Understanding Conditional Contracts in Insurance Policies, Exams of Nursing

Download Understanding Conditional Contracts in Insurance Policies and more Exams Nursing in PDF only on Docsity! 1 [Date] PSI - NY Life Accident and Health Practice Exam 17-55 Just my cards + 199+ 75 LATEST GRADES 1. Which policy provision permits the policy owner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms or costs? - ✓✓✓Free Look 2. When will a policy pay on a UCR basis? - ✓✓✓When particular benefits are not listed on a payment schedule 3. Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility? - ✓✓✓long term care rider 4. Which of the following is exempted from the incontestability provision in insurance policies? - ✓✓✓Fraudulent misstatements 5. What does first dollar coverage mean? - ✓✓✓As soon as covered medical expenses are incurred, the policy begins to pay 6. What is the waiver of premium provision? - ✓✓✓In a long term care contract, the premium is waived after the insured has been confined for a specific period of time 2 [Date] 7. According to the Time Payment of Claims provision, the insurer must make the payment immediately after receiving proof of loss EXCEPT - ✓✓✓for claims involving periodic payments 8. Which is a disadvantage to a flexible premium annuity? - ✓✓✓the actual amount of the annuity benefit cannot be determined in advance 9. When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing that applicant a summary of coverage that includes all of the following EXCEPT - ✓✓✓a detailed and comprehensive summary of the accelerated benefit 10. which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? - ✓✓✓the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis 11. How does a noncancelable policy differ from a guaranteed renewable policy? - ✓✓✓with the non cancelable policy the insurer may increase premiums only based on the terms of the policy 5 [Date] 25. When does insurable interest come into play in a life insurance policy? - ✓✓✓when the applicant for the policy is not the insured 26. Which of the following occurs immediately after the application is submitted and the initial premium paid? - ✓✓✓the underwriting process begins 27. Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - ✓✓✓Fair Credit Reporting Act 28. What is the purpose of Stranger-originated life insurance (STOLI)? - ✓✓✓the policy is originated primarily or solely for the purpose of resale 29. All of the following are classifications of risk EXCEPT - ✓✓✓non-nicotine 30. What specific new procedures does the USA Patriot Act require of insurance companies? - ✓✓✓Establish an anti-money laundering program 6 [Date] 31. What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? - ✓✓✓The applicant and possibly the agent initial any changes made. 32. What is a MIB report? - ✓✓✓medical information on an applicant for assessing life or health insurance risk 33. How do warranties differ from representations? - ✓✓✓a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. 34. If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT - ✓✓✓the treatment procedures that are covered by the policy. 35. Which of the following was specifically designed to address STOLI and IOLI practices? - ✓✓✓NCOIL Act 36. Why is rehabilitation considered worthy of federal help under workers' compensation? - ✓✓✓it reduces insurance losses and helps regain the worker's dignity 37. In a case where an individual's health is insured by both their own policy and their spouse's policy, which policy pays in the 7 [Date] event of an illness? - ✓✓✓The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. 38. The group conversion option is allowed for all of the following EXCEPT - ✓✓✓during the annual benefits enrollment period. 39. What type of insurance should a company purchase if it wants to insure the life of its CEO? - ✓✓✓key person insurance 40. All of the following are tax qualified retirement plans EXCEPT - ✓✓✓Section 529 plan. 41. Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - ✓✓✓It is financially insufficient to cover end of life expenses. 42. For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? - ✓✓✓age 43. When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? - ✓✓✓when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year 10 [Date] 58. Which is the major reason why long term care insurance is becoming increasingly important? - ✓✓✓As life expectancy increases, the chances of needing long term care also increase 59. Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses? - ✓✓✓Stop Loss Limit 60. Which is the primary purpose of Health Reimbursement Accounts (HRAs)? - ✓✓✓To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions. 61. States generally define a true "group" for insurance as requiring a minimum of how many participants? - ✓✓✓10 62. When should a buy-sell agreement include a provision for the buy-out of an owner's business interest in the event of a disability? - ✓✓✓When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner. 63. Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age? - ✓✓✓renewable term 11 [Date] 64. Which of the following is true about a decreasing term life policy? - ✓✓✓The face amount reaches zero at policy expiration. 65. Which of the following is TRUE of the limited pay whole life policy? - ✓✓✓Coverage continues after the policy is paid-up. 66. Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? - ✓✓✓prearranged costs for services rendered 67. All of the following are characteristics of variable whole life EXCEPT - ✓✓✓there is no guaranteed minimum death benefit. 68. Which of the following policy types is considered double indemnity? - ✓✓✓accidental death 69. Which of the following lists the three common types of permanent individual life insurance? - ✓✓✓Variable Life, Whole Life, Universal Life 70. Which of the following is TRUE for a flexible premium annuity? - ✓✓✓The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. 12 [Date] 71. Which type of annuity covers two or more annuitants and provides monthly income only until the first annuitant dies? - ✓✓✓Joint Life Annuity 72. Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? - ✓✓✓Disability income insurance 73. In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses? - ✓✓✓Flexible Spending Account (FSA) 74. Which of the following is covered by a dread disease policy? - ✓✓✓illnesses that do not occur frequently but incur significant costs when they do occur 75. Which insurance plans are commonly offered through the worksite (employer sponsored) EXCEPT? - ✓✓✓Medicare 76. Process 2103 (d-i) - ✓✓✓1. The Superintendent may issue a license to any person, firm or corporation who has complied with the requirements of the Insurance Code, authorizing the licensee to act as agent of any authorized insurer. Every individual applicant for a license under this section and every proposed sub- licensee must be 18 years of age or older at the time of issuance 15 [Date] 83. Agent 2101(a) - ✓✓✓In this section, insurance agent means any authorized or acknowledged agent of an insurer, fraternal benefit society or health maintenance organization issued a certificate of authority pursuant to the public health law, and any sub-agent or other representative of such an agent, who acts as such in the solicitation of, negotiation for, or sale of, an insurance, health maintenance organization or annuity contract, other than as a licensed insurance broker. 84. Agent 2101(k) - ✓✓✓insurance producer means an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the insurance laws of this state to sell, solicit or negotiate insurance. 85. The applicant must be at least 18 years of age at the time of license issuance. 86. An examination is required for each applicant, except where noted for applicants with a change in residency moving to New York (see code 2103 below). 87. Brokers 2101(c) - ✓✓✓a licensed insurance representative who does not represent a specific insurance company, but places business among various companies. Legally, the broker is usually regarded as a representative of the insured rather than the insuring company. 88. Brokers 2101(h) - ✓✓✓any licensed attorney at law of this state. 16 [Date] 89. Consultants (2107) - ✓✓✓The Superintendent may issue an insurance consultant's license to any person, firm, association or corporation who or which has complied with the requirements of this chapter with respect to either: life insurance, meaning all of those kinds of insurance authorized. Any such license issued to a firm or association shall authorize only the members of such firm or association named in such license as sub-licensees to act individually as consultants there under, and any such license issued to a corporation shall authorize only the officers and directors thereof named in such license as sub-licensees to act individually as consultants there under. 