Life and Health glossary

A feature paying part of the death benefit before death for a qualifying condition, reducing the benefit left for beneficiaries.

Also called: Living benefit; ADB

See also: Beneficiary

Study this card

Coverage paying stated benefits for covered accidental death or specified accidental losses, subject to contract conditions.

Also called: AD&D

See also: Principal sum, Capital sum

Study this card

The phase before annuity income payments begin, when contributions and investment results build the contract's value.

Also called: Accumulation phase

See also: Annuitization

Study this card Source: SEC Investor.gov Variable Annuities - How do variable annuities work? - Accumulation period

A measure of ownership in a variable annuity investment option during the savings phase; its value changes with investment results.

See also: Annuity unit

Study this card

Basic self-care tasks: bathing, dressing, eating, toileting, transferring, and continence.

Also called: ADLs

See also: Instrumental activities of daily living

Study this card Source: HHS ACL Long-Term Care Glossary, Activities of Daily Living

Daytime services in a community setting for adults needing supervision or support; it is not round-the-clock residential care.

Also called: Adult day services

See also: Respite care

Study this card Source: HHS ACL Long-Term Care Glossary, Adult Day Services

The tendency of people with greater-than-average loss potential to seek or retain insurance more often.

See also: Underwriting

Study this card

The federal health-reform law expanding coverage access, consumer protections, and financial assistance for eligible people.

Also called: ACA; Patient Protection and Affordable Care Act

See also: Essential health benefits

Study this card Source: HealthCare.gov Affordable Care Act, Overview

An agreement in which the value exchanged depends on an uncertain event and may be unequal.

See also: Contract of adhesion

Study this card

An insurance company organized under another country's laws, as viewed by a U.S. state.

See also: Domestic insurer, Foreign insurer

Study this card Source: NAIC glossary - Alien insurer

The cost a plan recognizes for a covered service when calculating benefits and the member's cost sharing.

See also: Usual, customary, and reasonable charges

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

One-year coverage renewable without new evidence of insurability, with premiums generally rising as the insured ages.

Also called: ART; Yearly renewable term; YRT

See also: Renewable term life insurance

Study this card

The person whose life is used to measure life-contingent benefits under the contract; this person need not be the owner.

See also: Annuity owner

Study this card

Converting an annuity's value into scheduled income payments under a selected payout option.

See also: Accumulation period

Study this card Source: SEC Investor.gov Variable Annuities - How do variable annuities work? - Annuitization

An insurance contract funded by one or more payments that can provide income now or later, including income for life.

See also: Longevity risk

Study this card Source: NAIC Annuities - Background - Annuity

The person or entity holding the contract rights, such as choosing beneficiaries and requesting permitted withdrawals.

Also called: Contract owner

See also: Annuitant

Study this card

A measure used to calculate variable annuity income; unit value changes with investment performance relative to the assumed rate.

See also: Accumulation unit

Study this card

Inability to perform work in an occupation for which the insured is reasonably suited by education, training, or experience.

Also called: Any occupation

See also: Own-occupation disability

Study this card

Powers a third party reasonably believes an agent has because of the insurer's words or conduct.

See also: Express authority

Study this card

The insured's current age at a later event, such as renewal or conversion, often used to calculate the new premium.

See also: Renewable term life insurance

Study this card

A report from a doctor who has treated the applicant, used to clarify medical history for underwriting.

Also called: APS

See also: Underwriting

Study this card

A provision using an advance against available cash value to pay an overdue premium and help prevent lapse.

Also called: APL

See also: Policy loan

Study this card

The person or entity designated to receive policy proceeds when the insured dies.

See also: Primary beneficiary, Contingent beneficiary

Study this card

The maximum time a policy pays benefits for a covered disability, subject to continued eligibility.

See also: Elimination period

Study this card

Coverage paying eligible business operating expenses during an owner's covered disability, rather than replacing personal earnings.

Also called: BOE

See also: Disability buy-sell insurance

Study this card

A contract arranging the purchase of a business owner's interest after a specified event, often funded with life insurance.

See also: Cross-purchase plan, Entity-purchase plan

Study this card

Coverage the insurer may end during its term with required notice and premium refund, where the contract and law allow.

See also: Noncancellable coverage

Study this card

A scheduled portion of an AD&D policy's principal sum payable for a covered dismemberment or other specified loss.

See also: Principal sum

Study this card

A provider payment method using a set amount per covered person per period rather than payment for each service.

See also: Primary care physician

Study this card

A life payout option returning the unrecovered purchase amount to the beneficiary in a lump sum if the annuitant dies early.

See also: Installment refund annuity

Study this card

The amount available when a policy is canceled, after applicable surrender charges and policy debt.

Also called: Net cash surrender value

See also: Nonforfeiture options

Study this card

A document describing a group member's coverage under the master contract; it is not the group's master policy.

Also called: Certificate of coverage

See also: Master policy

Study this card

A clause adjusting benefits or premiums when the insured moves to an occupation with a different hazard class.

See also: Relation of earnings to insurance

Study this card Source: NAIC Model 180, 3B(1)

Documents the insurer supplies after notice to help the claimant submit required loss information.

