LOMA 281 Module 2

Total disability

A disability that meets the requirements of a disability benefit provision of an insurance policy or policy rider and that qualifies the policyowner or insured to receive specified disability benefits.

Deductible

A flat dollar amount of eligible medical expenses that an insured must pay before the insurer will begin making any benefit payments under a medical expense insurance policy.

Variable life insurance

A form of cash value life insurance in which premiums are fixed, but the face amount and other values may vary, reflecting the performance of the investment subaccounts selected by the policyowner.

Universal life insurance

A form of cash value life insurance that is characterized by separate pricing factors, a flexible face amount and death benefits, and flexible premiums.

Workers' compensation programs

A government-mandated program designed to ensure that workers who are injured or disabled on the job receive fixed monetary awards without requiring the workers to pursue legal action against their employers.

Provider network

A group of physicians, hospitals, and ancillary services providers that a specific managed care plan has contracted with to deliver health care services to plan members.

Policy loan

A loan a policyowner receives from an insurer using the cash value of a life insurance policy as security.

Stop loss provision

A major medical expense insurance policy provision which specifies that the policy will cover 100% of allowable medical expenses after the insured has paid a specified amount out of pocket to satisfy deductible and coinsurance requirements.

Mortgage insurance

A plan of decreasing term life insurance designed to provide a benefit amount that corresponds to the decreasing amount owed on a mortgage loan

Family income coverage

A plan of decreasing term life insurance that provides a stated monthly income benefit amount to the insured's surviving spouse if the insured dies during the term of coverage.

Variable Universal Life insurance

A plan of life insurance that combines the premium and death benefit flexibility of universal life insurance with the investment flexibility ;and risk of variable life insurance.

Increasing term life insurance

A plan of life insurance that provides a policy benefit that starts at one amount and increases by some specified amount or percentage at stated intervals over the term of coverage.

Decreasing term life insurance

A plan of term life insurance that provides a policy benefit that decrease in amount over the term of coverage.

Level Term life insurance

A plan of term life insurance that provides a policy benefit that remains the same over the term of coverage.

Joint whole life insurance

A plan of whole life insurance that has the same features and benefits as individual whole life, except that it insures two lives under the same policy; the death benefit is payable when the first insured dies.

Copayment

A specified, fixed amount that a member of a managed care plan pays to a network provider each time the plan member receives services from the provider.

Equity indexed annuity

A type of annuity contract that offers certain principal and earnings guarantees, but also offers the possibility of additional earnings by linking the contract to a published index.

Market value adjusted annuity

A type of annuity contract that offers multiple guarantee periods and multiple fixed interest rates.

Medical expense coverage

A type of health insurance coverage that provides benefits to pay for the treatment of an insured's illnesses and injuries.

Disability income coverage

A type of health insurance coverage that provides income replacement benefits to an insured who is unable to work because of illness or injury.

Single premium payment

A type of limited-payment whole life insurance policy that requires only one premium payment.

Return of premium term insurance

A type of term insurance that provides a death benefit if the insured dies during the term of coverage and that promises a return of premiums if the insured does not die during the term of coverage.

Credit life insurance

A type of term life insurance designed to pay the balance due on a loan if the borrower dies before the loan is paid

Guaranteed minimum accumulation benefit

A variable annuity contract feature that guarantees a minimum protected accumulation value - usually the principal or the principal plus a modes growth factor - if the contract remains in force for a specified period of time.

Guaranteed minimum income benefit

A variable annuity contract feature that guarantees a protected annuitization value and minimum income payment amount.

Guaranteed minimum death benefit

A variable annuity contract feature that guarantees that if the contract owner dies before periodic income payments begin, the beneficiary will receive at least the amount that was paid into the contract, less any withdrawals, even if poor investment performance causes the contract's accumulation value to be less than the premiums paid.

Guaranteed lifetime withdrawal benefit

A variable annuity contract feature that guarantees that up to a specified percentage of a determined amount will be available for withdrawals annually for life, even if subaccount investments perform poorly.

Last survivor life insurance

A variation of joint whole life insurance under which the policy benefit is paid only after both people insured by the policy have died.

Continuous premium payment

A whole life insurance policy for which premiums are payable for the life of the policy. AKA straight life or ordinary life.

Limited premium payment

A whole life insurance policy for which premiums are payable only until some stated period expires or until the insured's death, whichever occurs first.

Modified premium whole life insurance

A whole life insurance policy that functions in the same manner as a traditional whole life policy except that the policy's annual premium changes after a specified initial period, such as 5,10,15,20 years.

Modified coverage whole life insurance

A whole life insurance policy under which the amount of insurance decreases by specific percentages or amounts either when the insured reaches certain stated ages or at the end of stated time periods.