90. Adjuster 2101(g) - ✓✓✓The Superintendent may, in his discretion require an applicant for a license under this section to present evidence, in such form as he prescribes, that such applicant has been employed, for a period which he deems reasonable, by an insurer, an independent adjuster or a public adjuster, in the performance of duties which in his opinion would provide the applicant with a satisfactory preliminary training for the duties and responsibilities which would evolve upon him as a licensee under this section. The term independent adjuster means any person, firm, association or corporation who for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigating and adjusting claims arising under insurance contracts issued by such insurer and who performs such duties required by such insurer as are incidental to such claims and also includes any person who for compensation or 17 [Date] anything of value investigates and adjusts claims on behalf of any independent adjuster. 91. Adjuster 2108 - ✓✓✓Adjusters will be licensed as either independent adjusters, or as public adjusters. The Superintendent may prescribe the types of independent adjusters' licenses according to the kind or kinds of insurance claims which the licensee is to be authorized to investigate and adjust. No adjuster may act on behalf of an insurer unless licensed as an independent adjuster, and no adjuster may act on behalf of an insured unless licensed as a public adjuster. A public adjuster works on behalf of the insured for a fee. 92. Nonresident 2101(d) - ✓✓✓In this section, non-resident insurance agent means an individual who is a non-resident of this state and who is licensed or authorized to act as an insurance agent in the state in which he resides, or in which he or the firm or association of which he is a member or employee, or the corporation, of which he is an officer, director, or employee maintains an office as an insurance agent. 93. Nonresident 2101(e) - ✓✓✓In this section, "non-resident insurance broker", means an individual who is a non-resident of this state and who is licensed or authorized to act as an insurance broker in the state in which he resides, or in which he, or the firm or association of which he is a member or employee, or the corporation, of which he is an officer, director or employee maintains an office as an insurance broker. 20 [Date] 99. Temporary License (2109; Regs. 9, 18, 29, Part 20.1) - ✓✓✓A temporary license may be issued in the case of death, service in armed forces or disability. The Superintendent may issue a temporary insurance agent's or insurance broker's license, or both, without requiring the applicant to pass a written insurance examination or to satisfy certain requirements except as to age in the following cases: (1)In the event of the death of a person who at the time of his death was a licensed accident and health insurance agent; 100. to the executor or administrator of the estate of such deceased agent or broker; 101. to a surviving next of kin of such deceased agent or broker, where no administrator of his estate has been appointed and no executor has qualified under his duly probated will; 102. to the surviving member or members of a firm or association, which at the time of the death of a member was such a licensed insurance agent or licensed insurance broker; or 103. to an officer or director of a corporation upon the death of the only officer or director who was qualified as a sub-licensee or to the executor or administrator of the estate of such deceased officer or director; (1)to any person who may be designated by a person licensed pursuant to this chapter as an insurance agent, or an insurance broker, or both, and who is absent because of service in any branch of the armed forces of the United States. 21 [Date] (2)to the next of kin of a person who has become totally disabled and prevented from pursuing any of the duties of his or her occupation, and who at the commencement of his or her disability the license or licenses may be issued for a term not exceeding 90 days from the death of such additional term or terms of 90 days each, not exceeding in the aggregate 15 months. 104. The Superintendent may issue renewal licenses for an additional term or terms of 90 days each exceeding the aggregate period of 15 months when in his judgment it will best serve the interests of any person serving in the armed forces of the United States. No person holding a temporary license is permitted to solicit new business under the temporary license. 105. Renewal (2103(j); Reg. 5, Part 21.2) - ✓✓✓All individual insurance agent licenses must be renewed every two years. Individual licenses are issued with an expiration date determined by the date of birth: 106. The license of an agent born in an even numbered year will expire on the agent's birthday in an even numbered year. 107. The license of an agent born in an odd numbered year will expire on the agent's birthday in an odd numbered year 22 [Date] 108. Adjuster licenses are not determined on a birth date renewal. Adjuster licenses expire on December 31st of even- numbered years. 109. Resident Licensees - ✓✓✓All licensed agents, brokers, consultants and public adjusters must complete continuing education (CE) requirements as a condition of renewing these licenses. Licensees must complete 15 credits of approved continuing education during each biennial licensing period. 110. After your license has been renewed the first time, continuing education (CE) will always be required upon subsequent renewal or relicensing applications. Credits must be accumulated during the renewal period, which begins with the effective date of the license and ends with the expiration date. CE must be completed before processing the renewal or relicensing application. 111. Assumed Names (2102(f)) - ✓✓✓Licensees must notify the Superintendent upon changing his, her or its legal name. Except for an individual licensee's own legal name, no licensee may use any name, in conducting a business regulated by this article that has not been previously approved by the Superintendent. 112. Change of Address (All Addresses, including Email) - (2134; Reg. 5, Part 21.4; Reg. 6, Part 22.3; Reg. 7, Part 23.4) - 25 [Date] (h) admitted or been found to have committed any insurance unfair trade practice or fraud; (i) had an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory; (j) forged another's name to an application for insurance or to any document related to an insurance transaction; (k)improperly used notes or any other reference material to complete an examination for an insurance license; (l) knowingly accepted insurance business from an individual who is not licensed; (m) failed to comply with an administrative or court order imposing a child support obligation; or (n) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax. 117. Before revoking or suspending the license of any insurance producer or other licensee pursuant to the provisions of this article, the Superintendent will give notice to the licensee and to every sublicensee and will hold, or cause to be held, a hearing not less than 10 days after giving notice. If an insurance producer's license or other licensee's license pursuant to the provisions of this article is revoked or suspended by the Superintendent, the Superintendent will give notice to the licensee. 118. No individual, corporation, firm or association whose license as an insurance producer or other licensee has been revoked, and no firm or association of which such individual is a member, will 26 [Date] be entitled to obtain any license under the provisions of this chapter for a period of one year after such revocation, or, if such revocation be judicially reviewed, for one year after the final determination affirming the action of the Superintendent in revoking such license. 119. Before revoking the license of any non-resident insurance producer the Superintendent will give 10 days' notice in writing to the licensee of the action proposed to be taken. 120. The Superintendent retains the authority to enforce the provisions of and impose any penalty or remedy. 121. All licensees must report to the Superintendent any administrative action taken against the licensee in another jurisdiction or by another governmental agency in this state within 30 days of the final disposition of the matter. 122. Within 30 days of the initial pretrial hearing date, a licensee must report to the Superintendent any criminal prosecution of the licensee taken in any jurisdiction. 123. Penalties (2127): - ✓✓✓The Superintendent, in lieu of revoking or suspending the license of a licensee, may in any one proceeding by order, require the licensee to pay a penalty in a sum 27 [Date] not exceeding $500 for each offense, and a penalty in a sum not exceeding $2,500 in the aggregate for all offenses. 124. Upon the failure of such a licensee to pay such penalty ordered within 20 days after the mailing of such order, postage prepaid, registered, and addressed to the last known place of business of such licensee, unless such order is stayed by an order of a court of competent jurisdiction, the Superintendent may revoke the license of such licensee or suspend the same for such period as he determines. 125. Superintendent's General Duties and Powers (2404, Financial Services 201, 202, 301) - ✓✓✓The Superintendent is empowered to: 126. Examine and investigate into the affairs of any person in order to determine whether the person has violated or is violating the insurance and regulations of this state. Responses to requests for information by the Superintendent should be made not less than 15 business days. 127. The Superintendent is authorized, after notice and hearing, to levy a civil penalty against such person in an amount not to exceed $500 per day for each day beyond the date specified by the Superintendent for response, but in no event will such penalty exceed $10,000. 