See also: Proof of loss

Study this card Source: NAIC Model 180, 3A(7)

A temporary extension of employer group health coverage after a qualifying event, generally paid for by the qualified beneficiary.

Also called: COBRA

See also: Master policy

Study this card Source: CMS, COBRA Continuation Coverage Questions and Answers, Q1 / Q5 / Q18

The member's percentage share of a covered service's allowed cost, often after the deductible has been met.

See also: Copayment, Deductible

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

A transfer of limited policy rights to secure a debt; the lender's claim is limited to the amount owed.

See also: Policyowner

Study this card

A rating method pooling costs across a community rather than pricing each applicant's health risk; permitted adjustments vary.

See also: Guaranteed issue

Study this card Source: HealthCare.gov Community Rating, Definition

Intentional failure to disclose a known material fact relevant to the insurer's decision.

See also: Material misrepresentation

Study this card

An agreement whose performance depends on specified requirements, such as payment of premiums and proof of a covered loss.

See also: Unilateral contract

Study this card

Coverage the insurer may decline to renew only for reasons stated in the contract, subject to law.

See also: Optionally renewable coverage

Study this card

An acknowledgment of initial payment that provides coverage only if the receipt's stated conditions are met.

See also: Statement of good health

Study this card

A clause amending policy terms that conflict with the insured's state law on the policy's effective date to meet minimum requirements.

See also: Legal actions provision

Study this card Source: NAIC Model 180, 3B(7)

The value exchanged in a contract; in life insurance, the applicant's premium and statements and the insurer's promise to pay.

See also: Unilateral contract

Study this card

Legal delivery without physical handover, such as an unconditional release of the policy to an agent for delivery.

See also: Policy delivery

Study this card

The person or entity next in line if no primary beneficiary qualifies to receive the death benefit.

Also called: Secondary beneficiary

See also: Primary beneficiary

Study this card

An agreement drafted by one party and offered largely on a take-it-or-leave-it basis; ambiguities generally favor the insured.

Also called: Adhesion contract

See also: Aleatory contract

Study this card

Coverage for which eligible employees pay part of the premium, with the employer typically paying the balance.

See also: Noncontributory group plan

Study this card

Temporary coverage that may be exchanged for permanent coverage without new evidence of insurability under the contract's terms.

Also called: Convertible term

See also: Permanent life insurance

Study this card

Rules determining payment order and limiting combined benefits when more than one plan covers the same person's expenses.

Also called: COB

See also: Primary plan, Secondary plan

Study this card Source: Wisconsin OCI, Glossary, Elimination Period / Coordination of Benefits / Free-look Period

A fixed dollar amount charged to the member for a covered service, under the plan's cost-sharing rules.

Also called: Copay

See also: Coinsurance

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

Coverage designed to repay an outstanding debt if the insured borrower dies, generally with the creditor as beneficiary.

Also called: Credit life

See also: Decreasing term life insurance

Study this card

A buy-sell arrangement in which owners purchase coverage on one another and use proceeds to buy a deceased owner's interest.

See also: Entity-purchase plan

Study this card

Nonskilled help with everyday personal needs, such as bathing, dressing, or moving between a bed and chair.

Also called: Personal care

See also: Skilled care

Study this card Source: HHS ACL Long-Term Care Glossary, Custodial Care

The general federal rule excluding life insurance death proceeds from a beneficiary's income; exceptions and taxable interest can apply.

See also: Beneficiary

Study this card Source: IRS Publication 525, Life Insurance Proceeds

An applicant the insurer will not accept for the coverage requested under its underwriting standards.

See also: Substandard risk

Study this card Source: California DOI Life Insurance Guide - Declined risk

Temporary coverage with a death benefit that declines on a schedule, often to match a shrinking debt.

Also called: Decreasing term

See also: Level term life insurance

Study this card

The amount a member pays for services subject to this requirement before the plan starts sharing those costs.

See also: Coinsurance

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

A contract intended to accumulate value before income payments begin at a future date.

See also: Immediate annuity

Study this card Source: NAIC Annuities - Background - Deferred annuity

A retirement plan promising a benefit determined by its formula, commonly using pay and years of service.

See also: Defined contribution plan

Study this card Source: IRS, Retirement plans definitions, Defined benefit and Defined contribution plans

A retirement plan with an individual account whose eventual benefit depends on contributions, investment results, and fees.

See also: Defined benefit plan

Study this card Source: IRS, Retirement plans definitions, Defined benefit and Defined contribution plans

Coverage funding the purchase of an owner's business interest after a qualifying long-term disability.

See also: Business overhead expense insurance

Study this card

Coverage replacing part of earned income when a covered illness or injury prevents work under the policy's disability definition.

Also called: DI insurance

See also: Benefit period

Study this card

An insurance company considered in relation to the state under whose laws it is organized.

See also: Foreign insurer, Alien insurer

Study this card Source: NAIC glossary - Domestic insurer

The time after disability begins that must pass before benefits become payable, subject to the contract's rules.

