license

conversion period "grace period"

if employee covered under a group life policy dies during the 31-day conversion period following termination a death benefit will be paid under the group policy whether or not application for the individual policy has been made

war exclusion

if included in a life insurance policy, it excludes coverage if insured dies from any act of war

aviation exclusion

if included in a life insurance policy, it excludes coverage if insured dies in an aviation-related accident other than as a fare-paying passenger on a scheduled airline

COB- medicare beneficiary if a person is a medicate beneficiary

if medicare beneficiary has retired insurance (insurance from former employer)- medicare is primary & group health plan is secondary if medicare beneficiary is 65 of order, has group insurance based on his or his spouses's current employment, and the employer has 20 or more employees- group health plan is primary & medicare is secondary if medicare beneficiary is 65 or older, has group health insurance based on his or his spouses's current e employment, and the employer has less than 20 employees- medicare is primary & group health plan is secondary

existing relationship

if senior requests same day meeting in home, notice must be delivered prior to meeting

Suitability not satisfied

if the insurer determines that applicant does not meet its financial suitability standards OR applicant has declined to provide the information, the insurer may reject the application for LTC insurance

Enrollment in a stand alone PDP automatically terminates enrollment in medicare advantage plan if PDP included

if your medicare advantage plan include prescription drug coverage (Part D) and you join a stand-alone Medicare prescription drug plan, you'll be automatically dis-enrolled from your medicare advantage plan and returned to original medicare

Supplemental Illustration

illustration furnished in addition to basic illustration that shows only non-guaranteed elements: must be accompanied by a basic illustration non-guaranteed elements cannot be more favorable than those in the basic illustration must include statement that non-guaranteed (same statement found in basic illustrations) premiums must be same as premiums used in basic illustration

annual status report

illustration that must be sent annually by insurer to policy owners of policy types for which the insurer has designated that illustrations will be used

when does money start to come out of the annuity?

immediate annuity (IA) deferred annuity (DA)

Generally the insured will be eligible for LTC benefits under their policy if either one of the two criteria are met

impairment in two ADLs OR impairment of cognitive ability (deterioration or loss of intellectual capacity due to organic mental disease including Alzheimer's disease or related illnesses, that requires continual supervision to protect oneself or others)

After the Affordable Care Act

in 2019 you pay 25% for brand-name drags and 37% for generics while in donut hole

LTC Costs

in California, nursing home costs averaged $290/day in 2017, with the annual cost of care close to $110,000 and the cost for home health care in California is an average of $22 per hour. that's about $23,000 per years based on 4 hours per day, 5 days per week

Variable Universal Life (UL, VUL, Flexible Premium Variable Life)

in a VUL, the account value is fueled by the policy owner's sub account (separate account) choices

Additional Medical Tests

in addition the the normal requirement, an underwriter may request additional medical tests if she feels it's necessary based on proposed insured's medical history and/or coverage amount being applied for e.g. physical exam, EKG (ECG), stress tests

LTC personal worksheet

in addition to the insurer's suitability standards, agents must present the LTC insurance personal worksheet to applicant at or prior to application completed worksheet must be submitted to insurer prior to LTC app being considered

additional medical tests

in addition to the normal requirements, an underwriter may request addition medical tests if she feels it's necessary based on proposed insured's medical history and/or coverage amount being applied for

Unfair Practices

in insurance are trade practices considered to be unfair, deceptive or misleading. There are numerous laws and regulations that define unfair practices in the insurance industry. Only the commissioner may enforce provisions of Unfair Practices Act

Suitability Standards

in order to determine whether the purchase or replacement if LTC insurance is appropriate for the needs of the applicant, insurers must develop and use suitability standards that consider the applicants ability to pay for proposed coverage, the applicant's LTC needs and the advantages and disadvantages of using insurance to meet those needs, and the value, benefits, and costs of applicant's existing insurance, if any, when compared to the values, benefits, and costs of the recommenced purchase or replacement

approved amount

in original medicare, this is the amount a doctor or other provider that accepts Medicare assignment can be paid. it may be less than the normal amount a doctor or supplier charger

PPO networks

in-network out-of-network

Any- Occupation Definition of Total Disability

inability to perform the duties of any occupation by which the individual is suited by training, education or experience

may

permissive (allowed but not obligatory)

"Long-term carte insurance"

includes coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a steeling other than an acute care unit of a hospital and induces all products containing any of the following benefit types... coverage for institutional care including care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care

Medicare Part B enrollment @ 65 can be delayed by someone who is covered under an employer's group health plan based on the active employment of

individual spouse family member (if disabled) when individual does finally enroll for Part B, late enrollment penalty can be waived by making use of Special Enrollment Period (enroll within 8 months of group coverage of ending)

Individual Disability Income Policy

individual owns & controls their own policy

individual life

individual owns and controls their own policy

The 3 ways long-term care coverage can be issued

individual policy group coverage life policy or annuity rider

beneficiary types

individuals groups trust charity business

Intimidation

inflicting fear upon a person as the result of actual or threatened bodily injury or property damage

what info is protected by HIPAA

info your doctors, nurses, and other health care providers put in your medical record conversations your doctor has about your care or treatment with nurses and others information about you in your health insurer's computer system billing information about you at your clinic most other health information about you held by those who follow these laws

enrollment for part D

initial enrollment period open (annual) special

CA partnership LTC insurance CE requirements agents who market CA partnership LTC insurance policies must satisfy the following educational requirements

initial training (16 hours total) 8-hour LTC course (regular LOTC CE requirements) 8-hour live classroom training on CA partnership LTC ongoing training 8-hour live classroom training ever 2-year license term

CA Partnership LTC Insurance CE Requirements

initial training (16 hours total) 8-hr LTC course 8-hr live classroom, training on CA Partnership LTC ongoing training - 8-hr live classroom training every 2-year license term

Title 10 - investment chapter 5 - Insurance commissioner

inside it specifically authorizes the use of CIC

fixed period

installments are paid to the beneficiary over a fixed number of years. amount of installments is based on amount of policy proceeds, interest and length of the period chosen

surrender old, buy new

instead of that- 1035 exchange is an IRS rule that allows for the exchange of a policy to a new policy insuring the same person without having to pay tax on any investment gains earned on the original contract & taxable gain deferred into new policy

fixed product

insurance product in which premiums are invested and backed by the insurer's general account

life insurance

insurance that pays out a sum of money (i.e. death benefit) upon death of the insured person

Disability Income "The Insurance"

insurance that provides for periodic payments of benefits to replace insured's income when insured is unable to work due to a covered disability

both of these associations exist to protect

insured/claimants of an insolvent member insurer

use & file

insurer can use rates immediately, but must then file the new rate with the DOI within a specific time, typically 15 to 60 days

non-cancelable LTC

insurer cannot unilaterally: change terms of coverage decline to renew change the premium rate

person

person (individual) associations organization partnerships business trusts LLCs corporations

guaranteed renewable LTC

insurer cannot unilaterally: change terms of coverage decline to renew insurer may change the premium rates to all insureds in the same class

file & use

insurer files rates with DOI and can then use immediately (rather than waiting for approval). DOI retains to right to disapprove of the rate later, if it violates law or is deemed to be not justified

certificate of insurance

insurer information group policy # employee's name coverage amount riders/add'l coverages beneficiary principal exclusions premium not included

claim settlements

insurer must accept for deny claim within 40 days of receiving proof of loss if more time is needed to process claim, written update must be provided every 30 days claim must be paid within 30 days of acceptance of claim

indemnity basis

insurer pays a specified amount per day for a specified maximum number of days ($300/day)

reimbursement basis

insurer pays the actual cost or a stated percentage of actual cost for coverage procedures and services

general account

insurer's account into which all incoming funds are deposited (except those designated for a separate account) invested very conservatively highly regulated used to back insurer's fixed insurance policies

prior approval

insurers are required to obtain approval from DOI for rates prior to using. may have to provide justification for the desired rare change. if not disapproved within specific time (e.g. 30 or 60 days), rate is deemed approved used for most P&C business is CA

claims file & record documentation

insurers claim files, which are always subject to examination by the commissioner, must contain all documents, notes and copies of all correspondence so that pertinent events and the dates of the events can be reconstructed and the insurer's actions pertaining to the claim can be determined 1. maintain claim data so that insurer can provide- claim number, line or coverage, date of loss, date of claim payment, date of acceptance, denial or date closed w/o payment. data must be available for all open and closed files for current year and the 4 proceeding years (i.e. 5 years total) 2. record the dates insurer received, processed and transmitted or mailed every material and relevant document in the file 3. maintain hard copy files or files that are accessible, legible and capable of duplication to hard copy for the current year and the proceeding 4 years (i.e. 5 years total)

applies to life insurance and disability income

insurers must not make unfair distinctions between individuals in underwriting for the risk of HIV and AIDS marital status or known or suspected homosexuality or bisexuality of an applicant cannot be considered in determining whether to require an HIV test typically applicant's age and/or amount of insurance being applied for determine if HIV test will be required

applies to life and disability income

insurers must not make unfair distinctions between individuals in underwriting for the risk of HIV and AIDS martial status or known or suspected homosexuality or bisexuality of an applicant cannot be considered in determining whether to require and HIV test typically applicant's age and/or amount of insurance being applied for determine if HIV test will be required

pretext interview

interview where party gathering info does any of the following in attempt to obtain information about a natural person: pretends to be someone he is not pretends to represent someone he is not misrepresents true purpose of interview refuses to identify himself upon request

pretext interview

interview where the party gathering info does any of the following in an attempt to obtain information about a natural person: pretends to be someone he is not pretends to represent someone he is not misrepresents true purpose of interview refuses to identify himself upon request

stranger-originated life insurance (STOLI)

involves transfer of owner's life policy to 3rd pray in exchange for $ investors solicit individual to buy new life policy for sole purpose of eventually selling it to them THIS IS ILLEGAL

