FL 2-15 · Reference
Glossary
Every key concept, A–Z. Open one for its definition, the plain-English version, and the exam traps.
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"Indemnity" — Two Meanings in Health InsuranceMasteredCh 13 · OverviewFor medical and dental insurance, an "indemnity plan" is a traditional contract that reimburses the policyholder for covered expenses. For disability,…$
$255 Lump-Sum Death BenefitMasteredCh 12 · Disability & SurvivorsA one-time $255 payment made only to a surviving spouse living with the deceased at death, or a spouse/child eligible for monthly benefits on the work…1
10 Essential Health Benefits (EHBs)MasteredCh 15 · StatutesMust be covered with NO lifetime or annual caps: ambulatory (outpatient) services · emergency services · hospitalization · maternity & newborn care · …1035 Exchanges & AnnuitiesMasteredCh 9 · Annuity TaxationTax-free exchanges under IRC §1035: annuity → annuity ✓, life insurance → annuity ✓, but annuity → life insurance ✗ (NEVER tax-free). The owner must r…14-Day Reply to DFS (Consumer Complaints)MasteredCh 20 · Agent ResponsibilitiesAnyone licensed or holding a certificate of authority must respond in writing or electronically within fourteen (14) days of receiving a written reque…4
401(k) Plan (CODA)MasteredCh 11 · Salary Reduction PlansA cash or deferred arrangement: employees choose to take income as cash OR defer part of it pre-tax into the plan (participation can't be forced). Def…9
90 Days + 60 Lifetime Reserve DaysMasteredCh 17 · Parts A & BEach benefit period covers up to 90 hospital days (deductible, then days 1–60 free; days 61–90 carry a daily coinsurance = 25% of the deductible). Bey…A
Absolute AssignmentMasteredCh 5 · Standard ProvisionsA complete, permanent transfer of ALL ownership rights to the assignee. Generally cannot be reversed.ACA Metal Tiers (Actuarial Value)MasteredCh 15 · StatutesExchange plans by projected share of costs covered: Bronze 60% (60/40) · Silver 70% (70/30) · Gold 80% (80/20) · Platinum 90% (90/10). Actuarial value…Accelerated Death Benefit (Living Benefit)MasteredCh 5 · RidersLets a terminally ill insured — certified by a physician as expected to die within 24 months or less — collect part of the death benefit while living,…Accident vs OccurrenceMasteredCh 2 · Perils, Losses & HazardsAccident: an unforeseen, unintended, SUDDEN event at a specific time and place. Occurrence: ANY event causing loss — including accidents AND losses fr…Accidental Bodily Injury (Accidental Results)MasteredCh 13 · Covered PerilsThe less restrictive definition of an accident: only the resulting injury must be unexpected and unintended — the act that caused it may have been del…Accidental Death & Dismemberment (AD&D) PolicyMasteredCh 13 · Limited Policies — Accident OnlyPays a lump-sum benefit if an accident results in death or dismemberment. The accident must be the SOLE cause of the loss, and death benefits typicall…Accidental Death Benefit (Double Indemnity)MasteredCh 5 · RidersPays a multiple of the face (2× = double indemnity) if death is accidental; the insured usually must die within 90 days of the accident.Accidental MeansMasteredCh 13 · Covered PerilsThe more restrictive definition of an accident: BOTH the cause AND the result must be unforeseen, unexpected, and unintended for a benefit to be paid.Accumulation Period (Pay-In Phase)MasteredCh 9 · Purpose & PhasesThe phase when premiums are paid in and grow with tax-deferred interest. The contract owner holds all rights. It ends when the owner dies, the payout …Accumulation UnitsMasteredCh 9 · Fixed, Variable & IndexedWhat variable annuity contributions (minus expenses) purchase during the pay-in phase. Their value fluctuates with the separate account's performance.ActuaryMasteredCh 1 · Industry BasicsThe professional who calculates policy rates, reserves, and dividends using mortality and morbidity tables and other statistical studies.AD&D — Principal vs Capital SumMasteredCh 5 · RidersPrincipal sum = full accidental-death benefit. Capital sum = dismemberment benefit, usually half the principal sum. Presumptive losses (sight/hearing)…AD&D: Principal & Capital SumsMasteredCh 16 · RidersAccidental Death & Dismemberment pays for catastrophic accidents: death → the PRINCIPAL sum (the face amount) · dismemberment → the CAPITAL sum (typic…Adjustable LifeMasteredCh 4 · Universal & VariableWhole life with an adjustable death benefit and cash value. Prospective (future) changes only.Adverse SelectionMasteredCh 2 · The Nature of InsuranceSelection AGAINST the insurance company: higher-risk individuals are more likely to seek or keep coverage than lower-risk individuals — often because …Advertising & Sales Rules (F.S. 626.9531)MasteredCh 21 · AdvertisingAll advertisements used by agents, producers, brokers, or an insurer's solicitors must be approved by the insurer — prior written approval, or prior o…Advertising Rules (Approval & Identification)MasteredCh 20 · Marketing RulesAn agent may use advertising pertaining to an insurer's business ONLY with the insurer's approval — prior written approval, or prior oral approval wit…Affordable Care Act (ACA/PPACA)MasteredCh 15 · StatutesSet federal minimum standards for major medical: guaranteed issue (no denial or higher premiums for pre-existing conditions), no lifetime/annual caps …Age & Sex in Health RatingMasteredCh 19 · Risk FactorsGenerally, the older the applicant, the higher the premium. Sex also affects rates: men show a LOWER rate of disability than women (except at the uppe…AgentMasteredCh 1 · Industry BasicsAuthorized to solicit, sell, and transact insurance for specific insurers under contract. Represents the insurer and can bind coverage.Agent (Florida Definition)MasteredCh 20 · LicensingA licensed general lines agent, life agent, health agent, or title agent — an individual authorized by an insurer to be its representative and perform…Agent Not Liable for Insurer InsolvencyMasteredCh 20 · Marketing RulesA licensed and appointed agent who sells a policy cannot be held liable to the insured — and no cause of action arises against them — when the insurer…Agent Record KeepingMasteredCh 20 · License MaintenanceEvery agent must keep (in-office or readily accessible electronically/photographically) records of policies transacted — daily reports, applications, …Agent's Report (Part III)MasteredCh 7 · The ApplicationA CONFIDENTIAL communication between the agent and the insurer giving the agent's personal observations: the applicant's financial condition and chara…Aleatory ContractMasteredCh 3 · Contract CharacteristicsUnequal exchange — one party may receive more or less value than they paid, depending on an uncertain event.AnnuitantMasteredCh 9 · PartiesThe person who receives the income when the contract is annuitized — and the person whose life expectancy the benefit payments are based on (not the o…AnnuitizationMasteredCh 9 · Purpose & PhasesExchanging the accumulation fund for a guaranteed income stream. Once annuitized, the decision is IRREVOCABLE — the contract can no longer be surrende…AnnuityMasteredCh 9 · Purpose & PhasesA contract — sold only by life insurance companies — that provides a steady income stream and protects against outliving one's assets. Life insurance …Annuity (Annuitization) Period — Payout PhaseMasteredCh 9 · Purpose & PhasesBegins when the owner elects to start income. The insurer takes ownership of the accumulation fund and the annuitant owns the promised income stream. …Annuity (Period) CertainMasteredCh 9 · Payout OptionsIncome for a fixed period only — NOT for life. Payments stop at the end of the period even if the annuitant is alive; if the annuitant dies early, the…Annuity Agent Training (4-Hour)MasteredCh 21 · Agent TrainingAn agent cannot solicit annuity sales without proper training and sufficient product knowledge. As of January 1, 2024, agents selling annuities must c…Annuity BeneficiaryMasteredCh 9 · PartiesReceives any funds remaining at death — e.g., contributions plus interest if the owner dies during the accumulation period. If no beneficiary is named…Annuity Contract OwnerMasteredCh 9 · PartiesThe person who buys and pays for the annuity. Controls the contract: decides when to annuitize, names/changes the beneficiary, takes cash distribution…Annuity Non-Forfeiture ValueMasteredCh 9 · Charges & Living BenefitsBefore annuitization: all premiums paid + interest − withdrawals − surrender charges. If the annuitant dies before the annuity period starts, the bene…Annuity Suitability & Best InterestMasteredCh 9 · Uses & SuitabilityFlorida applies its annuity standard to every annuity sale or recommendation, not just to seniors: the agent must act in the best interest of the cons…Annuity UnitsMasteredCh 9 · Fixed, Variable & IndexedAt annuitization, accumulation units are converted into annuity units — the measure used to compute each payment. The NUMBER of units per payment is f…Anti-Fraud Reward ProgramMasteredCh 20 · EnforcementThe DFS may pay rewards of up to $25,000 to persons providing information leading to the arrest of persons committing insurance-fraud crimes under Flo…Any Occupation DefinitionMasteredCh 16 · Defining DisabilityTotally disabled only if unable to perform your own occupation OR any occupation for which you are reasonably suited by education, training, or experi…Apparent AuthorityMasteredCh 3 · Agency & AuthorityThe appearance of authority created by the principal's actions (company email, portal, business cards).Application in Policy / Representations (Group)MasteredCh 21 · Group ProvisionsA Florida group life policy must provide that a copy of the application is attached to the policy when issued. All statements by the policyholder or i…Application Responsibilities and Marketing Methods (FL)MasteredCh 22 · Agent DutiesThe agent-customer relationship is a fiduciary duty — trust and good faith, acting in the customer's best interest. The agent must ask ALL application…Application SignaturesMasteredCh 7 · The ApplicationMinimum two: the applicant and the producer. Third-party ownership (applicant ≠ insured) adds the proposed insured's signature — three total. The bene…Application Statements = RepresentationsMasteredCh 7 · The ApplicationAn applicant's answers are representations — true to the best of their knowledge — NOT warranties (guaranteed true in every detail). A material misrep…Appointment (Florida)MasteredCh 20 · AppointmentsThe authority given by an insurer or employer to a licensee (the appointee) to transact insurance or adjust claims on its behalf. Insurers notify the …Appointment FeesMasteredCh 20 · AppointmentsPaid by the insurer, in advance, to the Department: a life, health, property, or casualty agent's (or customer representative's) original appointment …Approval-Type Conditional ReceiptMasteredCh 19 · Premium ReceiptsA far more restrictive conditional receipt: coverage is in force only after the insurer APPROVES the application — providing protection only between t…Archer MSA & Medicare MSAMasteredCh 15 · Tax-Advantaged AccountsArcher MSA: the HSA's pilot-program ancestor for small employers (≤50 employees) and the self-employed — grandfathered since 2008, contributions limit…ART / YRT (Annually Renewable Term)MasteredCh 4 · Term LifeOne-year coverage, renewable each year without evidence of insurability; premium climbs annually. The most basic form of life insurance.Assessment Mutual (Pure & Advance Premium)MasteredCh 1 · Company TypesPure assessment: no premium in advance — members are assessed their share of losses after they occur. Advance premium assessment: premium paid up fron…Assessments Against Member Insurers (L&H)MasteredCh 20 · Guaranty FundsThe Association's funds come from assessments of member insurers by insurance account. The annual assessment on a member may not exceed 1% of the insu…Assignment of Proceeds — Group (F.S. 627.552–.571)MasteredCh 21 · Group LifePersons insured under a Florida group life policy may assign all or part of their ownership (F.S. 627.552–.571) — including the privilege of having an…Assignment ProvisionMasteredCh 5 · Standard ProvisionsThe owner may transfer policy rights to another (assignor → assignee). The insurer's permission is NOT needed, but written notice is required. Insurab…Assignment, MSN & AppealsMasteredCh 17 · Parts A & BParticipating providers accept assignment: Medicare's approved fee is full payment, paid directly — balance billing prohibited. Nonparticipating provi…Association and Labor Union Groups (FL)MasteredCh 22 · Group HealthA policy may be issued to an association (including a labor union) only if it: has a constitution and bylaws; has at least twenty-five (25) individual…Attained AgeMasteredCh 4 · Key ConceptsThe insured's current age as of a given date. Renewals and most conversions are priced at attained age → higher premium.Attending Physician's Statement (APS)MasteredCh 7 · Underwriting Info SourcesA detailed report from the applicant's OWN treating doctor about a specific medical condition raised by the application. Requires the applicant's sign…Authorized/Admitted vs Unauthorized/NonadmittedMasteredCh 20 · DefinitionsClassification by permission to transact insurance in Florida. An authorized (admitted) insurer is duly authorized by a subsisting certificate of auth…Autism Spectrum Disorder and Down Syndrome CoverageMasteredCh 22 · Required CoveragesSubject to certain dollar limits, Florida health insurance plans and HMO contracts must cover treatment of autism spectrum disorder and Down syndrome …Automatic Premium Loan (APL)MasteredCh 5 · Cash ValueAnti-lapse provision: if a premium is missed and the grace period ends, the insurer automatically loans the premium from the cash value. In Florida, i…Avocations (Hobbies)MasteredCh 19 · Risk FactorsAn applicant's hobbies and personal activities — another name for hobbies is avocations. High-risk avocations (skydiving, bungee jumping, racing, hang…B
Backdating (Saving Age)MasteredCh 7 · Policy Issue & DeliveryMaking the policy effective at an earlier date so premiums are based on a younger age — a lifetime of lower premiums. Conditions: the insurer must all…Basic Hospital Expense InsuranceMasteredCh 15 · Basic PlansCovers room & board plus miscellaneous hospital expenses (lab, X-ray, inpatient medicines, ICU, operating room, supplies) — usually on an indemnity ba…Basic Medical Expense InsuranceMasteredCh 15 · Basic PlansFirst-dollar coverage (no deductible) with modest limits for a specific list of services — not listed, not covered. Three main forms: basic hospital, …Basic Physician (Medical) Expense InsuranceMasteredCh 15 · Basic PlansCovers a physician's NON-surgical services — office visits, hospital visits, house calls — typically a fixed amount per visit. Usually packaged with h…Basic Surgical Expense InsuranceMasteredCh 15 · Basic PlansPays surgeons' fees (in OR out of hospital) plus anesthesiologist costs. Benefit approaches: surgical schedule (flat dollar amount per procedure) · re…BeneficiaryMasteredCh 6 · BeneficiariesThe person or entity designated to receive the death proceeds. The policy owner names and changes beneficiaries. Acceptable types: individuals, minors…Benefit Period & Benefit AmountsMasteredCh 16 · Policy StructureBenefit period = max time paid per claim (2/5/10 years or to 65; longer = pricier; insurers shorten it for substandard/hazardous risks instead of rati…Benefit ScheduleMasteredCh 8 · Group BasicsHow the employer sets each employee's coverage amount: a flat amount (e.g., $50,000 for everyone), a multiple of earnings/salary, or by employment pos…Binding (Unconditional) ReceiptMasteredCh 7 · Receipts & Effective DateCoverage begins immediately upon premium payment and is GUARANTEED until the insurer formally rejects the application — even if the applicant turns ou…Blanket Health InsuranceMasteredCh 13 · Limited Policies — CircumstancesCovers group or association members exposed to the SAME risks at DIFFERENT times — the circumstances stay constant while the group's composition conti…Blanket Health Insurance (F.S. 627.659–.660)MasteredCh 22 · Group HealthHealth insurance covering special groups whose membership changes, issued to entities such as: common carriers (covering passengers); employers (emplo…Blanket Life InsuranceMasteredCh 8 · Other Group FormsCovers a changing group exposed to the same hazard — airline passengers, students at a school. No individuals are named and no certificates are issued…Blue Cross & Blue Shield (Service Providers)MasteredCh 14 · Traditional PlansOrganized as service providers, not indemnity insurers: they pay participating providers directly at contracted rates instead of reimbursing the insur…BrokerMasteredCh 1 · Industry BasicsRepresents the insured (client), NOT the insurer — and cannot bind coverage.Bureau of Unclaimed PropertyMasteredCh 20 · Financial Services RegulationOverseen by the CFO, the Bureau holds unclaimed property accounts valued at more than $2 billion — mostly dormant accounts at financial institutions, …Business Overhead Expense (BOE) InsuranceMasteredCh 16 · Business & Special UsesReimburses a small business for actual overhead expenses — rent, utilities, employee wages, leased equipment, a temporary replacement — while the owne…Buy-Sell AgreementMasteredCh 10 · Business ContinuationA legal business continuation agreement providing (1) an orderly transfer of the business and (2) money paid to the deceased's survivors at a prearran…Buyer's GuideMasteredCh 7 · Agent Duties & DisclosuresA GENERIC compliance publication explaining life insurance types (whole, term, universal) in plain language for the average consumer. It addresses gen…Buyer's Guide (Florida Life)MasteredCh 21 · DisclosureAn informational and educational tool for consumers buying life insurance: general information on the features, benefits, and types of life products, …C