128. In the event the Superintendent levies five separate civil penalties against any one person within five years for failure to comply with this section, the Superintendent is authorized, after notice and hearing, to levy an additional civil penalty against not to exceed $50,000. 30 [Date] products. A producing agent may not issue any illustration or statement used to advertise his/her business unless the agent is authorized to transact those lines of authority. 141. Defamation of Insurer (2604) - ✓✓✓It is any false or malicious communication, written or oral, that injures another's reputation, fame or character. Individuals and companies both can be defamed. Unethical agents practice defamation by spreading rumors or falsehoods about the character of a competing agent or the financial condition of another insurance company. Both of these actions are considered illegal. 142. Unfair Discrimination (2606-2608, 2612) - ✓✓✓Neither agents nor insurance companies are permitted to discriminate against perspective insureds. This means that a person cannot be given a different rate for coverage than another person in identical circumstances. They may not discriminate against a person solely because of an applicants' race, religion, occupation, where they live or their financial status. 143. Rebating (2324, 4224) - ✓✓✓Rebating occurs if the buyer of an insurance policy receives any part of the agent's commission or anything of significant value as an inducement to purchase a policy. State regulations are very strict in this respect and are designed to prohibit discrimination in favor of, or against, policyowners. In this state, the practice of rebating is illegal and the following are defined as illegal inducements: 31 [Date] 144. Offering, paying or allowing any rebate or other inducement not specified in the policy or any special favor or advantage concerning the dividends or other benefits that will accrue, in order to place, negotiate or renew the policy. 145. Offering, selling or purchasing anything of value not specified in the policy. 146. Offering, paying or allowing any rebate of any premium on any insurance policy or annuity contract. 147. Controlled Business (2103(i)) - ✓✓✓The Superintendent may refuse to issue, suspend, or revoke a license if an applicant receives more than 10% of the aggregate net commissions during a 12- month period from insurance sold to a licensee's spouse or other family members or business associates or their immediate family. 148. Sharing Commissions (2121, 2128) - ✓✓✓The sharing of commissions with an unlicensed person or entity is prohibited. 149. Fiduciary Responsibility - ✓✓✓When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else, usually financially. The person who has a fiduciary duty is called the fiduciary, and the person to whom the duty is owed is called the principal or the beneficiary. 32 [Date] 150. License display - ✓✓✓an insurance agent or broker must prominently display the license or licenses of the supervising person or persons responsible for that office. While the Insurance Law and regulations promulgated thereunder do not require other insurance agents or brokers in an office to display their licenses, the Department is of the view that it is a good practice for each licensee to do so. 151. Commissions and compensation - ✓✓✓A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as incentives to increase worker productivity. A commission may be paid in addition to a salary or instead of a salary. 152. Termination responsibilities of producer - ✓✓✓https://www.nysenate.gov/legislation/laws/ISC/2112 153. Aiding Unauthorized Insurer (2117) - ✓✓✓Acting for or aiding unlicensed or unauthorized insurers or health maintenance organizations. (a) No person, firm, association or corporation shall in this state act as agent for any insurer or health maintenance organization which is not licensed or authorized to do an insurance or health maintenance organization business in this state, in the doing of any insurance or health maintenance organization business in this state or in soliciting, negotiating or effectuating any insurance, health maintenance organization or annuity contract or shall in this state act as insurance broker in 35 [Date] disability benefits equal two-thirds of your average weekly wage, multiplied by the percentage of your disability. Cash benefits are subject to a weekly maximum established by the state each year. As of July 1, 2017, the maximum benefit is $870.61 per week. 162. These payments are usually paid every other week. The insurance carrier will continue to make these payments to you until your workers' compensation claim is closed or you are able to return to work, whichever occurs first. 163. If your doctor finds that your injury has caused a permanent impairment, you may also be entitled to a permanent disability award. When a work injury results in death, the worker's family members can receive weekly death benefits and reimbursement for funeral expenses. 164. Death Benefit (face amount/face value/coverage) - ✓✓✓The amount paid to beneficiaries when a policyholder dies. 165. Beneficiary - ✓✓✓The person(s) who receive the death benefit. They are selected by the policyholder. 166. Premium - ✓✓✓The regular payment made toward the insurance policy. These are typically monthly. 167. Cash value - ✓✓✓A tax-deferred savings account that are included in permanent life insurance policies. 36 [Date] 168. The cash value is basically an investment account inside of your straight life insurance policy. This account will grow according to a guaranteed rate over the course of the policy length. The rate of return will typically be large enough that when you turn 100 the cash value account will equal the value of the death benefit. At any point, you can use the cash value account for a variety of reasons, including: 169. Universal life insurance - ✓✓✓has a cash value, just like a whole life insurance policy. Your premiums go toward both the cash value and the death benefit. 170. But there's a twist: the policyholders of universal life policies can change the premium and death benefit amounts without getting a new policy. 171. Basically, although you have a minimum premium to keep the policy in force, you can use the cash value to pay the premium. That means if you have enough money in the cash value, you can use that to skip premium payments entirely, letting the accrued interest do the work. 172. the cash value of a universal life insurance policy has an interest rate that's sensitive to current market interest rates. If the interest rate being credited to your policy decreases to the minimum rate, your premium would have to increase to offset the reduced cash value. 173. You can also adjust the death benefit within limits outlined in your policy. Increasing it may subject you to further underwriting, while there may be fees to decrease it. 174. If your financial situation changes, the ability to change the death benefit amount within your policy is appealing. While this 37 [Date] can be done with term life insurance policies, this feature is one of the main selling points of a universal policy. 175. Variable Life Insurance - ✓✓✓similar to whole life insurance in that they both have a cash value, but the functions of the cash values are quite different. 176. With a whole life insurance policy, the cash value component is a savings account. That's why, although the growth might be small compared to other investment options, there is a guaranteed minimum rate. It also includes dividend payments from the life insurance company. 177. A variable life insurance cash value, though, is more akin to investing. The money paid into it goes into a series of mutual fund-like sub-accounts where you can get some decent growth, but you can also lose money depending on the market. The cash value is more or less placed in the stock market. 178. While this makes variable life insurance policies a better investment option than whole life insurance policies - the potential for higher, tax-deferred growth makes it a "super-IRA" - you can only invest in the sub-accounts available through your policy. That means you don't get to choose from the wide variety of mutual funds that are available on the open market. 179. As an investment vehicle, variable life insurance policies provide tax-free money to beneficiaries during the time that the policyholder is alive. Once that person dies, however, that money is retained by the insurance company. Like other types of life insurance, a variable policy can help cover funeral and end-of-life expenses. 40 [Date] with your death, whether its medical costs, a funeral, or cremation - whatever your literal final expenses are. It's usually only issued to people of a certain age and the policy is valid up to a certain age. 193. Like other permanent life insurance policies, there's a cash value that can grow over time. Final expense insurance is a simplified issue policy in most cases, but if you don't pass the health questionnaire you'll be placed in a guaranteed issue policy instead. 