Also called: Benefit waiting period

See also: Benefit period

Study this card Source: Wisconsin OCI, Glossary, Elimination Period / Coordination of Benefits / Free-look Period

Coverage that pays the stated amount at a specified maturity date if the insured lives, or at earlier death.

Also called: Endowment insurance

See also: Whole life insurance

Study this card

A clause identifying the documents forming the agreement, generally the policy, attached application, and attached riders.

See also: Insuring clause

Study this card

A buy-sell arrangement in which the business owns the coverage and uses proceeds to buy a deceased owner's interest.

Also called: Stock redemption plan

See also: Cross-purchase plan

Study this card

Ten categories of services required in non-grandfathered individual and small-group major medical coverage.

Also called: EHB

See also: Affordable Care Act

Study this card Source: CMS Essential Health Benefits, Overview

A legal principle that can prevent a party from contradicting conduct or statements on which another reasonably relied.

See also: Waiver

Study this card

A managed care plan covering services only within its network except emergencies, subject to the plan's terms.

Also called: EPO

See also: Health maintenance organization

Study this card Source: HealthCare.gov, Health insurance plan and network types

A premium-setting method using the group's own claims history as a factor in determining its rates.

See also: Self-funded health plan

Study this card

Powers an insurer explicitly grants an agent in their agreement or instructions.

See also: Implied authority, Apparent authority

Study this card

A nonforfeiture choice using available value to buy temporary coverage, generally for the original face amount less policy debt.

Also called: Extended term insurance

See also: Reduced paid-up option

Study this card

A duty to handle another person's money or interests in a position of trust, such as safeguarding collected premiums.

Also called: Fiduciary duty

See also: Insurance

Study this card

An agent's collection and initial evaluation of application information to help the insurer assess risk.

See also: Underwriting

Study this card

A payout method paying a chosen installment amount until proceeds and interest are exhausted.

See also: Fixed-period settlement

Study this card

A contract offering insurer-backed interest or income guarantees; those guarantees depend on the insurer's claims-paying ability.

See also: Variable annuity

Study this card Source: California DOI Life Insurance Guide - Fixed annuity

A contract crediting interest partly by an index formula, with a guaranteed minimum; charges or early surrender can still cause losses.

Also called: FIA; Equity-indexed annuity

See also: Participation rate, Interest cap

Study this card Source: SEC Investor Bulletin: Indexed Annuities - How is the return calculated? - Fixed indexed annuity

A payout method distributing proceeds and interest over a selected time; the payment size depends on the amount and period.

See also: Fixed-amount settlement

Study this card

An insurance company organized under the laws of another U.S. state, as viewed by the state where it does business.

See also: Domestic insurer, Alien insurer

Study this card Source: NAIC glossary - Foreign insurer

A specified time after receiving a policy when the owner can return it for a refund under the applicable rules.

Also called: Right to examine

See also: Policyowner

Study this card Source: Wisconsin OCI, Glossary, Elimination Period / Coordination of Benefits / Free-look Period

A care-coordination role, often filled by a primary doctor who manages referrals to specialists under a plan's rules.

See also: Primary care physician

Study this card

The insurer's pool of assets supporting its guaranteed obligations, including fixed insurance and annuity benefits.

See also: Separate account

Study this card

The time after a premium due date when coverage continues despite nonpayment, subject to the policy's terms.

See also: Reinstatement

Study this card

Coverage provided under a master contract to eligible members of a group, commonly employees of an employer.

See also: Term life insurance

Study this card

An option to buy specified additional coverage at stated times without new evidence of insurability.

Also called: Guaranteed purchase option; GIO

See also: Waiver of premium rider

Study this card

A requirement to offer eligible applicants coverage without rejecting them because of health status or similar factors.

See also: Community rating

Study this card Source: HealthCare.gov Guaranteed Issue, Definition

Coverage renewable by paying premiums through its guaranteed period; the insurer may change rates for a permitted class.

See also: Noncancellable coverage

Study this card Source: NAIC Model 171, 8A(2)(c)

A condition that increases the likelihood or severity of a loss.

See also: Peril

Study this card

An employer benefit reimbursing eligible medical costs, commonly funded through pretax salary reductions, under plan and tax rules.

Also called: Health FSA; Flexible spending account

See also: Health reimbursement arrangement

Study this card Source: IRS Publication 969, HSAs, FSAs and HRAs

A managed care plan usually limiting coverage to its network except emergencies, often using a primary doctor to coordinate care.

Also called: HMO

See also: Preferred provider organization

Study this card Source: HealthCare.gov, Health insurance plan and network types

An employer-funded arrangement reimbursing eligible medical expenses up to the plan's limits; employees do not fund it.

Also called: HRA

See also: Health flexible spending arrangement

Study this card Source: IRS Publication 969, HSAs, FSAs and HRAs

An individual tax-favored account for qualified medical expenses; contributions require eligible coverage and no disqualifying coverage.

Also called: HSA

See also: High deductible health plan

Study this card Source: IRS Publication 969, HSAs, FSAs and HRAs

A plan with a higher deductible and lower premiums in general; HSA eligibility requires meeting the applicable federal requirements.