Cancelable PolicyMasteredCh 18 · RenewabilityThe least favorable class (and cheapest premium): either party may terminate, and the insurer may cancel AT ANY TIME with written notice and a refund …Cancellation ProvisionMasteredCh 18 · Optional ProvisionsOptional provision — prohibited by most states — appearing in cancelable contracts: the insurer may terminate the policy at any time with 5 days' writ…Capital Needs Analysis (Retention vs Liquidation)MasteredCh 10 · Amount of CoverageA needs-approach method determining both immediate lump-sum needs (final expenses, death taxes, mortgage redemption, emergency and education reserves)…Capital SumMasteredCh 13 · Limited Policies — Accident OnlyThe amount payable under an AD&D policy for accidental permanent loss of hearing, speech, sight, or a limb — expressed as a percentage of the prin…CapitationMasteredCh 14 · Managed Care NetworksCompensating providers per patient, not per service — the HMO pays a flat fee per subscriber. Unused? The HMO wasted the fee. Overused? The provider e…Captive InsurerMasteredCh 1 · Company TypesAn insurer established and owned by a parent firm to insure the parent's own loss exposure — an in-house insurer.Cash Surrender OptionMasteredCh 5 · Cash ValueOwner takes the cash value (minus loans); coverage ends. Under the cost-recovery rule, premiums paid come back tax-free; any excess is taxable as ordi…Cash ValueMasteredCh 4 · Key ConceptsThe equity/savings that builds inside a permanent policy — the amount received on surrender, and the collateral for policy loans. Only permanent polic…Cease-and-Desist OrdersMasteredCh 20 · EnforcementThe Department (DFS) or OIR serves a complaint on a licensee believed to be engaging in conduct that shows unfitness, endangers the insurance-buying p…Certificate of AuthorityMasteredCh 20 · DefinitionsThe license that allows an insurance company to transact business within a state — in Florida, issued by the Office of Insurance Regulation. An insure…Certificate of Coverage (F.S. 627.657)MasteredCh 22 · Group HealthEvery group health policy must provide that the insurer will furnish the policyholder, for delivery to each insured group member, a certificate showin…Certificate of InsuranceMasteredCh 8 · Group BasicsThe document covered employees (certificate holders) receive as evidence of coverage — it shows their benefits, duration, and beneficiary. Employees d…CFO License Penalties & GroundsMasteredCh 20 · Financial Services RegulationThe CFO may suspend, revoke, or refuse a license (or fine/probate instead) for: false or incomplete license applications, violating insurance laws or …Change of Beneficiary ProvisionMasteredCh 18 · Mandatory ProvisionsMandatory provision: the policyowner may change a revocable beneficiary at any time, but cannot change an irrevocable beneficiary without that benefic…Change of OccupationMasteredCh 18 · Optional ProvisionsOptional provision adjusting the policy when the insured switches jobs without telling the insurer: more hazardous occupation → benefits reduced propo…Change of Occupation · Relation of Earnings · ExclusionsMasteredCh 16 · Policy StructureChange of occupation: switch to a MORE hazardous job → benefit reduced; LESS hazardous → premium reduced (+ refund of excess). Relation of earnings to…Changes / Mistakes on the ApplicationMasteredCh 7 · The ApplicationThe agent may correct a mistake, but the applicant must INITIAL every correction. A producer who alters an application without telling the applicant o…Changing a Beneficiary — Filing vs EndorsementMasteredCh 6 · BeneficiariesFiling (recording) method — the predominant one: written notice to the insurer; effective when submitted. Endorsement method: the policy is returned a…Charitable Uses of Life InsuranceMasteredCh 10 · Personal UsesTransferring an existing policy to a qualified charity → an income tax deduction generally equal to the lesser of the donor's cost basis or the policy…Chief Financial Officer (CFO)MasteredCh 20 · Financial Services RegulationFlorida's elected chief fiscal officer — a member of the Governor's Cabinet, head of the Department of Financial Services, Florida's State Fire Marsha…Children: Adoption, Supervision, Disability and Cleft Lip/PalateMasteredCh 22 · Required CoveragesFour Florida child mandates. Adopted/foster children: covered from placement at the insured's residence; no preexisting-condition exclusion allowed — …Chronically IllMasteredCh 6 · Viatical & Life SettlementsCertified by a licensed health care practitioner (within the past 12 months) as either requiring substantial supervision due to severe cognitive impai…ChurningMasteredCh 20 · Marketing PracticesThe practice whereby policy values in an existing life policy or annuity (cash values, dividends, other assets) are directly or indirectly used to pur…Claim Forms ProvisionMasteredCh 18 · Claims ProvisionsMandatory provision requiring the insurer to supply a claim (proof of loss) form within 15 days of receiving notice of claim. If it fails, the insured…Claiming Age: Early · Full · DelayedMasteredCh 12 · Benefit CalculationClaim at 62 → permanent reduction to 70% of PIA (30% cut). Claim at FRA (67 for those born 1960+) → 100%. Delay past FRA → +8% per year to a maximum 1…Claims DepartmentMasteredCh 1 · Industry BasicsThe insurer department that processes, investigates, and pays claims (where adjusters work).Claims Experience & Community RatingMasteredCh 19 · Premium CalculationTwo ways insurers project future claims. Experience rating — for group health, underwriters price coverage using the group's own past claims experienc…CLOC — Elements of a Valid ContractMasteredCh 3 · Contract LawCompetent parties · Legal purpose · Offer & acceptance · Consideration.COBRA ContinuationMasteredCh 14 · RegulationsEmployers with 20+ employees must offer continuation (not conversion) of group health coverage after qualifying events. 18 months — termination (excep…CoercionMasteredCh 20 · Marketing PracticesAn agent's use of physical or mental force with the intent of convincing an applicant to buy insurance.Coinsurance (Percentage Participation)MasteredCh 15 · Cost SharingAfter the deductible, insurer and insured split covered costs by percentage (insurer/insured — 80/20 is classic). Exists to discourage overutilization…Collateral (Conditional) AssignmentMasteredCh 5 · Standard ProvisionsA partial, temporary transfer — usually to a lender as security for a debt. At death, the assignee gets the loan balance; the named beneficiary gets t…Commissions & Charges for Extra ServicesMasteredCh 20 · Agent ResponsibilitiesNo person may pay or accept commissions to/from an unlicensed individual for selling or negotiating insurance. Commission sharing is acceptable when b…Common Disaster Provision (Survivorship Clause)MasteredCh 6 · Special SituationsAdds a time-delay: the primary beneficiary must outlive the insured by a stated period (typically 14–30 days) to collect. If both die within the perio…Common Health Policy ExclusionsMasteredCh 18 · Exclusions & LimitsLosses health policies routinely exclude: war/act of war, self-inflicted injuries, aviation as pilot/crew or noncommercial flying, military service (w…Common Medical Expense ExclusionsMasteredCh 15 · Major MedicalExcluded from essentially all medical expense policies: elective cosmetic procedures · experimental therapies · care in government facilities · work-r…Communicating with the Department (30-Day Rules)MasteredCh 20 · License MaintenanceA licensee must notify the DFS in writing within thirty (30) days of any change to their name, residence address, principal business street address, m…Community Rating (Small Groups)MasteredCh 14 · Group HealthPremiums for small groups (2–50 employees) are based on the claims experience and costs of the surrounding community, not the group's own history. Als…Comparative Interest Rate (CIR) MethodMasteredCh 6 · Policy Cost ComparisonThe rate of return an investment account would need so that "buy term + invest the difference" equals the cash value policy's result. Face amounts com…Comprehensive PolicyMasteredCh 13 · Classes of Health InsuranceA policy providing broad coverage — comprehensive policies tend to be "open-peril": they cover a wide range of losses and services and exclude only wh…ConcealmentMasteredCh 3 · Contract LawFailure to disclose a known, material fact when applying.Concealment (Unfair Practice)MasteredCh 20 · Marketing PracticesThe omission of information that would affect the issuance or the rate of an insurance contract. It is a violation to purposefully conceal relevant in…Concurrent · Delayed · Confined DisabilityMasteredCh 16 · Defining DisabilityConcurrent: multiple causes, one disability → ONE benefit only. Delayed: a total disability developing some time (20–90 days) after the accident still…Conditional ContractMasteredCh 3 · Contract CharacteristicsBenefits are paid only if conditions are met (pay premiums, give notice/proof of loss). No covered event → no benefit.Conditional ReceiptMasteredCh 7 · Receipts & Effective DateGiven when the premium is paid WITH the application. Coverage is effective as of the application date or medical-exam date (whichever is LATER) — ON T…Conditionally Renewable PolicyMasteredCh 18 · RenewabilityThe insurer may terminate only under specific conditions written in the policy — e.g., the insured reaching a stated age or losing gainful employment …Conformity With State StatutesMasteredCh 18 · Optional ProvisionsOptional provision automatically amending the policy to comply with minimum state law requirements wherever its terms conflict with them.ConservationMasteredCh 21 · ReplacementThe existing insurer's effort to retain the policy after being notified of a proposed replacement. Advance notice of the replacement gives the current…ConsiderationMasteredCh 3 · Contract LawThe value each party gives. The applicant gives premium + truthful information; the insurer gives a promise to pay claims. The "binding force" of the …Consideration Clause (Health)MasteredCh 18 · Necessary ProvisionsDefines the insured's consideration — the value exchanged for the insurer's promise: (1) the premium paid and (2) the statements (representations) on …Constructive DeliveryMasteredCh 7 · Policy Issue & DeliveryDelivery is legally complete when the insurer gives/mails the policy to the agent for UNCONDITIONAL delivery to the owner — even if the agent never ph…Consumer-Driven Health Plan (CDHP)MasteredCh 15 · Tax-Advantaged AccountsThree stacked elements: 1️⃣ a tax-advantaged savings vehicle (HSA/HRA/Archer MSA) 2️⃣ a corridor or integrated deductible 3️⃣ a qualifying HDHP cappin…Contingent (Secondary) BeneficiaryMasteredCh 6 · BeneficiariesReceives the death benefit only if ALL primary beneficiaries died before the insured. A tertiary beneficiary is third in line; succession can go as de…Continuing Education (CE) RequirementsMasteredCh 20 · License MaintenanceLicensees complete CE as part of license renewal every two (2) years: a 4-hour law and ethics update course specific to the license held (multi-licens…Contract of AdhesionMasteredCh 3 · Contract LawA contract written by one party only (the insurer). The applicant must "take it or leave it" — no negotiation.Contributory PlanMasteredCh 8 · Plans & ParticipationEmployer AND employees share the premium cost. Employees must authorize payroll deduction. Insurers typically require at least 75% of eligible employe…Controlled Business (50% Rule)MasteredCh 20 · Marketing PracticesCoverage written by an agent on their own life, health, or property, their immediate family, or business associates (i.e., insurance written in the in…Conversion on Policy Termination (5-Year Rule)MasteredCh 21 · ConversionIf the group policy terminates the insurance of any class of insured members, every member insured on the termination date — including insured depende…Conversion on Termination of Eligibility (31 Days)MasteredCh 21 · ConversionFlorida group life policies must contain a conversion privilege: conversion to an individual policy for a specified period, with no evidence of insura…Conversion Privilege (FL Group Health)MasteredCh 22 · ContinuationA Florida group policy providing hospital, surgical, or major medical expense coverage on an expense-incurred basis must let an employee or member who…Conversion Privilege (Group → Individual)MasteredCh 8 · ConversionOn leaving the group (quit, laid off, terminated), an employee may convert group coverage to an individual policy on any form the insurer then customa…Conversion When the GROUP Policy TerminatesMasteredCh 8 · ConversionIf the master policy itself is terminated (or amended to terminate a whole class), a person insured for at least 5 consecutive years before the termin…Convertible TermMasteredCh 4 · Term LifeOwner may convert to permanent (whole life) without evidence of insurability. Must be in the contract at purchase.Coordination of Benefits (COB)MasteredCh 18 · Additional ProvisionsGroup-plan provision preventing duplicate payment/over-insurance when someone is covered by multiple group plans: the primary plan pays its full contr…Coordination of Benefits (F.S. 627.4235)MasteredCh 22 · Group HealthFlorida group hospital/medical/surgical policies must carry a COB provision coordinating with similar benefits under any other group policy for the sa…Corporate-Owned Annuities (Non-Natural Person Rule)MasteredCh 9 · Annuity TaxationA corporation may OWN an annuity, but must name a natural person as annuitant (the "measurable life") for interest to stay tax-deferred. If a non-natu…Corporate-Owned Life Insurance (COLI)MasteredCh 10 · Key Person & COLIA company purchases and owns life insurance on a key employee, with the corporation as primary beneficiary. Premiums are not tax-deductible (§264(a)(1…CorridorMasteredCh 4 · Key ConceptsThe required gap between death benefit and cash value. If cash value crowds the death benefit, the policy fails the IRS definition of life insurance →…Corridor DeductibleMasteredCh 15 · Cost SharingThe deductible between basic coverage and major medical coverage: basic first-dollar benefits pay first, then the insured crosses the 'corridor' (pays…Cost BasisMasteredCh 6 · TaxationTotal premiums paid into the policy MINUS dividends received in cash or used to offset premiums. The tax-free portion recoverable at surrender.Cost-of-Living (COLA) RiderMasteredCh 5 · RidersAutomatically increases the face amount with the CPI — no proof of insurability.Cost-of-Living Adjustment (COLA) RiderMasteredCh 16 · RidersIndexes benefits already being paid on a claim to the CPI (adjusted each disability anniversary, often capped ~5%). LTD policies only; kicks in after …Coverdell ESA (Education IRA)MasteredCh 11 · Education PlansEducation savings account usable for primary AND secondary school expenses (tuition, books) as well as college. Leftover funds (child skips college / …Covered Perils: Accident & SicknessMasteredCh 13 · Covered PerilsAll health and accident policies address the same two broadly defined causes of loss: accidents and sickness. An illness is an internal occurrence — s…Credit Disability (Decreasing Term DI)MasteredCh 16 · Business & Special UsesProtects the lender: if a borrower becomes disabled before a debt is paid off, the policy pays the monthly debt payments directly to the creditor whil…Credit Life InsuranceMasteredCh 4 · Term LifeDecreasing term on a debtor; pays the lender the loan balance if the debtor dies. Max benefit = the outstanding indebtedness — Florida: credit life "s…Credit Reports (in Underwriting)MasteredCh 7 · Underwriting Info SourcesUsed because applicants with poor credit are more likely to lapse early — before the insurer recovers its acquisition costs — or to buy more insurance…Critical Illness PolicyMasteredCh 13 · Limited Policies — Illness OnlyPays a LUMP SUM directly to the insured upon diagnosis AND survival of a covered critical illness — typically heart attack, stroke, organ transplant, …Cross-Purchase Buy-Sell PlanMasteredCh 10 · Business ContinuationThe OWNERS THEMSELVES (not the business) agree to buy each other out. Each partner buys, owns, and is beneficiary of a policy on each other partner — …Current Assumption Whole Life (CAWL)MasteredCh 4 · Whole LifeInterest-sensitive whole life: premiums and cash values flex with the insurer's current mortality/investment/expense assumptions, within guaranteed li…Currently Insured StatusMasteredCh 12 · Coverage & EligibilityEarned with at least 6 quarters of coverage in the 13 quarters (3 years) ending with the quarter of death, disability entitlement, or retirement entit…D
