Florida Insurance Licenses
U S v Southeastern Underwriters Association
1944 ruling stating that insurance is a form of interstate commerce and therefore should be regulated by the federal government
McCarran-Ferguson Act
1945 Act exempting insurance from federal antitrust laws to the extent insurance is regulated by states
Fair Credit Reporting Act
1970 federal law requiring an individual to be informed if he or she is being investigated by an inspection company
Financial Services Modernization Act
1999 Act eliminating placed on financial institution, insurance companies, commercial banks, investment banks and retail brokerage from entering each other's line of business
Risk pooling
A basic principle of insurance whereby a large number contribute to cover the losses of a few
Mutual Insurers
A insurance characterized by having no capital stock and is owned by its policy owner and usually issues participating insurance
Adhesion Contract
A life insurance policy is a contract of adhesion because buyers must adhere to the terms of the contract already existence. They have no opportunity to negotiate terms, rates values, etc
Modified Endowment (MEC)
A life insurance policy under which the amount a policy owner pays in during the first years exceed the sum of net level premium that would have been payable to paid up future benefits in seven years
Personal Producing General Agency System PPGA
A method of marketing , selling and distributing insurance in which PPGA are compensated for business they personally sell and business sold by agents with whom the May subcontract. Subcontract agents are considered employees of the PPGA, not the insurer.
Career Agency System
A method of marketing, selling and distributing insurance, it is represented by agencies or branch offices committed to on going recruitment and development of career agents.
Facility of Payment Provision
A provision found most often in industrial policies permitting an insurer to pay all or a portion of the proceeds to someone who though not named in the policy has valid rights in certain situations
Medical Information Bureau
A service organization that collects medical data on life and health insurance applicants for member insurance companies
Independent Agency System
A system for maketing, selling and distributing insurance in which independent brokers are not affiliated with any one insurer but represents any number of insurers.
Disability Income Insurance
A type of health insurance coverage that provides for the payment of regular, periodic income should the insured become disabled from illness or injury.
Speculative Risk
A type of risk that involves the chance of both loss and gain ; not insurable
Void vs Voidable Contract
A void contact is agreement without legal effect, an invalid contract. A voidable contract is one that can be made void at the option of one or more parties to agreement.
Reinsurance (Reinsurer)
Acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage
Misrepresentation
Act of making, issuing circulating or causing to be issued or circulated an estimate, illustration, circular,or statement do any kind that does not represent the correct policy terms, dividends r share of the surplus or the name of title fro any policy or class of policies that does not in fact reflect its true nature
Life Insurance
Actuarial or Mathematical principles and guarantees a specified sum of money upon death of person insured
What are the key terms factors evaluated in the health insurance underwriting process?
Age, occupation, physical condition, medical history, moral factors financial status and hobbies . The most important factors are medical history and occupation
Three Entities involved in the Concept of Agency
Agent Insured The insurance company
Multiple Employer Welfare Arrangement (MEWA)
Allow small employers to pull together to provide insurance benefits for their employees. any plan and involving more than one employer is a MEWA and is subject to licensure and regulations by the Office of Insurance Regulation. MEWA is self-funded and employers enjoy tax exempt status. Employees covered under MEWA are required by law to have an employment related bond
Time Payment of Claim Provision
Allows insurers 45 days after receiving notice and proof of loss in which to pay or deny the claim (In Florida)
Change of Beneficiary Provision
Allows the policy owner to change the policy beneficiary as so desired as long as beneficiary designation is revokable
The Reinstatement Provision
Allows the restoration of a policy that lapsed due to late payment back to active status. If insurer takes no action within 45 days the policy is considered reinstated automatically.
Group Permanent Life Insurance
Also known as whole life in the group plan market can be broken down into three different types offerings Group Ordinary Plans Group Paid Up Plans Group Universal Life Plans
Primary Insurance Amount (PIA)
Amount equal to a covered workers for Social Security retirement benefit at age 65 disability benefits.
Viatical Settlement
An agreement under which under which the owner of a life insurance policy sells the policy to another person in exchange for bargained payments which is generally less than expected death benefits under the policy
Wavier
An agreement waiving the company's liability for certain types or types of risk ordinarily covered in the policy; a volunteer giving up a legal, given right.