194. Final expense insurance is usually attractive to older people who don't have other life insurance coverage (maybe they outgrew their term life policy) and don't have enough savings to pay for their own funeral, which can cost upwards of $8,000.Coverage is usually for small amounts, from $5,000 to $25,000, to cover those expenses. It's good if you don't have another way to pay for your funeral and don't want to burden your family with the costs. 195. However, it has the same drawbacks as guaranteed issue life insurance: higher life insurance premiums for relatively low coverage amount. If you or your family are able to pay for a funeral through other means, that's your best bet. 196. Term Life Insurance - ✓✓✓Term life insurance lasts for a set number of years before it expires. If you die before the term is up, a set amount of money, known as the death benefit, is paid to your designated beneficiary. Term life is considered the simplest, most accessible insurance policy. When you make your payments (known as your premium), you're simply paying for the death benefit that goes to your beneficiaries in the event of your death. The death benefit can be paid out as a lump sum, a monthly 41 [Date] payment, or an annuity. Most people elect to receive their death benefit as a lump sum. 197. Term life insurance policies are more affordable than other types of life insurance policies, usually costing between $30-40 a month for a 30-year, $500,000 policy for healthy people in their 20s and 30s. They expire at the end of the term, which can last up to 30 years. 198. Level Term Life Insurance - ✓✓✓A term life policy guaranteed to have the premium remain the same for the duration of the contract. This is what most people refer to as term life. Purchased for a set number of years (5, 10, 30 years, for example), the premium and the death benefit remains the same (level) until the end of the term. Many of these policies can be converted to a permanent policy at the end of the term, or can be canceled at any time. 199. Annual renewable term life insurance - ✓✓✓Annual renewable life insurance works just like term life policies that have 10-, 20-, and 30-year terms. If you die while the term is active, your beneficiaries get a death benefit from the carrier. However, the term in an annual renewable term policy only lasts one year, after which it's renewed for another year, for a set number of years. 42 [Date] 200. Traditional term life insurance policies typically have a guaranteed level premium, meaning that your premium rates at the time of purchase are the same throughout the term of the policy. (Guaranteed level premium policies average out the cost over the life of the policy.) Your premiums will only go up if you let your policy lapse and try to purchase the same policy again. 201. Convertible term - ✓✓✓A convertible life insurance policy is simply a term life insurance policy that can convert to a permanent life insurance policy. Here's how it works: Let's say a 35-year-old man buys a 30-year convertible term life insurance policy. At age 45, he decides to convert that policy to a permanent life insurance policy. He will pay a substantially larger premium as a result but have coverage for the rest of his life. 202. Most convertible policies have a time limit to convert, usually 10 years. Often, when the conversion option is close to expiring, life insurance companies let policyholders know that time is running out to execute this option. 203. level-premium term insurance - ✓✓✓Level-Premium Insurance is a type of life insurance in which premiums stay the same price throughout the term, while the amount of coverage offered increases. 204. Premium payments often start at a higher level than policies with similar coverage but are ultimately worth more than competitors as policyholders experience increased coverage over time at no additional expense. 45 [Date] 215. Two popular single-premium policies are single-premium whole life and single-premium variable life. The two differ in how each policy accumulates a cash value. The first offers a risk-free fixed interest rate. The second invests the cash value in actively managed portfolios and comes with the risks and potential rewards of active investing. 216. Flexible Premium or Adjusted Life Insurance - ✓✓✓Adjustable life insurance is a term and whole life hybrid insurance plan that allows policyholders the option to adjust policy features. These policies allow policyholders the ability to adjust the period of protection, face amount, premiums, and length of the premium payment period. These policies also incorporate an interest-bearing savings component or cash value account. 217. Adjustable life insurance policies are attractive to those who want the protection and cash value benefits of permanent life insurance yet need or want some level of flexibility with policy features. Using the ability to modify premium payments and face amounts, policyholders may customize their coverage as their lives change. For example, a policyholder may want to increase the face amount upon getting married and having children. An unemployed person may want to reduce premiums to accommodate a restricted budget. 218. As with other permanent life insurance, adjustable life insurance has a savings component that earns cash value interest. 46 [Date] Today, most adjustable life insurance cash value accounts have a guaranteed rate of interest. 219. Universal Life Insurance - ✓✓✓permanent life insurance with an investment savings element and low premiums like term life insurance. Most universal life insurance policies contain a flexible premium option. However, some require a single premium (single lump-sum premium) or fixed premiums (scheduled fixed premiums). 220. Policyholders have the flexibility to adjust their premiums and death benefits. Universal life insurance premiums consist of two components: a cost of insurance (COI) amount, and a saving component, known as the cash value. 221. The cost of universal life insurance is the minimum amount of a premium payment required to keep the policy active. 222. can accumulate cash value, which earns interest based on the current market or minimum interest rate. 223. Policyholders may borrow against the accumulated cash value without tax implications. 224. Joint-Life (First to die) - ✓✓✓combines life insurance for you and your spouse into one joint policy. Both individuals are listed as insured parties on the policy. When the first person dies, the policy's death benefits will be paid out to the survivor. The policy 47 [Date] also terminates at that point, leaving the surviving spouse with no life insurance coverage. 225. Survivorship (Second-to-Die) Life Insurance - ✓✓✓Second- to-die insurance is a type of life insurance on two people (usually married) that provides benefits to the beneficiaries only after the last surviving person on the policy dies. This differs from regular life insurance in that the surviving partner doesn't receive any benefits after the spouse dies. Thus, second-to-die insurance is used for estate planning. 226. Life insurance on minors (3207(b)) - ✓✓✓A minor above the age of fourteen years and six months shall be deemed competent to enter into a contract for, be the owner of, and exercise all rights relating to, a policy of life insurance upon the life of the minor or upon the life of any person in whom the minor has an insurable interest, but the beneficiary of such policy may be only the minor or the parent, spouse, brother, sister, child or grandparent of the minor. 227. Fixed (equity) indexed life - ✓✓✓Equity-indexed universal life insurance is a type of permanent life insurance policy that ties its accumulation to a stock market index. 228. Unlike variable universal life insurance, which allows policyholders to invest a portion of the cash value into a range of funds and stocks with various risk profiles, equity-indexed 50 [Date] 236. Types of Group plan sponsors - ✓✓✓a designated party— usually a company or employer—that sets up a healthcare or retirement plan, such as a 401(k), for the benefit of the organization's employees. The responsibilities of the plan sponsor include determining membership parameters, investment choices, and in some cases, providing contribution payments in the form of cash and/or stock. 237. Some companies offer retirement savings plans, pension plans, or health plans to their employees as part of their employee benefits program. These companies are referred to as plan sponsors. Employers are typically plan sponsors, but unions and professional bodies could also be plan sponsors. 238. Credit life insurance - ✓✓✓type of life insurance policy designed to pay off a borrower's outstanding debts if the borrower dies. The face value of a credit life insurance policy decreases proportionately with the outstanding loan amount as the loan is paid off over time, until both reach zero value. 239. typically sold by banks at a mortgage closing; it could also be offered when you take out a car loan or a line of credit. The pitch is to protect your heirs if you die, since the policy will pay off the loan. If your spouse or someone else is a co-signer on your mortgage, credit life insurance would protect them from making loan payments after your death. This could be appealing if you are the primary breadwinner in your family, and the loan co-signer would be unable to make payments in the event of your death. 