Death During the Conversion PeriodMasteredCh 21 · ConversionA Florida group life policy must provide that if a member dies during the conversion period — before an individual policy is issued — the amount of li…Debtor Groups: Credit Disability and Mortgage InsuranceMasteredCh 22 · Group HealthA creditor may hold a group policy insuring its debtors against loss of time from bodily injury or illness tied to a specific loan or credit transacti…Decreasing TermMasteredCh 4 · Term LifeFace amount declines to $0 over the term; premium stays level. Commonly used to cover a shrinking debt/loan.Deductible TypesMasteredCh 15 · Cost SharingCalendar-year (all-cause): met once per benefit period — the most common; may include a carryover provision (claims from the final 3 months roll into …Defamation (Unfair Practice)MasteredCh 20 · Marketing PracticesKnowingly making, publishing, disseminating, or circulating (or aiding, abetting, or encouraging the same) any oral or written statement, pamphlet, ci…Deferred AnnuityMasteredCh 9 · Premium & Timing ClassesIncome begins more than one year after purchase. Can be funded with any premium plan (single, level, or flexible) and includes an accumulation period …Deferred Compensation PlanMasteredCh 10 · Executive Benefit PlansA non-qualified arrangement in which a highly paid employee's compensation is paid later — at disability, retirement, or death. No qualified-plan tax …Defined Benefit Plan (Pension)MasteredCh 11 · Employer Plan TypesGuarantees a specific future benefit set by formula — typically years of service × salary — paid for life at retirement. The EMPLOYER bears the invest…Defined Contribution PlanMasteredCh 11 · Employer Plan TypesThe plan defines the CONTRIBUTION formula; the final benefit varies with contributions + investment performance. The EMPLOYEE bears the investment ris…Delivery (Policy) ReceiptMasteredCh 19 · Policy Issue & DeliverySigned by the insured when the producer delivers the policy, giving the insurer proof of delivery. Important because it can designate the start of the…DemutualizationMasteredCh 1 · Company TypesConversion of a mutual company into a stock company. Each policyholder gets a preemptive right to buy a proportionate share of the new stock, applying…Dental InsuranceMasteredCh 13 · DentalSpecialized health expense coverage focused on diagnostic and preventive treatment, paying for routine dental care and care necessitated by accidents.…Dental Plan Types: Standalone · Integrated · CombinationMasteredCh 13 · DentalStandalone plans work with any provider and keep separate deductibles and benefit limits, even inside an employer package. Integrated plans are offere…Dental SpecialtiesMasteredCh 13 · DentalOral surgery — tooth extraction and surgical treatment of injuries/diseases/jaw defects · Endodontics — root canals and dental pulp diseases · Periodo…Dental Treatment Levels (100/80/50)MasteredCh 13 · DentalNon-scheduled plans divide services into three levels: Preventive — cleanings, periodic exams, annual X-rays — usually covered at 100%, often no deduc…Department of Financial Services (DFS)MasteredCh 20 · Financial Services RegulationHeaded by the CFO and organized into thirteen (13) divisions, the DFS enforces the Florida Insurance Code and issues insurance licenses to individuals…Dependent / Other-Insured RidersMasteredCh 5 · RidersAdd term coverage for others: spouse rider (convertible level term), children's rider (all kids as a class, one set amount), family rider (both).Dependent Coverage (Group Life)MasteredCh 21 · Group LifeA group member's dependent spouse and children may be covered — up to an amount not to exceed the amount of insurance for which the employee or member…Designated Beneficiary / Facility of Payment (Group)MasteredCh 21 · Group ProvisionsA Florida group life policy makes any sum due at a covered person's death payable to the designated beneficiary. If no designated beneficiary is livin…Designation of Beneficiary (Florida)MasteredCh 21 · Individual ProvisionsA life policyowner can always change the beneficiary or beneficiaries — unless the designation is irrevocable, in which case the beneficiary must agre…Disability Buy-Out PolicyMasteredCh 16 · Business & Special UsesFunds a disability buy-sell agreement — purchasing a disabled owner's share. Cross-purchase: partners buy policies on each other (n×(n−1) policies). E…Disability Income Benefit RiderMasteredCh 5 · RidersPays the insured a monthly income during total disability — typically 1% of the face amount. Often also waives the premium.Disability Income InsuranceMasteredCh 16 · BasicsReplaces a portion of earned income when accident or sickness prevents the insured from working — a specified benefit for a defined period. Restores e…Discount Medical Plan Organization (DMPO)MasteredCh 14 · Managed Care NetworksNOT insurance — a membership arrangement giving access to providers at discounted rates for a fee. Usually regulated by the state insurance department…Distribution to a Minor / TrustMasteredCh 6 · BeneficiariesInsurers generally will NOT pay proceeds directly to a minor (no legal capacity) — a guardian or trustee is appointed, or the insurer holds proceeds a…Distribution to an EstateMasteredCh 6 · BeneficiariesIf no listed beneficiary is alive at the insured's death, proceeds go to the insured's estate — exposing them to federal/state estate taxes, probate f…Distributions at DeathMasteredCh 9 · Annuity TaxationOwner dies during accumulation → the beneficiary receives the GREATER of the accumulated value or the contributions; any amount above premiums paid is…Dividend Options (CRAPPO)MasteredCh 5 · DividendsCash · Reduction of premium · Accumulate at interest · Paid-up additions · Paid-up policy · One-year term. Only participating policies pay dividends.Doctrine of Reasonable ExpectationsMasteredCh 3 · Contract CharacteristicsCourts honor what an average, prudent person would reasonably expect the policy to cover — correcting the drafter's advantage in a contract of adhesio…Domestic, Foreign & Alien InsurersMasteredCh 20 · DefinitionsClassification by domicile — where the insurer was formed or incorporated. Domestic: formed under the laws of Florida. Foreign: formed under the laws …Dual Benefit LiabilityMasteredCh 12 · Benefit CalculationWhen someone is eligible for two benefits (e.g., their own retirement benefit AND a deceased spouse's benefit), they may collect only one — the greate…Dual Occupation RuleMasteredCh 19 · Risk FactorsWhen an applicant works two jobs, the insurer bases the policy's benefits AND premiums on the MORE HAZARDOUS occupation.Duties of the Replacing AgentMasteredCh 21 · ReplacementWhen replacing a life policy or annuity, the agent must: (1) present a Notice Regarding Replacement signed by both the applicant and the agent, leavin…Duties of the Replacing InsurerMasteredCh 21 · ReplacementWhen a replacement occurs, the replacing insurance company must: (1) require a list of the applicant's life/annuity contracts to be replaced and a cop…E
E&O (Errors & Omissions) InsuranceMasteredCh 3 · Agency & AuthorityProfessional liability coverage protecting an agent against mistakes/negligence (defense costs + damages). Excludes intentional, criminal, dishonest, …Earned vs Unearned PremiumMasteredCh 6 · PremiumsEarned = the portion the insurer is entitled to for coverage already provided. Unearned = paid-for coverage not yet provided — refunded to the insured…Economic Benefit DoctrineMasteredCh 6 · TaxationAny benefit with financial value granted to a person must be counted as taxable compensation the year it's granted — avoided when there's a substantia…Effect of Divorce on Death Proceeds (F.S. 732.703)MasteredCh 21 · Individual ProvisionsA beneficiary designation in favor of the owner's spouse is void upon divorce, dissolution, or invalidity of the marriage if the designation was made …Elements of an Insurable RiskMasteredCh 2 · Risk Types & InsurabilityFor a pure risk to be insurable, the loss must be: due to chance (accidental, outside the insured's control), definite and measurable (time, place, am…Eligible Groups Under Florida LawMasteredCh 21 · Group LifeFlorida's eligible group types: Employer-employee (full-time employees of a single employer); labor union (the union holds the policy since members ch…Elimination (Waiting) PeriodMasteredCh 16 · Policy StructureThe time deductible: days between disability onset and the start of payable benefits (individual: 30/60/90/180/365 days; STD: 7/10/14). Longer elimina…Emergency Services and the Balance Billing BanMasteredCh 22 · Required CoveragesEmergency services: must be covered without prior authorization, whether the provider participates or not; cost-sharing (coinsurance, copay, benefit l…Employee Life Rules (Group Policy)MasteredCh 21 · Group LifeEmployees may be insured under a group policy issued to their employer, subject to: (1) the policy must benefit someone other than the employer (e.g.,…Employee Stock Ownership Plan (ESOP)MasteredCh 11 · Defined Contribution PlansGives employees an ownership interest in the company: shares are allocated to employees and held in an ESOP trust until they retire or leave.Employee's Beneficiary Right (Incident of Ownership)MasteredCh 8 · Group BasicsThe employer owns the group policy and holds all ownership rights EXCEPT one: the employee (certificate holder) names and changes the beneficiary. In …Employer and Trustee Groups (F.S. 627.6516–.656)MasteredCh 22 · Group HealthTrustee group: employees of employers or union members insured under a policy issued to fund trustees (the trustees are the policyholders); the policy…Endow / Mature at Age 100MasteredCh 4 · Whole LifeThe point where cash value equals the face amount and no more premiums are due — the insurer pays the face to a living owner. (Newer tables use 115/12…Endowment ContractMasteredCh 4 · Special ProductsPays the face amount at a fixed earlier date (e.g., 20 years or age 65) OR at death if sooner. Rapid cash value, higher premium.Enrollment Period (31 Days)MasteredCh 8 · Eligibility & UnderwritingOnce eligible under a contributory plan, an employee has 31 days to enroll. Miss the window and the employee may have to provide evidence of insurabil…Entire Contract Clause (Health)MasteredCh 18 · Mandatory ProvisionsMandatory provision defining the full agreement as the policy form + signed application + attachments (riders/endorsements). External materials and ve…Entire Contract ProvisionMasteredCh 5 · Standard ProvisionsThe policy + attached application + riders/endorsements make up the WHOLE contract. Nothing outside can be incorporated by reference; only a duly auth…Entity Buy-Sell PlanMasteredCh 10 · Business ContinuationThe BUSINESS ITSELF agrees to buy the deceased owner's interest. The business purchases, owns, pays for, and is beneficiary of ONE policy per owner — …Equity-Indexed Annuity (EIA)MasteredCh 9 · Fixed, Variable & IndexedA FIXED (non-variable) annuity whose interest is linked to a stock index (e.g., S&P 500) — the funds are not directly invested in the market. Offe…Equity-Indexed Whole LifeMasteredCh 4 · Whole LifeCash value interest is tied to an equity index (S&P 500) but not directly invested in it. Guaranteed minimum interest and death benefit; not a sec…ERISA (1974)MasteredCh 11 · ERISA RulesFederal law protecting workers covered by employer-sponsored plans. To be tax-qualified a plan must be a formal written document, be for the exclusive…EstoppelMasteredCh 3 · Contract LawA legal bar that prevents the insurer from denying what its agent led an insured to reasonably rely on. Often the result of a waiver.Evidence (Proof) of InsurabilityMasteredCh 5 · Standard ProvisionsProof of the insured's current health and risk status (statements, exam). Required for: reinstatement and increasing coverage (privilege of change / a…Evidence of Individual Insurability (Group)MasteredCh 21 · Group ProvisionsA Florida group life policy must contain a provision stating the conditions under which the insurer reserves the right to require an eligible person t…Excess Interest ProvisionMasteredCh 5 · Cash ValueCredits interest above the guaranteed rate when the insurer earns more. Methods: index-linked (economic index) or portfolio (insurer's own earnings).Exclusion RatioMasteredCh 9 · Annuity TaxationDetermines the tax-free portion of each annuity payment: investment in the contract ÷ expected return. The return-of-principal portion is tax-free; th…Exclusive Provider Organization (EPO)MasteredCh 14 · Managed Care NetworksA hybrid of HMO and PPO: direct access to any in-network provider with no referrals (like a PPO), but zero out-of-network coverage except emergencies …Executive Bonus Plan (§162)MasteredCh 10 · Executive Benefit PlansEmployer pays a bonus that a selected employee uses to pay premiums on a life policy the employee personally owns. The bonus is tax-deductible to the …Expenses (Loading)MasteredCh 19 · Premium CalculationThe expense factor — also called the load, loading charge, or loading factor — built into premiums to cover what the insurer pays out to operate: agen…Experience Rating (Large Groups)MasteredCh 14 · Group HealthPremiums for large groups (51+ members) are based on the group's own past claims history, plus size, average age, and industry hazard.Expiration of Appointment — the 48-Month RuleMasteredCh 20 · AppointmentsAn expired appointment means immediate loss of all authority it granted. When a licensee's last appointment for a class of insurance terminates, the D…Express AuthorityMasteredCh 3 · Agency & AuthorityAuthority written in the agent's contract — deliberately and explicitly granted.Extended Term OptionMasteredCh 5 · Cash ValueUses cash value to buy term insurance at the SAME face amount for a limited period. Provides the HIGHEST death benefit of the three options.Extension of BenefitsMasteredCh 14 · RegulationsWhen coverage terminates mid-claim, benefits continue for the existing claim — a disability benefit continues until the disability ends; hospital bene…F