National Association of Health Underwriters NAHU
An organization of health insurance agent that is dedicated to supporting the health insurance industry and to advancing the quality of service provided by insurance professionals
Moral Hazard
An unhealthy habit such as smoking
Rollover IRA
And individual retirement account established with funds transferred from one IR a qualified retirement plan that the owner had terminated
Health Reimbursement Account
Another variation of health care funding pretax contribution for each employee to pay deductible, coinsurance, and copayment
Hazard
Any factor that gives rise to a peril (source of danger)
Health Saving Accounts (HSA)
Are designed to assist the small business owner and the self employee set aside tax advantage funds to help defray health cost
Limited Risk Policies (Dread Disease Policies)
Are designed to protect people against specific illness. Some state prohibit the sale of these policies
Certificate of Authority
Before any entity may operate as an insurer in this state, it must obtain a Certificate of Authority from the Office of Insurance
Revocable Beneficiary
Beneficiaries whose right in a policy are subject to the policy owner reserve right to revoke or change beneficiary designation and the rights of the surrender or make a loan on the policy without the beneficiary's consent
Irrevocable Beneficiary
Beneficiary whose interest cannot be revoked without his or her consent usually because the policy owner made the beneficiary designation without retaking the right to revoke
Binding Receipt
Binds the insurance company if the risk is approved as applied for, subject to any other conditions stated on the receipt.
Flexible Spending Account
Cafeteria plan that is funded with pretax employee contributions called Salary Reduction medium- large sized employers
Composite Rating
Can be used for groups of 10 or more and averages the cost of all employees charging the small premium for each, regardless of the nature variance of age and sex
11 Optional Provisions
Change of Occupation Misstatement of age or sex Other insurance with this insurer Insurance with other insurers Relation of Earning to Insurance Unpaid Premium Cancellation Conformity with state statues Insurance with other insurer Illegal occupation Intoxicant and Narcotics
Conditional
Characteristics of an insurance contract in that the payment of benefits is dependent on or a condition of the occurrence of the risk insured against
Limited Pay Whole Life
Characterized by premium payment only being made for a specified or limited number of years
Section 457 Plans
Deferred compensation plan for employees of state and local government in which amount deferred would not be included in gross income until they're actually received or made available.
Keogh Plans
Designed to fund retirement of self employed individuals, under which contributions to such plans are given a favorable tax treatment.
Common Disaster Provision
Designed to provide an alternative beneficiary in the event that the insured as well as the original beneficiary dies as the result of a common accident
Unilateral
Distinguishing characteristic of an insurance contract in that it is only the insurance company that please anything
Free Look Provision
Florida Law mandates a 10 day free look period for health insurance policies and a 30 day free look period for Medicare supplement and long term care
Grace Period
Florida Law requires 7 days on weekly premiums health policies, 10 days for health policies with premiums payable monthly and , 31 days for other health policies
Florida Free Look
Florida law allows life insurance and annuity applicants 14 days to inspect a policy that is delivered with the intent of issuing insurance coverage. Medicare supplements and long-term care policies a lot a 30 day free look. If the policy is that issued the applicant must be given a full refund
Policy Reserves
Funds held by the company to fulfill future claims
Physical Exam and Autopsy Provision
Give the insurer the right to have the insured physically examined periodically
Nonadmitted Insurance Company
Has not been licensed or authorized to transact insurance business in Florida
Health Maintenance Organization HMO
Health care management stressing preventive health care, early diagnosis and treatment on an outpatient basis. Person generally enroll voluntarily by paying a fixed fee periodically
Mortality
History of death
The State Court System
Identifies and make legal determination involving cases of conflict between insurance company and policy owners and enforces criminal penalties for violation of any directive of the insurance code
Misuse of Premium
Improper use of premium collected by insurance producer.
Relation of Earnings to Insurance Provision
In Florida indemnities payable to the insured may be reduced below $500 or the sum total benefits under all application coverage whichever is less
Legal Purpose
In contract law, the requirement that the object of, or reason for, the contract must be legal.
Alien Insurers
Incorporated in a country other than the US when doing business in the US
Franchise Life
Individually own policies for small groups
Reciprocal Insurer
Insurance company characterized by the facts its policyholder insure the risk of other policy holders
Stock Insurers
Insurance company owned and controlled by group of stockholders whose investment in the company provides the safety margin necessary in issuance of guaranteed, fixed premium, nonparticipating policies
Risk Transference
Is the act of shifting the responsibility to another in the form of an insurance contract. Purchasing insurance does not eliminate risk entirely; however, it is one of the most effective ways of transferring risk
Constructive Delivery
Is the point at which the insurer releases control of the contract to another party, such as the agent, for unconditional delivery to the insured.