Immediate annuity

An annuity that provides periodic income payments that generally are scheduled to begin on annuity period after the date the contract is issued.

Deferred annuity

An annuity under which periodic income payments are scheduled to begin more than one annuity period after the date on which the annuity was purchased.

Variable annuity

An annuity under which the amount of the accumulation value and the amount of the periodic income payments fluctuate in accordance with the performance of one or more specified investment funds.

Coinsurance

An expense participation requirement imposed by many medical expense plans; the requirement generally is specified percentage of all allowable expenses that remain after the insured has paid the deductible and that must be paid by the insured.

General account

An undivided investment account in which an insurer maintains funds that support its contractual obligations for guaranteed products, such as whole life and other non-variable products, as well as the fixed portion of any variable products.

Accumulation period

The period between the contract owner's purchase of a deferred annuity and the beginning of the payout period.

Payout period

The period during which an insurer makes periodic income payments under an annuity contract.

Payee

The person or entity named to receive the periodic income payments under an annuity contract.

Contingent payee

The person or entity named to receive the remaining benefit payments if the payee dies after annuity benefit payments have begun.

Contract owner

The person or entity that owns and exercises all the rights and privileges of an annuity contract.

Annuitant

The person whose lifetime is used to determine the amount of benefits payable under an annuity contract.

Cash value

The savings element of a cash value life insurance policy, which represents the policyowner's ownership interest in the policy.

Elimination period

The specific amount of time that an insured must be disabled before becoming eligible to receive disability income benefits.

Conversion period

The specified period of time following policy issue during which the owner of a convertible term life insurance policy can convert the coverage to cash value life insurance.

Policy term

The specified period of time for which a term life insurance policy provides coverage.

Benefit period

The time during which an insurer will pay income benefits to an insured under a disability income insurance policy.

Annuity period

The time span between each of the payments in the series of periodic income payments made under an annuity contract.

Accumulation value

The total of the premiums paid into an annuity contract, plus investment earnings, less any withdrawals and charges.

Flexible premium deferred annuity

A deferred annuity purchased with a number of premium payments that can vary in timing and amount, as long as they fall within stated minimum and maximum amounts.

Single premium deferred annuity

A deferred annuity purchased with a single, lump-sum premium.

Social Security Disability Income

A US federal program that provides disability income benefit payments to qualified individuals.

Supplemental Security Income

A US federal program that provides periodic benefit payments to people with limited incomes who are disabled, blind, or age 65 or older.

Withdrawal charge

A charge imposed when the owner of a deferred annuity withdraws more than a stated percentage of the annuity's accumulation value in one year.

Annuity

A contract under which an insurer promises to make a series of periodic payments to a named individual in exchange for a premium or a series of premiums.

Original age conversion

A conversion of a term life insurance policy to a cash value life insurance policy in which the renewal premium rate is based on the insured's age when the original term life insurance policy was issued.

Withdrawal provision

A deferred annuity contract that gives the contract owner the right to withdraw all or a portion of the annuity's accumulation value during the accumulation period.

Separate account

AKA segregated account; An investment account an insurer maintains separately from its general account to isolate and help manage the majority of the funds placed in its variable products.

Subaccounts

AKA variable subaccounts; Within the separate account, on of several alternative pool of investments to which the owner of a variable product allocates the premiums he has paid.

Fixed annuity

An annuity contract under which the insurer guarantees that (1) the contract's accumulation value will experience no loss of principal form investment-related losses and will earn at least a minimum guaranteed interest rate, and (2) amount of periodic payments will not change.

Life annuities

An annuity that provides periodic benefit payments for at least the lifetime of a named individual.

Primary care providers

In a manged care plan, a physician or other health care provider who coordinates pan members' medical care and treatment.

Section 7702 corridor

In the US, the difference between an insurance policy's face amount and the policy's cash value. This amount is used to determine whether the policy qualifies as a life insurance policy rather than an investment product under federal tax laws.

Term Life insurance

Insurance that provides a policy benefit if the insured dies during a specified period of time.

Cash value life insurance

Insurance that provides life insurance coverage throughout the insured's lifetime and also provides a savings element.

Major medical coverage

Medical expense insurance coverage that provides substantial benefits for (1) basic hospital, surgical, and physician expenses, (2) additional medical services related to illness or injuries, and (3) some preventive care.

Evidence of insurability

Proof that a given person is an insurable risk.

Renewable term insurance

Term life insurance that gives the policyowner the option to continue the policy's coverage for an additional policy term without providing evidence of insurability.

Convertible term insurance

Term life insurance that gives the policyowner the right to convert the term policy to a cash value life insurance policy without providing evidence of insurability.

Cash surrender value

The amount, after adjustments for factors such as policy loans, that the owner of a cash value life insurance policy is entitled to receive upon surrendering the policy.