Face Amount / Death BenefitMasteredCh 4 · Key ConceptsThe amount paid to the beneficiary at death. Level in whole life; may be level, decreasing, or increasing in term.Facility of Payment ProvisionMasteredCh 6 · BeneficiariesPermits the insurer to pay some or all proceeds to ANY person who appears equitably entitled — e.g., someone who paid the insured's final/medical expe…Fair Credit Reporting Act (FCRA, 1970)MasteredCh 7 · Underwriting Info SourcesFederal law (1970) setting procedures for collecting and disclosing consumer credit and investigative information — fairness, confidentiality, accurac…False Information & AdvertisingMasteredCh 20 · Marketing PracticesKnowingly making, publishing, or circulating before the public — in any publication, notice, circular, letter, poster, over radio/TV, or in any other …False Statements, Entries & Application FraudMasteredCh 20 · Marketing PracticesProhibited: knowingly filing a false material statement with any public official, or making/publishing/delivering/placing one before the public. Failu…Family Income PolicyMasteredCh 4 · Special ProductsWhole life + DECREASING term. Pays monthly income if death occurs during the period, counted from the policy issue date, then pays the face.Family Maintenance PolicyMasteredCh 4 · Special ProductsWhole life + LEVEL term. Pays income for a set number of years from the date of death, then the whole-life face.Family Plan PolicyMasteredCh 4 · Special ProductsOne policy covering the whole family: whole life on the breadwinner + level term riders on spouse/children. New children auto-included.FEGLI — Federal Employees Group LifeMasteredCh 8 · Military & FederalGroup term life for federal/civil-service employees. Basic coverage is automatic unless waived: annual basic pay rounded UP to the next $1,000, plus $…FICA Payroll TaxesMasteredCh 12 · Characteristics & FundingFederal Insurance Contributions Act taxes fund Social Security and Medicare. Employee: 7.65% (6.2% SS + 1.45% Medicare) · Employer: 7.65% (matching) ·…FiduciaryMasteredCh 3 · Agency & AuthorityA person in a position of financial trust who must put the client's interest first. Agents act as fiduciaries when handling premiums and giving advice…Fiduciary Capacity / ResponsibilityMasteredCh 7 · Agent Duties & DisclosuresThe producer's legal obligation to act in the client's best interest — care, loyalty, and good faith — especially when collecting premiums (money held…Fiduciary Capacity & Premium AccountabilityMasteredCh 20 · Agent ResponsibilitiesA fiduciary occupies a position of special trust holding another's funds. All premiums, return premiums, and other funds received by an agent, agency,…Field Underwriter (the Agent)MasteredCh 7 · Agent Duties & DisclosuresThe agent/producer who INITIATES the underwriting process: proper solicitation, completing the application thoroughly, obtaining signatures, collectin…Financial Services Commission (FSC)MasteredCh 20 · Financial Services RegulationThe Governor plus the Florida Cabinet — the CFO, the Attorney General, and the Commissioner of Agriculture — sitting together as one legal body. Commi…Fixed Amount OptionMasteredCh 6 · Settlement OptionsProceeds remain at interest and pay a specified installment amount (e.g., $1,200/month) until principal and interest are exhausted. The income amount …Fixed AnnuityMasteredCh 9 · Fixed, Variable & IndexedGuarantees a predetermined, level benefit and a minimum interest rate. Premiums go into the insurer's GENERAL account (conservative investments — bond…Fixed Period OptionMasteredCh 6 · Settlement OptionsProceeds + interest paid in equal installments over a set number of years (no life contingency). The face amount and the chosen period determine the p…FL Deceptive & Unfair Trade Practices Act — PenaltiesMasteredCh 20 · Marketing PracticesUnfair methods of competition and unfair/deceptive acts in trade or commerce are illegal; the DFS and OIR may examine, investigate, fine, and penalize…FL Life & Health Insurance Guaranty AssociationMasteredCh 20 · Guaranty FundsA nonprofit organization (F.S. 631.711) protecting policyowners, insureds, beneficiaries, annuitants, payees, and assignees against an insurer's failu…Flexible Premium Deferred Annuity (FPDA)MasteredCh 9 · Premium & Timing ClassesPeriodic premiums that vary in amount — the owner contributes what they can and may even skip payments; future income reflects the total saved. The mo…Flexible Spending Account (FSA)MasteredCh 15 · Tax-Advantaged AccountsPre-tax payroll set-aside through an employer's cafeteria plan for qualified medical expenses — famously 'use it or lose it' (only a small IRS-set amo…Florida Code of Ethics (Agents)MasteredCh 20 · EthicsBy statute, the DFS adopts and maintains a code of ethics for all Florida insurance agents, governing conduct with the public, other agents, and insur…Florida Continuation — Mini-COBRA (F.S. 627.6692)MasteredCh 22 · ContinuationThe Florida Health Insurance Coverage Continuation Act extends group coverage to employees of small employers (fewer than 20 employees) and their depe…Florida Healthy Kids Corporation (F.S. 624.91)MasteredCh 22 · State ProgramsEstablished by the legislature in 1990 as a combined public and private venture to improve access to comprehensive health insurance for Florida's unin…Florida Insurance Guaranty Association (FIGA)MasteredCh 20 · Guaranty FundsPays certain outstanding covered claims to Florida residents on behalf of an insurer that has become insolvent. Membership is required of insurers tra…Florida Long-Term Care Partnership ProgramMasteredCh 22 · Long-Term CareA partnership between Medicaid and private LTC insurers encouraging private LTC purchase by granting dollar-for-dollar asset protection: every dollar …Florida LTC Policy Standards (F.S. 627.9407; 69O-157, F.A.C.)MasteredCh 22 · Long-Term CareIn Florida, an LTC policy must: give a 30-day free look; be issued "guaranteed renewable" or better ("level premium" may be claimed only when the insu…Florida Plan Types: HMO to Dread DiseaseMasteredCh 22 · Plan TypesHMO: comprehensive prepaid care through a closed network — members are NOT covered outside it; the primary physician is the gatekeeper; emphasis on pr…FormularyMasteredCh 13 · Limited Policies — ServicesThe list of specific medications covered by a prescription drug plan. Formularies categorize drugs by price class, drug family, and clinical purpose; …Franchise (Wholesale) InsuranceMasteredCh 8 · Other Group FormsUniform individual policies solicited to members of a small group (often at the workplace with the employer's consent) — used for groups too small to …Fraternal Benefit SocietyMasteredCh 1 · Company TypesNonprofit, no capital stock, conducted solely for the benefit of members and their beneficiaries, operated on a lodge system with ritualistic form of …Fraternal Benefit Society (Florida)MasteredCh 20 · DefinitionsAn incorporated society, order, or supreme lodge conducted solely for the benefit of its members and their beneficiaries that: has no capital stock, i…Fraudulent Insurance ActMasteredCh 20 · Marketing PracticesCommitted by one who knowingly and with intent to defraud presents (or prepares, knowing it will be presented) any written statement — in support of a…Free Insurance ProhibitedMasteredCh 20 · Marketing RulesAdvertising, offering, or providing free insurance as an inducement to the purchase or sale of real or personal property or of services directly or in…Free Look — Florida Life & Annuity (F.S. 626.99)MasteredCh 21 · Individual ProvisionsIn Florida (F.S. 626.99), an unconditional refund of premiums must be available for at least fourteen (14) days for life insurance. For a fixed annuit…Free Look / Right to Examine (Health)MasteredCh 18 · Necessary ProvisionsGives the policyholder typically 10 days from DELIVERY to examine the policy and return it for a full premium refund. Policies sold by direct mail and…Free-Look Provision (Right to Examine)MasteredCh 5 · Standard ProvisionsAfter delivery, the owner may return the policy for a full premium refund, no reason needed. The clock starts when the owner receives the policy.FSGLI — Family SGLIMasteredCh 8 · Military & FederalCovers the spouse and children of an SGLI-insured member. Spouse: automatic coverage for $100,000 or the member's coverage, whichever is LESS (premium…Fully Insured StatusMasteredCh 12 · Coverage & EligibilityEarned by accruing 40 quarters of coverage (~10 years of work). Unlocks the full menu: retirement, disability, premium-free Medicare Part A, and survi…Future Increase Option (Guaranteed Insurability)MasteredCh 16 · RidersLets the insured buy additional DI coverage at specified future dates with NO evidence of insurability — but only if income has risen, and it's use-it…G
Genetic Information Nondiscrimination Act (GINA)MasteredCh 19 · Underwriting LawsFederal law (2008) protecting Americans against discrimination based on genetic information when applying for health insurance. Insurers cannot use ge…Grace PeriodMasteredCh 5 · Standard ProvisionsTime after the premium due date during which coverage stays in force (Florida: not less than 30 days, F.S. 627.453). If the insured dies during it, th…Grace Period — Florida Individual Life (F.S. 627.453)MasteredCh 21 · Individual ProvisionsEvery individual life contract in Florida must provide a grace period of not less than thirty (30) days for premium payment (F.S. 627.453). At the ins…Grace Period (Health)MasteredCh 18 · Mandatory ProvisionsMandatory provision giving the policyowner a set number of days after the premium due date to pay without penalty or loss of coverage. NAIC minimums s…Graded-Premium Whole LifeMasteredCh 4 · Whole LifeLow initial premium that increases every year during the initial period, then stays level for life.Grandfathered Health Plans (F.S. 627.402)MasteredCh 22 · Minimum Benefit StandardsGroup or individual coverage in which someone was enrolled on March 23, 2010 (the ACA's advent) and that has covered someone continuously since — sold…Grandfathered PlanMasteredCh 15 · StatutesA plan unchanged since March 23, 2010 (pre-ACA). Exempt from covering free preventive care, essential health benefits, and individual-market pre-exist…Gross PremiumMasteredCh 6 · PremiumsThe premium actually charged: net premium + insurer expenses (loading). The gross ANNUAL premium adjusts for paying over years instead of a lump sum.Group Credit Life InsuranceMasteredCh 8 · Other Group FormsSet up by banks and finance companies on their borrowers: if the insured dies before the loan is repaid, the benefit pays off the loan balance. Usuall…Group Disability Income InsuranceMasteredCh 16 · Group & TaxationNatural-group coverage, benefits defined as a percentage of wages (50–70%) that auto-adjusts with pay (no FIO needed). Group STD: 13/26-week benefit p…Group Eligibility, Probation & EnrollmentMasteredCh 14 · Group HealthMembers are typically full-time (30+ hrs); new hires may wait a probationary period (1–3 months), then get a 31-day enrollment period. Miss it and you…Group Health Insurance BasicsMasteredCh 14 · Group HealthOne master contract issued to a sponsor (the master policy owner); members get certificates of insurance. Requires a natural group (existing for a pur…Group Life Grace Period — 31 DaysMasteredCh 21 · Group ProvisionsA Florida group life policy (standard provisions, F.S. 627.558–.565) must give the policyholder a grace period of thirty-one (31) days for payment of …Group Life Incontestability — 2 YearsMasteredCh 21 · Group ProvisionsA Florida group life policy must provide that its validity will not be contested — except for nonpayment of premium — after it has been in force for t…Group Life InsuranceMasteredCh 8 · Group BasicsLife insurance written on more than one person under a single contract — typically an employer covering its employees. Almost always written as annual…Group LTC, Riders, Extension of Benefits and Replacement (FL)MasteredCh 22 · Long-Term CareGroup LTC: the sponsoring policyholder need not contribute premium — but if it contributes ANY, all group members must be declared eligible and accept…Group Premium Taxation (the $50,000 rule)MasteredCh 8 · Group TaxationEmployer-paid premiums are tax-deductible to the employer as a business expense. For the employee, the premium on the first $50,000 of employer-provid…Group Proceeds TaxationMasteredCh 8 · Group TaxationSame as individual life: death proceeds are income-tax-free as a lump sum; under installment options, the principal is tax-free but the interest porti…Group UnderwritingMasteredCh 8 · Eligibility & UnderwritingThe insurer underwrites the group's characteristics — size, participation, purpose, persistency — rather than each member. Members are normally issued…Guaranteed Insurability Option (GIO)MasteredCh 5 · RidersBuy additional coverage at set dates/life events (marriage, birth) with no evidence of insurability. Missed options can't be recovered. New coverage p…Guaranteed Minimum Accumulation Benefit (GMAB)MasteredCh 9 · Charges & Living BenefitsGuarantees the premiums paid will reach a minimum accumulation value after a set waiting period (net premiums typically × a factor of 1–3). Annuitizat…Guaranteed Minimum Income Benefit (GMIB)MasteredCh 9 · Charges & Living BenefitsGuarantees a minimum income at annuitization regardless of market performance — payout based on the GREATER of the actual account value or the GMIB be…Guaranteed Minimum Withdrawal Benefit (GMWB)MasteredCh 9 · Charges & Living BenefitsVariable-annuity rider guaranteeing steady retirement income regardless of market volatility: the annuitant may withdraw a fixed percentage (generally…Guaranteed Renewable PolicyMasteredCh 18 · RenewabilityThe insurer cannot terminate or change benefits/terms while premiums are paid on time — but it CAN raise premiums, only on an entire CLASS of policies…H
HazardMasteredCh 2 · Perils, Losses & HazardsA condition that increases the likelihood that a peril will occur. Three types: physical, moral, and morale — all arising from conditions relating to …Health & Accident InsuranceMasteredCh 13 · OverviewA broad range of policies covering the economic costs of losses affecting physical and mental health, well-being, and the ability to perform effective…Health Insurance Advertising (F.S. 626.9531; 69O-150, F.A.C.)MasteredCh 22 · AdvertisingAds must identify themselves as relating to insurance products, and soliciting agents must identify themselves as agents for identified insurers. Proh…Health Insurance UnderwritingMasteredCh 19 · Purpose of UnderwritingThe process of risk selection for health insurance: reviewing the many characteristics that make up an applicant's risk profile to determine whether t…Health Maintenance Organization (HMO)MasteredCh 14 · Managed Care NetworksOffers comprehensive PREPAID care to subscribers — it both finances AND delivers healthcare through a local/regional network. Emphasizes preventive ca…Health Premium Formula (M − I + E)MasteredCh 19 · Premium CalculationHealth insurance premiums are calculated as Morbidity − Interest + Expenses. Morbidity predicts claims; interest earned on invested premiums LOWERS th…Health Reimbursement Arrangement (HRA)MasteredCh 15 · Tax-Advantaged AccountsEmployer-established AND employer-funded credit for approved medical expenses. No annual contribution limit, tax-free reimbursements, unused amounts c…Health Savings Account (HSA)MasteredCh 15 · Tax-Advantaged AccountsIndividual-owned, fully portable, tax-advantaged account requiring a qualifying HDHP (and no other medical coverage, no Medicare, not a tax dependent)…Health Underwriting Risk FactorsMasteredCh 19 · Risk FactorsThe factors underwriters weigh to answer "is the applicant insurable?": (1) physical condition & health history — current health, body build (extr…High-Deductible Health Plan (HDHP)MasteredCh 15 · Tax-Advantaged AccountsMajor medical with a high IRS-set minimum deductible and a capped out-of-pocket maximum — the insured pays basic expenses except ACA-mandated free pre…HIPAA: Portability, Creditable Coverage & PrivacyMasteredCh 14 · RegulationsFederal law (1996) guaranteeing portability: prior creditable coverage (no break of 63+ days) wipes out new pre-existing-condition waiting periods whe…HIV Consent FormMasteredCh 19 · Underwriting LawsProducers must secure a signed HIV consent form from the applicant and communicate that blood tests may be required. Even when a blood test is part of…HIV/AIDS Underwriting Requirements (F.S. 627.429)MasteredCh 22 · State ProgramsBefore HIV testing, the insurer must disclose its intent and obtain written informed consent explaining the test, its purpose, potential uses, limitat…HMO Structures: Staff · Group · Network · IPAMasteredCh 14 · Managed Care NetworksStaff (closed panel): physicians are HMO employees in HMO facilities. Group (closed): HMO pays a physician group capitation; the group pays its doctor…Hospital Indemnity (Income) InsuranceMasteredCh 13 · Limited Policies — CircumstancesPays a specified flat amount daily, weekly, or monthly directly to the INSURED (not the hospital) from admission until discharge. Payment is unrelated…Human Life Value Approach (HLV)MasteredCh 10 · Amount of CoverageDetermines coverage by expressing a person's life as a dollar value: the present value of future net earnings devoted to the family (gross income − ta…I