Also called: HDHP

See also: Health savings account

Study this card Source: IRS Publication 969, HSAs, FSAs and HRAs

A federal law addressing health-insurance portability and administrative standards, including rules protecting health information.

Also called: Health Insurance Portability and Accountability Act

See also: Protected health information

Study this card Source: HHS Summary of the HIPAA Privacy Rule, Summary

Health-related services delivered at home, such as skilled treatment or assistance, depending on the program or policy.

See also: Skilled care

Study this card Source: Medicare.gov, Home health care

Coverage paying a stated cash benefit for a covered hospital stay, rather than reimbursing the actual medical bill.

See also: Major medical insurance

Study this card

A contract purchased with one premium that begins income payments within one year.

Also called: Single premium immediate annuity; SPIA

See also: Deferred annuity

Study this card Source: NAIC Annuities - Background - Immediate annuity

Powers reasonably necessary to carry out an agent's expressly assigned duties, even if not specifically written.

See also: Express authority

Study this card

A clause limiting how long an insurer may challenge coverage for application misstatements, subject to applicable exceptions.

Also called: Incontestable clause

See also: Misstatement of age provision

Study this card

Temporary coverage with a death benefit that rises according to the contract's schedule.

Also called: Increasing term

See also: Level term life insurance

Study this card

Traditional coverage reimbursing eligible medical expenses under the policy, rather than restricting care to a managed network.

See also: Preferred provider organization

Study this card

Permanent coverage that credits interest partly by an index formula; charges can reduce cash value even when index interest is zero.

Also called: IUL

See also: Universal life insurance

Study this card

A life payout option continuing payments to a beneficiary until the guaranteed purchase amount has been recovered.

See also: Cash refund annuity

Study this card

Tasks supporting independent living, such as shopping, preparing meals, managing money, or taking medication.

Also called: IADLs

See also: Activities of daily living

Study this card Source: HHS ACL Long-Term Care Glossary, Instrumental Activities of Daily Living

A recognized interest in another person's continued life, based on a close relationship or potential financial loss from death.

See also: Insurance

Study this card

A contract that transfers specified financial risks to an insurer in exchange for a premium.

See also: Risk transfer

Study this card

The request for coverage containing information the insurer uses to evaluate the proposed insured.

Also called: Application

See also: Underwriting

Study this card Source: New York DFS Life Insurance Information - Glossary - Insurance application

The person whose life is covered by the policy; this person may be different from the owner.

See also: Policyowner

Study this card

The policy's basic promise to pay the specified benefit when a covered event occurs.

Also called: Insuring agreement

See also: Entire contract provision

Study this card

The upper limit on interest credited for a specified period under an indexed annuity's formula.

Also called: Cap rate

See also: Participation rate

Study this card Source: SEC Investor Bulletin: Indexed Annuities - How is the return calculated? - Interest cap

A payout method leaving the proceeds with the insurer while paying the recipient interest on that balance.

See also: Settlement option

Study this card

The tax basis used to measure taxable policy proceeds, generally premiums paid minus prior tax-free amounts received.

Also called: Policy cost basis

See also: Surrender gain

Study this card Source: IRS Publication 525, Life Insurance Proceeds

A designation generally requiring the named recipient's consent to change it or take actions affecting that recipient's rights.

See also: Revocable beneficiary

Study this card

A payout option continuing income while either covered person lives, sometimes at a reduced amount after the first death.

See also: Life-only annuity

Study this card

Coverage on two lives that pays at the first death and then generally ends.

Also called: First-to-die life insurance

See also: Survivorship life insurance

Study this card

Coverage paying a business to help offset financial loss when an essential employee suffers a covered disability.

See also: Disability income insurance

Study this card

Coverage a business owns on a vital worker to help offset financial loss from that person's death.

Also called: Key employee life insurance

See also: Buy-sell agreement

Study this card

The principle that actual loss experience tends to approach expected results as similar, independent exposures increase.

See also: Adverse selection

Study this card

A clause setting the waiting period and filing deadline for a lawsuit to recover policy benefits.

See also: Proof of loss

Study this card Source: NAIC Model 180, 3A(12)

The ability under law to enter a binding agreement, including the required age and mental competence.

Also called: Competent parties

See also: Consideration

Study this card

Temporary coverage with a death benefit that stays the same throughout the specified term.

Also called: Level term

See also: Decreasing term life insurance

Study this card

A payout option providing lifetime income with payments guaranteed for a minimum period even if the annuitant dies earlier.

See also: Life-only annuity

Study this card

A payout option that pays for one person's life and stops at death, without a guaranteed minimum payment period.

Also called: Straight life annuity; Pure life annuity

See also: Life income with period certain

Study this card

The 60 additional inpatient hospital days available once over a lifetime for stays exceeding 90 days per Medicare benefit period.

See also: Medicare benefit period

Study this card Source: Medicare.gov Inpatient Hospital Care, Inpatient hospital care

Permanent coverage whose scheduled premiums are completed over a set number of years or by a specified age.