51 [Date] 240. But in most cases, any heirs who are not co-signers on your loans are not obligated to pay off your loans when you die; debts are not generally inherited. The exceptions are the few states that recognize community property, but even then only a spouse could be liable for your debts, not your children. When banks loan money, part of their accepted risk is that the borrower could die before the loan is repaid. As such, credit life insurance really protects the lender, not your heirs. In fact, the payout on a credit life insurance policy goes straight to the lender, not to your heirs. 241. Credit life insurance is a specialized type of life insurance policy intended to pay off specific outstanding debts in the case the borrower dies before the debt is fully repaid. 242. Such a policy may be required by certain lenders for specific purposes. 243. Credit life policies feature a term that corresponds with the loan maturity and decreasing death benefits that correspond with the reduced debt outstanding over time. 244. Credit life policies, due to their specific nature, often have less stringent underwriting requirements. 245. Qualified Retirement Plans - ✓✓✓A qualified retirement plan meets the requirements of Internal Revenue Code Section 401(a) of the Internal Revenue Service (IRS) and is therefore eligible to receive certain tax benefits, unlike a non-qualified plan. An employer establishes such a retirement plan on behalf of and 52 [Date] for the benefit of the company's employees. It is one tool that can help employers attract and retain good employees. 246. defined contribution plan - ✓✓✓retirement plan that's typically tax-deferred, like a 401(k) or a 403(b), in which employees contribute a fixed amount or a percentage of their paychecks to an account that is intended to fund their retirements. The sponsor company will, at times match a portion of employee contributions as an added benefit. These plans place restrictions that control when and how each employee can withdraw from these accounts without penalties. 247. Defined contribution (DC) retirement plans allow employees to invest pre-tax dollars in the capital markets where they can grow tax-deferred until retirement withdrawals. 248. 401(k) and 403(b) are two popular defined-contribution plans commonly used by companies and organizations to encourage their employees to save for retirement. 249. DC plans can be contrasted with defined benefit (DB) pensions, whereby retirement income is guaranteed by an employer. With a DC plan, there are no guarantees, and participation is both voluntary and self-directed. 250. Defined Benefit Plan - ✓✓✓employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history. The company administers portfolio management and investment risk of the plan. There are also restrictions on when 55 [Date] 262. Under a SEP, the employer may make a contribution of up to the lesser of 15% or $30,000 of compensation to IRAs established in each employee's name. Hence, such an arrangement is known as a SEP-IRA. When made, these contributions are owned in their entirety by the employee, and they may be withdrawn and/or transferred by the employee at any time. Contributions to a SEP by the employer are discretionary, but must be deposited into each eligible employee's IRA when made. Because these accounts are IRAs, the amounts therein are subject to all IRA rules regarding transfer, withdrawal and taxation. 263. Savings Incentive Match Plan for Employees (SIMPLE) - ✓✓✓Established by the Small Business Protection Act of 1996, a SIMPLE may be set up by employers who have no other retirement plan and who have 100 or fewer employees with at least $5,000 in compensation for the previous year. They may be structured as an IRA or as a 401(k) plan. Employees may defer any percentage of compensation up to $6,500 per year to the SIMPLE, and the employer is required to make a matching contribution of up to 3% of the employee's pay based on that election. The employer may reduce the maximum matching percentage in any two years out of five. Alternatively, the employer may establish a uniform 2% of salary contribution per year for all eligible employees regardless of whether they contribute to the SIMPLE or not. 264. 457 Plan - ✓✓✓Non-qualified, deferred compensation plan established by state and local governments for tax-exempt government agencies and tax exempt employees. 56 [Date] 265. While governmental 457 plans have special catch-up provisions for those age 50 or older, they enjoy an even greater contribution amount in the three years before retirement. The catch-up provisions three years prior to retirement will amount to double the normal amount for allowable maximum contributions. Until withdrawn, 457 plan contributions and all earnings remain untaxed. The 457 plan assets of tax-exempt employers are subject to the claims of the employer's creditors, but those of plans sponsored by governmental entities are not. Plan distributions may occur at retirement; on separation from employment; as the result of an unforeseeable emergency; and at death. Distributions may be taken as a lump sum, in annual installments, or as an annuity. In 2002 and later years, proceeds from a governmental 457 plan may be transferred to an IRA or a new employer's 401(k), 403(b) or 457 plan that accepts transfers from an old employer's plan. On withdrawal from an IRA or from the new plan, the distribution will be subject to immediate taxation at ordinary income tax rates. 266. ownership provision - ✓✓✓provision that states that a policy may be owned by a different person than the one insured. 267. assignment provision - ✓✓✓Transfer by the holder of a life insurance policy (the assignor) of the benefits or proceeds of the policy to a lender (the assignee), as a collateral for a loan. In the event of the death of the assignor, the assignee is paid first and 57 [Date] the balance (if any) is paid to the policy's beneficiary. Other types of insurance policies may not be used for this purpose. 268. Entire Contract Provision - ✓✓✓This is a provision in an insurance contract stating that the entire agreement between the insured and the insurer is contained in the contract, including the application if it is attached, declarations, insuring agreements, exclusions, conditions and endorsements. 269. Right to Examine ("Free Look") Provision - ✓✓✓The free look period for a life insurance contract is a trail period, typically 10 days. This period is for policy owners, and is mandated by most states in the United States. The free look period allows a policy owner to review their contract after it is delivered, without having to make an unchangeable financial commitment. If an owner wants to return the policy after reviewing the contract, he/she may do so for a full refund of all money given to the insurance company. 270. Payment of Premium provision - ✓✓✓a condition precedent to the payment of a Covered Loss that the Named Insured has remitted to us all Premium in accordance with the terms of this Policy. 271. Grace period - ✓✓✓A uniform mandatory provision that gives the insured a period of time, based on the payment mode, 60 [Date] many insurance policies, the insuring agreement is very broad. Insurers utilize exclusions to carve away coverage for risks they are unwilling to insure. 280. Catastrophic: Some risks are uninsurable because they are likely to affect a huge number of policyholders at once. An example is war. 281. Covered Elsewhere: Many risks are excluded under one type of policy because they are covered under another. For instance, auto liability claims are excluded under a general liability policy because they are covered by a commercial auto policy. 282. Easy To Control: Some risks are excluded because they are easily controlled by the policyholder. An example is damage to personal property in the open caused by rain, snow, ice or sleet. Such damage is excluded under most commercial property policies because it is easily prevented by the insured. 283. Not Accidental: Most insurance policies cover fortuitous events. Thus, they exclude losses the insured caused intentionally. For example, both general liability and commercial auto liability policies exclude bodily injury that an insured inflicts on a third party intentionally. 284. Maintenance Issues: Some risks are not practical to insure because they occur naturally. An example is wear and tear. Damage caused by wear and tear is excluded from both commercial property and auto physical damage coverage. Risks of this type can often be controlled through proper maintenance. Vehicle tires can be protected from wear and tear through proper rotation. 285. Illegal: Many policies exclude losses that result from violations of the law or criminal acts. For example, general liability 61 [Date] policies exclude bodily injury, property damage or personal and advertising injury that results from a violation of the Telephone Consumer Protection Act or CAN-SPAM Act. 286. Partially Insurable: Some risks are insurable within specific parameters. For instance, many liability policies exclude liability assumed under a contract. However, coverage is provided for liability assumed under a contract that qualifies as an insured contract (as defined in the policy). 