Illegal Occupation ProvisionMasteredCh 18 · Optional ProvisionsOptional provision letting the insurer deny claims for losses from the insured committing or attempting a felony (e.g., robbing a bank) or engaging in…Immediate Annuity (SPIA)MasteredCh 9 · Premium & Timing ClassesIncome begins as soon as 30 days after purchase and no later than 12 months. Can ONLY be funded with a single premium, so there is no accumulation per…Immediate EstateMasteredCh 4 · Key ConceptsLife insurance instantly creates funds for the beneficiary at death — even if only one premium was paid. Chapter 10 calls this the most significant ad…Impaired vs Insolvent InsurerMasteredCh 20 · Guaranty FundsAn impaired insurer is a member insurer that is NOT insolvent but is deemed by the department potentially unable to fulfill its contractual obligation…Impairment (Exclusion) RiderMasteredCh 18 · Exclusions & LimitsAlso called an exclusion rider, coverage waiver, or waiver for impairment: attached when a pre-existing condition is severe, it excludes coverage for …Implied AuthorityMasteredCh 3 · Agency & AuthorityUnwritten but necessary authority to carry out express duties (e.g., printing business cards with the company name).Incontestable ClauseMasteredCh 5 · Standard ProvisionsAfter the policy is in force 2 years, the insurer can no longer contest or void it — even for fraud, material misstatement, or concealment.Increasing TermMasteredCh 4 · Term LifeDeath benefit rises over the term (often via a COLA rider tied to the CPI). Level premium. Used to keep pace with rising income.Indemnity (Traditional) Health PlanMasteredCh 14 · Traditional PlansTraditional major medical insurance from commercial insurers: the insured sees any provider, pays, and is reimbursed for covered costs (subject to ded…Indexed Universal Life (IUL)MasteredCh 4 · Universal & VariableA fixed (non-variable) UL whose interest is linked to an index (often the S&P 500) — the owner's money is not invested in the index. Upside is lim…Individual Certificates (Group Life)MasteredCh 21 · Group ProvisionsA group life insurer must issue each covered member an individual certificate containing the group number and describing: the insured; the insurance p…Individual vs Group Health ContractsMasteredCh 13 · Classes of Health InsuranceIndividual policies are contracts between an insured and the company: an application and evidence of insurability are typically required, options/bene…Industrial (Home Service) LifeMasteredCh 4 · Special ProductsSmall face amounts, premiums payable weekly or monthly and collected at the home by a debit agent working a route. Often sold as burial insurance.Information and Privacy Protection ActMasteredCh 19 · Underwriting LawsBased on the NAIC insurance information & privacy model act (adopted in many states): insurers must comply with laws governing the dissemination of pr…Inspection (Investigative Consumer) ReportMasteredCh 7 · Underwriting Info SourcesOrdered for LARGE policies from outside investigative agencies: the applicant's general character, reputation, mode of living, finances, and hazards —…Inspection ReceiptMasteredCh 19 · Policy Issue & DeliverySigned when a prospect wants to review the policy BEFORE purchasing — no initial premium is paid, so no coverage is in force during the inspection per…Insurability-Type Conditional ReceiptMasteredCh 19 · Premium ReceiptsThe standard conditional receipt: the insurer makes a conditional offer of coverage, which the applicant accepts by paying the premium. Coverage becom…Insurable Group Categories & SizeMasteredCh 21 · Group LifeAlmost any group formed for a purpose other than obtaining life insurance is eligible for group life consideration. Insurable groups fall into: single…Insurable InterestMasteredCh 3 · Contract LawA financial/economic interest in the subject of insurance — you would suffer a real loss if it were harmed. Required for legally enforceable coverage.Insurable Interest — Automatic RelationshipsMasteredCh 7 · Insurable Interest & UnderwritingAutomatically presumed: yourself (unlimited), spouses, parents ↔ children, child in a grandparent, a business in its officers/directors/key employees,…InsuranceMasteredCh 1 · Industry BasicsThe transfer of risk from one party to another through the pooling of funds (premiums), in exchange for premium payments.Insurance Agency & Agent-in-ChargeMasteredCh 20 · LicensingAny business location where insurance transactions take place that only licensed insurance agents can perform. There must be an agent-in-charge at eac…Insurance With Other Insurer(s)MasteredCh 18 · Optional ProvisionsOptional provisions handling duplicate coverage with DIFFERENT insurers. Expense-incurred version: each insurer pays its pro rata (proportionate) shar…InsuredMasteredCh 1 · Industry BasicsThe customer who receives protection under the policy.Insurer (Carrier)MasteredCh 1 · Industry BasicsThe company that provides coverage and assumes the risk.Insuring ClauseMasteredCh 5 · Standard ProvisionsThe insurer's fundamental promise to pay the benefit at death (or maturity). Appears on the first page of the policy.Insuring Clause (Health)MasteredCh 18 · Necessary ProvisionsStates the insurer's promise to pay: the types of benefits provided, the circumstances under which they're paid, and the contract's start date and cov…Integrated DeductibleMasteredCh 15 · Cost SharingWhen major medical is packaged with basic coverage: amounts the basic policy pays COUNT toward the major medical deductible. Basic pays $4,000 of a $5…Interest-Adjusted Cost IndexesMasteredCh 6 · Policy Cost ComparisonNAIC-required index numbers that let consumers compare policy costs of the same generic type, factoring in premiums, death benefits, cash value, divid…Interest-Only MethodMasteredCh 10 · Amount of CoverageDetermines how much insurance is needed to maintain the family's after-tax consumption level if the insurer holds the principal and pays out earnings …Interest-Only OptionMasteredCh 6 · Settlement OptionsThe insurer holds the death benefit and pays only the earned interest (guaranteed minimum, paid at least annually) to the beneficiary. Principal is gu…Internal (Inside) Limits & Benefit PeriodMasteredCh 15 · Cost SharingCaps on specific covered services (semi-private room only, UCR-only, $10,000 rehab lifetime max). Post-ACA, internal/annual limits are allowed only on…Intoxicants & Narcotics ProvisionMasteredCh 18 · Optional ProvisionsOptional provision relieving the insurer of liability for losses sustained while the insured was under the influence of alcohol or non-prescribed drug…IRA Early Withdrawal: 10% Penalty & ExceptionsMasteredCh 11 · Rollovers & DistributionsTraditional IRA distributions before 59½ incur income tax + 10% penalty — waived for: death or disability · unreimbursed medical expenses above 7.5% o…J
Joint and Survivor AnnuityMasteredCh 9 · Payout OptionsPays over the lifetimes of two (or more) annuitants and continues until the LAST annuitant dies — guaranteed income for the duration of two lives. Com…Joint and Survivor Income OptionMasteredCh 6 · Settlement OptionsGuarantees income on a life-long basis to two or more people; often reduces (e.g., to ⅔ or ½) after the first death. Based on the ages of both benefic…Joint Life (First-to-Die)MasteredCh 4 · Special ProductsCovers two+ lives, pays at the FIRST death, then ends. Ages are averaged; premium is lower than separate policies.Joint Life AnnuityMasteredCh 9 · Payout OptionsPays two or more annuitants simultaneously, but ALL payments stop at the FIRST death — like a joint life insurance policy.Juvenile Insurance / Jumping JuvenileMasteredCh 4 · Special ProductsOrdinary life on a minor; an adult owns and pays (third-party ownership). Jumping juvenile: face amount "jumps" (≈5×) at a set age with no evidence of…K
Keogh Plan (HR-10)MasteredCh 11 · Small Employer PlansQualified plan for self-employed individuals and unincorporated businesses (from the Self-Employed Individuals Retirement Act of 1962). The owner part…Key Person (Key Employee) InsuranceMasteredCh 10 · Key Person & COLIProtects a business against financial loss from the death or disability of a vital employee (special managerial/technical skill). The business is appl…Key Person Disability InsuranceMasteredCh 16 · Business & Special UsesPays the business (owner, payor, beneficiary) when a key employee is disabled — funding replacement help, outside services, and lost income. Benefit =…L
L&H Guaranty Association Benefit LimitsMasteredCh 20 · Guaranty FundsThe Association's liability is never greater than the insolvent insurer's own contractual obligations — it pays no more than the benefit or policy lim…Law of AgencyMasteredCh 3 · Agency & AuthorityThe insurer is the principal; the agent represents it. Within the scope of authority, the agent's acts ARE the insurer's acts — including the agent's …Law of Large NumbersMasteredCh 2 · The Nature of InsuranceAs the number of similar and independent exposure units increases, actual losses more closely match expected losses — letting insurers predict losses …Legal ActionsMasteredCh 18 · Claims ProvisionsMandatory provision: the insured may bring no lawsuit against the insurer over a claim until at least 60 days after filing written proof of loss (give…Level (Annual) Premium AnnuityMasteredCh 9 · Premium & Timing ClassesFunded with fixed, constant periodic premiums until income begins. An older design with high front-end loads (expense charges deducted from deposits) …Level TermMasteredCh 4 · Term LifeConstant face amount for a set period, then expires. The most common term type.Levels & Settings of LTCMasteredCh 17 · Long-Term CareThree levels: skilled (daily, 24-hr, licensed professionals, physician-ordered) · intermediate (intermittent/occasional skilled care) · custodial (hel…License Qualifications & ApplicationMasteredCh 20 · LicensingThe DFS will not license anyone untrustworthy or incompetent. An applicant must be: a natural person at least 18; a U.S. citizen or legal alien with w…Licensing Examination & ReexaminationMasteredCh 20 · LicensingEach exam tests the applicant's ability, competence, and knowledge of the kinds of insurance under the license sought, the licensee's duties, and pert…Life Annuity with Period-CertainMasteredCh 9 · Payout OptionsIncome for life OR a specified period, whichever is LONGER. Die before the period ends → the beneficiary collects the remaining guaranteed payments. O…Life Income OptionMasteredCh 6 · Settlement OptionsLiquidates proceeds with a life contingency: guaranteed installments for as long as the beneficiary lives — income they cannot outlive. Funded by the …Life Income with Period CertainMasteredCh 6 · Settlement OptionsLifetime income, PLUS: if the beneficiary dies before a set period (e.g., 10 years), payments continue to a secondary payee for the remainder of the p…Life Insurance as PropertyMasteredCh 10 · Personal UsesLife insurance is unique: it is both protection AND an asset that can be bought and sold. Insurable interest is required only at purchase (inception) …Life Policy Exclusions (Aviation, Hazardous Activities)MasteredCh 5 · ExclusionsCommon life exclusions beyond war and suicide: high-risk aviation (stunt/test/student pilots, flight instructors, crop-dusting — fare-paying commercia…Life SettlementMasteredCh 6 · Viatical & Life SettlementsSale of an existing policy to a third party for more than its cash surrender value but less than its net death benefit. No illness required — the owne…Life with Refund Option (Installment / Cash)MasteredCh 9 · Payout OptionsLifetime income with a guarantee that the entire principal gets paid out — to the annuitant or, if they die first, to the beneficiary. Installment ref…Limited PolicyMasteredCh 13 · Classes of Health InsuranceCovers only a few or only one type of loss — by specific peril (accident-only, cancer), benefit amount (basic medical expense), specific procedures/ne…Limited Risk vs Special Risk PoliciesMasteredCh 13 · Classes of Health InsuranceLimited risk policies cover specific COMMON risks; special risk policies cover unusual hazards typically excluded or ignored by ordinary insurance con…Limited-Pay Whole LifeMasteredCh 4 · Whole LifePremiums paid for a set shorter period (10-pay, 20-pay, paid-up at 65), then paid-up for life. Higher premiums, faster cash value — still endows at 10…Lloyd's of LondonMasteredCh 1 · Company TypesNot an insurer — a marketplace/association (often compared to a stock exchange) where member syndicates individually underwrite coverage, including un…Long-Term Care InsuranceMasteredCh 17 · Long-Term CareCovers medical + personal services for people needing help with the activities of daily living due to chronic (not acute) conditions — at least 12 con…Long-Term Care Rider (Generalized vs Integrated)MasteredCh 5 · RidersPays if the insured is certified as unable to perform at least 2 of the 6 ADLs (eating, toileting, transferring, bathing, dressing, continence) for at…Loss (Direct vs Indirect)MasteredCh 2 · Perils, Losses & HazardsAn unintentional decrease in value due to a peril. Direct loss: the peril damages the person/property with no intervening cause (the peril is the prox…Loss of Earnings / Income ReplacementMasteredCh 16 · Defining DisabilityDefines disability by a drop in EARNED income (wages, salary, commissions, fees — never passive income like rent, interest, dividends). Typically requ…Loss PreventionMasteredCh 2 · Handling RiskTaking actions to eliminate damage or loss before it happens.LTC Benefit TriggersMasteredCh 17 · Long-Term CareTwo triggers — either qualifies: 1️⃣ inability to perform 2 of the 6 ADLs without substantial assistance 2️⃣ cognitive impairment (memory, orientation…LTC Benefit Triggers, ADLs and Cognitive Impairment (F.S. 627.9404)MasteredCh 22 · Long-Term CareEligibility must appear in a separate paragraph labeled "Eligibility for the Payment of Benefits." Acceptable triggers: loss of ability to perform act…LTC Benefits: Daily Limits & the Pool of MoneyMasteredCh 17 · Long-Term CareBenefits pay per day as a fixed indemnity (full daily amount regardless of cost) or reimbursement (actual cost up to the limit; home care often capped…LTC Care Settings and Terminology (FL)MasteredCh 22 · Long-Term CareSkilled care: licensed medical personnel (doctors, licensed nurses, physical therapists) under a doctor's orders — the nursing-home standard of 24-hou…LTC Grace Period, Secondary Addressee and Reinstatement (F.S. 627.94073)MasteredCh 22 · Long-Term CareFlorida LTC policies must give a grace period of not less than thirty (30) days; a claim during grace lets the insurer deduct the unpaid premium, and …LTC Home Health Care Minimums (F.S. 627.94071)MasteredCh 22 · Long-Term CareAn LTC policy containing a home health care benefit may NOT: condition benefits on an acute condition before home care is needed; limit home care to c…LTC Inflation ProtectionMasteredCh 17 · Long-Term CareStates require insurers to OFFER inflation protection (typically to applicants under ~76). Two forms: the automatic inflation rider (AIR) — daily bene…LTC Inflation Protection, Nonforfeiture and Contingent Benefit (F.S. 627.94072)MasteredCh 22 · Long-Term CareInflation protection — must be OFFERED: benefit increases of at least 5% compounded annually, purchasable as an automatic annual increase rider or a p…LTC Outline, Shopper's Guide and Advertising (FL)MasteredCh 22 · Long-Term CareOutline of coverage: delivered at the time of application (direct response insurers: on request, no later than policy delivery); must describe princip…LTC Preexisting Conditions and Permitted Exclusions (FL)MasteredCh 22 · Long-Term CareA Florida LTC contract may define a preexisting condition no more restrictively than one for which medical advice or treatment was recommended or rece…LTC Provisions & OptionsMasteredCh 17 · Long-Term CareWaiver of premium while on claim (standard or optional w/ 90-day wait) · exclusions: war, self-inflicted, drug/alcohol treatment, mental/nervous disor…LTC Regulation, Medicaid & PartnershipsMasteredCh 17 · Long-Term CareNAIC model minimums: ≥12-month benefits · free look · guaranteed renewable or noncancelable · no prior-hospitalization requirement · no facility-first…LTC Riders & Hybrid PlansMasteredCh 17 · Long-Term CareAccelerated death benefit rider: lump-sum share of a life policy's death benefit on terminal diagnosis (NOT LTC insurance under the NAIC model; payout…Lump-Sum (Cash Payment) OptionMasteredCh 6 · Settlement OptionsThe death benefit paid in a single payment, minus outstanding loans and overdue premiums. The most common and the default option. Received income-tax-…M
