Chapter 1 Xcel Health and Life Insurance
Mutual Companies
Are referred to as participating companies because the policy-owners participating in dividends.
Private Insurance Companies
Commercial are private companies offering many lines of insurance. Some sell primarily life insurance and annuities, while other sell primarily accident and health insurance, or primarily property and casualty insurance.
What type of insurance companies use a Policy Summary? A. Life Insurance B. Long-term care insurance C. Annuities D. All of the above
D
Health insurance is also called A. Accident and health B. Accident and sickness C. Sickness and accident D. disability E. All of the above
E
Health Insurance
Insurance against sickness or accidental bodily injury.
The NAIC works on suggesting standards for states to adopt with the goal of a standardizing the insurance industry throughout the USA. True or False
True
With group life insurance the insured does not own the policy, the group owns and controls the policy. True or False
True
Property and Casualty Insurance
What you own could harm someone that could cause someone to sue you. This protects you from that.
Reinsurer
a company that provides financial protection to insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.
Fair Credit Reporting Act
a federal law requiring an individual to be informed if she is being investigated by an inspection company. The law also outlines the sharing and impact of such information and requires individuals to be notified prior to being investigated.
Disability (income) insurance
a form of insurance that insures the beneficiary's earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. There are rules.
State Guaranty Association
established by each state to support insurers and protect consumers in the case of insurer insolvency.
Mutual Companies
insurance companies characterized by having no capital stock; it is owned by its policy owners and usually issues participating insurance.
Stock Companies
insurance companies owned and controlled by a group of stockholders whose investment in the company provides the safety margin necessary in issuance of guarantee, fixed premium, nonparticipating policies.
Casualty (Liability) Insurance
insurance which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Protects you in the case someone sues you.
Fraternal Benefit Societies
nonprofit benevolent organization that provide insurance to its members. Producers or agents who only sell within their society, do not receive commission, and stay under a specific premium threshold often have less stringent licensing requirements.
Medical Expense Insurance
pays benefits for nonsurgical doctors' fees commonly rendered in a hospital; sometimes pays for home and office calls.
Reinstatement
the act of putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required.
divisible surplus
the amount of earnings paid to policy owners as dividends after the insurance company sets aside funds required to cover reserves, operating expenses, and general business purposes.
Deductible
the amount of expense or loss to be paid by the insured before an insurance company starts paying benefits.
Term life is designed to provide _________ in case a person dies during a set period of time? A. full protection B. healthcare C. temporary protection D. nothing
C
What type of insurance companies use a buyer's guide? A. Life Insurance B. Long-term care insurance C. Annuities D. All of the above
D
What types of insurance does deductibles typically apply to? A. Property B. Casualty C. Health D. All of the above
D
All authorized insurers are NOT legally required to participate in the State Guaranty Association for any state they are authorized to do business in regardless of where their corporate office is. True or False
False
The NAIC directly makes laws. True or False
False
What's the main difference between private and government insurance?
Government insurers typically cover catastrophic events, or a segment of society against medical costs.
Proof of loss
a mandatory health insurance provision stating that the insured must provide a completed claim form to the insurer within days of the date of loss. If the insured wants to be paid they must prove the loss.
Declaration Page
a piece of paper which provides basic information about an insurance policy. The first page is generally the declaration page.
Participating Plan
a plan under which the policy owner receives shares (commonly called dividends) of the divisible surplus of the company.
Buyer's Guide
an informational consumer guide books that explain insurance policies and insurance concepts; in many states, they are required to be given to applicants when certain types of coverages are being considered.
Multi-line insurer
an insurance company or independent agent that provides a one-stop shop for businesses or individuals seeking coverage for all their insurance needs.
Entire Contract
an insurance policy provision stating that the application and policy contain all provisions and constitute the entire contract.
Property Insurance
an insurance policy that provides financial reimbursement to the owner or renter of a structure and its contents, in the event of damage or theft. Property insurance protects what you own or rent.
Surplus lines insurance
available to those who need protection but it is not available through private or commercial carriers. Gets covered for substandard or unusual risks.
Life Insurance
insurance against loss due to the death of a particular person (the insured) upon whose death the insurance company agrees to pay a stated sum or income to the beneficiary.
Whole Life
permanent level insurance protection for a person's "whole of life," from policy issue to the death of the insured. Characterized by level premiums, level benefits, and cash values.
Term Life Insurance
protection for a set number of years; expiring without value if the insured survives the stated period, which may be one or more years.
Consideration
the part of an insurance contract setting forth the amount of initial and renewal premiums and frequency of the future payments.
The Insuring Agreement
the portion of the insurance policy in which the insurer promises to make payment to or on behalf of the insured.
How are state guaranty associations funded? A. Taxes B. Insurers through investments C. Insurers through insurance D. All of the above
B
Why is a stock company referred to as a nonparticipating company? A. They do not work with insurance B. Because policyholders do not participate in dividends resulting from stock ownership C. It's hard to work with stocks
B
Policy Summary
a summary of the terms of an insurance policy, including the conditions, coverage limitations, and premiums.
Notice of claim
a policy provision that describes the policy owner's obligations to provide notification of loss to the insurer within a reasonable period of time. A notice of claim only requires the insurance company be notified of a loss, it does not require that proof of the loss is provided.
Group Life
a type of life insurance in which a single contract covers an entire group of people. Most often, the group is an employer-employee group. Those covered under a group life policy may or may not pay a portion of the premium and can usually choose their beneficiary.
National Association of Insurance Commissioners (NAIC)
an association of all of the state insurance commissioners active in insurance regulatory problems and in forming and recommending model legislation and requirements.
Reserve
funds held by the company to help fulfill future claims. Minimum reserves are usually set by the state department of insurance.
What do you call companies that sell more than one line of insurance? A. Multi-line insurers B. Double insurers C. Participating Plan D. Reserve
A