287. Insurable for a Price: Some risks are insurable if you are willing to pay an additional premium. An example is a loss caused by theft committed by your employees. Such losses are routinely excluded under commercial property policies. However, you can insure such losses by purchasing employee theft coverage. 288. Proof of Death - ✓✓✓The transfer on death designation lets beneficiaries receive assets at the time of the person's death without going through probate. This designation also lets the account holder or security owner specify the percentage of assets each designated beneficiary 289. Beneficiary - ✓✓✓any person who gains an advantage and/or profits from something. In the financial world, a beneficiary typically refers to someone eligible to receive distributions from a trust, will, or life insurance policy. 290. Beneficiary Designation Options - ✓✓✓Primary beneficiaries are the account owner's first choice for a beneficiary. In the event of death, the first person who can claim the assets is 62 [Date] the primary beneficiary. Note that you can have multiple primary beneficiaries in some cases. For example, you could have three primary beneficiaries, all of which receive 33.3% of assets (assuming they are all still living at the time of your death). 291. Contingent beneficiaries are used as a backup. In the event that there are no living primary beneficiaries, the contingent beneficiary claims the asset. 292. Tertiary Beneficiary. 293. Finally, the beneficiary next in line (should you choose to name one), is the tertiary beneficiary. This person or entity will receive the life insurance policy proceeds in the event that both the primary and the secondary beneficiaries are unable to do so. 294. Classes (per stirpes/per capita) - ✓✓✓The estate planning terms "per stirpes distributions" and "per capita distributions" are commonly used in last wills and testaments and revocable living trusts. They describe how you want your property to be left to your beneficiaries. 295. Per stirpes indicates that if any of your beneficiaries aren't living at the time of your death, their share of the estate will pass to their descendants. Per capita distributions can only go to the named beneficiaries and in equal shares. 65 [Date] 306. Settlement options - ✓✓✓A settlement is the way in which your life insurance policy proceeds are paid out. 307. Fixed Period Option - ✓✓✓The fixed amount option, also known as the installment amount option, means your beneficiary will be paid a fixed amount for as long as the settlement proceeds last. Any remaining balance can be passed to a secondary beneficiary if the beneficiary dies before receiving all proceeds. 308. Good for: This option is good for beneficiaries who need to supplement their income. 309. Fixed Amount Option - ✓✓✓The fixed amount option, also known as the installment amount option, means your beneficiary will be paid a fixed amount for as long as the settlement proceeds last. Any remaining balance can be passed to a secondary beneficiary if the beneficiary dies before receiving all proceeds. 310. Good for: This option is good for beneficiaries who need to supplement their income. 311. Cash Payment Settlement Option - ✓✓✓type of option for which actual physical delivery of the underlying asset or security is not required. The settlement results in a cash payment, instead of settling in stocks, bonds, commodities or any other asset. This 66 [Date] type of option avoids the high costs of transport or transaction fees. 312. Interest Only Settlement Option - ✓✓✓the insurer holds the proceeds and pays interest to the beneficiary until such time as the beneficiary withdraws the principal. 313. Life Income Option - ✓✓✓The life income option means the beneficiary will receive payments for his or her entire lifetime. If the beneficiary chooses this settlement option, the insurance company will decide how much income the beneficiary will receive each year based on age and gender although the company may purchase an annuity instead. 314. Payouts stop when the beneficiary dies. If the beneficiary dies sooner than expected, the insurance company can keep the unpaid amount in most cases. This option tends to work best for people who want guaranteed payments for life but do not need a large sum of money at once. 315. To understand how the straight life income option works, imagine a policy with a $100,000 death benefit. A 55-year-old male beneficiary chooses the life income option and receives $6,250 for life, based on his age and gender. 67 [Date] 316. Joint and Survivor - ✓✓✓Joint and survivor annuities provide fixed, periodic payments for as long as either of two beneficiaries is alive with payment ending when the surviving beneficiary dies. 317. If a policy has a $100,000 death benefit, the beneficiary can choose the joint and survivor life income option for her life and her spouse's life. The couple will receive $5,600 per year until both die. If one spouse dies, the remaining spouse will still receive the $5,600 per year for life. 318. spendthrift clause life insurance - ✓✓✓The spendthrift clause protects life insurance proceeds from creditors. The beneficiary's creditors are prohibited from claiming any of the policy's benefits before the beneficiary is paid. 319. Payments are made to the beneficiary in lieu of receiving the policy proceeds in one lump sum. Policy proceeds are held in trust by the insurance company for the beneficiary's future payments. Policy distributions are not assignable or transferable and cannot be attached. 320. The spendthrift clause prevents the beneficiary from changing the way in which the policy proceeds have been designated for payout. For instance, if the policy state the beneficiary is to receive a certain amount payable over a 15-year 70 [Date] 329. As an example, if the policy owner paid a total of $20,000 in premiums into the policy, and they have a total of $25,000 in total cash value, then they can decide to withdraw $23,000 and only $3,000 of that amount will be taxable. If the policy owner withdraws less than what they have paid into the policy, then they will not be hit with taxes at all on the withdrawal. 330. It is important to note that a partial surrender or withdrawal of a life insurance policy will lower the cash value of that policy - and, even though it is not typically required that these funds be repaid, if the insured dies while there is still an unpaid cash value balance, then the amount of that unpaid balance will be charged against the death benefit that is paid out to the policy's beneficiary. 331. There may also be additional costs involved when taking a partial surrender or withdrawal, such as processing and / or administrative fees from the life insurance company. 332. Dividend options - ✓✓✓varying ways in which insureds may elect to receive dividends under a life insurance policy. Dividends may be received in the form of cash payments, as increases to the policy's cash value, or as paid-up additional insurance. 333. Cash payment Dividend Option - ✓✓✓The option to receive the dividend in cash is pretty self-explanatory. Each year the life insurer pays the policyholder the dividend in the form of a check. 71 [Date] The payment comes directly to the policyholder who can then use the cash for whatever purpose he or she sees fit. 334. Reduction of premium payments Dividend Option - ✓✓✓Choosing to reduce or pay the premium with the dividend means the policyholder chooses to pay a part or all of the premium due with the dividend. If the dividend payment is less than the total premium due, the policyholder will need to pay the rest of the premium either with money out of pocket or with cash values from the whole life policy. It's much more common for the policyholder to pay with out-of-pocket money. 335. Once the dividend payment equals or exceeds the premium due amount, the dividend can pay the entire premium due and the policyholder does not need to make any payment to the policy with any out-of-pocket money. It's fairly common to see older whole life policies using this option as the policyholder can keep his/her death benefit in force without having to pay the premium on the life insurance policy. 336. Paid-up Additions Dividend Option - ✓✓✓instructs the insurance company to take the annual dividend and purchase paid-up additions with it. Paid-up additions are mini whole life insurance policies that attach to a main whole life policy. They earn dividends themselves and have immediate cash value. 72 [Date] 337. This dividend option will ensure the most bang for the buck in terms of premiums generating cash surrender value. Put another way, if you seek to maximize return on premiums (i.e. the internal rate of return of a whole life policy) then the option to purchase paid-up additions is the dividend option you seek. 338. This dividend option is also how whole life policies accumulate non-guaranteed cash value. The non-guaranteed cash value of a whole life policy is simply the cash value created through paid-up additions. 339. Some life insurers refer to this as building "dividend additions" and will even make reference to surrendering dividend additions if the policyholder chooses to withdraw money from the policy at some point. If this is the case, understand that the terminology means the same thing. 