Insurance

is a contract whereby an insurer indemnifies (protects) an insured against a loss, damage, or liability arising from a contingent or unknown event

adult daycare

is a medical or nonmusical care on a less than 24 hour basis provided in a licensed facility outside the residence for persons in need of personal services, supervision, protection, or assistance in sustaining daily needs, including eating, bathing, dressing, ambulating, transferring, toileting, and taking medications

transacting insurance without a valid license

is a misdemeanor and can result in a fine of $50,000 and/or up to 1 year

pre-existing condition

is any condition that was treated or diagnosed within a 6-month loopback period before coverage started under the medicare supplement policy insurer can deny benefits for pre-existing conditions if not creditable coverage

personal care (custodial care)

is assistance with the ADLs including the instrumental ADLs can be provided by a skilled or unskilled person

Personal Lines Broker-Agent

is authorized to transact insurance on all things personal

medicare

is government health insurance primarily for people 65+

cash values

policy owner has the right to cash surrender their policy policy owner has the right to a policy loan or withdrawal

right to hearing

is usually provided to applicants and licensees before their application is revoked or suspended

Whole Life (ordinary life/straight life)

issue age-> maturity age (e.g. 100 or 121) builds cash value lasts for life (permanent) policy loans available level premiums

when inadvertent

it is a single act when adding it up

university life policy is so special because

it is unbundled (flexible) and policy holder can see exactly what is going on

Any insurer that fails the MLR test in a calendar year for all plans in a given market segment (individual or group)

it must refund excess premiums to consumers enrolled in plans in that market segment

beneficiary should not be an estate

it subjects it to probate

what is deemed a conviction for licensing purposes

judgement, plea or verdict of guilty or a conviction following a plea of no contest

level 5

judicial review by a federal district court

business uses of life insurance

key person insurance buy-sell agreements business overhead insurance deferred compensation split dollar insurance salary continuation

twisting

knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurer for the purpose of inducing any person to lapse, forfeit, surrender, terminate, or retain an insurance policy

MLR test requirements

large group plans need to have a minimum of 85% and individual and small group plans need a minimum of 80%

Rescission (rescind)

legal remedy that voids an existing contract and restores both parties to their situation prior to entering into the contract

assignment

legal transfer of ownership in a policy from one person to another owner can freely assign life policy assignment form signed by both only and new owners and must be filed with insurer (note: insurer approval not needed)

nonforfeiture options

legally required options for using the cash value of a whole life policy made available to the policy owner if they no longer want to or are able to make premium payments- reduced paid-up extended term cash surrender

benefit period

length of time a disability policy (including disability income) will pay benefits once insured becomes disabled based on time or based on age

notice of appointment terminates when

license of agent cancelled or expired license of agent becomes inactive agent quits working for insurer termination of appointment filed with CDI

Accident & Health Agent

license type which entitles the licensee to transact insurance coverage for: sickness bodily injury accidental death benefits for disability income 24-hour care coverage*

Life-Only Agent

license type which entitles the licensee to transact insurance coverage on: human lives (life insurance) benefits of endowment and annuities benefits in the event of death or dismemberment by accident* benefits for disability income*

Life Settlement Broker

licensed to act on behalf of an owner of a life insurance policy to negotiate a life settlement contract between the owner and a life settlement provider

the fundamental purpose of insurance regulatory law is to protect the public as insurance consumers and policyholders. this involves:

licensing and regulating insurance companies and other involved in the insurance industry monitoring and preserving the financial solvency of insurers regulating and standardizing insurance policies and products controlling market conduct and preventing unfair trade practices

Association CLHIGA

life annuities health

CLHIGA covered policies

life health annuities disability income long-term care

how to become a life settlement broker

life agent > 1 year - notify CDI within 10 days of first operating as a life settlement broker - submit notification form and pay fee life agent < 1 year or no license - must complete 15 hours of education related to life settlements - complete application and pay fee licensing exception - licensed attorney, CPA, or financial planner NOT required to have life settlement broker license if... retained to representing owner; AND compensation not paid directly or indirectly by the provider

Qualifying Life Event

life event under PPACA involving a change in family status, loss of other health coverage, or change in income that permits use fo the social enrollment period

annuitant

life expectancy used (usually same person as owner)

non-medical application

life insurance for which proposed insured may not be required to undergo medical examination

key person insurance

life insurance purchased by a business on the life of a key employee (e.g. CEO, Sales Manager) whose death would have adverse effects on the company (recruit and train replacement, replace lost profits, assure potential creditors)

family rider

life insurance rider that combines level term coverage in both a spouse and children

term life insurance

life insurance that pays out a death benefit if insured dies during a specific term no cash value (pure insurance) temporary (limited term) most affordable best suited to cover temporary needs: mortgage loans

applied to life insurance

life insurers shall not refuse to accept an application for insurance, refuse to issue or renew a policy, cancel a policy, or deny coverage under a policy because the applicant is, or has been, a victim of domestic violence

common disaster clause

life policy provision that states when the insured and primary beneficiary both die simultaneously and it is impossible to determine who died first, the insured will be presumed to have survived the primary beneficiary so that proceeds will be paid to contingent beneficiary (or Insured's estate if not contingent)

survivorship clause

life policy that specifies an amount of time by which a beneficiary must outlive the insured in order to receive the policy proceeds (aka time or delayed-payment clause) examples: policy proceeds will be payable to a designated beneficiary only if beneficiary is alive at the time of payment policy proceeds will be payable to a designated only if the beneficiary survives the insured by 30 days

payout options during the annuitization phase

life-only life with period certain period certain refund life joint-life joint-and-survivor

Life Agent

life-only OR accidental & health agent license OR someone with both

failure to maintain creditable prescription drug coverage after initial enrollment period ends @ 65 may result in

lifetime 1% per month premium penalty for each month without such coverage penalty applies for life or as long as beneficiary has part D coverage

suicide clause

limits insurance company's liability to a refund of premium if the insured commits suicide within 2 years of the policy's effective date

schedule of fees

list various services and what they would pay for each one

reinstatement provision

lists the requirements for insurer to consider reinstating a life policy that has lapsed due to non-payment of premium examples: written request for reinstatement can be made within two years after end of grace period (reinstatement app) E of I must be submitted along with service fee overdue premiums + interest must be submitted policy loans + loan interest must be repaid 2-year incontestability and suicide provisions start all over again

long term care rider

living needs rider that allows life policy death benefits to be advanced for long-term care expenses pays % of face amount each month for insured's LTC expenses death benefit reduced by amount paid typically LTC rider can only be attached to WL or UL policies

policy loan

loan made by insurer to policy owner that uses policy's cash value as collateral- loan interest accrues loan interest rate can be fixed or variable no fixed time for repayment upon insured's death and outstanding loan (and accused interest) will be dedicated from policy's face amount to arrive at death benefit (limit of liability) payable to beneficiary

policy loan

loan made by insurer to policy owner that uses policy's cash value as collateral- loan interest accrues, loan interest rate can be fixed for variable, no fixed time for repayment, upon insured's death any outstanding loan (and accrued interest) will be deducted from policy's face amount to arrive at death benefit (limit of liability) payable to beneficiary

UL Designed as Term (Guaranteed Universal Life) Coverage

provides coverage to a specific age chosen by insured (e.g. 90, 95, 100, 110, 121)

Cost Sharing Reductions

lower out-of-pocket health care costs, such as coinsurance, copays and deductibles in enchanted silver plans (not available with the bronze, gold, or platinum plans) enhanced silver plans provide benefits of gold or platinum plan, but at silver plan price

policies that pay fixed dollar amounts for specified diseases or other specified impairments

lump sum

policies that provide benefits for expenses incurred for an accidental injury only

lump sum

policies that provide benefits for expenses incurred for specified limited services

lump sum

False Financial Statement

making a false statement of the financial condition of an insurer with the intent to deceive

no insurer shall attempt to settle a claim by

making a settlement offer that is unreasonably low

cold lead advertising

making use of any method of marketing that fails to disclose in a conspicuous manner that: purpose is solicitation of insurance contact will be made by an insurance agent or company

capitation

managed care payment system in which a fixed amount of money per member/patient is paid (usually per month) to a physician for the delivery of health care services (commonly used in HMOs)

shall

mandatory

Credit Reports

many life and disability insurers consider an applicant's credit history during the underwriting process as they believe there is a connection between how one handle's his credit and his risk of dying early/poor health. these insurers believe that credit history is a good predictor of good health and longevity

credit reports

many life insurers consider an applicant's credit history when underwriting a life insurance application as they believe there is a connection between how one handles his credit and his risk of dying early these insurers believe that credit history is a good predictor of good health and longevity

as dental coverage is generally not included in health insurance plans for adults > 18

many purchase it as an optional add-on to their health insurance plan or separately as a stand-alone policy

as vision insurance is generally not included in health insurance plans for adults 18>

many purchase it as an optional add-on to their health insurance plan or separately as a stand-alone policy

Direct response

marketing/distribution system in which the insurer uses advertising to encourage prospective customers to contact the insurer directly to buy insurance. advertising examples include direct mail, internet advertisements, television commercials, and print marketing

divisions

marketing/sales underwriting claims actuarial

qualifying events examples

marriage having a baby

any person capable of making a contract

may be an insurer

consumer must be informed that he

may request to be interviewed is entitled to receive a copy

employer-employee

maybe you have an insurable interest

unmarried couple

maybe you have an insurable interest

basic medial expense policies are frequently written on a First Dollar Coverage basis

meaning that there is no deductible that has to be paid by the insured before the insurer begins paying for covered claims

genetic characteristics

means any scientifically or medically identifiable gene or chromosome that is known to be a cause of a disease or disorder that us presently not accosted with any symptoms of any disease or disorder

exposure unit

measure of loss potential used for pricing of insurance (usually $100 or $1000) # of exposure units x rate = premium

rating (table rating)

mechanism used in life and disability insurance for increasing premiums for higher than average risks