Also called: Limited payment life insurance

See also: Straight life insurance

Study this card Source: NAIC glossary - Limited-pay whole life

The possibility of outliving the assets available to support retirement spending.

See also: Life-only annuity

Study this card Source: SEC Investor.gov Variable Annuities - How do variable annuities work? - Longevity risk

Extended services and supports helping people with ongoing health or personal-care needs, at home or in other settings.

Also called: LTC

See also: Custodial care

Study this card Source: HHS ACL Long-Term Care Glossary, Long-Term Care

A condition activating eligibility for policy benefits, commonly needing ADL help or having a qualifying cognitive impairment.

Also called: LTC benefit trigger

See also: Activities of daily living

Study this card Source: HHS ACL Long-Term Care Glossary, Benefit Triggers

A feature increasing available LTC benefits over time to help address rising care costs.

Also called: LTC inflation protection

See also: Long-term care

Study this card

Qualified private LTC coverage offering asset-disregard protection for Medicaid under a participating state's rules.

Also called: LTC partnership policy

See also: Medicaid

Study this card Source: HHS ACL Long-Term Care Glossary, Partnership Long Term Care Insurance Policy

Broad medical-expense coverage for eligible large and small costs, generally using deductibles, coinsurance, and other limits.

See also: Hospital indemnity insurance

Study this card

The annual window for enrolling in or changing Marketplace coverage without needing a special enrollment event.

See also: Special enrollment period

Study this card Source: HealthCare.gov Open Enrollment Period, Definition

The group insurance contract issued to the employer, association, or other eligible group sponsor.

See also: Certificate of insurance

Study this card

An incorrect statement important enough to affect an insurer's decision about issuing coverage or setting its terms.

See also: Representation, Concealment

Study this card

A joint federal-state program covering eligible people with limited resources; eligibility and covered services vary by state.

See also: Long-term care partnership policy

Study this card Source: HHS ACL Long-Term Care Glossary, Medicaid

The federal health-insurance program mainly for people age 65 or older and some younger people with qualifying conditions.

See also: Original Medicare

Study this card Source: Medicare.gov, Program overview

A Part A period starting with inpatient admission and ending after 60 consecutive days without inpatient hospital care or skilled SNF care.

See also: Lifetime reserve days

Study this card Source: CMS Medicare Claims Processing Manual, Chapter 21, Benefit period definition

The first sign-up window, generally the seven months spanning the three months before age 65 through the three months after.

Also called: Medicare IEP

See also: Medigap open enrollment period

Study this card Source: Medicare.gov When does Medicare coverage start, Initial Enrollment Period

Hospital insurance covering eligible inpatient care, skilled nursing facility care, hospice, and some home health care.

Also called: Part A

See also: Medicare Part B

Study this card Source: Medicare.gov Parts of Medicare, Part A

Medical insurance covering eligible doctor services, outpatient care, preventive services, and medical equipment.

Also called: Part B

See also: Medicare Part A

Study this card Source: Medicare.gov Parts of Medicare, Part B

An alternative delivering Medicare benefits through approved private plans, generally bundling Parts A, B, and often D.

Also called: Medicare Advantage; MA plan

See also: Original Medicare

Study this card Source: Medicare.gov Parts of Medicare, Medicare Advantage

Coverage for eligible prescription drugs through a Medicare-approved private plan.

Also called: Part D

See also: Medicare Part C

Study this card Source: Medicare.gov Parts of Medicare, Part D

A type of Medigap policy generally requiring specified providers for full benefits, except in emergencies.

See also: Medigap

Study this card Source: New York DFS Medicare Insurance Coverage Information, Definition

Private supplemental insurance helping pay certain out-of-pocket costs under Original Medicare.

Also called: Medicare Supplement Insurance

See also: Original Medicare

Study this card Source: Medicare.gov, Get Medigap Basics

The six months starting when a person is at least 65 and enrolled in Part B, with federal protections against health-based denial.

See also: Medigap

Study this card Source: Medicare.gov, Medigap Open Enrollment

Bronze, Silver, Gold, and Platinum plan categories describing average cost sharing, rather than quality of care.

Also called: Metal levels; Health plan categories

See also: Affordable Care Act

Study this card Source: HealthCare.gov Health Plan Categories, Definition

A clause adjusting benefits to what the premium would have bought at the correct age rather than automatically voiding coverage.

See also: Incontestability provision

Study this card

Life insurance failing the seven-pay funding test, or received for an existing MEC; distributions generally use income-first taxation.

Also called: MEC

See also: Investment in the contract

Study this card Source: IRS Rev. Rul. 2007-38, law and analysis, section 7702A and 72(e)(10)

Permanent coverage with lower premiums for an initial period, followed by higher level premiums under the contract.

See also: Whole life insurance

Study this card

An increased chance of loss caused by carelessness or indifference because insurance exists.

See also: Moral hazard

Study this card

An increased chance of loss arising from dishonesty, such as deliberately submitting a false claim.

See also: Morale hazard

Study this card

An insurance company owned by its policyholders rather than shareholders.