340. Accumulation at interest Dividend Option - ✓✓✓The dividend option to accumulate at interest means the insurance company places the dividend payment in an interesting bearing account and adds interest to the account each year. The insurer sets the interest rate on these accounts annually and usually, announces it with other information regarding interest rates such as loan rates, universal life interest rates, and annuity rates. 341. The rate can change annually, but most insurers establish a minimum guaranteed rate on these accounts. 75 [Date] from a terminal illness, have a long term high-cost illness, require permanent nursing home confinement or have a medically incapacitating condition. Some insurance companies differ on how much cash can be pulled out and how close to death the insured has to be in order to receive these benefits. Insurers offer anywhere from 25 to 100 percent of the death benefit as an early payment. Accelerated benefits are also referred to as living benefits. 351. Accelerated benefit riders are essentially the modern equivalent of the viatical settlements that terminally ill policyholders used in previous decades to raise cash to pay their medical bills. 352. Spouse/other-insured term rider - ✓✓✓Provides level term coverage on the life of the insurers spouse. Such rider will also provide a conversion provision permitting the spouse to convert to permanent coverage without evidence of insurability prior to the termination of the rider or upon the death of the insured under the basic policy. 353. Children's term rider - ✓✓✓allows you to add term life insurance coverage on all children - natural, adopted and stepchildren. You may find this to be an affordable way to extend the benefits of your policy to your children. Coverage is typically available for children 15 days of age to 18-25 years of age, depending on carrier. 76 [Date] 354. Some of these common riders and endorsements come standard and may be automatically included with your policy at no additional charge, while others require you to pay an additional premium. There are also specific riders that can only be added at the time the contract is written and can't be endorsed onto the policy once it has been issued. Because life insurance products and companies differ, not all riders and endorsements presented here are offered under every life insurance policy contract or offered by every insurer. 355. Family term rider - ✓✓✓an addition to a life insurance policy that provides the beneficiary with an amount of money equal to the policyholder's monthly income if the policyholder dies. A family income rider is a type of death benefit, and it specifies the term for the additional coverage. It eventually expires if not activated. 356. In some cases, the beneficiary of a family income rider may choose a lump sum rather than receiving monthly payments. 357. Accidental Death Benefit Rider - ✓✓✓This type of rider provides an additional benefit if you die or suffer a combination of loss of limbs, sight, and hearing as a result of accidental bodily injury. When you purchase this additional coverage, the insurance company provides a schedule that assigns a benefit amount to each specific type of injury. 77 [Date] 358. Guaranteed Insurability Rider (GI Rider) - ✓✓✓allows the owner of a life insurance policy to buy additional life insurance with no underwriting. 359. The guaranteed insurability rider is usually available at a small additional charge. 360. The guaranteed insurability rider gives the owner of a life insurance contract the opportunity to add death benefit coverage to the policy at certain points in the insured person's life. The amount that can be added is limited to an amount such as the face value, or a given amount such as $10,000. The owner does not need to add coverage at the option date, and they may have the option to add less than the full available amount. 361. Usually the option to add death benefit coverage through the GI rider occurs at certain pre-determined ages (which may vary by company) throughout the insureds life, but may also occur during special life events such as marriage or the birth of a child. Usually there is a cap to the amount of total coverage that can be added, or a cap to the amount of qualifying events to increase coverage. 362. Cost-of-living adjustment (COLA) - ✓✓✓A cost-of-living rider protects the purchasing power of your disability benefits against the effects of inflation. After you have received benefits for a year, this rider automatically increases the amount of your benefits to 80 [Date] 370. The listing manual, which has been updated for 2020, includes: 371. musculoskeletal problems, such as back injuries 372. cardiovascular conditions, such as heart failure or coronary artery disease 373. senses and speech issues, such as vision and hearing loss 374. respiratory illnesses, such as COPD or asthma 375. neurological disorders, such as MS, cerebral palsy, Parkinson's disease, or epilepsy 376. mental disorders, such as depression, anxiety, autism, or intellectual disorder 377. immune system disorders, such as HIV/AIDS, lupus, and rheumatoid arthritis 378. various syndromes, such as Sjogren's Syndrome and Marfan Syndrome 379. skin disorders, such as dermatitis 380. digestive tract problems, such as liver disease or IBD 381. kidney disease and genitourinary problems 382. cancer, and 383. hematological disorders, such as hemolytic anemias and disorders of bone marrow failure 384. Definition of disability - the law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. 81 [Date] 385. Waiting period - Five Months 386. Disability income benefits - Federal benefits include a monthly cash payment and medical care. If you are disabled due to an accident or injury and are under age 65, you may already know that Social Security Disability (SSDI) benefits are available to help you financially until you can return to work, or in the event that you may never return 387. In addition to any assistance received in a worker's compensation claim or personal injury suit, SSDI may be available as a financial aid to help you pay your bills, visit the doctor, fill prescriptions, and provide for your family. 388. New York State Disability Benefits Law - ✓✓✓Purpose - creates a state disability insurance program designed to provide employees with some level of income replacement in case of disability caused off-the-job. 389. Definitions - provides temporary cash benefits to an eligible wage earner when he or she is disabled by an illness or injury that occurs off the clock, or becomes disabled due to pregnancy. As a NY-based employer, you are required to provide disability benefits to all eligible employees. 82 [Date] 390. Employment covered - An employer who has had in New York State employment one or more employees on each of at least 30 days in any calendar year shall be a "covered employer" subject to the Disability Benefits Law after the expiration of four weeks following the 30th day of such employment. These 30 days of employment need not be consecutive days but must be work days of employment in one calendar year. In addition to the above- stated provisions, employers of personal or domestic employees in a private home are subject if they employ at least one employee who works 40 or more hours per week for that one employer. An employer who by operation of law becomes successor to a covered employer, or who acquires by purchase or otherwise the trade or business of a covered employer, immediately becomes a covered employer. 391. Benefits - will pay 50% of your average wages (calculated over the prior eight weeks) up to a maximum of $170 per week. Benefits will begin on your eight consecutive day out of work; the first seven days is an unpaid waiting period. You can receive benefits for a maximum of 26 weeks in a 52-week period. 392. Medicaid - ✓✓✓a federal and state program that helps with medical costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. 85 [Date] 418. Medicare Part A (Hospital Insurance) - ✓✓✓Individual eligibility requirements - Most people are automatically eligible for Medicare Part A at age 65 if they're already collecting retirement benefits from the Social Security Administration or the Railroad Retirement Board. You may qualify for Medicare Part A before 65 if you have a disability, end-stage renal disease (ESRD), or amyotrophic lateral sclerosis (ALS). You must be either a United States citizen or a legal permanent resident of at least five continuous years. 419. Coverages and cost-sharing amounts - Medicare Part A covers Medicare inpatient care, including care received while in a hospital, a skilled nursing facility, and, in limited circumstances, at home. 420. Hospital care (inpatient) 421. Limited home health services 422. Skilled nursing facility care, provided that custodial care isn't the only care required 423. Hospice care 424. Medicare Part A also does not cover the cost of blood. 425. Medicare Part B (Medical Insurance) - ✓✓✓Medicare Part B (medical insurance) is part of Original Medicare and covers medical services and supplies that are medically necessary to treat 86 [Date] your health condition. This can include outpatient care, preventive services, ambulance services, and durable medical equipment. It also covers part-time or intermittent home health and rehabilitative services, such as physical therapy, if they are ordered by a doctor to treat your condition. 