Cost Sharing Devices

mechanisms for making the insured share in some of the costs of their health care with the insurer ex: deductibles, copayments, coinsurance

applications for medicare supplement insurance must include specific questions designed to find out if applicant currently has in force

med supplement insurance medicare advantage plans medical (medicaid) other health insurance in force whether med supplement policy is intended to replace any other Med supplement of MA presently in force

simplified issue

medical history is considered health history questions on app large face amounts ($1) available can be more expensive insurer may still require medical exam

Part B

medical insurance

legal assistance

medicare social security elder abuse consumer fraud supplemental security income (SSI) medi-cal housing pensions nursing homes age discrimination

partial benefit dual eligible

medicare (medi-cal) pays some medicare expenses (e.g. copays, premiums, coinsurance, deductibles)

medicare prescription drug coverage (Part D)

medicare-approved optional prescription drug plans run by insured companies and other private companies PDP = prescription drug plan

level 2

reconsideration by a qualified independent contractor (QIC)

medical information bureau (MIB)

member-owned corporation that provides an "information exchange: for member life and health insurers to report and retrieve important underwriting information about insurance applicants (e.g. errors, omissions or misrepresentations made on application) MIB reports alone cannot be used for adverse u/w decisions

medical information bureau (MIB)

member-owned corporation that provides an "information exchange: for member life and health insurers to report and retrieve important underwriting information about insurance applicants (proposed insureds) MIB reports - they cannot be used alone for adverse u/w decisions

human life value approach

method of calculating amount of life insurance a family will need based on he financial loss the family could incur if the insured person were to pass away today -income, projected pay raises, household services, employment benefits

needs approach

method of calculating how much life insurance an individual or family requires to cover their needs and expenses -funeral expenses, estate & gift taxes, probate fees, medical expenses, legal fees, business buyout costs, emergency funds, mortgage/rent, debts/loans, child care, educational expenses

minor beneficiary

minor is someone under 18 insurer will not pay out to a minor beneficiary insurer will hold proceeds until child turns 18

penalty for working with non-admitted insurer

misdemeanor + $500 + $100/month agent continues the violation

penalty

misdemeanor + $500 + $100/month if the agent continues the violation

Unfair Claims Settlement Practices

misrepresenting to the claimant pertinent facts or insurance policy provision relating to any coverages at issue failing to acknowledge and act reasonably promptly upon communications with respect to claims failing to affirm or deny coverage within a reasonable time after proof of loss requirements have been submitted by insured failing to implement reasonable standards for the prompt investigation and processing of claims not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear attempting to settle a claim for less than what a reasonable person would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application compelling insured to pursue litigation to recover amounts due under a policy by offering substantially less than the amounts ultimately recovered attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured, his or her representative, agent or broker directly advising a claimant not to obtain the services of an attorney failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made failing to provide promptly a reasonable explanation if the basis relied on in the insurance policy, un relation to the fact or applicable law, for the denial of a claim or for the officer of a compromise settlement failing to settle claims promptly, where liability has become apparent, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage misleading a claimant as to the applicable statue of limitations delaying the payment or provisions of hospital, medical, or surgical benefits for services provides with respect to acquired immune deficiency syndrome (AIDS) or AIDS-related complex for more than 60 days after the insurer has received a claim for those benefits, where the delay in claims payment is for the purpose of investigating whether the condition preexisted the coverage. However, this 60-day period shall not include any time during which the insure is awaiting a reposes for relevant medical information from a health care provider

premium rate=

morbidity- investments+ expenses+ benefit period

a person cannot have

more than one medicare supplement plan

flexible premium (FP)

multiple premium payments

right to cancel (free look)

must appear on front of policy jacket or cover page if policy owner is <60 they have between 10-30 days if policy owner is 60+ they can have 30+ days

regulation of admitted insurers (standard market insurers)

must approved ("admitted") by the state must file forms and rates for approval pays into state's Guarantee Association (CIGA) CIGA may pay out in case of insolvency policy holder can appeal to CDI

Admitted Insurers

must be approved ("admitted") by state must file forms and rates for approval pays into state's Guarantee CIGA may pay out in case of insolvency

notice to applicant regarding replacement of medicare supplement coverage or medicare advantage

must be completed upon determining that a sale will involve replacement of existing medicare supplement coverage "your new policy will provide thirty days within which you may decide without cost whether you desire to keep the policy (replacement must make sense) "do not cancel your present policy until you have received your new policy and are sure that you want to keep it" agent or broker signature and applicant's signature applicant gets a copy and insurer must retain a signed copy on file

HICAP (health insurance counseling and advocacy program) Notice

must be included on all applications for med supp insurance

Plan A (core plan)

must be offered by an insurer that offers any medicare supplement policies if any other plans are offered they are in addition to plan a

3 hour course in ethics

must be part of the required 24 hours of CE needed for license renewal every 2-year period

notice regarding replacement

must be signed by both applicant and agent agent must obtain a list of all existing policies to be replaced must be presented to applicant no later than at the time of application agent must leave form with applicant

authorization to disclose personal information

must be signed by proposed insured(s) so that medical records can be released by physicians, hospitals, etc.

employees who become totally disabled while insured under a group life policy and who continue to be totally disabled on the date the policy is discontinued

must have the same conversion privilege as a terminating employee

Life & Disability Analyst

must hold both life-only agent license and A&H agent license Holds L&D Analyst license earns fees for advising clients

for any business cards, print advertisements, and written price and quotes you hand out

must include license number which must be in type size as least as large as any telephone number, address, or fax number OR in 12-point (8-point type for business cards) whichever is larger must include the word "insurance" in type size that is at least as large as the smallest telephone number OR 12-point type (8-point type for business cards), whichever is larger

internet advertisement

name as it appears on agent's insurance license, and any fictitious name(s) approved by commissioner agent's state of domicile (i.e. residence) and principal place of business license number (business number not required)

other efforts to combat fraud include

national automobile theft bureau insurance claims analysis bureau workers' comp fraud reporting arson information reporting system

Concealment

neglect to communicate that which a party knows and ought to communicate

Exceptions

newspaper subscriptions credit union members offered as a guarantee of performance of goods title, life or disability insurance to pay balance of loan

Application Alterations

no alteration of any written application for any disability policy shall be made by any person other than the applicant without his written consent... except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not be to ascribed by the applicant making any other alteration without applicant's consent is a misdemeanor

non-qualified annuity

no contribution limit 10% penalty on distributions made before age 59 1/2

Applies to disability policies for hospitals, medical, and surgical expenses

no disability insurer covering hospital, medical, or surgical expenses shall deny, refuse to insure, refuse to renew, cancel, restrict, or otherwise terminate, exclude, or limit coverage or charge a different rate for the same coverage, on the basis that the applicant or insured person is, has been, or may be a victim of domestic violence

No Free Insurance

no insurer shall participate in any plan to offer any kind of insurance or annuities as an inducement to the purchase or rental by the public of any property or services, without a separate charge to insured for such insurance. Nor shall any agent, broker, or solicitor arrange the sale of any such insurance

employee-employer

no they do not have an insurable interest

landlord-tenant

no they do not have an insurable interest

policy dividend

non guaranteed return of premium paid to a policy owner out of an insurance company's surplus (profits) premium= mortality- investment income+ expenses

excess & surplus lines insurer

non-admitted insurer that offers coverage for unique risks or insureds with poor loss history enable to obtain coverage from Standard Market Insurers

excess and surplus lines insurer

non-admitted insurer that provides property and casualty coverage when not available from insurers in the state

Long-term care policies (individual & group) shall have one of the following renewability provisions

non-cancelable guaranteed renewable

medicare supplement policies can only contain one of the following types of renewal provisions

non-cancelable guaranteed renewable

policy dividend

non-guaranteed return of premium paid to a policy owner out of an insurance company's surplus (profits)

for policy owner 60+, if individual life policy or annuity returned within the cancellation period, the owner will be refunded

non-variable: all premiums paid + any policy fee variable: parking lot rule- all premiums paid + any policy fee specific request rule- account value + any policy fee

avoidance

not performing an activity that could carry risks (e.g. not flying, not buying a business)

LTC Training Requirements

not required if not services provided to chronically ill, but is required if services are provided to chronically ill person

any notice required to be given to any person by the CIC, may be given by mail if

notice mailed to person to be notified postage prepaid notice addressed to residence or principle place of business in CA

no existing relationship

notice must be delivered no less than 24 hours and no more than 14 days prior to initial meeting in senior's home

notice of legal action

notice of an action commenced against the insurer with respect to a claim, or notice of action against the insured received by the insurer. (includes any arbitration proceeding)

agent needs to be aware of

occupation & occupational status marital status age dependents (# and type) sources of income annual income existing insurance insurance needs & objectives investment experience cost/ability to pay source of funds investment savings liquid net worth tax status/tax advantage needs need for principal preservation product time horizon

large group U/W considerations

occupational classes group size prior claims experience

Adverse Selection

occurs when insurer is confronted with the probability of loss due to risk(s) jot factored in a the time of sale because insured deliberately hides certain pertinent information ex an imbalance in an exposure group created when persons who perceive a high probability of loss for themselves seek to buy insurance to a much greater degree than those who perceive a low probability of loss

adverse selection

occurs when insurer is confronted with the probability of loss due to risk(s) not factored in at the time of sale because insured deliberately hides certain pertinent information

conduct previous to the purchase

of a policy is relevant to any action alleging breach of the duty of honesty, good faith, and fair dealing

dividends

policy owner can select/change policy's dividend option policy owner can withdraw dividend accumulations or surrender paid-up additions for their cash value

when an insurer files a notice of appointment on behalf of an applicant for an original license it shall be deemed by that act to have declared that the applicant is

of good reputation worthy of license sought IMPLIED DECLARATIONS

Fiduciary Duty

of, relating to, or inviting a confidence of trust

health insurance

off the job

OASDHI

old age (retirement) survisors disability health insurance (medicare)

social security administration programs

old age (retirement) survivors- pays benefits to certain family member of deceased worker disability health insurance (medicare) (OASDHI)

worker's comp

on the job

Why the need for disability income insurance

one in 3 working americans will become disabled for 90 days or more before age 65 more than 80% of working Americans don't have disability income insurance or aren't covered adequately the average disability absence is 2.5 years

single premium whole life policy

one large premium payment is made for a paid-up whole life policy

single premium (SP)

one lump sum premium

occupational

one that provides coverage both on & off the job

nonoccupational

one that provides coverage only off the job

Open Enrollment Period

one time only, 6 month period when a person can buy any medicare supplement policy available and can't be denied for charged more due to past or present health problems 6 month period beings when... individual is 65 or older and covered under medicare part B

modified whole life

one-time premium increase somewhere between years 3-5

dividend options

one-year term cash reduced premium accumulation at interest paid-up additions

Variable Life

opportunity to grow cash value at higher rate than might be provided by a regular whole life policy poor performance of sub accounts may result in lower death benefit and/or cash values policy owner assumes investment risk with variable products

voluntary life insurance

optional group life insurance that can be purchased by employee under an employers group life insurance plan premiums for voluntary life insurance benefits are paid by employee

future purchase option

optional rider that allows policy owner to increase monthly disability benefit by some specific amount at various ages and/or after major life events (e.g. birth of a child) without providing E of I

inflation protection

optional rider that increased the policy's benefit in order to combat the effects of inflation insurers are legally required to offer! simple inflation rider compound inflation rider future purchase options

