Life Insurance (My struggles)

How many days written notice must insurance commissioner give to producer regarding a hearing of unfair practice

10 days notice

% required for noncontributory plans?

100% of eligible employees

Within how many days after receiving notice of claim should the company supply a claim form?

15 days after receiving notice of claim

Insurer may request a hearing within ___ days of policy being rejected

20

How many employees required for employers to offer COBRA

20 or less; can continue coverage for 18 months after termination

How many credits to obtain fully insured status?

40 credits, 10 years of work

How many days of no action upon reinstatement request until policy automatically reinstated?

45 days

If company wants to cancel policy, within how many days must they notify insured?

45 days written notice to insured 10 days if bc of unpaid premiums

One becomes eligible for SS disability after having been disabled for

5 months

SS disability waiting period

5 months

Currently insured requirements

6 credits in last 13 quarter period

When can an insured take legal action against company after submitting proof of loss

60 days after

% required for contributory plans?

75% of eligible employees

Most Major Medical policies contain a

lifetime max benefit that limits insurer's total exposure

Traditional IRA tax

limited amount contribution per year; interest is tax-deferred until withdrawal; prior to 59 1/2 are assessed addititonal 10%

Equity Index Universal

minimum guaranteed fixed interest rate; company general account; accumulations tied to stock index like s&p 500

PPOs

more flexible in that given more providers; prearranged discount prices for referalls; fee-for-service

Health Reimbursement Arrangements

must be established by employer; reimburse employees for out-of-pocket medical expenses and health premiums tax free

Risk Retention Group

mutual companies form by group of people in same industry

Variable Whole Life

offset inflation; policy invested in insurer's separate accounts in stock, bond, money market, etc.; fixed premiums, minimum death benefit, cash values not guaranteed

When issued a conditional receipt, when does coverage begin?

one collection of premium, approval of app, and policy is issued.

What policy falls under replacement regulations

ordinary life

Return of Premium Rider

pays total amount of premiums paid into policy plus face if insured dies within certain time

Guaranteed Insurability rider

permits buying additional payment for coverage at specific times without submitting insurability

Tax treatment of cash values

portion that exceeds premium is taxable cash value grows tax free

CAWL or Interest-Sensitive Life policy

premiums can reflect insurer's changing assumption with regard to its death, investment, and expense facts; usually a MEC

Typical tax of individual life insurance premiums

premiums generally not deductible

HMOs

prepaid; deliver services at own health care facility; doctos and physicians are providers who participate in HMO (salaried employees of HMO); stress preventative care; have to have 25 or more employees

Part D

prescription drug plan

Tax of proceeds paid AT DEATH

proceeds to beneficiary tax free as lump sum

legal action is not designed to protect

producer

What are annuities

provide stream of income for guaranteed period of time to protect against risk of living too long

Basic Medical Expense

provides benefits without satisfying deductible hospital, surgical, and nonsurgical benefits lower than actual expenses incurred amount of claim based on terms in policy have a max coverage per days may not pay for full amount of stayed

Part B

provides medical insurance for required doctors' services, outpatient, and services not covered by A

National Association of Insurance commissioners

recommends appropriate laws and regulations and responsible for creation of Advertising Code and Unfair Trade Practice Act

Rules governing life insurance and annuity replacements were created to

reduce misrepresentation

Medical Expense Insurance plans are considere

reimbursement plans

In qualified retirement plan, yearly distributions to an employees acount are

restricted to a max level set by IRS

Guaranteed Insurability Rider

right to purchase additional disabilicy without insurability

1944 US v SE Underwriters Association

ruled insurance transaction across state lines are interstate commerce and are subject to federal regulation; did not affect power of states to regulate insurance

Hospital Indemnity pays

stated amoun per day of day of hospitalization

If IRA participant receives distribution prior to 59 1/2,

subject to ordinary income and 10% penalty tax

Flexible Savings Acount

tax advantaged through cafeteria plan

Qualified Annuity

tax deferred plan; max limits set by IRS

Health Savings Account

tax favored; for under 65 for high qualified deductible plan; 100% of health plan deductible can be made to HSA; earnings grow tax-free and withdrawals can be made tax-free; distributions for anything other than medical expenses are taxable and penalty of 20%

A sole proprietor may use a ___ only if employees are included

Keogh pension plan

How are SS benefits calculated?