Major Medical Expense InsuranceMasteredCh 15 · Major MedicalComprehensive, high-limit coverage against catastrophic costs on an open-peril basis (covered unless excluded), built on the UCR standard with deducti…Managed Care / Medical Cost ManagementMasteredCh 14 · Cost ContainmentControlling how insureds use their coverage to contain costs. Four general approaches: mandatory second opinions · pre-certification review · ambulato…Mandated Coverage: Diabetes and OsteoporosisMasteredCh 22 · Required CoveragesDiabetes: health policies and HMO contracts must cover ALL medically necessary equipment, supplies, and services to treat diabetes when the physician …Market Conduct ExaminationsMasteredCh 20 · Financial Services RegulationThe OIR examines the affairs, transactions, accounts, records, and assets of each authorized insurer as often as it deems necessary — with statutory m…Market Value-Adjusted (Modified Guaranteed) AnnuityMasteredCh 9 · Fixed, Variable & IndexedA single-premium deferred annuity that locks in a guaranteed rate for a set maturity period (typically 2–10 years) but shifts SOME (not all) investmen…Marketing (Distribution) SystemsMasteredCh 1 · Industry BasicsHow insurers sell: independent (American) agency — a self-employed agent contracts with many insurers and owns the book of business (expirations); car…Marketplace Enrollment PeriodsMasteredCh 15 · StatutesOpen enrollment runs roughly Nov 1 – Jan 15 (enroll by Dec 15 → Jan 1 effective; later → Feb 1). A special enrollment period follows qualifying events…Mastectomy, Mammograms and the Fibrocystic RuleMasteredCh 22 · Required CoveragesFlorida mandates post-mastectomy coverage for prosthetic devices and reconstructive surgery, including all surgeries to restore symmetry between the b…Master PolicyMasteredCh 8 · Group BasicsThe actual group contract, issued to the employer / plan sponsor (the policy owner). It contains all the insuring clauses that define the benefits.Material MisrepresentationMasteredCh 3 · Contract LawA false statement in the application. Under F.S. 627.409 it defeats recovery only if it is fraudulent, or material to the acceptance of the risk or th…McCarran-Ferguson Act (1945)MasteredCh 1 · RegulationThe federal act that made state regulation of insurance primary: federal antitrust laws apply to insurance only to the extent states do not regulate i…Medical Exams & ReportsMasteredCh 7 · Underwriting Info SourcesRequired for higher face amounts (above the insurer's non-medical limits). May be completed by a paramedic or registered nurse — not necessarily a phy…Medical Information Bureau (MIB)MasteredCh 7 · Underwriting Info SourcesA nonprofit member-owned bureau of North American life/health insurers (roughly 430 members today; older course materials say 600–700) that shares cod…Medicare EligibilityMasteredCh 17 · Medicare Basics65+: citizens/5-year legal residents with 40 credits (10 years) of work (self or spouse) get premium-free Part A; others may buy in. Under 65: after 2…Medicare Enrollment Periods & PenaltiesMasteredCh 17 · Medicare BasicsInitial: 7 months — 3 before, the birth month, 3 after. General: Jan 1–Mar 31 (coverage the next month) with a 10% lifetime Part B penalty per 12-mont…Medicare Part A: Hospital InsuranceMasteredCh 17 · Parts A & BPremium-free for the fully insured (40 quarters of FICA). Covers inpatient hospital (semi-private room, meals, nursing, drugs, OR — not physicians' fe…Medicare Part B: Medical InsuranceMasteredCh 17 · Parts A & BOptional, monthly premium + annual deductible, then 80/20 — Medicare pays 80% of approved charges with NO out-of-pocket maximum. Covers physicians & s…Medicare Part C: Medicare AdvantageMasteredCh 17 · Parts C & DPrivate, Medicare-approved plans replacing Original Medicare (must cover everything A+B does; usually adds drugs/dental/vision). Requires enrollment i…Medicare Part D: Prescription DrugsMasteredCh 17 · Parts C & DVoluntary private drug plans (stand-alone with Original, or built into MA). Each has a formulary — ≥2 drugs per class, ALL drugs in 6 protected classe…Medicare SELECTMasteredCh 17 · MedigapA discounted Medigap variant that works like an HMO: full benefits only from network providers (PCP referrals; emergencies excepted) in exchange for a…Medicare Supplement (Medigap) BasicsMasteredCh 17 · MedigapPrivate policies that fill Original Medicare's gaps (deductibles, coinsurance, extra hospital days). Only for Original Medicare enrollees — never with…Medicare Supplement Marketing Standards (F.S. 627.6743, .6744)MasteredCh 22 · Medicare SupplementEvery entity marketing Medicare supplement coverage in Florida must: ensure agent policy comparisons are fair and accurate; ensure excessive insurance…Medicare Supplement Minimum Standards (F.S. 627.674, .6741)MasteredCh 22 · Medicare SupplementIn Florida, a Medicare supplement policy: may not define a preexisting condition to limit or deny coverage for longer than six (6) months after the ef…Medicare Supplement Open Enrollment (FL)MasteredCh 22 · Medicare SupplementThe annual Open Enrollment Period runs October 15 – December 7, with elections effective January 1. Age 65+: an insurer may not deny an application or…Medicare Supplement Replacement and Duplication (69O-156, F.A.C.)MasteredCh 22 · Medicare SupplementReplacement = buying a new Medicare supplement while canceling (or substantially reducing benefits of) an existing one. Applications must ask directly…Medicare: The Four PartsMasteredCh 17 · Medicare BasicsFederal health insurance (1965) administered by CMS for those 65+ and certain younger disabled people. Part A = hospital insurance · Part B = medical/…Medigap Core Benefits (Plan A)MasteredCh 17 · MedigapEvery Medigap plan must include the core: Part A daily coinsurance for days 61–90 and the reserve days · an extra 365 lifetime hospital days · Part B …Medigap Marketing RulesMasteredCh 17 · MedigapProhibited: duplication (selling a second Medigap), high-pressure tactics, cold lead advertising (ads hiding that an agent will call), twisting. Requi…Medigap Open Enrollment & Pre-ExMasteredCh 17 · MedigapSix months starting the month one is both 65 AND enrolled in Part B: guaranteed issue, no medical underwriting. Apply later and insurers may underwrit…Medigap vs. Medicaid and Medicare AdvantageMasteredCh 22 · Medicare SupplementIt is illegal to sell a Medigap policy to someone in a Medicare Advantage plan (unless their enrollment is ending) or on Medicaid (unless Medicaid pay…Methods of Handling Risk (STARR)MasteredCh 2 · Handling RiskSharing (spread among parties — reciprocals, coinsurance), Transfer (shift by contract — buying insurance), Avoidance (eliminate the activity — the MO…Military Suspense ProvisionMasteredCh 18 · Additional ProvisionsTemporarily suspends coverage while the insured is on active military service; when service ends, coverage resumes with no loss of benefits and no cov…Minimum Deposit (Financed) InsuranceMasteredCh 6 · PremiumsNOT an actual policy type — a funding strategy where the owner uses policy loans to pay premiums. Suited to high tax brackets. Under IRC §264(d), the …Minimum Essential Coverage ('Skinny') PlanMasteredCh 15 · StatutesA limited-benefit plan that technically satisfies the ACA's minimum-essential-coverage employer requirement — typically covering only preventive/welln…Misrepresentation (Unfair Practice)MasteredCh 20 · Marketing PracticesAn agent's use of publications, sales materials, or false, misleading, or deceptive statements to unfairly influence the purchase of a policy — e.g., …Misstatement of Age (Group)MasteredCh 21 · Group ProvisionsA Florida group life policy must contain a provision specifying an equitable adjustment of benefits if the insured's age has been misstated — with a c…Misstatement of Age (Health)MasteredCh 18 · Optional ProvisionsOptional provision: benefits are adjusted to what the premium paid would have purchased at the correct age. Age understated (said younger) → benefits …Misstatement of Age or SexMasteredCh 5 · Standard ProvisionsThe policy is NOT voided — the death benefit is adjusted to what the premium paid would have bought at the correct age/sex.Mixed PlanMasteredCh 1 · Company TypesA company that issues BOTH participating and nonparticipating policies.Modified Endowment Contract (MEC)MasteredCh 4 · Special ProductsAn overfunded life policy that fails the seven-pay test. Distributions taxed gain-first (LIFO) plus a 10% penalty before age 59½. Death benefit still …Modified Whole LifeMasteredCh 4 · Whole LifeLower premium for an intro period (≈3–10 yrs), then one step up to a rate higher than straight-life, level thereafter. For buyers expecting rising inc…Money Purchase PlanMasteredCh 11 · Defined Contribution PlansA defined contribution plan where the employer MUST contribute a fixed percentage of each employee's salary every year — set in advance, regardless of…Moral HazardMasteredCh 2 · Perils, Losses & HazardsLoss is more likely because of the insured's dishonest character — intentional, conscious wrongdoing or negative habits.Morale HazardMasteredCh 2 · Perils, Losses & HazardsLoss is more likely because of the insured's careless indifference — an unconscious "I don't care, it's insured" state of mind. Unintentional.MorbidityMasteredCh 13 · Covered PerilsThe probability or risk of becoming ill or disabled — whether due to an accident or disease. Morbidity is to health insurance what mortality is to lif…Morbidity Tables & RatesMasteredCh 19 · Premium CalculationTables revealing the frequency, extent, and duration of disability expected within a given group. A morbidity rate is the average number of persons in…Mortality Table (CSO Table)MasteredCh 6 · PremiumsA table showing the probability of death at each age (deaths per thousand). Sourced from the Commissioners Standard Ordinary (CSO) Mortality Table; mu…Mortgage Redemption InsuranceMasteredCh 4 · Term LifeA decreasing term policy whose face falls alongside the mortgage balance — pays off the home if the insured dies before it's repaid.Multiple Employer Trust (MET)MasteredCh 14 · Alternative Group FormsA fully insured MEWA established by a third party (insurer/TPA) pooling small employers for group benefits. The TRUST holds the master contract — empl…Multiple Employer Welfare Arrangement (MEWA)MasteredCh 14 · Alternative Group FormsAn ERISA arrangement providing health/welfare benefits to employees of two or more unrelated employers — often self-insured. Can be a trust, corporati…Multiple-of-Earnings MethodMasteredCh 10 · Amount of CoverageA rough estimate of insurance need: a pre-set multiple of current earnings — practitioners often use 5 or 7 × annual salary. Crude, but better than th…Mutual CompanyMasteredCh 1 · Company TypesOwned by policyholders (not publicly traded). Issues participating ("par") policies. Policy dividends are treated as a return of premium — not taxable…Mutualization / DemutualizationMasteredCh 1 · Company TypesMutualization = Stock → Mutual. Demutualization = Mutual → Stock (each policyholder receives a proportionate share of stock, or cash, based on his or …N
NAIC (National Association of Insurance Commissioners)MasteredCh 1 · RegulationA voluntary association of state insurance commissioners. It is not a regulator — it drafts model acts and model regulations that states may adopt, to…Named (Specified) vs Open (Special) PerilsMasteredCh 2 · Perils, Losses & HazardsNamed/specified perils: the policy LISTS what it covers — anything not listed is NOT covered. Open/special perils: the policy covers ALL direct causes…Natural GroupMasteredCh 8 · Eligibility & UnderwritingA group formed for a purpose OTHER than buying insurance — coverage must be incidental to why the group exists. Insurers will not write a group organi…Needs ApproachMasteredCh 10 · Amount of CoverageDetermines coverage from the survivors' goals and obligations: total capital needs (final expenses, debts, mortgage, education, emergency fund, beques…Net Amount at Risk (NAR)MasteredCh 4 · Key ConceptsThe pure insurance portion = death benefit − cash value. As cash value grows, the insurer's NAR shrinks.Net Payment Cost IndexMasteredCh 6 · Policy Cost ComparisonEstimates the average annual premium outlay (time-value adjusted) assuming the policy is kept — the cash value element is omitted. Best when the death…Net Premium vs Gross PremiumMasteredCh 6 · PremiumsNet (single) premium = mortality cost + interest only. Net level annual premium = the amount needed annually to fund future benefits. Gross premium = …Newborn Coverage (FL)MasteredCh 22 · Required CoveragesAny individual or group policy covering family members must cover a newborn of the insured from the moment of birth — and a newborn of a COVERED FAMIL…No Loss / No Gain StatutesMasteredCh 18 · Additional ProvisionsWhen one health policy replaces another, no-loss/no-gain laws make the new insurer pick up claims already in progress under the old policy — coverage …Non-Medical ApplicationMasteredCh 7 · The ApplicationAn application requiring no medical information beyond the application itself — used for younger applicants (20s–30s) seeking limited coverage, below …Non-Qualified PlanMasteredCh 11 · Qualified vs Non-QualifiedDoes NOT meet federal requirements → no favorable tax treatment: contributions are not deductible and the employer may legally discriminate in favor o…Noncancelable PolicyMasteredCh 18 · RenewabilityThe renewability class most favorable to the insured (and most expensive): as long as premiums are paid, the insurer can neither cancel/modify the pol…Noncancelable vs Guaranteed RenewableMasteredCh 16 · Policy StructureBoth guarantee renewal to a stated age as long as premiums are paid. Noncancelable: premium is ALSO locked forever (preferred occupations). Guaranteed…Noncontributory PlanMasteredCh 8 · Plans & ParticipationThe employer pays the entire premium. Florida requires the policy to insure all eligible employees — except anyone whose evidence of insurability the …Nonforfeiture OptionsMasteredCh 5 · Cash ValueGuaranteed ways to not lose accumulated cash value when premiums stop: (1) Cash surrender · (2) Reduced paid-up · (3) Extended term (the default).Nonforfeiture Options — Florida (F.S. 627.476)MasteredCh 21 · Nonforfeiture & SettlementUnder Florida's Standard Nonforfeiture Law (F.S. 627.476), a life policy must provide a paid-up nonforfeiture benefit on default (on a plan stipulated…Nonparticipating PolicyMasteredCh 1 · Company TypesNo dividends, no ownership/voting rights. Issued by stock companies.Nonrenewable / Period-of-Time PoliciesMasteredCh 18 · RenewabilityNonrenewable policies are temporary (in force one year or less) with NO renewal option — used to bridge anticipated coverage gaps. Period-of-time (ter…Notice of ClaimMasteredCh 18 · Claims ProvisionsMandatory provision requiring the policyowner to notify the insurer of a loss within 20 days of the occurrence or start of disability, or as soon as r…Notification of Termination (Group Master Policy)MasteredCh 21 · Group ProvisionsEvery insurer must notify each certificate holder (member) when the master policy has expired or been canceled. The insurer may act through the employ…O
Occupational vs Non-Occupational CoverageMasteredCh 16 · BasicsOccupational = covers on AND off the job, 24/7 (typical of INDIVIDUAL policies, which do NOT coordinate with workers' comp). Non-occupational = exclud…Offer & Acceptance (in insurance)MasteredCh 3 · Contract LawThe applicant makes the offer = completed application + initial premium. An app without premium is only an invitation. The insurer accepts by issuing/…Offer & Counteroffer (Rated Policy)MasteredCh 19 · Policy Issue & DeliveryCompleting the application and paying the first premium is the applicant's legal OFFER. Issuing the policy as requested is the insurer's acceptance; d…Office of Financial Regulation (OFR)MasteredCh 20 · Financial Services RegulationThe FSC office regulating all financial services not related to insurance: banks, credit unions, other financial institutions, finance companies, and …Office of Insurance Regulation (OIR)MasteredCh 20 · Financial Services RegulationThe FSC office responsible for all activities concerning insurers and other risk-bearing entities: company licensing, rates, policy forms (insurers mu…Opioid and Step-Therapy ProtectionsMasteredCh 22 · Required CoveragesAbuse-deterrent opioids: a policy covering abuse-deterrent opioid analgesics may impose prior authorization ONLY if the identical requirement applies …Optionally Renewable PolicyMasteredCh 18 · RenewabilityRenewal is at the company's option: the insurer may terminate any individual contract at its renewal date (with notice) or continue it — and may raise…Original Medicare vs Medicare AdvantageMasteredCh 17 · Medicare BasicsOriginal (A+B): federal fee-for-service, any provider nationwide, no referrals, NO out-of-pocket maximum, no drugs (buy Part D), pairs with Medigap. A…Other DI Riders & BenefitsMasteredCh 16 · RidersAMB: extra benefit for the first 6–12 months (covers the SSDI wait). Lifetime extension: benefits past 65. Hospital confinement: extra daily benefit +…Other Insurance With This InsurerMasteredCh 18 · Optional ProvisionsOptional provision: if the insured holds multiple policies with the SAME insurer, only the maximum benefit of one policy is payable; the insurer termi…Outline of CoverageMasteredCh 19 · Policy Issue & DeliveryA disclosure document most states require the agent to deliver to each health insurance applicant, generally before accepting the initial premium (Flo…Outline of Coverage (F.S. 627.642)MasteredCh 22 · DisclosureCompleted and sent to the applicant at the time of application, with an acknowledgment of receipt (or certificate of delivery) returned to the insurer…Own Occupation DefinitionMasteredCh 16 · Defining DisabilityTotally disabled if unable to perform the material and substantial duties of YOUR OWN occupation — even if you could do other work. The most generous …Owner's Provision (Ownership Rights)MasteredCh 5 · Standard ProvisionsThe policy owner holds ALL rights: name/change the beneficiary, borrow cash value, set premium mode, assign the policy, choose dividend and settlement…Owner's Rights / Assignment of BenefitsMasteredCh 18 · Additional ProvisionsThe policyowner holds all ownership rights, including the right to assign benefit payments directly to health care providers — avoiding pay-out-of-poc…P