Social Insurance Substitute Rider

optional rider that reduces monthly DI benefits on a dollar-for-dollar basis by any federal, state, or "social" benefits (aka legislative benefits) for which insured qualifies up to a certain threshold (aka Social insurance supplement rider or SIS rider)

domestic insurer

organized under CA laws (whether admitted or not)

alien insurer

organized under laws of any country other than a state in the United States

foreign insurer

organized under the laws of any state, other than CA (whether or not admitted)

every admitted insurer must maintain the following records pertaining to the activities of its agents

original application for each policy sold in CA record of premiums received for each policy all policies/ contracts sold in last 5 years commissions paid for each policy copies of all correspondence between applicant or policyholder & insurer or agent copies of any outline of coverage or disclosure required by law

coverage that satisfies the MEC requirements includes

original medicare (Part A)/ Part C (note: part B only not MEC) employer-sponsored plans (including COBRA and retiree coverage) individual plan, including QHP purchases through covered CA student health plans grandfathered health plans most state high-risk pools (dental-only or vision-only plans do not qualify)

required items given LTC applicant

outline of coverage A shopper's guide to LTC insurance Long-term care insurance personal worksheet notice to applicant regarding replacement of accident and sickness or LTC care insurance

disclosures

outline of coverage HICAP Notice notice to applicant regarding replacement of medicare supplement coverage or medicare advantage

hospice care

outpatient care not paid by medicare designed to provide palliative care, alleviate the physical, emotional, social, and spiritual discomforts of an individual who is experiencing the last phases of life due to the existence of a terminal disease and to provide supportive care to the primary care giver and the family care may be provided by a skilled or unskilled person

owner

owner annuity and exercises all ownership rights

agent's report (agent's statement)

part of a life insurance application that requires that the agent provide certain information regarding the proposed insured. it generally includes information regarding: agent's relationship to the insured data about the proposed insured's financial status, habits, general character any other information that may be pertinent to the risk being assumed by the insurance company

agent's report

part of a life or disability insurance application that requires that the agent provide certain information regarding the proposed insured. it generally includes information regarding: agent's relationship to the insured data about the proposed insured's financial status, habit, general character any other information that may be pertinent to the risk being assumed by the insurance company

required specifications for insurance policies

parties between whom contract is made property or life insured policy period risks insured against premium insured's interest in property, if not the owner

20 pay life policy

pay for 20 years

10 pay life policy

pay for ten years

owner can change

payment mode on the policy

disability income

pays a monthly benefit while the insured is disabled as defined in the policy monthly benefit is usually a % of policy's face amount (e.g. 1%) monthly benefit is paid for a set duration specific in the rider 3-6 month waiting period typical

hospital income policy

pays a specific dollar amount on a daily, weekly or monthly basis while insured is confined to a hospital (aka Hospital Confinement Indemnity) benefits paid directly to insured money can be used for anything helping for paying deductibles, copays, coinsurance, etc.

accidental death rider (AD)

pays an additional death benefit over and above based life policy when the insured dies from an accidental cause death must occur within specified time after accident (e.g. 60 or 90 days) dangerous hobbies might be excluded

social security disability insurance program (SSDI)

pays benefits to a disabled worker if worker has worked long enough and earned a sufficient number of work credits 5-month waiting period for benefits condition must interfere with basic work-related activities and prevent substantial gainful activity condition has or is expected to last at least 1 year or result in death

supplemental security income (SSI)

pays benefits to disabled adults and children who have limited income and resources who have either never worked or who haven't earned enough work credits for SSDI need-based program

Social Security Disability Insurance Program (SSDI)

pays benefits to disabled worker if the worker has worked long enough and earned a sufficient number of work credits 5 month waiting period for benefits condition must interfere with basic work-related activities and prevent substantial gainful activity condition has or is expected to last at least 1 year or result in death

joint life (first-to-die- policy)

pays out @ 1st death can provide income for surviving spouse less expensive than separate policies on each insured surviving spouse will be left without insurance can insure 2 or more business partners

survivorship life (second-to-die policy)

pays out @ 2nd death ideal for estate taxes can provide for special needs child are death of second parent 1M+ face amount is typical less expensive than separate policies on each insured

as a result off the PPACA (obamacare) all health plans offered through covered California must include embedded coverage for children's

pediatric dental benefits pediatric vision benefits pediatric = 18 & younger pediatric services, which includes dental (oral) and vision benefits, is one of the PPACA's essential health benefits

Under the PPACA all individual and small group health plans must include

pediatric dental benefits, pediatric vision benefits pediatric = 18 & younger

coinsurance

percentage participation between insured and insurer for covered expenses (after deductible satisfied)

elimination period

period of time between the onset of a disability and the time policy benefits begin being paid. (like a deductible- only measured in time, not dollars) 30 days - illness 14 days - accident

elimination period

period of time between the onset of a disability and the time policy benefits begin being paid. (like deductible- only measured in time, not dollars)

Open Enrollment Period PPACA

period of time during which an individual can enroll in a health plan, change plans, or apply for premium subsidies nov 1- dec 15

guaranteed issue period

period of time following certain changes in or loss of other health coverage in which insurers must offer someone a medicare supplement policy without medical underwriting and cover any pre-existing health conditions without waiting period ex- you have original medicare and an employer group health plan that pays after medicare pays and that plan is ending

probationary period

period of time set by an employer in a group disability plan that must pass before coverage for a new employee becomes effective (aka waiting period)

probationary period

period of time set by an employer in a group health insurance plan that must pass before coverage for a new employee becomes effective (aka waiting period)

authorization to disclose personal information

permission by applicant to release information to the insurer must be signed by proposed insured(s) so that medical records can be released by physicians, hospitals, etc.

Medicare- Medi-Cal Dual Eligible

person eligible for both medicare and Medical-cal (aka "medi-medi") people typically become dual eligibles by first being enrolled in one program and later becoming eligible for the other

person

person or individual associations organizations partnerships business trusts LLCs corporations

Life & Disability Analyst

person who provides advice on life or disability policies for a fee

be an ethical agent

place customers interest first know your job and continue to increase your level of competence recommend products and services that meet customer's needs accurately and truthfully represent products and services use simple language when possible conduct periodic coverage reviews with customers protect your confidential relationship with your client stay informed on and obey insurance laws and regulations provide exemplary service avoid unfair or inaccurate remakes about the competition

an agent with a contract to provide service for a licensed corporation may use the name of the corporation in stationery or advertisements in one of the following ways

placing business through using services of a stockholder of representing

benefits to self-insured plan

plan can be tailored to meet groups' needs not subject to state premium taxes third party administrator often used to handle administration of plan

non-qualified deferred compensation plan

plan in which employee defers the payment of a portion of his compensation (and taxation of it) to a future date, such as retirement life insurance can be used to informally fund the money row company will need to pay out promised benefits

Catastrophic Coverage

point when coverage gap ("donut hole") is satisfied and beneficiary responsible for small coinsurance or copay for the remainder of the year

Med Supp

policies issued by private insurers to help fill "gaps" in medicare coverage

Medicare Supplement Policies

policies sold by privater insurer to help fill "gaps" in coverage provided by Medicare (aka Medigap policies) copayments coinsurance deductibles exclusions

signed illustration

policy applied for same as illustrated: basic life illustration = application signed copy shall be submitted to insurer with application copy shall be provided to applicant policy issued other than as applied for: application/basic life illustration =/ life policy "revised illustration" shall be sent with policy and be signed and dated by applicant and producer no later than the time the policy is delivered copy shall be provided to insurer and policy owner

service basis

policy benefits are expressed in terms of the services provided rather than dollar maximums (-3 visits/day)