Primary insurance amount full amount unless retires early

have conversion periods that vary according to contract

term life policies

What is included in Insuring Clause?

the basic promise to pay specified benefits to designated person, the circumstances of which they'll be paid; any promise the insurer makes

what determines benefits paid in SS Disability Income

the percentage of PIA

Inducing an insured through misrepresentation is called

twisting

How long does the insured have to submit proof of loss form?

typically 90 days

fees charged by healthcare professionals

usual, customary, and reasonable

Reinstatement Period

usually allowed up to 3 years after policy lapse

Family Income Policies

whole life, decreasing term; benefit decreases as soon as policy begins

Family maintenance policy

whole life, level term; begins at death

If withdrawal made to a qualified rollover plan,

withdrawal not subjected to 10% penalty

Roth IRA tax

withdrawals are income tax free contributions subject to limits but not tax deductible interest not taxable if withdrawal is qualified

Within how many days should an insured send a Notice of Claim to insurer?

within 20 days after occurrence of loss

Tax of SS benefits

benefits subject to federal income tax if annual income greater than $25,000

Employee tax on qualified plan

contributions not taxed until withdrawn interest on contribution is tax deferred until withdrawn contributions cannot exceed max limits by IRS early withdrawls are penalty taxed and income taxed unless dies or disabled

Part A

coveres inpatient care in hospitals skilled nursing hospice and home care drugs administered in inpatient max of 100 days covered for skilled nursing no dental

Blanket Life

covers group exposed to same hazard such as passengers on airplane

When does binding receipt coverage begin?

date of application whether or not insurable

Tax Treatment of proceeds from Individual Life Insurance

death benefit - tax free as lump sum; installments are tax free minus the interest (interest in taxed) premiums are not tax deductible

Basic hospital/surgical expense claims are

determined by terms of policy

In MS, an element of insurance contract would be

determining how much coverage is needed

a 401k sent in one lump sum and rolled into IRA..

distribution is subject to federal tax income and withholding

cross purchase plan

each partner buys, pays premiums, and is beneficiary of policy on each other;

Tax of group life insurance:

employee paid premiums are non tax-deductible employer paid is tax deductible proceeds are tax free if in lump sum proceeds in installments are subject to tax on interest portion

Family Plan Policies

family head covered by permanent insurance and spouse/children covered as level term life riders (family term riders)

Adjustable Life

flexibility with face amount protection and premium paid with your changing needs; term and whole life combo

Universal

flexible premium that adjusts face amount; investments go to cash value; no minimum death benefits; minimum interest rate

Medical Savings Account

for employees of small employers; tax free accounts with banks

Long term care in mississippi must be

guaranteed renewable

Waiver of Premium Rider generally included with

guaranteed renewable or noncancelable individual disability policies

Social Security benefits are based mainly on

how long a person has worked

Part C

include service providers (hmos, ppos) does not cover long term care

What is included in Consideration?

initial premium, completed application, and how much and often of premium paid

1860 Paul v Virginia

insurance transactions across state lines are not interest commerce

Income tax of annuity

interest earned on principal is taxed as income withdrawal prior to 59 1/2 are taxable as ordinary income

1999 Financial Services Modernization Act

law repealed the Glass-Steagall Act

Tax for terminally ill

accelerated benefit is received tax free

1945 McCarran and Ferguson Act

act stating federal government can regulate insurance industry but will not exercise the right if industry is regulated effectively on state level

1905 The Armstrong Investigation Act

act that gave authority to states to regulate insurance

reimbursement long term pay

actual covered expenses up to a daily amount

A Cost of Life rider gives the insured

additional death benefits

Stop-Loss

after insured paid specific amount, insurer will pay 100% of the remainder

Cost of Living Rider

allows face amount to be adjusted to account for inflation

Blue Cross

benefits are on service basis (paid to medical treatment directly); prepaid plans in that subscribers pay a set fee to cover medical services; nonprofits

Disability Buy-Sell Plan tax

benefits are tax-free and premiums not tax deductible

Key Person Disability Insurance tax

benefits are tax-free and premiums not tax deductible

someone drawing totally disability receive benefits with what taxation

$0

If a company is 80% vested

$20 of funds forfeited

What is included in Owner's Rights Provision?

- defines person who may name and change beneficiaries, select options, and recieve financial benefits from policy

Universal life tax

- withdrawn prior to 59 1/2 subject to 10% penalty tax - taxed when cash distributed

In what instance will a dividend be subject to taxation?

When the policyowner chooses to let dividends sit and accumulate, the interest would be taxable

What does Policy face contain?

a summary of policy and coverage provided; identifies the insured, term of policy, and how it can be renewed