Paid-UpMasteredCh 4 · Whole LifeNo more premiums owed, but coverage stays in force (e.g., a 20-pay life policy after year 20).Paid-Up Additions (Dividend Option)MasteredCh 5 · DividendsThe dividend buys small amounts of single-premium permanent insurance at the insured's current age, no proof of insurability. INCREASES death benefit …Parol Evidence RuleMasteredCh 3 · Contract LawOnly the written policy counts; verbal promises made before or at issue don't override it.Part A: Skilled Nursing Facility BenefitMasteredCh 17 · Parts A & BRequires a prior 3-day inpatient hospital stay for the same condition. Covers up to 100 days per benefit period: days 1–20 paid in full, days 21–100 c…Partial DisabilityMasteredCh 16 · Defining DisabilityUnable to perform one or more (but not all) key duties of your own occupation, or unable to work full-time — with a resulting income loss. Standard be…Participating ("Par") PolicyMasteredCh 1 · Company TypesPolicyholders participate: vote for the board and may receive policy dividends from the divisible surplus. Issued by mutual companies.Parties in UnderwritingMasteredCh 7 · Insurable Interest & UnderwritingApplicant — requests the insurance and completes the app. Proposed insured — the life to be covered. Policy owner — holds all rights (usually also the…Payment of ClaimsMasteredCh 18 · Claims ProvisionsMandatory provision directing who gets paid: benefits go to the insured (or, at the insurer's option, directly to the hospital/provider). A death bene…Payor Benefit RiderMasteredCh 5 · RidersOn a juvenile policy: if the adult payor dies or becomes totally disabled, premiums are waived until the child reaches a set age (18/21/25).Per Capita DistributionMasteredCh 6 · Beneficiaries"Per head" — proceeds divided evenly among all named LIVING beneficiaries. A deceased beneficiary's share does NOT pass to their heirs. This is the de…Per Stirpes DistributionMasteredCh 6 · Beneficiaries"By the bloodline" — a deceased beneficiary's share passes to their heirs (down the family branch). Makes contingent designations largely unnecessary.PerilMasteredCh 2 · Perils, Losses & HazardsThe immediate, specific event that CAUSES a loss. Property: fire, lightning, windstorm. Health: illness and accidents. Life insurance: the covered per…PersistencyMasteredCh 8 · Eligibility & UnderwritingThe percentage of policies that stay in force (don't lapse or get replaced) over a period. Insurers may avoid groups that switch carriers often — acqu…Personal ContractMasteredCh 3 · Contract CharacteristicsInsures the person, not the property, and generally can't be transferred without insurer consent.Personal Uses: Lump-Sum vs Income NeedsMasteredCh 10 · Personal UsesLump-sum (immediate cash) needs: final expenses, debt repayment, emergency fund, mortgage redemption, estate protection/conservation, charitable gifts…Physical Exam & AutopsyMasteredCh 18 · Claims ProvisionsMandatory provision giving the insurer the right — at its own expense — to examine the insured as often as reasonably necessary while a claim is pendi…Physical HazardMasteredCh 2 · Perils, Losses & HazardsA tangible, observable condition that makes loss more likely — it can be seen, touched, or measured.Point-of-Service (POS) PlanMasteredCh 14 · Managed Care NetworksA hybrid of an HMO and an indemnity plan: in-network care runs like an HMO (PCP + referrals + copays = highest coverage level), but the insured may go…Policy DividendMasteredCh 5 · DividendsA return of overpaid premium from a participating (mutual) policy → not taxable until total dividends exceed the premiums you've paid (any excess is o…Policy Effective DateMasteredCh 7 · Receipts & Effective DatePremium paid with the app → effective as of the receipt/medical-exam date. No premium with the app → effective only at delivery + first premium + stat…Policy FeeMasteredCh 19 · Premium CalculationA small transaction fee some insurers charge for the first or subsequent years of a policy, in addition to the regular premium. Paid either annually o…Policy LapseMasteredCh 5 · Standard ProvisionsTermination of a policy due to non-payment of premium after the grace period ends.Policy Loan Interest CapMasteredCh 21 · Individual ProvisionsUnder F.S. 627.4585 (the course note's "672.4585" was a typo), an insurer may not charge a fixed policy loan interest rate above 10% per year, subject…Policy Loan ProvisionMasteredCh 5 · Cash ValueOwner may borrow against cash value — no credit check, can't be "called," repay anytime. Technically a collateral assignment of cash value. Unpaid loa…Policy Reserves / Legal ReserveMasteredCh 6 · PremiumsFunds an insurer sets aside to pay current and future claims — a fixed liability required by law and a measure of solvency. The legal reserve amount i…Policy Settlement (F.S. 627.461, .4615, .462)MasteredCh 21 · Nonforfeiture & SettlementWhen an insured dies, settlement is paid upon receipt of proof of death and surrender of the policy (F.S. 627.461, .4615, .462). A lump-sum death bene…Policy SummaryMasteredCh 7 · Agent Duties & DisclosuresDescribes the SPECIFIC policy being presented: agent, insurer, policy and each rider — premiums, dividends, benefit amounts, cash surrender values, lo…Policy Summary (Florida Life)MasteredCh 21 · DisclosureContains specific information on an applied policy's coverage, provisions, and benefits. It must be delivered before or on the policy delivery date, a…Policy TermMasteredCh 19 · Premium CalculationThe period of time during which a policy remains in existence, as long as premiums are being paid.Policyholders Bill of RightsMasteredCh 20 · EthicsStatutory principles serving as standards for the Department, Commission, and Office in exercising their powers. Policyholders have the right to: comp…Post-Selection Underwriting ActivitiesMasteredCh 19 · The Underwriting ProcessThe underwriting department's work once the application arrives: evaluating the risk using all appropriate information sources, then determining accep…Pre-Certification & Preadmission TestingMasteredCh 14 · Cost ContainmentPre-certification (prospective review): insurer approval required BEFORE elective hospital admission — skipping it in a non-emergency reduces or elimi…Pre-Existing Condition ProvisionMasteredCh 18 · Exclusions & LimitsExcludes coverage for conditions that existed before the policy's effective date — even if the applicant didn't know about them. For DISCLOSED conditi…Pre-Existing Conditions & the Look-BackMasteredCh 15 · StatutesUnder the HIPAA framework (pre-2014, still exam-tested), a condition counts as pre-existing only if treated/diagnosed within the 6-month look-back bef…Pre-Licensing Education HoursMasteredCh 20 · LicensingCourse hours required before sitting the exam, by license: General lines — a 200-hour property & casualty course, or only a 40-hour course with at…Pre-Selection Underwriting ActivitiesMasteredCh 19 · The Underwriting ProcessThe agent/producer's work completing the initial application before it goes to the underwriting department: obtaining complete, detailed answers to al…Predetermination of BenefitsMasteredCh 13 · DentalA review — also called pre-certification or prior authorization — conducted to determine whether proposed services are medically necessary and covered…Preexisting Conditions and Provider Access (FL Minimums)MasteredCh 22 · Minimum Benefit StandardsInsurers and HMOs offering comprehensive individual medical coverage in Florida must offer at least one comprehensive policy that does NOT exclude pre…Preferred Provider Organization (PPO)MasteredCh 14 · Managed Care NetworksA sponsored network of providers contracting at prearranged discounted fee-for-service prices. PPOs finance but do not deliver care, require no gateke…Preferred RiskMasteredCh 19 · Risk ClassificationA better-than-average (low) risk rewarded with reduced premiums, based on the expectation of better-than-average morbidity experience. Typical markers…Pregnancy Discrimination Act (1978)MasteredCh 14 · RegulationsAmendment to the Civil Rights Act of 1964: employers (15+ employees) must treat pregnancy, childbirth, and related conditions the same as any other me…Premium Factors — Mortality, Interest, ExpensesMasteredCh 6 · PremiumsThe three factors in gross premium calculation: mortality (probability of death — the biggest factor), interest (insurer's investment return — higher …Premium Funding MethodsMasteredCh 6 · PremiumsSingle = one lump sum. Fixed/Level = spread evenly (overpay early to offset later costs). Modified = lower for a set period, then ONE step up, constan…Premium ModeMasteredCh 5 · Standard ProvisionsThe frequency with which the owner pays premiums (monthly, quarterly, semiannually, annually).Premium ReceiptMasteredCh 19 · Premium ReceiptsThe receipt the producer must leave with an applicant who pays the initial premium with the application. The type of receipt determines precisely when…Prescription Drug DatabasesMasteredCh 19 · Sources of InformationDatabases revealing an applicant's medication history, which tells underwriters a lot about health status — e.g., five years of blood-pressure medicat…Prescription Drug PlanMasteredCh 13 · Limited Policies — ServicesCovers the cost of prescription drugs not dispensed in a hospital or extended care facility. Each plan has a formulary. Typically requires a copayment…Presumptive DisabilityMasteredCh 16 · Defining DisabilityA medical definition: double dismemberment, or total permanent loss of sight, hearing, or speech automatically qualifies as total disability. The insu…Primary BeneficiaryMasteredCh 6 · BeneficiariesFirst in line to receive proceeds, income-tax-free. Multiple primaries can share in designated percentages; if one dies first, the surviving primaries…Primary Care Physician (Gatekeeper)MasteredCh 14 · Managed Care NetworksThe doctor an HMO (or POS) subscriber must select for general care — the PCP controls all referrals to specialists. A PCP referral is a pre-approval; …Primary Insurance Amount (PIA)MasteredCh 12 · Benefit CalculationThe basic benefit payable at full retirement age, derived from the worker's AIME (Average Indexed Monthly Earnings — lifetime earnings indexed for inf…Principal SumMasteredCh 13 · Limited Policies — Accident OnlyThe DEATH benefit payable under an AD&D policy when death results from an accident. It equals the face amount purchased and is the maximum the pol…Principle of IndemnityMasteredCh 1 · Industry BasicsRestore the insured to the financial position they were in before the loss — no profit from the loss. Typical of health, property & casualty insur…Privacy Notice & HIV ConsentMasteredCh 7 · Underwriting Info SourcesAn agent taking an application that captures personal financial or health information must give the applicant a privacy notice — for life insurance th…Private vs Government (Social) InsuranceMasteredCh 13 · Classes of Health InsuranceMost health coverage is bought from private insurers — commercial companies, service providers, provider groups, plus self-insured employers and assoc…Probationary Period (New Employees)MasteredCh 8 · Eligibility & UnderwritingThe wait — typically 1 to 6 months — before a new employee becomes eligible for the group plan. Eligible employees are usually defined by class: full-…Probationary Period (Policy Provision)MasteredCh 16 · Policy StructureA one-time period — typically 15 to 30 days, set by the contract, not by law — starting at the policy's effective date during which sickness claims ar…ProducerMasteredCh 1 · Industry BasicsAnyone licensed to sell, solicit, or transact insurance — includes both agents and brokers. In Florida, "producer" is simply a synonym for agent (F.S.…Profit-Sharing PlanMasteredCh 11 · Defined Contribution PlansDistributes a portion of company profits to qualifying employees. Contributions are NOT required every year — but to keep tax benefits the IRS require…Prohibited Advertising Practices (Life)MasteredCh 21 · AdvertisingFlorida life advertisements cannot omit information or use phrases/illustrations with the potential to mislead. Required content: policy names that co…Proof of LossMasteredCh 18 · Claims ProvisionsMandatory provision requiring the insured to demonstrate that a loss occurred: proof within 90 days of the loss; if that's not reasonably possible, as…Protection of Beneficiaries from Creditors (F.S. 222.13, .14)MasteredCh 21 · Individual ProvisionsAt the insured's death, life proceeds are paid exclusively to the named beneficiary(ies) and are exempt from creditors' claims unless the policy provi…Public Adjuster vs All-Lines AdjusterMasteredCh 20 · LicensingAdjuster licenses split two ways. A public adjuster, for compensation, prepares/completes/files claims for an insured or third-party claimant, negotia…Pure RiskMasteredCh 2 · Risk Types & InsurabilityA risk with only the possibility of loss — no chance of gain. The only insurable type of risk.Q
Qualified PlanMasteredCh 11 · Qualified vs Non-QualifiedA retirement plan meeting IRS/federal requirements for favorable tax treatment: employer contributions are deductible business expenses, contributions…Qualified vs Non-Qualified AnnuityMasteredCh 9 · Uses & SuitabilityQualified: purchased inside a tax-qualified retirement plan — contributions are tax-deductible (or pre-tax via salary reduction). Non-qualified: bough…Quarter of Coverage (Credit)MasteredCh 12 · Coverage & EligibilityThe unit Social Security uses to measure insured status — also called a credit. Credits are earned on annual earnings — one credit per set dollar amou…R