Partner Disability Income

policy designed to provide the business with benefits (cash flow) in the event that a covered business partner is unable to work due to a covered disability DI benefits can help business to... recruit and train replacement replace lost profits assure potential creditors

key person disability income

policy designed to provide the business with benefits (cash flow) in the event that the covered key employee is unable to work due to a covered disability (aka key employee disability income) CEO, CFO, COO, Founder, Top Salesperson DI benefits can help business to... recruit and train replacement replace lost profits assure potential creditors

life insurance taxation - policy dividends

policy dividends generally not taxable as they are a return of premium that's already been taxed

living benefits

policy features which allow policy owner to benefit from policy while insured still alive loans/withdrawals- no qualifying required, often competitive rate of interest, loan payments not necessary collateral assignments- type of assignment which guarantees outstanding loan balance will be paid to lender out of life policy's death benefit proceeds if insured dies. any remaining death benefit will be paid to policy beneficiaries

underwriting outcomes

policy gets issued exactly as applied for policy issued other than as applied for application declined

policy specifications page

policy identification schedule of benefits schedule of premiums schedule of insurance

cash surrender

policy is surrendered (terminated) and cash value paid to policy owner

Underwriting Outcomes

policy issued as applied for policy issued other than as applied for application declined

the following types of groups are eligible for group disability insurance

policy issued to employer covering 2 or more public or private employees policy issued to a creditor covering 10 or more debtors of that creditor master policy issued to the trustee of any self-employed individuals, all off whom have contracts with the same publisher of a newspaper for the performance of services for such publisher as independent contractors (10 lives min)

the following types of groups are eligible for group life insurance

policy issued to employer covering 2 or more public or private employees policy issued to creditor covering 10 or more debtors master policy issued to the trustee of any self-employed individuals, all of whom have contracts with the same publisher of a newspaper for the performance of services for such publisher as independent contractors (10 lives minimum)

life insurance - policy loans

policy loans are not taxable as ling as policy remains in force if the policy is not in force he could end up owing a lot of money in taxes after the CSV with 1099-R for the gain

insurable interest has to exist between the

policy owner and insured has nothing to do with applicant and beneficiary

per capita

policy proceeds are divided equally among living beneficiaries of the class note: many insurers will assume our capita if not specified in beneficiary designation. but read the fine print because different insurers do different things

interest only

policy proceeds kept in account with insurer and periodic interest payments (monthly, quarterly, semi-annually, annually) made to beneficiary

lump sum

policy proceeds paid out in one lump sum 5o beneficiary (this is usually the automatic or default settlement option when one has not been chosen by policy owner or beneficiary)

life income

policy proceeds retained by insurer and annuitized (i.e. converted to series of payments) to provide lifetime income for beneficiary

Presumptive Disability

policy provision that waives normal total disability eligibility requirements and considers insured to be totally disabled in the event of a catastrophic-type disability such as... loss of hearing, loss of sight, loss of speech, or loss of use of two limbs

Applies to disability policies for hospitals, medical, and surgical expenses Severe Emotional Disturbances of a Child

policy shall provide coverage for the diagnosis and medically necessary treatment of serious emotional disturbances of a child under the same terms and conditions applied to other medical conditions in the policy

Applies to disability policies for hospitals, medical, and surgical expenses Severe Mental Illness

policy shall provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses or an person of any age under the same terms and conditions applied to other medical conditions in the policy

lifetime benefit

pool of money available for LTC services

divisible surplus

portion of insurer's earned surplus allocated to be paid out as dividends to policyholders (typically for life and disability income policies)

Unearned Premium

portion of premium that represents the unexpired part of the policy period

Automatic Increase Provision & Future Purchase Option

pre-disability

common exclusions and limitations

pre-existing conditions elective cosmetic surgery intentionally self-inflicted injuries injuries sustained while committing criminal acts war & acts of war workers' compensation losses foreign travel

UL Designed as Term (Guaranteed Universal Life) Notice!

premium and death benefit are not flexible as with regular UL policies

graded premium whole life

premium initially increases annually for 5-10 years and thereafter remains level

certain qualified retirement plans are eligible to hold life insurance

premium payments are made with pre-tax dollars permanent life insurance purchases by the plan can be available to employee after retirement

Benefit Period

premiums are different for 2-year benefit period vs. 5-year benefit period elimination period probationary period

limited pay whole life policy

premiums are payable for specified number of years or unit a specified age

permemant life

premiums are very high (and unaffordable for many) for WL and UL policies

guaranteed renewable

premiums can be increased (by class) cannot be non-renewed prior to specified age in the policy

optionally renewable

premiums can be increased (by class) coverage can be non-renewed at insurer's option (by class) on date specified in policy

conditionally renewable

premiums can be increased (by class) coverage can be non-renewed under certain condition (e.g. job change)

Universal Life Insurance

premiums can be varied in amount premiums can be paid at anytime (with limitations) face amount can be increase (E of I may apply)

indeterminate level premiums

premiums can increase at some point usually after some initial fixed period guaranteed maximum premiums limit how high premiums can be increased

non-guaranteed level premium

premiums can increase at some point, usually after some initial fixed person no limited to how high premiums can be increased

guaranteed level premium

premiums cannot change (i.e. guaranteed) for the entire term of the policy

UL Designed as Term (Guaranteed Universal Life) Premiums

premiums guaranteed to remain level throughout life of policy (i.e. guaranteed)

Investments

premiums invested for growth

investment

premiums invested for growth

non-tax qualified LTC policies

premiums not tax deductible (after tax dollars) benefits may be taxable - easier to qualify for benefits compared to a tax-qualified policy

Level premium concept

premiums paid early on are higher than necessary so that cash value can build up allowing premiums to remain level in later years when premiums would normally be much higher due to insured's age

life insurance taxation- premiums & cash value

premiums paid for individual life policies are made with after-tax dollars cash value growth is not taxed as long as the policy is in force

continuous premium whole life policy

premiums payable for life of policy

Individual DI Taxation

premiums payments with after-tax dollars disability benefits will be 100% tax-free

level 1

redetermination by the company that handles claims for medicare

tax qualified LTC policies

premiums tax deductible (up to limit based on age) as medical expenses benefits NOT taxable - more difficult to qualify for benefit compared to non-TQ policy

An original medicare beneficiary may enroll in a

prescription drug plan if they are enrolled in Part A and/or Part B enrollment in PDP is optional

UL Policy Account Value Mechanics

prev. ending account balance premium- premium expense- monthly fee- monthly cost of insurance (morality)+ interest earned monthly fee, monthly cost of insurance, & interest earned happens on 'monthiversary'

Rate

price of insurance for each exposure unit

an affidavit (written statement by oath or affirmation) of the person who mails the noice, stating the facts of such mailing, is

prima facie evidence (i.e. accepted as correct until proved otherwise) that the notice was thus mailed

EPO

primarily CDI some DMHC

PPO

primarily CDI some DMHC

beneficiary classes

primary beneficiary contingent (successor) beneficiary tertiary (final) beneficiary

POS

primary care physician may be required to manage care and for referrals to specialists (gatekeeper) services can be received in-network & out-of-network

surgical expense

primary surgeon fee 2nd opinion asst suregons/ anesthesiologists

exception

printed material in general use which has been distributed by the insurer is not required to be part of records (e.g. sales brochures, pamphlets, etc.)

controlling person

processes power to direct management and policies or organization, whether by ownership, contract or official position within organization

no illustration used in sale or policy applied for other than as illustrated

producer shall certify to that effect in writing on a form provided by the insurer on the same form as above applicant shall acknowledge that no illustration confronting to the policy applied for was provided and than an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery this form shall be submitted to the insurer at the time of policy application if policy issued, a basic illustration conforming to policy and signed by policy owner no later than the time the policy is delivered copy of illustration shall be provide to the insurer and the policy owner

why buy an annuity

professional money management tax-deferred growth guaranteed income for life

Survivor Program

program that pays benefits to certain eligible survivors of deceased workers who paid SS taxes

discrimination protection

prohibits discrimination in group health plans against employees and their dependents based on any health factors that may have, such as: health status medical conditions, including physical and mental illnesses claims experience/history medical history genetic information disability

Underwriters

properly classify risks accept or reject risks protect insurer against adverse selection

underwriter

properly classify risks accept or reject risks protect insurer against adverse selection

Surplus Line Broker Requirements

property & casualty broker and agent license surplus lines broker license

personal uses of life insurance

provide income pay off loans final expenses supplement retirement income mortgage payoff estate taxes

intermediate nursing care

provides 24-hour custodial and basic medical care under the supervision of a registered nurse. basic medical care includes rehabilitative and recuperative care, but NOT more intensive medical procedures as with skilled nursing care

Skilled Nursing Care

provides 24-hour custodial and nursing care with registered nurse on duty who is under the supervision of a licenses physician. equipped to provide more intensive medical procedures such as intravenous therapy and feeding tubes

outline of coverage

provides a very brief description of the important features of there LTC policy in question

hospice care

provides care for a terminally ill person in a hospice doctor and that person's regular doctor certify he/she is terminally ill and has a life expectancy of 6 months or less

hospice care

provides care for terminally ill some respite care included

Residual Disability

provides coverage for a disability that causes an insured's income to fall below its pre-disability level by a specified % (e.g. 20%)

Accident Only Policy

provides coverage for the following ONLY when they result from an accident (sickness NOT covered) death dismemberment disability hospital care medical care benefits usually paid in lump sum

title 18 section 1033

provides criminal and civil enforcement provisions aimed at assisting state insurance regulators in dealing with interstate insurance fraud schemes

Intermediate Care Facility (ICF)

provides intermediate nursing care

delivery receipt

provides proof that the policy owner has received and accepted the policy provides date for beginning g of free look period signed by policy owner and agent

accidental death & dismemberment (AD&D)

provides same coverage as accidental death rider, but also pays for dismemberment schedule in policy lists amounts paid for different types of dismemberment benefits usually paid as lump sum

commissioner's annual rate guide

provides sample rates reported by all companies that offer or marker medicare supplement insurance in california (aka consumer rate guide)

skilled nursing facility (SNF)

provides skilled nursing care

Benefit Integration

provision found in many employer-provided group DI plans that reduces benefits paid by the amount received from other sources (e.g. SSDI or workers' comp)

right to terminate

provision in a health insurance contract that spells out the rules regarding the rights of both parties to terminate the contract

renewable term

provision in most term life policy that gives the policy owner the option to renew the policy at the end of its term for another term without evidence of insurability (E of I) premium will increase at each renewal based on insured's attained age

term conversion provision

provision in most term policies that allows owner to convert all or a portion of the face amount to a permanent plan for insurance without evidence of insurability (E of I) premium based on age @ conversion

term conversion provision

provision in most term policies that allows owner to convert all or a portion of the face amount to a permanent plan of insurance without evident of insurability

stop-loss provision

provision in policies with coinsurance that says insurer will pay 100% of covered expenses once insured has paid a specified maximum out-of-pocket limit for the plan year

transplant donor benefit

provision that considers the insured to be totally disabled if disability results from the transplant of her body part to another person

spendthrift clause

provision that prevents beneficiary's creditors from being able to make claims on death benefit before they are received

misstatement of age or sex

provision that says if the insured's age or sex is different from what was on the application on adjustment will be made to the coverage based on the correct age or sex

