Life Insurance Fundamentals

<p>Substandard rating (C)</p> Signup and view all the answers

<p>Health Insurance Portability and Accountability Act (HIPAA) (A)</p> Signup and view all the answers

<p>Aleatory nature (A)</p> Signup and view all the answers

<p>She was informed that her coverage would begin after the underwriting review. (A)</p> Signup and view all the answers

<p>Premium payments are suspended, and no further action is needed. (D)</p> Signup and view all the answers

<p>Sliding (B)</p> Signup and view all the answers

<p>There is no insurable interest between Jane and her neighbor. (D)</p> Signup and view all the answers

<p>Twisting (A)</p> Signup and view all the answers

<p>Workers’ Compensation (D)</p> Signup and view all the answers

<p>It ensures claims are paid up to certain statutory limits. (C)</p> Signup and view all the answers

<p>Premium accountability (D)</p> Signup and view all the answers

<p>Cancel the policy and receive a refund of the premium paid. (B)</p> Signup and view all the answers

<p>Obtain the client’s written acknowledgment of the replacement. (A)</p> Signup and view all the answers

<p>Disclosure of credit report source (D)</p> Signup and view all the answers

<p>$4,000 (A)</p> Signup and view all the answers

A receipt issued to an applicant who pays the initial premium for a life insurance policy, but the policy is not yet issued. It guarantees coverage if the applicant passes away before the policy is issued, subject to the insurer's approval.

A rider added to a life insurance policy that waives premium payments if the policyholder becomes permanently disabled. The policy remains active without any premium payments.

An unethical practice where an agent persuades a client to replace their existing life insurance policy with a new one, often with higher fees, without disclosing the potential disadvantages.

The process of an insurer evaluating an applicant's risk before issuing a policy. This involves assessing various factors, including health, lifestyle, and occupation, to determine the appropriate premium or even if coverage should be granted.

A regulation in the United States designed to protect the privacy of health information. It restricts the disclosure of protected health information (PHI), which includes medical history and treatment records, by healthcare providers and insurance companies.

A characteristic of insurance contracts where the amount paid by the insured is disproportionate to the amount received from the insurer in the event of a claim. The insured pays a relatively small premium, but the insurer potentially pays a much larger amount in case of a covered loss.

The process of evaluating an applicant's health and risk factors to determine if they qualify for insurance coverage and at what premium rate. This involves reviewing the applicant's medical history, lifestyle habits, and other relevant factors.

A practice where an agent sells a new insurance policy to a client, often without fully disclosing the potential disadvantages of the new policy, and without considering the client's existing insurance needs. This can be done by misrepresenting or exaggerating the benefits of the new policy, leading to the client switching policies unnecessarily.

An insurance agent adds an extra coverage to a client's policy without the client's knowledge or consent. This unethical practice is considered illegal and can have serious consequences for the agent.

A person or entity must have a financial interest in the insured object or person to be eligible for insurance. This ensures there's a valid reason for covering a potential loss.

An agent persuading someone to switch insurance policies to a new one with different terms, often without fully disclosing the downsides of the new policy. This can lead to higher premiums or fewer benefits.

A government-run insurance program that protects workers against injuries or illnesses that occur on the job. Benefits include medical expenses, lost wages, and rehabilitation.

A state-established fund in Florida designed to protect policyholders in case an insurance company goes bankrupt. It ensures that policyholders receive some benefits instead of losing everything.

Agents have a fiduciary responsibility to act in the best interest of their clients. They must manage funds ethically, including premiums, and ensure proper accounting practices are followed.

A period after receiving an insurance policy during which the insured can choose to cancel it without any penalties, usually for 10 days. This allows for review and reflection before being fully bound by the policy.

A formal documentation process that must be completed when replacing an existing insurance policy with a new one. It ensures that the client is aware of the changes and differences between policies.

An insurance company is legally required to inform an applicant if their application was denied based on a credit report, and must disclose the source of the credit report.

An insurance contract where the terms are set by the insurer without negotiation. The insured must accept the contract's terms