The Florida Association of Insurance and Financial Advisors (FAIFA)
Is to enhance the ability of members to provide financial security for their clients through appropriate legislative action,continue education, professional skills development, and promotion of ethical conduct of agents and others engaged in insurance and related financial services. FAIFA defines appropriate and inappropriate business behavior for life insurance agents as demonstrated by associate 's Code of ethics
The True Significance of Insurance
Is to substitute future economic certainty for uncertainty and to replace the unknown with a sense of security
Certificate of Coverage
Is what participants in group life insurance are issued
Estoppel
Legal impediment to denying the consequences of one's action or deeds if they lead to detrimental actions by another
Ordinary Insurance
Life insurance of commercial companies NOT issued on the weekly premium basis; amount of protection is us usually $1000 or more
Modify Community Rating
Means that all small groups are afforded the same pricing for everyone in the same category or class identical by county of residence. Regulations do acquiesce somewhat permitting a limited 15% plus or minus rate variance from the approved community rate to compensate for health changes and/or playing experience
Proof of Loss Provision
Means that the insured must supply the insurer with some evidence that the loss actually occurred and to what extent. The claimant has 90 days to supply proof.
Uniform Simultaneous Death Act
Model law that states when an insured and beneficiary die at the same time it is presumed that the insured survived the beneficiary
Three Premium Factor
Morbidity, Interest, Expenses
Demutualization
Mutual company turn to a stock company
Fraternal Benefit Insurer
Nonprofit benevolent organization that provides insurance to its members.
Risk Avoidance
Occurs when individuals evade risk entirely.
Hospital Fixed Rate Policies
Offers daily, weekly, or monthly payments of a specific amount specified amount is based on the number of day insured is hospitalized
Physician Expenses
Office visits, non surgical
Foreign Insurers
One licensed and doing business in a state other than the one in which it is incorporated
Settlement Options
Optional modes of settlement provided by most life insurance policies in lieu of lump sum payment. Usually option are lumps sum cash, interest only, fixed period, fixed amount and life income
Claim Form Provision
Outlines the insurers responsibility to provide the claimant with the specific forms the insurer requires within 15 days after receiving the insurer notice of claim.
The Department of Financial Services Headed by the Chief Financial Officer
Oversees the insurance industry in accordance with the provisions of the insurance code
Medical Expense Insurance
Pays benefits for non surgical doctors' fees commonly rendered in a hospital; sometimes pays for home and office calls
Whole Life Insurance
Permanent level insurance protection for the "whole of life" from policy issue to the death of the insured
Indexed Whole Life
Policy whose death benefit increases according to the rate of inflation, usually tied to CPI
Twisting
Practice of inducing a policy owner with one company to lapse, forfeit or surrender a life insurance policy for the purpose of taking out a policy in another company
Beneficiary Designation Options
Primary Secondary Tertiary
Underwriting
Process through which an insurer determines whether, and or what the basis, an insurance application will be accepted.
Self Insurance (Self Insurer)
Program for, providing insurance financed entirely through the means of the policy owner,
Legal Action Provision
Prohibits insured from taking legal action against the insurer due to a claim for 60 days from the date of proof of loss if claim is disputed. Legal action in Florida cannot be taken before 60 days nor 5 years after the date of loss
Pre Existing Clause
Protect insurer from adverse selection
Health Insurance Portability and Accountability Act of 1996 ( HIPAA)
Protects and insured persons insurability. Under HIPAA, if a person has been insured consecutively under a group health plan for the past 18 months and does not have access to other health insurance, a new insurance company cannot refuse to cover the person and cannot impose pre-existing conditions or a waiting period before providing coverage
Prepaid Limited Health Service Organization (PLHSO)
Provider panel, limited health services, ambulance, dental care vision, mental health, substance abuse care, chiropractic podiatric care, and pharmaceutical services provided ; no coverage for inpatient, hospital surgical, or emergency services
Annuities
Provides a stream of income by making a series of payment to annuitant for a specific period of time or for his/ her life
Disability Income
Provides and income stream if individual is unable to continue working for a period of time. In order to qualify for disability benefits individuals must be 20% disabled.