Guarantee Association

publicizing an insurer's membership in a Guarantee Association

Deceptive Information

publicizing untrue or deceptive information about a person engaged in insurance

transfer

purchasing an insurance policy so that financial impact of loss is transferred to insurance company (e.g. carrying physical damage coverages on auto policy, paying a premium to get a life insurance policy)

mortality

pure cost of insurance

Hazardous Activity Questionnaire

questionnaire applicant fills out with the activities they do that can result in injury. could lead to u/w rejecting the application or charging the applicant higher premiums

no application for insurance or insurance investigation report furnished by an insurer to its agents or employees for use in determining insurability of the applicant shall carry any identification, or requirement therefor, of the applicants

race religion ancestry national origin color sexual orientation

Morbidity

rate of sickness/disease in a population (not to be confused with mortality which is used in life insurance)

open competition

rates are "naturally" regulated by competition. insurers not required to file rates, but may be required to furnish rate schedules to DOI

state-mandated

rates are set by a state agency or rating bureau

life insurance receipt

receipt given to eligible life insurance applicants when initial premium submitted with application that provides coverage while application is being underwritten. there are two types of receipts: binding receipt- applicant -> life policy conditional receipt- provides coverage while application is being underwritten only if approved

indemnity policies and other policies that pay a fixed dollar amount per day

receive covered care -> submit claim form -> receive check from insurer

beneficiary

receives annuity proceeds if annuitant dies

tertiary (final) beneficiary

receives life policy death benefit proceeds if both primary and successor beneficiaries not living at the time of insured's death

primary beneficiary

receives life policy death benefit proceeds if living at the time of insured's death

contingent (successor) beneficiary

receives life policy death benefit proceeds if primary beneficiary not living at the time of the insured's death

beneficiary

receives policy death benefit upon insured's death consent NOT required

Adverse Underwriting Decision

refers to any of the following actions declination of insurance termination of insurance coverage failure of an agent to apply for insurance coverage with a specific insurance institution the agent represents and that is requested by an applicant (P&C) the charging of a higher rare on the basis of information which differs from that which the applicant or policyholder furnished (Life/Health/Disability) An offer to insure at higher than standard rates

Coverage Gap ("Donut Hole")

refers to point in time when the amount the beneficiary pays for prescriptions suddenly increases

market conduct regulation

refers to the state laws that regulate insurer practices regarding their divisions

FINRA (Financial Industry Regulatory Authority)

regulates brokerages selling variable products not part of the government, but does have regulatory powers over its member securities firms overseen by the SEC

commissioner takes on role of conservator

rehabilitation is the primary goal of the commissioner as conservator, however if commissioner determines that it is futile to proceed as conservator, he will liquidate and wind up the business of insurer

a group life policy may provide that the insurer is not liable, or is liable only in a reduced amount, for losses arising from conditions

relating to war or act of war relating to military or naval service relating to aviation

Cancelling or refusing to renew a policy that insures a

religious organization educational organization any other non-profit organization reproductive health services facility on the basis that one or more claims has been made during the preceding 60 months for a loss that is the result of a HATE CRIME or an ANTI-REPRODUCTIVE RIGHTS CRIME

when fiduciary funds are received by a licensee, he shall

remit premiums, less commission, and return premiums (i.e. premium refunds) received or held by him to the insurer or the person entitle to them maintain fiduciary funds at all times in a trust account in a bank or S&L in any state which is insured by the FDIC and is licensed by any state government of by the U.S. government, separate from any other account

if new license not rep'd by renewal date, agent can transact using old license fir up to 60 days as long as the following have been submitted on or before the expiration date

renewal app license renewal fee continuing education (CE) hours

renewal commissions: years 3+

renewal commission in years 3 and beyond must be same as 2nd year renewal commission

5 renewal year minimum

renewal commissions must be paid for no less than 5 renewal years

expenses

rent/utilities claims employee salaries agent commissions

in an insurance contract an implied warranty qualifies as a

representation

Life Settlement Broker

represents only owner, not provider owes a fiduciary duty to the owner paid a fee, commission or other valuable consideration by owner

grace period (life)

required contractual provision in both individual and group life policies that continues coverage under the policy for up to 60 days after premium due date when premium is not paid

grace period (disability)

required contractual provision in disability policies that continues coverage for up to X days (depends on premium mode) after premium due date is not paid weekly- if premiums paid weekly grace period must be at least 7 days monthly- if premiums paid monthly grace period must be at least 10 days all other- if premiums paid quarterly, semi-and, annually grace period must be at least 31 days

conversion privilege

required provision that allows employee, following termination for any reason, to convert group life coverage to an individual plan without E of I 31-day conversion period to turn it into an individual policy (new plan cannot be term)

Gramm-Leach-Bliley Act Safeguards Rule

requires financial institutions to develop written security plans that describe how consumers' nonpublic personal information will be protected

Gramm-Leach-Bliley Act privacy notice

requires privacy notice explaining what consumer info is collected, where shared, how used, and how protected. Must disclose right to "opt-out" if consumer chooses to not allow information to be shared

underwriting

responsible for accepting or rejecting risks based on the insurer's underwriting guidelines

SEC (Securities and Exchange Commission)

responsible for bringing stability to financial markers regulated stocks and the mutual funds and variable life and annuity sub accounts which contain them

sales

responsible for selling the compony's products and services

personal uses

retirement income protection of assets from creditors

right to cancel life policy (60+)

return period shall not be less than 30 days can be returned by mail or other delivery method notice must appear on front of policy jacket or cover page

living need

rider or feature in life policy that allows insured to utilize policy's death benefit before the insured's death. any amount advanced reduced death benefit paid to beneficiary upon insured's death (aka accelerated death benefit) terminal illness critical illness insured may take ADB benefits in a lump sum or in a periodic payments for a certain period only

Return of Premium (ROP)

rider that returns all of a portion of the premiums paid at some set period of time less any benefits paid

CA Code of Regulations (CCRs)

rules and regulations institutes by state agencies (e.g. CDI) to administer law, including those adopted by the commissioner in order to administer the CIC

coverage period

runs from jan 1-dec 31 of each year

entire contact provision

says that a copy of the application must be made part of the policy for it to be valid

example benefit structures for Surgical Expense Policies

schedule of fees relative value unit usual, customary, and reasonable

employer responsibilities

selection of coverage enrollment non-discrimination record keeping/ paying premiums

CLHIGA excluded policies

self-funded employer plans stop-loss group insurance plans

hospitalization (inpatient care)

semiprivate room & board, general nursing, hospital supplies

in the replacement situation, the replacing insurer must within 3 working days of receiving the application

send written communication to existing insurer advising or replacement and include a policy summary containing data on the proposed life insurance or annuity

agent conduct with seniors 65 and older

seniors get taken advantage of a lot :(

EPO

service only available from EPO network no primary care physician no referrals fee-for-service

HMO

services must be received from within HMO network to be covered services received outside of network are not covered use of a primary care physician that acts as a gatekeeper is common in HMOs copayment preventive care

applies to life and disability: race color national origin ancestry religion sexual orientation

shall not, by itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance

The fancy PPACA name for this tax penalty is

shared responsibility payment

hazardous activity questionnaire

sheet the insured fills out about their dangerous hobbies

respite care

short-term care provided in an institution, in the home, or in a community-based program that is designed to relieve a primary caregiver in the home this is a operate benefit with its own conditions for eligibility and maximum benefit levels

agent must submit the following to an insurer as part of an application for individual life insurance or annuity

signed applicant statement "will the insurance applied for replace or change any existing insurance or annuity" (must answer yes or no) signed agent statement "do you have any knowledge or reason to believe that the insurance applied for will replace or change any existing insurance or annuity (must answer yes or no?

payment authorization form

signed by person on the account it is being pulled from

producers statement

signed by producer(s)

notice regarding replacement

signed by: applicant agent

third party notice request form

signed by: policy owner & only section 2 if they don't want to designate anyone

temporary life insurance agreement

signed by: proposed insured other proposed insured applicant if other than proposed insured applicant

authorization to disclose personal/medical information

signed by: proposed insured spouse if they are also proposed insured signature of parent if minor signature of non-minor child if proposed is non-minor

notice of AIDS/HIV testing and consent for testing

signed by: proposed insured or parent/guardian

the actions of employers who fraudulently underreport payroll or fail to report payroll for all employees to their insurance company in order to lower workers' compensation premium result in

significant additional premium costs and an unfair burden to honest employers and their employees

execution of a contract of insurance

signing a binder collecting initial premium issuing a policy

non-spouse beneficiary

since California is a community property state, if a policy owner wishes to name someone other than their spouse as primary beneficiary, spousal consent may be required

24 hour coverage benefits

single health care provider lower admin costs reduced litigation

24- hour coverage

single policy that includes both workers' compensation coverage and disability insurance coverage (cannot include life insurance)

how does the money get into the annuity?

single premium (SP) flexible premium (FP)

annuity classification possibilities

single premium immediate annuity (SPIA) single premium deferred annuity (SPDA)

home health care

skilled nursing or other professional services in the residence, including, but not limited to part-time and intermittent skilled nursing services home health aid services physical therapy occupational therapy speech therapy audiology services medical social services by a social worker

small business health insurance tax credit

small employers eligible with 25 or fewer FTW employees that pay average wage of <50k/ year pay at least 50% of health premiums for full-time employees offered covered CA for small business (SHOP) coverage to all full-time employees

guaranteed issue

small group health plans are issued on this basis they cant be declines

HMOs tend to emphasize preventive care and services

smoking cessation weight loss flu shots

An insurance institution or agent shall clearly specific those questions designed to obtain information

solely for marketing or research purposes from an individual in connection with an insurance transaction

Transact as applied to insurance includes and of the following

solicitation negotiations preliminary to execution execution of a contract of insurance transaction of matters subsequent to execution of the contract and arising out of it