Also called: Mutual insurance company

See also: Stock insurer

Study this card Source: Alabama DOI Glossary of Life Insurance Terms - Mutual insurer

Protection the insurer cannot cancel or unilaterally change, including premiums, during the guaranteed period if premiums are paid.

Also called: Noncancelable coverage

See also: Guaranteed renewable coverage

Study this card Source: NAIC Model 171, 8A(2)(b)

Coverage whose premium is paid entirely by the employer, without an employee premium contribution.

See also: Contributory group plan

Study this card

Choices for using a permanent policy's available cash value when coverage is surrendered or required premiums stop.

See also: Extended term option, Reduced paid-up option

Study this card

The initial written report alerting an insurer that a covered loss has occurred or begun.

See also: Claim forms

Study this card Source: NAIC Model 180, 3A(6)

Coverage the insurer may choose not to continue at a renewal date, subject to the contract and applicable law.

See also: Conditionally renewable coverage

Study this card

The federal fee-for-service program combining Parts A and B; separate drug and supplemental coverage may be added.

See also: Medicare Part C, Medigap

Study this card Source: Medicare.gov Parts of Medicare, Original Medicare

A limit on member cost sharing for covered services; premiums, uncovered care, and some other costs do not count.

Also called: Out-of-pocket limit

See also: Stop-loss insurance

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

Inability to perform the material duties of the insured's usual occupation, as defined by the policy.

Also called: Own occupation

See also: Any-occupation disability

Study this card

Small amounts of fully paid permanent coverage, often purchased with dividends, that increase cash value and death benefits.

Also called: PUA

See also: Policy dividend

Study this card

Reduced ability to perform job duties or work a full schedule, potentially qualifying for limited benefits under the policy.

See also: Residual disability

Study this card

Coverage eligible to share in the insurer's divisible surplus through dividends, which are not guaranteed.

Also called: Par policy

See also: Policy dividend

Study this card

The percentage of an index gain used in an indexed annuity's interest calculation, before other contract adjustments.

See also: Interest cap

Study this card Source: SEC Investor Bulletin: Indexed Annuities - How is the return calculated? - Participation rate

A distribution method dividing proceeds equally among surviving eligible beneficiaries at the designated level.

See also: Per stirpes

Study this card

The event or cause that produces a loss, such as death or illness.

See also: Hazard

Study this card

Coverage designed to last for life if required funding and policy conditions are met, generally with a cash value component.

Also called: Permanent insurance

See also: Term life insurance

Study this card

A distribution method passing a deceased beneficiary's share down that beneficiary's family branch.

See also: Per capita

Study this card

A clause allowing insurer-paid claim examinations and, where law permits, an autopsy.

See also: Proof of loss

Study this card Source: NAIC Model 180, 3A(11)

A tangible condition, such as a dangerous occupation, that increases exposure to loss.

See also: Hazard

Study this card

A plan using primary-care referrals while allowing out-of-network care, usually at higher cost.

Also called: POS plan

See also: Preferred provider organization

Study this card Source: HealthCare.gov, Health insurance plan and network types

The process of providing the issued contract to the owner and completing any outstanding requirements for coverage.

See also: Constructive delivery

Study this card

A nonguaranteed distribution of divisible surplus to an eligible participating policyowner.

See also: Participating policy, Paid-up additions

Study this card

An advance secured by policy cash value; unpaid principal and interest reduce available benefits and can cause lapse.

See also: Automatic premium loan

Study this card

The person or entity holding the contract rights, such as naming beneficiaries, assigning the policy, or requesting loans.

Also called: Policyholder

See also: Insured

Study this card

A plan's advance approval for certain care; approval alone does not guarantee that every charge will be covered.

Also called: Prior authorization; Precertification

See also: Provider network

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

A health problem present before coverage begins; Marketplace plans cannot deny coverage or charge more because of it.

See also: Guaranteed issue

Study this card Source: HealthCare.gov Pre-existing Conditions, Overview

A plan with contracted providers that usually covers out-of-network care at higher cost and does not require specialist referrals.

Also called: PPO

See also: Health maintenance organization

Study this card Source: HealthCare.gov, Health insurance plan and network types

An applicant whose expected mortality is more favorable than the insurer's standard class, often qualifying for lower rates.

See also: Standard risk, Substandard risk

Study this card Source: California DOI Life Insurance Guide - Preferred risk

A specified severe loss, such as sight or use of limbs, treated as total disability under the contract without the usual work test.

See also: Total disability

Study this card

The first person or entity in line to receive the death benefit under the policy's designation.

See also: Contingent beneficiary

Study this card

A doctor providing general care and coordinating access to other services or specialists.

Also called: PCP

See also: Gatekeeper

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

The coverage that pays first under coordination-of-benefits rules, applying its own terms before another plan considers the claim.

See also: Secondary plan

Study this card

The full stated AD&D benefit, typically payable for covered accidental death or specified combinations of severe losses.

See also: Capital sum

Study this card

Written evidence establishing the nature and extent of a claimed loss, submitted under the policy's timing rules.