The Chief Financial Officer is responsible for
Regulations of insurance agencies Insurance fraud Customer protection
Independent Agent
Represents several insurers and their different insurance products
Insurable Interest
Requirement of insurance contracts that loss must be sustained by applicant upon the death or disability of another and loss must be sufficient to warrant compensation.
Rebating
Returning part of the commission or giving anything else of value to the insured as an inducement to buy the policy. In some states, it is offense by both the agent and the person receiving the rebate
Parol Evidence Rule
Rule of contract law that brings all verbal statements into written contract and disallows any changes or modifications to the contract by oral evidence
1035 Exchange
Section 1035 of tax code allows policy owner to exchange their policy for another to avoid tax on gains
Adverse Selection
Selection against the company. Tendency of the less favorable insurance risks to seek or continue insurance to a greater extent than others. Also, tendency of policy owners to take advantage of favorable options in insurance contracts.
Mixed Company
Sells both Par and non par policies
The Florida Life Insurance Solicitation Law
Spells out the information and procedures require of agents and ensures when proposing life insurance to a prospective buyer and this otherwise specifically included the following products or exempt from law. Annuities, credit life insurance, group life insurance, life insurance policy issued in connection with pension and welfare plans as defined by and which are subject to ERISA, variable life insurance under which the death benefits and cash values varies in accordance with unit values of investments held in separate accounts
Representation
Statement made by applicants on their application for insurance that they represent as being substantially true to the best of their knowledge and belief, but that are not warranted as exact in every detail
Warranties
Statements made on an application for insurance that are warranted to be true; that is they are exact in every detail as opposed to representations. Statements on application for insurance are rarely warranties, unless fraud is involved.
Accelerated Benefits
The early payment of some portion of the policy face amount should the insured suffer from terminal illness or injury
Cash Value
The equity of "saving" accumulation in whole life policy
Peril
The immediate specific event causing loss or giving rise risk
Pre certification
The insurer's approval of an insured's entering a hospital. Many health policies require pre certification as part of an effort to control cost.
Taxable Wage Base
The maximum amount of earnings upon which FICA taxes must be paid.
Offer and Acceptance
The offer may be made by the applicant by signing the application, paying the first premium and, if necessary, submitting to a physical examination. Policy issuance, as applied for, constitutes acceptance by the company. Or, the offer may be made by the company when no premium payment is submitted with the application. Premium payment on the offered policy the constitutes acceptance by the applicant.
Leeway or "Basket" Provision
This provision spells out the terms that allow the domestic insurers the right to invest a certain percent of their total assets in loans or certain other investments
Mandatory Second Opinion
To control cost, many health policies provide that, in order to be eligible for benefits, insureds must get a second opinion before receiving nonlife-threatening surgery
Simplified Employee Pension Plan (SEP)
Type of qualified retirement plan under which the employer contributes to an individual retirement account set up and maintain by the employee.
Moral Hazard
Typically habits such as Smoking
Valued vs Reimbursement Contract
Valued contract is a contract of insurance that pays a stated amount in the event of loss. Reimbursement (indemnity) contracts pay the amount of loss only.
Stranger Originated Life Insurance (STOLI)
When investigators persuades consumers to take out new life insurance policy's with investors names as beneficiary. STOLI is also called the Investor Originated Life Insurance (IOLI). Many states view these arrangements as fraudulent.
Date the Policy Is issued
When the initial premium deposit is NOT collected and submitted with the application" the date of policy is issued " would be considered the effective date of the policy is long as the require premium payment is made within the appropriate timeframe
Cancellation Provision
When the insurance company exercises it's right to cancel a policy the insured must be notified 45 days in advance and must be reimbursed for any prepaid premiums
Conversion Provision
Which allows the covered individual 31 days to convert the group coverage to an individual plan without evidence of insurability if their employment is terminated. Any death within the conversion period is covered
Modified Whole Life Insurance
While life insurance with premiums payable during the first few years usually five years only slightly larger than the rate for term insurance. Premiums are high for ordinary life at ordinary age but longer than the rate that the attained age at the time of charge
Single Premium Whole Life
Whole life insurance for which the entire premium is paid in one lump sum at the beginning of the contract
Captive Agent
Work for one insurer and sells only that insurers product
The National Association of Life Underwriters
Works for the best interest of policy owners and broadening opportunities for individual agents, promotes high ethical standards and provides community service projects and continuing education for agents
Exclusive Provider Organization (EPO)
Written agreement with providers for certain services for certain insureds
Federal Trade Commission
[FTC] sought to control the advertising and sales literary used by health insurance industry
Florida Life and Health Guaranty Association
liability for contractual obligations of an insolvent insurer cannot exceed $100,000 cash value or $300,000 for all benefits including cash value with respect to any one life
Stop Loss Feature
Are in major medical contract sevens to help reduce these cost
Pure Risk
Involves Possibility of loss ONLY. ..Only pure risk are insurable
Mutualization
Stock company turns to mutual company
Ambulatory Surgery
Surgery performed on a outpatient basis
Morbidity
Takes into account the likelihood a person will get sick or injured.