Health Insurance Portability and Accountability Act (HIPAA)

special enrollment discrimination protection

Applies to disability policies for hospitals, medical, and surgical expenses if insurer denies coverage for an experimental medical procedure or plan of treatment for a claimant with a terminal illness (incurable or irreversible condition that has a high probability of causing death within one year or less), under a disability insurance policy that includes hospital, medical, or surgical coverage shall provide written notification directly to the claimant or representative, which shall include all of the following

specific medial and scientific reasons for denial and specific references to pertinent policy provisions upon which the denial is bases description of alternative medical procedures or treatments cover by the policy (if any) description of the process by which the claimant may exercise his right to appeal the denial

In the event of an adverse underwriting decision the insurance institution or agent responsible for the decision shall provide the applicant or policyholder with

specific reason(s) for adverse u/w decision in writing AND summary or rights regarding access to recorded personal information about the individual

deductible

specified dollar amount insured must pay before insurer begins to pay any benefits under a disability policy

deductible

specified dollar amount insured must pay before insurer beings to pay any benefits under a disability policy

copayment (copay)

specified dollar amount insured must pay each time a covered service is received

copayments typical in HMOs

specified dollar amount insured must pay each time a covered service is received (no or low deductible)

copayment

specified dollar amount the insured must pay reach time a covered service is received

dependents include

spouse children (at least until age 26) children of any age if: incapable of self-sustaining employment by reason of a physically or mentally disabling injury, illness, or condition AND chiefly dependent upon the employee for support and maintenance

Prescription dug plans may be purchases as either

stand-alone for those who have original medicare (Part A and/or Part B) (stand-alone cannot be purchased by someone who has HMO or PPO medicare advantage plan) or embedded for those who have medicare advantage (Part C)

buyer's guide

standardized guide from NAIC that must be given to buys of life insurance

coordination of benefits (COB)

standardized provision establishing the order in which health plans pay their claims in order to prevent duplication of coverage and overinsurance with an individual is covered by more than one health insurance plan

Dual Definition of Disability

start off using own occupation definition of total disability (usually 24 months) and then use any-occupation definition after the specified amount of time

Process for Changing the California Insurance Code (CIC)

state legislature introduces bill legislature passes bill governor approves bill bill becomes law and is added, deleted. or amended in CIC

Attending Physicians's Statement (APS)

statement of medical records of the physician who treated the proposed insured for a particular illness or disease

attending physician's statement (APS)

statement or medical records of the physician who treated the proposed insured for a particular illness or disease

consideration clause

states money and other considerations necessary foe the validation of the contract

Applications for residential real property, legal liability, life or disability insurance are allowed to include a question that asks the applicant's birthplace if

such question is used only to identify the applicant and not to discriminate against them

ERISA participants must be provided with

summary plan description (SPD) summary annual report pension benefit statement

critical illness insurance

supplemental insurance for a number of specified catastrophic diseases/illnesses listed in the policy

specified disease insurance

supplemental insurance for a specified disease of illness (e.g. cancer) (aka dread disease insurance) typically pays a fixed dollar amount to help cover expenses that may not be covered by regular health insurance (coverage for cancer is the most popular)

gatekeeper concept

system used in managed care (e.g. HMOs) in which a primary care physician helps control costs by managing a patient's treatment. PCP (gatekeeper) must authorize patient's referrals to specialists, hospitalizations, lab studies, etc.

mortality table

table that shows the rate of deaths occurring in a defined population during a selected time interval OR survival from birth to any given age

Plans K & L

take a coinsurance approach both have out-of-pocket limits to protect from catastrophic losses

Advanced Premium Tax Credits (APTC)

tax credits available under PPACA to help eligible individuals and families with low or moderate incomes afford health coverage (aka premium tax credit or premium assistance or premium subsidy) HH income (MAGI) ≤ 400% for FPL to be eligible

health savings account (HSA)

tax-advantaged medical savings account available for individuals with a high deductible health plan (HDHP) that is used to pay for qualified medical expenses contributions made with pre-tax dollars, has tax-free growth, and withdraws are tax-free if used for qualified medical expenses unused funds rolled over to future years if money is taken out for other purposes it is taxed + 10% penalty

medical savings account (MSA)

tax-advantaged medical savings account primarily for self-employed individuals with a high deductible plan (HDHP) (aka Archer MSA) no new MSAs allowed since 2007 health savings accounts (HSAs) largely replaced MSAs in California, MSA contributions are tax-deductible at state level, whereas HSA contributions are not

Tax-Deferred

tax-deferred gains will be taxed when distributed

Tax-Free

tax-free gains will never be taxed

cash surrender and maturity proceeds are

taxable to the extent that there is a gain in the policy

managed care

techniques used by insurers to contain costs capitation preventive care case management gatekeeper

Substandard Alternatives

temporary exclusion permanent exclusion commonly see exclusions on - pre-existing conditions, mental/nervous disorders, alcohol & substance abuse rating (table rating)

return of premium rider

term insurance policy (or rider) that returns all or a portion of the premiums paid over the life of the policy if the insured survives through the end of the policy's term can increase policy by up to 30% only applied to term insurance

return of premium

term insurance policy that returns all or a portion of the premium paid over the life of the policy if the insured survives through the end of the policy's term can cost up to 30% more compared to comparable term life insurance without return of premium benefit

Dependents under DOBRA

termination (other than for gross misconduct, 18 months) reduction in work hours (18 months) medicare entitlement (36 months*) divorce/ legal separation (36 months) death (36 months) loss of dependent child status (36 months)

the following are not considered to be adverse underwriting decisions

termination of an individual policy form on a class or statewide basis declination of insurance coverage solely because coverage is not available on a class or statewide basis rescission of a policy

cancellation

termination of coverage by insured or insurer during policy term

Lapse

termination of coverage due to non-payment of premium

non-renewal

termination of coverage that coincides with policy's expiration date

7-pay test

test used to determine if cumulative premiums paid in for a life policy during the first 7 years make it qualify as a modified endowment contract

Insurers can do nothing

that might suggest that their medicare supplement policies are somehow endorsed by the government

insurance laws are established by

the California state legislator

conversation

the act of the commissioner taking over an insolvent insurer's business and being vested with its assets, books and records in attempt to rehabilitate it

Field Underwriter

the agent/broker is the eyes and ears of the Insurer

limit of liability

the amount the insurer is obligated to pay our under a life policy upon the insured's death: face amount- policy loan- loan interest= limit of liability

limit (measure) of liability (net death benefit)

the amount the insurer is obligated to pay out under a life policy upon the insured's death face amount - policy loan - loan interest = limit of liability

limit of liability

the amount the insurer is obligated to pay out under a life policy upon the insured's death face amount- policy loan- policy loan interest= limit of liability (measure of liability, net death benefit)

An insurance institution, agent or insurance-support organization which discloses and personal or privileged information about an individual collected or received in connection with an insurance transaction without authorization shall be liable for the monetary damaged sustained by the individual

the court may award the cost of the action and reasonable attorney's fees to the prevailing party

when do action notice of appointment become effective

the day it is signed by the insurer

for personal lines of insurance, an agent must provide insured/applicant with

the effective date of coverage at the time of application or receipt of premium moneys

insurer

the insurance company

insuring clause

the insurer's basic promise to pay policy proceeds upon insured's death

demutualization (conversion)

the legal process whereby a mutual insurance company becomes a stock insurance company

additional reasons a permanent license may be suspended or revoked

the licensee has induced a client, whether directly or indirectly, to: cosign or make a loan, make an investment, make a gift, or provide any future benefit through a right of survivorship to the licensee, or his relatives, friends, business acquaintances, or registered domestic partners make the licensee (or his relatives, friends, business acquaintances, or a registered domestic partner) a beneficiary under the terms of any interviews or testamentary trust or the owner or beneficiary of a life insurance policy or an annuity policy make the licensee (or his relatives, or a registered domestic partner) a trustee under the terms of any intervivos or testamentary trust. (exception: if licensee is also a licensed attorney)

a licensee may at any time surrender for cancellation any license under which he or she is permitted to act in any of the capacities specified in this chapter

the licensee may make that surrender by written notice thereof delivered to the commissioner (CIC 1708)

insured status

the number of credits needed to provide benefits for survivors depends on worker's age at death. no one needs more than 40 credits to be eligible for any social security benefit. but, the younger a person is, the fewer credits they must have for family members to receive survivors benefits. but for children and a spouse who is caring for the children, survivor benefits can be paid even if they deceased worker did not have enough credits. benefits can be paid if deceased worker earned just 6 credits in the 3 years just before death.