See also: Notice of claim

Study this card Source: NAIC Model 180, 3A(8)

Individually identifiable health information held or transmitted by a HIPAA-covered entity or business associate.

Also called: PHI

See also: HIPAA

Study this card Source: HHS Summary of the HIPAA Privacy Rule, What Information is Protected

The doctors, hospitals, and other providers contracted with a health plan to furnish covered services.

See also: Preferred provider organization

Study this card Source: HealthCare.gov, Glossary of Health Coverage and Medical Terms

A situation with a possibility of loss or no loss, but no opportunity for gain.

See also: Speculative risk

Study this card

An employer retirement plan meeting federal tax-code requirements for favorable tax treatment; an IRA is a separate arrangement.

See also: Defined benefit plan, Defined contribution plan

Study this card Source: IRS, 401(k) plan qualification requirements, IRC 401(a)

A return of disability from the same or a related cause that may count as the prior claim if it occurs within the contract's window.

See also: Elimination period

Study this card

A nonforfeiture choice using available value to purchase a smaller permanent benefit with no further premiums.

Also called: Reduced paid-up insurance

See also: Extended term option

Study this card

Restoring a lapsed policy by satisfying its conditions, often including evidence of insurability and overdue premiums with interest.

See also: Grace period

Study this card

An arrangement in which one insurer transfers some of its assumed insurance risk to another insurer.

See also: Insurance

Study this card Source: NAIC glossary - Reinsurance

A disability-policy clause limiting combined loss-of-time benefits in relation to the insured's earnings.

See also: Change of occupation provision

Study this card Source: NAIC Model 180, 3B(5)

Temporary coverage that can be continued for another term without new evidence of insurability, subject to contract limits.

Also called: Renewable term

See also: Attained age

Study this card

Buying new life insurance in connection with ending, surrendering, reducing, or using value from existing coverage.

See also: Policy delivery

Study this card

A statement believed to be true to the best of the applicant's knowledge, rather than a guarantee of absolute truth.

See also: Warranty

Study this card

An earnings loss from a covered disability while the insured can still work; benefits are commonly proportional to lost income.

See also: Partial disability

Study this card

Temporary care giving a regular unpaid caregiver a break.

See also: Adult day care

Study this card Source: HHS ACL Long-Term Care Glossary, Respite Care

Temporary coverage that refunds specified premiums if the insured survives the term and contract conditions are met.

Also called: ROP term

See also: Term life insurance

Study this card

A designation the owner may change without the named recipient's consent.

See also: Irrevocable beneficiary

Study this card

Eliminating exposure to a particular risk by not engaging in the activity that creates it.

See also: Risk reduction

Study this card

Taking steps to lower the chance or severity of a loss without eliminating the exposure.

See also: Risk avoidance

Study this card

Keeping responsibility for some or all of a potential financial loss instead of transferring it.

See also: Risk transfer

Study this card

Shifting the financial consequences of a specified risk to another party, commonly through insurance.

See also: Risk retention

Study this card

An individual retirement arrangement funded with after-tax contributions; qualified distributions, including earnings, are tax-free.

See also: Traditional IRA

Study this card Source: IRS, Traditional and Roth IRAs

The coverage that considers eligible remaining expenses after the primary plan has processed the claim.

See also: Primary plan

Study this card

A qualifying exchange of insurance contracts without current gain recognition, such as life-to-life or life-to-annuity; the reverse is not allowed.

Also called: 1035 exchange

See also: Tax deferral

Study this card Source: 26 USC 1035(a), Certain exchanges of insurance policies

An arrangement in which the employer or sponsor bears the financial risk of covered claims rather than buying full insurance.

Also called: Self-insured health plan

See also: Stop-loss insurance, Third-party administrator

Study this card

Assets held apart from the insurer's general account to support variable contracts; investment results affect contract values.

See also: General account, Subaccount

Study this card Source: NAIC Annuities - Background - Separate account

A method of paying policy proceeds, such as a lump sum, installments, or life income.

See also: Interest-only settlement, Fixed-period settlement

Study this card

Permanent coverage funded with one lump-sum premium rather than ongoing scheduled payments.

See also: Limited-pay whole life

Study this card

Services requiring trained medical professionals, such as wound treatment or certain therapies.

See also: Custodial care

Study this card Source: HHS ACL Long-Term Care Glossary, Skilled Care

An enrollment window outside the annual period triggered by a qualifying circumstance, such as loss of coverage or marriage.

Also called: SEP

See also: Marketplace open enrollment

Study this card Source: HealthCare.gov Special Enrollment Period, Definition

A situation that can produce a gain as well as a loss, such as a business investment.

See also: Pure risk

Study this card

An applicant who meets the insurer's ordinary risk assumptions and qualifies for its regular premium class.

See also: Preferred risk, Substandard risk

Study this card Source: California DOI Life Insurance Guide - Standard risk

Confirmation at delivery that the proposed insured's health has not changed as described in the application.

See also: Conditional receipt

Study this card

An insurance company owned by shareholders, who may receive distributions of company profits.