426. Individual eligibility requirements - Anyone who is eligible for premium-free Medicare Part A is eligible for Medicare Part B by enrolling and paying a monthly premium. 427. If you are not eligible for premium-free Medicare Part A, you can qualify for Medicare Part B by meeting the following requirements: 428. You must be 65 years or older. 429. You must be a U.S. citizen, or a permanent resident lawfully residing in the U.S for at least five continuous years. 430. You may also qualify for automatic Medicare Part B enrollment through disability. If you are under 65 and receiving Social Security or Railroad Retirement Board (RRB) disability benefits, you will automatically be enrolled in Medicare Part A and Part B after 24 months of disability benefits. You may also be eligible for Medicare Part B enrollment before 65 if you have end- stage renal disease (ESRD) or amyotrophic lateral sclerosis (also known as ALS, or Lou Gehrig's disease). 87 [Date] 431. Enrollment - If you do not enroll during your initial enrollment period and do not qualify for a special enrollment period, you can also sign up during the annual General Enrollment Period, which runs from January 1 to March 31, with coverage starting July 1. You may have to pay a late enrollment penalty for not signing up when you were first eligible. 432. Some people may get Medicare Part A "premium-free," but most people have to pay a monthly premium for Medicare Part B. Because Medicare Part B comes with a monthly premium, some people may choose not to sign up during their initial enrollment period if they are currently covered under an employer group plan (either their own or through their spouse's employer). 433. Coverage's and cost-sharing amounts - outpatient care, preventive services, ambulance services, and durable medical equipment. It also covers part-time or intermittent home health and rehabilitative services, such as physical therapy, if they are ordered by a doctor to treat your condition. 434. Medicare Part C (Medicare Advantage) - ✓✓✓A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare. 90 [Date] 442. Contribution limits -$2,650 per year per employer. If you're married, your spouse can put up to $2,650 in an FSA with their employer too. 443. Health Savings Accounts (HSAs) - ✓✓✓Definition - A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums 444. Eligibility - You must be covered under a qualifying high- deductible health plan (HDHP) on the first day of the month. You have no other health coverage except what is permitted by the IRS. You are not enrolled in Medicare, TRICARE or TRICARE for Life. You can't be claimed as a dependent on someone else's tax return. 445. Contribution limits - For 2019, the maximum contribution amounts are $3,500 for individuals and $7,000 for family coverage. If you're 55 or older, you can add up to $1,000 more as a "catch-up" contribution. 446. Healthy New York - ✓✓✓program designed to make reduced-cost, comprehensive health insurance available to working uninsured individuals, sole proprietors, and small 91 [Date] employers with no more than 50 eligible employees that do not provide health insurance to their employees. 447. Annuity - ✓✓✓An annuity is an interest-bearing financial contract that combines the tax-deferred savings and investment properties of retirement accounts with the guaranteed-income aspects of insurance. 448. "Annuities are sometimes described as the flip side of life insurance," stated Stephen Blakely in Nation's Business . "Whereas life insurance is designed to provide financial protection against dying too soon, annuities provide a hedge against outliving your retirement savings. While life insurance is designed to create principal, an annuity is designed ultimately to liquidate principal that has been created, typically in regular payments over a number of years." 449. Some annuities stop payments when the owner dies, while others will continue to pay a spouse or other beneficiary. 450. Annuity (Accumulation period versus annuity period) - ✓✓✓(pay in period) is the period of time over which the owner makes payments into an annuity. Furthermore it is the period of time during which the payments earn interest on a tax deferred basis 92 [Date] 451. (annuitization period, liquidation period or payout period), is the time during which the sum that has been accumulated during the accumulation period is converted into a stream of income payments to the annuitant 452. Annuity income period is based upon the following - 453. amount of premium paid 454. cash value frequency of the payment 455. interest rate 456. annuitants age 457. gender 458. Immediate Annuities - ✓✓✓is purchased with a single, lump sum payment and provides income payments that start within one year from the date of purchase. first payment typically one month from start date 459. Single premium immediate annuities (SPIAs) - ✓✓✓A single premium immediate annuity, or SPIA, is a contract in which you pay an insurance company a lump sum, or a premium, in exchange for guaranteed, periodic payments for life. A SPIA can begin paying out income almost immediately after you purchase it. People purchase SPIAs to fund retirement. 460. Deferred annuities - ✓✓✓an insurance contract designed for long-term savings. Unlike an immediate annuity, which starts annual or monthly payments almost immediately, investors can 95 [Date] annuities. When the annuity has been annuitized, this specific option guarantees that the annuitant will receive a minimum value of payments on a regular basis, regardless of other circumstances. 470. A guaranteed minimum income benefit (GMIB) is an optional rider attached to an annuity contract that guarantees a minimum level of payments once it has annuitized. 471. GMIBs are often found with variable annuities, which contain some level of market risk. 472. While handy, these riders will come at an additional cost to the annuity buyer. 473. single life annuity - ✓✓✓An annuity or pension that pays out to only one person is known as a single-life payout. Single-life payout is one of two payout options an employer uses to distribute retirement benefits. At retirement, a retiree has the choice of either a single-life payout or a joint-life payout. A single- life payout means only the employee will receive the payments for the rest of his/her life, but the payments stop upon his/her death. 474. A single-life payout is an annuity or pension option that means that payments will stop when the annuitant dies. 475. In a joint-life payout, payments continue after death to the annuitant's spouse. 96 [Date] 476. Single-life payouts are generally larger on a per month basis since the payments stop upon the death of the annuitant. 477. Annuities certain (types) - ✓✓✓There are five major categories of annuities — fixed annuities, variable annuities, fixed- indexed annuities, immediate annuities and deferred annuities. 478. Fixed annuities - ✓✓✓These are fixed interest investments issued by insurance companies. They pay guaranteed rates of interest, typically higher than bank CDs, and you can defer income or draw income immediately. These are popular among retirees and pre-retirees who want a no-cost, modest and guaranteed fixed investment. 479. General account assets - ✓✓✓The general account is where an insurer deposits premiums from policies it underwrites and from which it funds day-to-day operations of the business. The general account does not dedicate collateral to a specific policy and instead treats all funds in aggregate. 480. The general account is where insurance companies place their collected premiums. 481. The account is treated as an investable asset and is allocated accordingly. 482. General accounts invest in less risky ventures in case they need to make a large payout to their policyholders, as was the case with the Fukushima disaster or during large wildfires. 97 [Date] 483. Variable Annuities - ✓✓✓A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of mutual funds. Variable annuities differ from fixed annuities, which provide a specific and guaranteed return. 484. The value of a variable annuity is based on the performance of an underlying portfolio of mutual funds selected by the annuity owner. 485. Fixed annuities, on the other hand, provide a guaranteed return. 486. Variable annuities offer the possibility of higher returns and greater income than fixed annuities, but there's also a risk that the account will fall in value. 487. Level benefit payment amount - ✓✓✓A level death benefit is a payout from a life insurance policy that is the same whenever the insured person dies, whether shortly after purchasing the policy or many years later. Compared to a policy that provides an increasing death benefit, one that provides a level death benefit will be less expensive (that is, the premiums will be lower for the same amount of initial benefit). However, inflation will diminish the value of the level death benefit over time. 488. Fixed (equity) indexed annuities - ✓✓✓These are essentially fixed annuities with a variable rate of interest that is added to your contract value if an underlying market index, such as the S&