COB- dependents/non-dependents

the pans that covers the person other than as a dependent (e.g. as an employee), is the primary plan and the plan that covers the person as a dependent is the secondary plan

Long-Term Care Insurance Personal Worksheet

the premium section of the LTC insurance personal worksheet must include the rate guide disclosure statement

rate

the price of the insurance for each exposure unit

California Insurance Code (CIC)

the primary body of laws that regulated the business of insurance in California

Minimum Essential Coverage (MEC)

the type of coverage an individual needs to have to satisfy the individual mandate requirement under PPACA. failure to maintain MEC (assuming no exemptions apply) with result in tax penalty (shared responsibility payment)

minimum essential coverage (MEC)

the type of coverage and individual needs ti gave too satisfy the individual mandate requirement under PPACA. failure to maintain MEC (assuming no exemptions apply) will result in tax penalty (shared responsibility payment)

Waiver

the voluntary and intentional relinquishment of a right, which can be expressed explicitly or implied by conduct

a fiduciary who diverse or appropriates (takes) fiduciary funds (e.g. premiums) for his own use is guilty of

theft and punishable for theft as provides by law

A risk must be insured with an admitted insurer if possible... but if it cant be

then one could be the services of a surplus line broker to try and get insurance through a non-admitted insurer

Medicare beneficiaries always have the right of appeal for any coverage decision by medicare with which they disagree

there are 5 levels to the appeals process on original medicare

an insolvent insurer is on where

there is an inability of the insurer to meet its financial obligations when due OR this is any impairment of minimum paid-in capital required in the aggregate of an insurer for the class, or classes, of insurance it transacts

universal policy lapses when

there is insufficient account value to cover monthly expenses

A late enrollment penalty may be added to Part D premium if, at any time after initial enrollment period is over

there's a period of 63 or more days in a row without Part D or other creditable prescription drug coverage

before a risk can be placed with an excess & surplus lines insurer, the surplus line broker must submit a form (diligent search report) that establishes either

three admitted insurers that write the particular type of insurance in CA have declined the risk OR that there are fewer than three admitted insurers that actually write the particular type of insurance

blackout period

time between when child turn 16 and widow(er) turns 60 when no survivor benefits are paid to the widow(er)

accumulation phase

time during which an annuity is funded (tax-deferred growth)

annuitization phase

time during which annuity is liquidated to provide income to owner

disability-insured status

to be eligible for DDSI benefits, worker generally needs 40 credits with 20 credits having been earned in the last 10 years before disability

applies to life, annuity, and disability benefits (ind. or group) insurer shall not refuse

to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of a physical or mental impairment, except where the refusal, limitation or rate differential is based on sound actuarial principles or is related to actual and reasonably anticipated experience

life insurance

to protect somebody from dying too soon pays after death

the application must be completed accurately and truthfully

to the best of the agent's ability

reasons for disapproval

too similar to name being used use of name may mislead public name states or implies licensee is an underwriter states or implies activities not allowed by license licensee has already filed and not discontinued use of more than 2 names

cost index

tool consumer can used to determine or compare the relative costs of similar policies based on several factors such as premiums, cash values and dividends. there are two main types of cost indexes- surrender cost index (measurer cost of insurance assuming policy will be surrendered) & net payment cost index (measurers cost of insurance assuming policy will not be surrendered)

lump sum

total value of annuity paid in annuitant in one lump sum. (not very popular as most people use annuities to create a guaranteed stream of income in retirement)

Equity Index

tracts the performance of a specific group of stocks representing a particular segment of the market, or in some cases an entire market

Licensee must file with the DOI

true name (individual or organization) fictitious names (DBAs) to be used

guaranteed issue

true non-medial life insurance no health history questions on app small face amount, usually WL policy more expensive than medical policies target market - seniors

All of the following practices are prohibited when working with a prospective or current medicare supplement client

twisting high pressure tactics cold lead advertising

Express (Actual) Authority

type of authority specifically given to an agent by a principle, usually in writing (but not always)

Errors & Omissions (E &O) Insurance (aka Professional Liability Insurance)

type of liability insurance designed to cover financial losses for which a professional (e.g. insurance agent) is responsible because of errors, negligence or omissions

supplemental major medical policy

type of major medical policy that is purchased in conjunction with one or more basic medical expense policies to provide broader coverage

Special Needs Plans (SNP)

type of medicare advantage plan (like HMO or PPO) that limits membership to people with specific diseases or characteristics, and tailors their benefits, provider choices, and drug formularies to best meet the specific needs of the group they serve. must provide prescription drug coverage

Medicare Select Plan

type of medicare supplement policy that provides coverage through a restricted network, like a HMO or PPO premiums can be lower as much as 8-36%

tax sheltered annuity (TSA)/ 403(b) plan

type of qualified annuity used for retirement savings plans that is only available to employees of: public education organizations (teachers) non-profit employers cooperative hospital service organizations self-employed ministers

UL Designed as Term (Guaranteed Universal Life) Cash Value

typically minimal, if any at all. focus is on premium amount that will provide coverage to specified age chosen by insured

insurers may not

unfairly discriminate on the basis of tests or a person's genetic characteristics

Accident

unforeseen and unintentional injury

insurers are not allowed to use pretext interviews

unless it is used while investigating a claim where criminal activity, fraud, material misrepresentation or material nondisclosure is suspected

specific request rule

unless the owner specifically directs that the premium be invested in the mutual funds (separate account/ sub accounts) underlying the variable life insurance policy or variable annuity contract

specific request rule

unless... the owner specifically directs that the premium be invested in the mutual funds (separate account/sub accounts) underlying the variable life insurance policy or variable annuity contract

an agent shall not cause a policy holder to replace a LTCx insurance policy

unnecessarily *3 or more LTC policies sold to a policy holder in a 12-month period is automatically deemed to be unnecessary OR that results in a decrease in benefits and increase in premium

refusal to turn over books, records, or assets after the commissioner issues a seizure order during an insolvency proceeding will result in a misdemeanor and be subject to a penalty of

up to $1,000 and/or imprisonment up to 1 year

Any violation of the Unfair Trade Practices is a misdemeanor and subject the following penalties

up to $5,000 each act up to $10,000 each act if willful

an insurance institution, agent, or insurance-support organization that violates a ceases & desist order issued by the commissioner for conduct or practice in violation of the Insurance Information & Privacy Protection Act shall be subject to one or more of the following penalties

up to a $10k fine for each violation up to a $50k fine if general business practice suspension or revocation of license if insurer or agent knew it was in violation

all licenses issued to natural persons terminate

upon the death of such person

PPO

use of a primary care physician not required referrals to see specialists not required PPO premiums typically more expensive than HMO premiums

Applies to life and disability: applications for life or disability insurance are allowed to include a question that asks the applicant's birthplace if such question is

used only to identify applicant and not to discriminate against them

instrumental ADLs

using telephone managing medications moving about outside light housekeeping laundry shopping for essentials preparing meals

Group Life Insurance

usually bought by employers on their employees and covers 2+ people

in-network PPO providers (e.g. physicians, surgeons, hospitals, etc.)

usually paid on a fee-for-service basis discounted fees pre-negotiated by PPO with in-network providers

paid-in capital

value of the insurer's assets in excess of the sum of its liability for the losses reported, expenses, taxers, and all other indebtedness and reinsurance of outstanding risks as provided by law

premiums

vary by plan Part D premiums are in addition to Part A and/or B premiums some plans include Part D and do not charge separate premiums (e.g. HMO Medicare Advantage) higher income = higher premium

Applies to disability insurers: no disability insurer may utilize any information regarding whether a beneficiary's psychiatric inpatient admission was made on a

voluntary basis or involuntary basis for the purpose of determining eligibility for claim reimbursement

waiver of monthly deduction

waives UL monthly deductions (i.e. monthly fee and cost of insurance) while the insured is disabled as defined in the policy 3-6 month waiting period typical

waiver of premium

waives policy premiums while the insured is disabled as defined in the policy 3-6 month waiting period typical

incontestability clause

waives the insurance company's rights to dispute the validity of the contract after it has been in force for 2 years

payor rider

waives the policy premiums on a juvenile policy if the payor dies or becomes disabled while the insured is under 21 premiums usually waived under insured 21 or 25

waiver of premium rider

waves policy premiums while insured is disabled as defined in the policy 3-6 month waiting period typical available on term and whole life

external replacement

when a policy is being replaced by a new company

life paid up @ age 65 policy

when you stop paying premiums at age 65

active license

where insurance license has been issued, but for a license to be active you must have notice of appointment

Permanent Life Insurance

whole life (ordinary life/straight life) variable life universal life variable universal life

jumping juvenile

whole life policy insuring a juvenile insured (<16) in which the face amount increases by 5 times when insured turns 21 years old (without E of I)

Eligible Survivors

widow or widower at any age caring for a deceased's child <16 or disabled widow or widower 60+ unmarried child <18 unmarried child up to 19 if full-time student unmarried child age 18+ with a disability that began before age 22 dependent parent(s) 62+ dependent on deceased for at least 1/2 of their support

mec

withdrawals taxed on LIFO basis 10% penalty for distributions prior to 59 1/2 (like an IRA) death benefit proceeds NOT impacted by policy's MEC status once a mec, always a mec single premium WL always a MEC

endowments

work like continuous premiums whole life policies, except that maturity age is some age less than normal maturity for a whole life policy (e.g. 100 or 121)

currently insured status

workers under age 24 need 6 credits in the last 3 years (12 calendar-quarters) workers 24 and older will need additional credits based on age at time of disability

binder

written agreement issued by a P&C insurer or broker-agent that provides coverage pending the issuance of an insurance policy binders are not used with life of disability insurance

Life & Disability Analyst Requirements with clients

written agreement- insurer might perform services for free services performed & associated fees commissions earned on sales (copy retained for 3 years)

A Disclosure Authorization Form must meet the following requirements

written in plain language provide purpose for collection persons authorized to disclose info insurance institution or agent to whom info can be disclosed nature of info authorized to be disclosed duration authorization valid individual (or rep) entitled to copy dated

Representation

written or oral response to questions on an application that applicant believes to be true to the best of his knowledge and upon which the insurer relies to issue a policy

long-term care insurance CE requirements

years 1-4 - 8 hrs/ years years 5 & after - 8 hrs/ 2 years

long-term care insurance CE requirements

years 1-4: 8 hours/ year years 5 & after: 8 hours/ 2-years initial 8 hour LTC course must be completed prior to soliciting consumers for the sale of LTC insurance training must consist of topics related to LTC services and insurance, including: CA regulations and requirements, available LTC services and facilities, changes or improvements in services or facilities, alternatives to purchase of private LTC insurance there house are part of (not in addition to) total hours needed

long-term care insurance CE requirements

years 1-4: 8 hrs/year years 5 & after: 8 hrs/ 2-yrs note: initial 8-hr LTC course must be completed prior to soliciting consumers for the sale of LTC insurance

business partners

yes you have insurable interest

parent-child

yes you have insurable interest

self

yes you have insurable interest

spouse-spouse

yes you have insurable interest

guaranteed renewability of coverage

you must be allowed to renew the health coverage (policy) regardless of health status

after successfully passing your state insurance exam

you'll need to submit an application for the appropriate insurance license(s) to the CDI. this application, along with the corresponding documentation, will be used by the CDI in determining whether or not a license will be issued