The Outline of Coverage contains
A Summary of the principal exclusions and limitations of the policy A summary of the renewal and cancellation provisions of the policy A briefing of the benefits and coverage provided in the policy
Competent Parties
A competent part is one who is capable of understanding the contract being agreed to. Minors, mentally , and under the influence are not considered competent
Risk Retention Groups
A form of mutual insurers that provide liability coverage to insure groups of individuals who are of the same group class
Fraud
An act of deceit, misrepresentation of a material fact knowingly, with the intention of having another person rely on that fact and consequently suffer a financial hardship
Misdemeanor penalties set forth by the Insurance Code
An individual who knowily make a false or otherwise fraudulent application for any licenses or who violates any provision in the Insurance Code shall upon conviction and in addition to any denial, suspension, revocation, or refusal to renew or continue any Licenses be punishable as a misdemeanor by a fine of not less than $500 nor more than $3500 or by imprisonment for not more than six months or both for each violation in Lou of a bottle of the chief financial officer made at his discretion impose an administrative penalty of up to $50,000 if a cease and desist order is violated. In lieu of above of the chief financial officer may at his discretion impose an administrative penalty up to $50,000 if a cease and desist order is violated it addition to a fine the chief financial officer can access an amount equal to the amount of commission the agent earned. Willfully submitting fraudulent signatures on an application or policy related document is a third-degree felony and is subject to a $5000 fine for each nonwillful violation and a $75,000 fine for each willful violation
National Association of Insurance and Financial Advisors NAIFA
An organization of life insurance agents that dedicated to supporting the life insurance industry and to advancing the quality of service provide by insurance professionals.
Credit Life
Applies to the relationship between theater groups and creditor groups
Health Savings Account (HSA)
Are bases on high deductible contributions plan 55 and older may make additional annual contribution of $1000
Expenses
Are taken into account and are included in all premiums to cover cost
Lloyd of London
As association of individuals and companies that underwrite insurance on their own accounts and provides specialized coverages
Preferred Provider Organization PPO
Association of health care providers, such as doctors and hospitals that agree to, provide health care to members of a particular group at fees negotiated in advance.
National Association of Insurance Commissioner NAIC
Association of state insurance commissioner active in insurance regulatory problems and in forming and recommending model legislation and requirements
Implied Authority
Authority not specifically granted to the agent in the contract of agency, but which common sense dictates the agent has. It enables the agent to carry out routine responsibilities
Law of Large Number
Basic principle of insurance that the larger the number of individuals risk combined into a group, the more certainty their is in predicting the degree or amount of loss that will be incurred in a given time
Domestic Insurers
Company doing business in the state in which it is incorporated
Supplementary and Comprehensive Major Plans
Contain deductible and coinsurance
Right of Assignment
Contract between the policy owners who is not necessarily the insured. The contract, can be transferred to another with written notice to the insurer.
Endowment Policies
Contract providing for payment of the face amount at the end of a fixed period, at specified age of the insured, or the insured's death before the end of the stead period.
Traditional IRA
Contributions are nontaxable income until the funds are withdrawn.