Also called: Stock insurance company

See also: Mutual insurer

Study this card Source: NAIC glossary - Stock insurer

Coverage reimbursing a self-funded sponsor for eligible claims exceeding specified individual or aggregate thresholds.

See also: Self-funded health plan, Out-of-pocket maximum

Study this card

Whole life with level scheduled premiums payable throughout the insured's life, or until the policy's stated maturity age.

Also called: Ordinary life; Continuous premium whole life

See also: Limited-pay whole life

Study this card

An investment option within a variable contract's separate account, commonly investing in an underlying fund.

See also: Separate account

Study this card Source: NAIC Annuities - Background - Subaccount

An applicant with greater expected risk than the standard class, who may receive coverage at higher rates or with restrictions.

Also called: Rated risk

See also: Standard risk

Study this card Source: California DOI Life Insurance Guide - Substandard risk

A clause limiting benefits for death by suicide during a specified initial period, commonly to a return of premiums.

See also: Insuring clause

Study this card

A contract fee for withdrawing or ending coverage during a stated period, often declining as the contract ages.

Also called: Surrender fee

See also: Deferred annuity

Study this card Source: SEC Investor.gov Variable Annuities - How do variable annuities work? - Surrender charge

The amount by which proceeds from fully surrendering a life policy exceed its tax basis; generally taxable as ordinary income.

See also: Investment in the contract

Study this card Source: IRS Publication 525, Life Insurance Proceeds

Coverage on two lives that pays the death benefit after the second insured dies.

Also called: Second-to-die life insurance

See also: Joint life insurance

Study this card

Postponement of tax on growth until a later taxable event; it does not mean the growth can never be taxed.

Also called: Tax-deferred growth

See also: Investment in the contract

Study this card

Coverage for a stated period that pays a death benefit if the insured dies during that period; it generally has no cash value.

Also called: Term insurance

See also: Permanent life insurance

Study this card Source: Alabama DOI Glossary of Life Insurance Terms - Term life insurance

A firm handling services such as claims processing or enrollment for a plan, without necessarily bearing its claims risk.

Also called: TPA

See also: Self-funded health plan

Study this card

A health-policy clause limiting application-based defenses and certain pre-existing-condition denials after its stated period.

See also: Pre-existing condition

Study this card Source: NAIC Model 180, 3A(2)

A clause specifying when benefits become payable after adequate written proof of loss.

See also: Proof of loss

Study this card Source: NAIC Model 180, 3A(9)

A condition meeting the policy's full-disability definition; it does not necessarily mean complete physical helplessness.

See also: Partial disability

Study this card

An individual retirement arrangement with potentially deductible contributions and tax-deferred earnings; pretax withdrawals are taxable.

See also: Roth IRA

Study this card Source: IRS, Traditional and Roth IRAs

Evaluating an applicant's risk to decide whether to offer insurance and on what terms.

See also: Adverse selection

Study this card Source: California DOI Life Insurance Guide - Underwriting

An agreement in which only one party makes an enforceable promise; the insurer promises covered benefits.

See also: Conditional contract

Study this card

Permanent coverage with flexible premiums and adjustable benefits; enough value must remain to cover policy charges.

Also called: UL

See also: Variable universal life insurance

Study this card Source: Alabama DOI Glossary of Life Insurance Terms - Universal life insurance

A generally level death benefit that includes the policy cash value; the contract may require a higher benefit as cash value grows.

Also called: UL Option 1; Level death benefit option

See also: Universal life Option B

Study this card

A death benefit generally equal to the specified amount plus the policy's cash value.

Also called: UL Option 2; Increasing death benefit option

See also: Universal life Option A

Study this card

A clause allowing a premium due and unpaid to be deducted from a claim payment.

See also: Time of payment of claims

Study this card Source: NAIC Model 180, 3B(6)

A way of determining eligible charges using typical prices for comparable services in an area; excess charges may be uncovered.

Also called: UCR

See also: Allowed amount

Study this card

A contract whose value changes with selected separate-account investments; the owner can lose money.

See also: Fixed annuity, Separate account

Study this card Source: NAIC Annuities - Background - Variable annuity

Permanent coverage with cash value invested in separate-account options; the owner bears investment risk.

Also called: Variable life

See also: Separate account

Study this card

Permanent coverage combining flexible premiums and adjustable benefits with separate-account investment choices and investment risk.

Also called: VUL

See also: Universal life insurance, Variable life insurance

Study this card

A participant's nonforfeitable ownership of retirement benefits; employer contributions may vest over a plan's service schedule.

Also called: Vested benefit

See also: Qualified retirement plan

Study this card Source: IRS, Retirement topics - Vesting

The voluntary surrender of a known right.

See also: Estoppel

Study this card

An addition excusing required premiums during a qualifying disability after any waiting period, under the rider's conditions.

See also: Guaranteed insurability rider

Study this card

A statement guaranteed to be true; it is a stricter assertion than an ordinary application representation.

See also: Representation

Study this card

Permanent coverage with guaranteed cash values and a guaranteed death benefit, funded by the policy's scheduled premiums.

Also called: Whole life

See also: Straight life insurance

Study this card