Life Insurance and Health Insurance Terms and Definitions, Quizzes of Finance

Download Life Insurance and Health Insurance Terms and Definitions and more Quizzes Finance in PDF only on Docsity! TERM 1 Accelerated death benefits rider DEFINITION 1 A rider that allows insured who are terminally ill or who suffer from certain catastrophic diseases to collect part or all of their life insurance benefits before they die, primarily to pay for the care they require. TERM 2 Automatic premium loans DEFINITION 2 cash borrowed from a life insurance policy's cash value to pay an overdue premium after the grace period for paying the premium has expired TERM 3 Blackout period DEFINITION 3 the period during which Social Security benefits are not paid to a surviving spouse--between the time the youngest child reaches age 16 and the surviving spouse's sixtieth birthday TERM 4 Cash surrender value DEFINITION 4 amount payable to the owner of a cash-value life insurance policy if he or she decides the insurance is no longer wanted. Calculated separately from the legal reserve. TERM 5 Contingent beneficiary DEFINITION 5 beneficiary of a life insurance policy who is entitle to receive the policy proceeds on the insured's death if the primary beneficiary died before the insured; or the beneficiary who receives the remaining payments if the primary beneficiary dies before receiving the guaranteed number of payments TERM 6 Cost-of-living rider DEFINITION 6 benefit that can be added to a life insurance policy under which the policy owner can purchase one-year term insurance equal to the cumulative percentage change in the consumer price index with no evidence of insurability. TERM 7 Dependency period DEFINITION 7 period of time following the re-adjustment period during which the surviving spouse's children are under eighteen and therefore dependent on the parent TERM 8 Grace period DEFINITION 8 period of time in which a policy owner may pay an overdue life insurance premium without causing the policy to lapse TERM 9 Human life value DEFINITION 9 for purposes of life insurance, the present value of the family's share of the deceased breadwinner's future earnings TERM 10 Incontestable clause DEFINITION 10 contractual provision in a life insurance policy stating that the insurer cannot contest the policy after it has been in force two years during the insured's lifetime TERM 21 Waiver-of-premium provision DEFINITION 21 benefit that can be added to a life insurance policy providing for waiver of all premiums coming due during a period of total disability of the insured TERM 22 Whole life insurance DEFINITION 22 Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. TERM 23 Blue Cross plans DEFINITION 23 typically nonprofit, community-oriented payment plans that provide health insurance coverage primarily for hospital services TERM 24 Blue Shield plans DEFINITION 24 typically nonprofit prepayment plans that provide health insurance coverage mainly for physicians' services TERM 25 Coinsurance provision DEFINITION 25 common provision in commercial property insurance contracts that requires the insured to maintain insurance on the property at a stated percentage of its actual cash value or its replacement costs TERM 26 Defined-benefit plan DEFINITION 26 type of pension plan in which the retirement benefit is known in advance but the contributions vary depending on the amount necessary to fund the desired benefit TERM 27 Defined-contribution plan DEFINITION 27 type of pension plan in which the contribution rate is fixed but the retirement benefit is variable TERM 28 Flexible-spending account DEFINITION 28 an arrangement by which the employee agrees to a salary reduction, which can be used to pay for plan benefits, unreimbursed medical and dental expenses, and other expenses permitted by the Internal Revenue Code TERM 29 Health maintenance organization (HMO) DEFINITION 29 organized system of health care that provides comprehensive health services to its members for a fixed prepaid fee TERM 30 Major medical insurance DEFINITION 30 health insurance designed to a large proportion of the covered expenses of a catastrophic illness or injury TERM 31 Pension Benefit Guaranty Corporation (PBGC) DEFINITION 31 a federal corporation that guarantees the payment of vested or nonforfeitable benefits up to certain limits if a private defined benefit pension plan is terminated TERM 32 Roth IRA DEFINITION 32 an IRA in which the contributions are not income-tax deductible but distributions are received income-tax free if certain condition are met TERM 33 Stop-loss limit DEFINITION 33 modification of the coinsurance provision in major medial plans that places a dollar limit on the maximum amount that an individual must pay TERM 34 Vesting DEFINITION 34 characteristic on pension plans guaranteeing the employer's right to part or all of the employer's contributions if the employment terminates prior to retirement