Federal Insurance Contributions ACTS (FICA)
Contributions made it through payroll taxes to find Social Security benefits
Surgical Expenses
Cost of surgeon services (Anesthesiologist)
Preliminary Term for Interim Coverage
Coverage that is designed to allow the insured immediate coverage and yet allows insured to defer premium payments
Hospital Expenses
Daily room and board, misc expenses
Increasing Term
Death benefits increase periodically over policy term
Per Capita
Death proceeds from an insurance policy are divided equally among the living primary beneficiaries
Per Stirpes
Death proceeds from an insurance policy are divided equally among the named beneficiaries. If named beneficiary is deceased his or her share goes to the living descendant of that individual
Consideration
Element of a binding contract; acceptance but the company of payment of the premium and statements made by the prospective insured in the application
Contributory Plan
Employee contributes a portion of the premium and the employer pays the rest
Noncontributory Plan
Employer pays entire premium cost; employee does not contribute; allows employer control and 100% participation
12 Mandatory Provisions
Entire Contract Time Limit on Certain Defenses Grace Period Reinstatement Notice of Claims Claim Form, Proof of Loss Time Payment of Claim Payment Claim Physical Exam and Autopsy Legal Action, Change of Beneficiaries
State Guaranty Association
Established by each state to support insures and protect consumers in case of insurer insolvency, guaranty association are funded by insurers through assessments
The Code of Ethic
Establishes a broad outline defining appropriate and inappropriate business behavior for life insurance agents. It also establishes the activities of agents as one of public trust.
The State Legislature
Establishes and maintains the legal framework for state laws relating to insurance. The legislature establish a Department of Financial Services and the Office of Insurance Regulations to administer the Insurance Code
Health Insurance
Evolved from scientific principles to provide funds for medical expenses due to sickness or injury and to cover loss of income during disability
Level Term
Face value remains unchanged from the date the policy comes into force to the date the policy expires
Decreasing Terms
Face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level.
Concealment
Failure of the insured to disclose to the company a fact material to the acceptance of the risk at the time application is made
Aleatory Contract
Feature of insurance in a contract in that there is an element of chance for both parties and that the dollar given by the policyholder (premiums) and the insurer (benefits) may not be equal.
Insurance
Financial protection against loss or harm
Roth IRA
Fine is our text as income before the contribution is made.
Three types of Deductibles
Flat Corridor Integrated
Pre-existing Conditions
Florida law prohibits individual health insurance policies other than disability income from excluding coverage for a pre-existing condition for longer than 24 months following the effective date of coverage for a condition that had manifested 24 months prior to coverage. Medicare supplement policy may not exclude benefits based on a pre-existing condition if the individual has a continuous period of credible coverage of at least six months as of the date of application for coverage
Group Insurance
Insurance coverage for groups of persons, usually employee of the company under one master contract.
Level Premium Funding
Insurance plan, under which instead of an annual increasing premium paid back in the early years, inadequate premiums are paid in later years.
Securities and Exchange Commission
Insurance products to be regulated by the states or securities to be regulated federally. The SEC also regulates variable life insurance.
Direct Selling
Insurer deal directly with customer selling its policies through vending machines advertisement and salaried sales representatives no agent or broker involved
Home Service Insurer
Insurer that offers relatively small policies with premiums payable on a weekly basis, collected by agents at the policy owners home.
Contract
Is a binding on parties involved and is enforceable by law. The elements that compose a legal binding contract perpetuating isn insurance transactions are. Offer and Acceptance + Consideration + Legal Purpose + Competent Parties = Legal Binding Contract
Cease and Desist Order
Is a legal court order preventing an individual or entity from continuing to do business or perform that which is being addressed (cease) to refrain from doing it again in the future (desist)
Experience Rating
Is a method of establishing a premium for the group based on the group previous claims experience
Multiple Employer Trust (MET)
Is a popular method of marketing group benefits to employers who have a small number of employees. Note that MET's may structure to provide a single type of insurance or a Y range of coverages
Flat Deductible
Is a stated amount that the insured must pay policy benefit become payable ( most familiar
Florida Health Insurance Coverage Continuation Act (Mini-COBRA)
Is akin to COBRA and is referred to as Mini-COBRA.
Time Limit on Certain Defenses
Is akin to the in contest ability clause except that fradulent statement on health application can be contested by anytime unless the policy is guaranteed renewable
Group Ordinary Plans
Is any type of group life plan that uses cash value life insurance in the plan
Risk Retention
Is being aware of the risk involved and taking precautions for financial protection.
Conditional Receipt
Is given by a company to put the applicants first premium payment. The policy, if approved becomes effective from the date of the receipt.
Date of Receipt
Is issue when the initial premium deposit is collected and would be considered the effective date of the policy
The Legal Reserve
Is mandatory according to the Florida standard valuation long it means that a certain amount of money is set aside to fulfill future claims that amount is to be set aside the time you use it to cut calculation defined by the insurance, which takes into account mortality tables and interest rates the regal reserve is display as the liability on the companies
High Deductible Health Plans (HDHP)
Is one that offers low premium but requires the insured to pay a relatively high deductible
Admitted Insurance Company
Is one that the Office of a Insurance Regulations have licensed to transact insurance business in Florida in accordance with state laws.
Coinsurance
Is that portion of the balance due that, each participant pays
Affordable Care Act
May Have a 90 day grace period to pay outstading premiums
Indemnity Contract
Pays the amount of the loss by paying the amount necessary to return the insured to the same position she\he was before the loss occurred
Fiduciary
Person in a position of special trust and.confidence in handling or supervising affairs or refunds of another.
Substandard Risk
Person who is conspired an under average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habit
Notice of Claim Provision
Pertains to a timely notice given to the insurer when a claim is being made (within 20 days). If claim is for disability income payment for two or more years, insured must submit proof of loss every 6 months
Three Risk Factors
Physical Condition, Moral Hazard Occupation
Physical Hazard
Physical Nature such as Cancer
401(k) Plans
Plan allowing employees to take the money as usual in their paycheck or defer a specific amount from their paycheck. Typically, the employer will match the contribution made by the employee. Amounts deferred are not included in the employees gross income and the funds and earnings are not taxable until distribution.
Group Paid Up Plan
Plans combine term life insurance (paid by employers) and whole life (paid by employee). The death benefit is a total of the two plans. At retirement or termination the employee is entitled to the cash value (paid up) policy.
Group Universal Life Plan
Plans offer is a greater degree of flexibility then is usually found in other groups life plans. The employee pays most of the premium payments; however they are given certain latitude in selecting the amount of insurance and the premium amount to be paid.
Graded Premium Whole Life
Provides lower than normal premium rates during the first few policy years, with premium increasing gradually each year. After the preliminary period, level off and remain constant
Industrial Insurance
Provides modest benefits on a relatively short benefit period. Premiums are collected on a weekly or monthly basis by an agent calling at insured home
The Florida Replacement Rule
Sets for the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance.
Insurance group categories
Single employer groups Multiple employer groups Labor unions Trade associations Creditor/debtor groups Fratnel organizations
Convalescent Expenses
Skilled nursing facility expenses
Payment Claim Provision
Specifies how and to whom claims payment are made to
Entire Contract Provision
States the insurance policy represents the contract between the insurer and the policy owner in its entirety, assuring the policy owner no changes can be made once the contract is issued. The clause is the same for health insurance and life insurance policies
Morale Hazard
Stems from individuals state of mind such as Road Rage
Spendthrift Trust Clause
Stipulates that to the extent permitted by law policy proceeds shall not be subject to the claims of creditors of the beneficiary or policy owner
Risk Reduction
Takes place when the chances of loss are lessened.
403(b) Plans
Tax sheltered annuity plan similar to a 401(k) plan except it is for nonprofit organizations.
Blanket Life
Temporary coverage of a specific hazard for a specific group
Two types of insurance plans fro group life insurance
Term Life Insurance Whole Life (permanent) Insurance
Four Entities that exercise Regulatory Authority over the insurance industry in Florida
The State Legislature The Department of Financial Services The Office of Insurance Regulation The State Court Systen
Apparent Authority
The authority an agency appears to have, based on the principal's actions, words, deeds, or because of circumstances the principal.
Average indexed Monthly Earnings (AIME)
The bases use for calculating the primary insurance amount for Social Security benefits.
Churning
The practice in which policy values in an existing life insurance policy or annuity contact are used to, purchase another policy or contract with that same insurer for the purpose of earning additional premiums or commissions without an objectively reasonable basis for believing that the new policy will result in a actual and demonstrate benefit.
Medical Cost Management
The process of controlling how policy holders utilize their policies
Case Management
The professional arrangement and coordination of health services through assessment, service plan development, and monitoring
Interest
The same as life insurance a portion of all premiums is invested to earn interest. Interest earned can reduce premium cost
Express Authority
The specific authority given in writing to the agent in the contract of agency.
Integrated Deductible
Works in conjunction with supplementary policies as well; however whatever amount the basic medical expenses cover is applied to the deductible
The Commissioner of the Office of Insurance Regulation
Works in conjunction with the Department of Financial Services to oversee the insurance industry in accordance with the provisions of the Insurance Code