Rebating (Florida)MasteredCh 20 · Marketing PracticesUnless expressly allowed by law, knowingly: making any contract or agreement other than as plainly expressed in the issued contract; paying or offerin…Receivership, Rehabilitation & LiquidationMasteredCh 20 · EnforcementA financially unstable insurer may be placed into receivership, with a third-party receiver controlling its operations. The Department of Financial Se…Reciprocal InsurerMasteredCh 1 · Company TypesMembers (subscribers) agree to insure each other. Unincorporated but regulated. Managed day-to-day by an attorney-in-fact.Recurrent Disability ProvisionMasteredCh 16 · Defining DisabilityA relapse within 6 months of returning to work counts as a continuation of the prior claim: no new elimination period, and it draws down the ORIGINAL …Reduced Paid-Up OptionMasteredCh 5 · Cash ValueUses cash value as a single premium to buy a smaller paid-up permanent policy — no more premiums, still builds cash value. Coverage for the LONGEST ti…Refund Life Income OptionMasteredCh 6 · Settlement OptionsLifetime income with a guarantee that the full original death benefit gets paid out: if the beneficiary dies early, the balance goes to a secondary pa…Reinstatement (Health)MasteredCh 18 · Mandatory ProvisionsMandatory provision letting a lapsed policy be restored. Back-premium payments are limited to premiums due within the previous 60 days. Reinstatement …Reinstatement ProvisionMasteredCh 5 · Standard ProvisionsA lapsed policy may be restored (generally within 3 years) with proof of insurability + all back premiums + interest. Restores the original-age premiu…ReinsuranceMasteredCh 2 · Handling RiskTransferring risk from one insurer to one or more OTHER insurers — how insurance companies protect themselves from catastrophic loss.Relation of Earnings to Insurance (Average Earnings)MasteredCh 18 · Optional ProvisionsOptional provision in disability income policies: if combined monthly benefits from all policies exceed the insured's earnings — in Florida, the great…Relative Value ScaleMasteredCh 15 · Basic PlansEach surgery is assigned units of relative cost rather than dollars; a conversion factor gives each unit a dollar value. Costs shift? Adjust the unit …Renewable TermMasteredCh 4 · Term LifeOwner may renew without proving insurability. Renews at attained age → the premium steps up each period.Renewal of Appointments (24-Month Cycle)MasteredCh 20 · AppointmentsAn appointment continues in force until suspended, revoked, or terminated — but insurers must file renewal requests biennially (every twenty-four [24]…Renewal, Nonrenewal and Cancellation (F.S. 627.6425, .6571)MasteredCh 22 · Renewal RulesFlorida individual and group health coverage must renew at the policyholder's option except for listed reasons. Individual: nonpayment; fraud or inten…Replacement (Florida Definition)MasteredCh 21 · ReplacementA transaction in which a new policy or contract is purchased and it is known to the proposing insurer or its agent that, because of the transaction, a…Replacing a Health PolicyMasteredCh 19 · The ApplicationHealth policy replacement is rare, but when the agent's report shows a replacement, most states require consumer-protection procedures: discussing the…RepresentationMasteredCh 3 · Contract LawA statement believed true to the best of the applicant's knowledge. NOT part of the contract; matters only to the extent it's material. Applicant stat…Required Minimum Distributions (RMDs)MasteredCh 11 · Rollovers & DistributionsMandatory annual withdrawals from a traditional IRA beginning by April 1 of the year after the owner turns 73 (SECURE Act 2.0). Missing one triggers a…RescissionMasteredCh 3 · Contract LawMaking a contract null and void — undoing it as if it never existed. The insurer's remedy for concealment or fraud.Residual DisabilityMasteredCh 16 · Defining DisabilityA proportional benefit while working part-time with an income loss of at least 20%: lose 60% of income → collect 60% of the total disability benefit.Restoration of BenefitsMasteredCh 18 · Additional ProvisionsProvides that amounts paid for a loss do not permanently reduce the total benefits available for future claims. Restoration may be immediate (disabili…Retired Lives Reserve (RLR)MasteredCh 8 · Other Group FormsGroup product that continues life coverage into retirement: annual renewable term PLUS a reserve account that accumulates while working, then pays the…Retirement Earnings TestMasteredCh 12 · Benefit CalculationWorking while collecting benefits before FRA reduces benefits $1 for every $2 earned over the annual limit. In the year FRA is reached: $1 for every $…Return of Premium / Return of Cash Value RidersMasteredCh 5 · RidersTypes of increasing term. ROP: beneficiary gets face + all premiums paid. ROCV: face + the cash value.Revocable vs Irrevocable BeneficiaryMasteredCh 6 · BeneficiariesRevocable = owner may change anytime, no permission needed. Irrevocable = cannot be changed without the beneficiary's written consent; the beneficiary…RiderMasteredCh 5 · RidersAn add-on provision that adds benefits or modifies the policy, usually for extra premium.Right to DeferMasteredCh 5 · Cash ValueThe insurer may delay paying cash surrender or a policy loan up to 6 months.RiskMasteredCh 2 · Risk Types & InsurabilityThe uncertainty or potential of loss. Two types: pure risk (loss only — insurable) and speculative risk (loss OR gain — not insurable).Risk Classifications — Standard, Substandard, PreferredMasteredCh 2 · Risk Types & InsurabilityStandard = average potential for loss, standard premium. Substandard = higher-than-average risk — higher premium, reduced benefit, or declined. Prefer…Risk ManagementMasteredCh 2 · Handling RiskAnalyzing exposures that create risk and designing programs to handle them: detect the exposure, select a method to reduce risk, execute the plan, and…Risk Pooling (Loss Sharing)MasteredCh 2 · The Nature of InsuranceSpreading the cost of possible losses over a large number of similar (homogeneous) exposure units. Requires: a large number of units, similar risks, a…Risk Purchasing Group (RPG)MasteredCh 1 · Company TypesA group that buys liability insurance FROM an insurer on a group basis (the group becomes the master policyholder). It does NOT act as an insurer or r…Risk Retention Group (RRG)MasteredCh 1 · Company TypesA group-owned liability insurer formed under the federal Liability Risk Retention Act (1986): members in the same business or industry own the company…Rollovers & Direct TransfersMasteredCh 11 · Rollovers & DistributionsMoving qualified-plan or IRA money to an IRA tax-free. Requirements: reinvest within 60 days; amount unlimited. If a distribution from an employer pla…Roth IRAMasteredCh 11 · IRAsBack-end benefits: contributions are after-tax (never deductible), but qualified withdrawals of earnings are completely TAX-FREE. Same contribution li…Roth Qualified vs Non-Qualified WithdrawalsMasteredCh 11 · IRAsA withdrawal is qualified (earnings tax-free) only if the account is at least 5 years old AND the owner is 59½+, dies, becomes disabled, or uses it fo…S
Salary Continuation PlanMasteredCh 10 · Executive Benefit PlansA corporate-sponsored benefit that replaces an executive's income at death, retirement, or disability. Funded by the EMPLOYER (the key difference from…Scheduled vs Non-Scheduled Dental PlansMasteredCh 13 · DentalScheduled (basic) plans pay the actual cost of each listed service up to a published stated maximum — the insured pays anything above it. They have NO…Secondary Addressee (F.S. 627.4555, .4556)MasteredCh 21 · Individual ProvisionsFor an individual life policy in force at least one year covering an insured age 64 or older, the policyowner may designate a secondary addressee (in …Secondary Premium FactorsMasteredCh 19 · Premium CalculationPolicy-design choices that adjust the base rate: Benefits — the greater the number/level/type of benefits, the higher the premium. Benefit period — th…Section 1035 ExchangeMasteredCh 6 · TaxationA tax-free, insurer-to-insurer exchange of like-kind contracts — the owner never takes constructive receipt of the cash, and the old contract's cost b…Section 125 Cafeteria PlanMasteredCh 15 · Tax-Advantaged AccountsIRC §125 arrangement letting employees pick benefits from a menu pre-tax — including health insurance and FSAs. Sole proprietors, partners, and more-t…Section 457 PlanMasteredCh 11 · Salary Reduction PlansDeferred compensation plan for state and local GOVERNMENT employees and certain nonprofits. Deferred amounts are excluded from gross income until rece…Section 529 PlanMasteredCh 11 · Education PlansState-operated investment plans for qualified education costs. Two types: college savings plan (use at any eligible school) and prepaid tuition plan (…Self-Funded Plans, Stop-Loss & ASOMasteredCh 14 · Alternative Group FormsThe employer funds and pays claims itself under an ERISA employee welfare benefit plan ('self-insurance' ≠ no insurance). Stop-loss insurance reimburs…Self-Insurance vs No InsuranceMasteredCh 2 · Handling RiskSelf-insurance is a PLANNED retention strategy — holding reserves to self-finance predictable losses. No insurance is simply refusing to acknowledge r…Separate Account & SubaccountsMasteredCh 9 · Fixed, Variable & IndexedThe account holding a variable annuity's investment options, segregated from the insurer's general account — if the contract so provides, the portion …Settlement OptionsMasteredCh 6 · Settlement OptionsThe methods for paying out the death benefit. The five: (1) lump-sum, (2) interest only, (3) fixed period, (4) fixed amount, (5) life income. The owne…Seven-Pay Test / TAMRAMasteredCh 4 · Special ProductsFrom TAMRA (1988), codified at 26 U.S.C. §7702A: for a contract entered into on or after June 21, 1988, if premiums paid in the first 7 contract years…SGLI — Servicemembers' Group LifeMasteredCh 8 · Military & FederalGroup term life for full-time members of the armed services: up to $500,000 in $50,000 increments. All active servicemembers are automatically covered…Short-Term Medical InsuranceMasteredCh 13 · Limited Policies — CircumstancesScaled-down, medically underwritten major medical for coverage gaps. Under Florida law (F.S. 627.6426) a short-term policy must expire less than 12 mo…Short-Term vs Long-Term DisabilityMasteredCh 16 · BasicsSTD: weekly benefits, minimal waiting periods (7/10/14 days), benefit periods up to 2 years max (group STD often 13–26 weeks; covers childbirth). LTD:…SIMPLE PlanMasteredCh 11 · Small Employer PlansSavings Incentive Match Plan for Employees — for small employers with no more than 100 employees (who earned ≥ $5,000 last year) and NO other qualifie…Simplified Employee Pension (SEP)MasteredCh 11 · Small Employer PlansThe EMPLOYER contributes to IRAs that employees establish and maintain. Created (1978) to spare small businesses the cost/compliance burden of full qu…Single Needs MethodMasteredCh 10 · Amount of CoverageSizes coverage to one specific need rather than a full plan — e.g., a loan or debt, an education fund, or death taxes. Common when funds are insuffici…Single Premium Annuity (SPIA / SPDA)MasteredCh 9 · Premium & Timing ClassesFully funded with one lump sum — principal is created immediately and no further deposits are allowed. Income can start right away (SPIA — single prem…Single-Premium Whole LifeMasteredCh 4 · Whole LifeOne lump-sum premium fully pays up the policy; immediate cash value. Most expensive up front, cheapest over the contract's life.SlidingMasteredCh 20 · Marketing PracticesThe act or practice of: representing that an ancillary coverage or product is required by law with the purchase of insurance when it isn't; representi…Small Employer Definitions (F.S. 627.6699)MasteredCh 22 · Small EmployersThe Florida Employee Health Care Access Act promotes coverage availability to small employers regardless of claims experience or employee health statu…Small Employer Group RulesMasteredCh 14 · Group HealthGenerally 2–50 full-time employees (30+ hrs/week; Florida's statutory floor is 1 employee, and F.S. 627.6699 counts 25+ hrs as eligible). HIPAA/ACA ma…Small Employer: Guaranteed Issue, Enrollment and Fair MarketingMasteredCh 22 · Small EmployersEvery small employer carrier must issue all employer health benefit plans on a guaranteed-issue basis (the statute's guaranteed-issue text covers grou…Social Insurance Supplement (SIS) RiderMasteredCh 16 · RidersPays a monthly benefit when SSDI or workers' comp is delayed, denied, or pays less than the rider amount. Insured must apply for all government benefi…Social Security (OASDI)MasteredCh 12 · Characteristics & FundingOld-Age, Survivors, and Disability Insurance — created by the Social Security Act of 1935. Provides retirement income, disability income, a lump-sum d…Social Security Blackout PeriodMasteredCh 10 · Amount of CoverageThe gap during which the surviving spouse receives NO Social Security: it begins when the youngest child in the spouse's care turns 16 (the mother's/f…Social Security Disability BenefitsMasteredCh 12 · Disability & SurvivorsRequires fully insured status + the 20/40 recent-work test, a five-month waiting period (benefits begin in the sixth month), and TOTAL disability: ina…Solicitation of InsuranceMasteredCh 20 · DefinitionsThe attempt to persuade any person to purchase an insurance product by: describing benefits or terms (including premiums or rates of return), distribu…SolicitorMasteredCh 1 · Industry BasicsAn individual who refers prospects and solicits applications on behalf of a producer but is NOT licensed to sell insurance — a solicitor cannot bind c…Special QuestionnairesMasteredCh 19 · Sources of InformationSupplemental forms gathering detailed information about a non-medical aspect of the applicant's life: avocations, aviation, foreign residence/travel, …Specified (Dread) Disease PolicyMasteredCh 13 · Limited Policies — Illness OnlyProvides limited benefits for one specific disease, such as cancer or heart disease. Benefits are a scheduled, fixed-dollar amount tied to specified p…Speculative RiskMasteredCh 2 · Risk Types & InsurabilityA risk with the chance of both loss AND gain. Not insurable.Spendthrift ClauseMasteredCh 6 · Settlement OptionsProtects proceeds held by the insurer from the beneficiary's creditors and from reckless spending — benefits paid in fixed installments. The beneficia…Split-Dollar PlanMasteredCh 10 · Executive Benefit PlansAn employer-employee arrangement funded with cash value life insurance in which the death benefit and cash value (and often the premium) are SPLIT bet…Spousal IRAMasteredCh 11 · IRAsA working spouse may fund a separate IRA for a non-working (non-wage-earning) spouse up to the full annual limit (plus catch-up if the non-working spo…Standard RiskMasteredCh 19 · Risk ClassificationAn applicant who fits the insurer's guidelines for issuing the policy without special restrictions or an additional rating. Standard risks meet the sa…Standardized Plans A–N & RulesMasteredCh 17 · MedigapNAIC-standardized letters A–N (E/H/I/J retired). Since 2020, Plans C & F (which cover the Part B deductible) are closed to newly eligible members — D …Statement of Continued Good HealthMasteredCh 7 · Policy Issue & DeliveryWhen the first premium was NOT paid with the application, the agent must collect the premium at delivery AND obtain the insured's signed statement tha…Stock Bonus PlanMasteredCh 11 · Defined Contribution PlansLike a profit-sharing plan, but contributions are NOT based on profits and benefits are paid in company STOCK — employees share in stock-price gains/l…Stock CompanyMasteredCh 1 · Company TypesOwned by stockholders / shareholders (publicly traded). Issues nonparticipating policies. Stockholder dividends are taxable.Stock Redemption & §303 PlansMasteredCh 10 · Business ContinuationAn entity plan for a closely held corporation: the corporation buys a policy on each stockholder and is obligated to redeem (purchase) the deceased st…STOLI / IOLIMasteredCh 3 · Contract LawStranger/Investor-Originated Life Insurance — a policy initiated by someone with no insurable interest, as a wager on a life. Lacks legal purpose → vo…Stop-Loss / Out-of-Pocket MaximumMasteredCh 15 · Cost SharingThe most an insured pays for covered services in a plan year — deductible + coinsurance + copays. Hit it and the insurer pays 100% for the rest of the…Straight (Ordinary) Whole LifeMasteredCh 4 · Whole LifeThe most basic whole life: level premiums paid from issue until death (or age 100).Straight (Pure) Life AnnuityMasteredCh 9 · Payout OptionsIncome for the annuitant's life only — no refund, no survivor benefit. Because nothing is held back for guarantees, it pays the HIGHEST monthly income…Straight (Pure) Life IncomeMasteredCh 6 · Settlement OptionsInstallments for as long as the beneficiary lives; payments stop at death — no refund, even after a single payment. Remaining proceeds are forfeited t…Structured SettlementMasteredCh 9 · Uses & SuitabilityUsing an annuity to distribute lawsuit settlements or lottery winnings over time (often 10–20 years). The payer buys the annuity from an insurer at a …SubrogationMasteredCh 3 · Contract LawThe insurer's right to "step into the insured's shoes" and recover a paid claim from the at-fault party. Applies to health/property — not life.Substandard (Rated) RiskMasteredCh 19 · Risk ClassificationA risk below the insurer's standard/average guidelines — due to poor health, a dangerous occupation, or hazardous habits. Some substandard applicants …Suicide ClauseMasteredCh 5 · ExclusionsLife policies customarily exclude suicide for the first 2 years from issue. Within that period → insurer refunds premiums (minus loans), no death bene…Suitability / Best Interest (Florida)MasteredCh 21 · SuitabilityFlorida insurers must establish standards and procedures for consumer recommendations that result in transactions involving life and annuity products,…Suitability Information (12 Items)MasteredCh 21 · SuitabilityConsumer information appropriate to determining the suitability of a recommendation: age; annual income; financial situation and needs (including the …Surplus Lines InsuranceMasteredCh 1 · Company TypesCoverage for high, substandard, or unusual risks the admitted (authorized) market will not write — placed with a nonadmitted insurer through a license…Surrender Charges (Back-End Loads)MasteredCh 9 · Charges & Living BenefitsA penalty for cancelling the annuity or withdrawing more than the free-withdrawal corridor (e.g., 10% per year). Typically declines each year (e.g., 8…Surrender Cost IndexMasteredCh 6 · Policy Cost ComparisonAverage cost per $1,000 for a policy surrendered for its cash value at the end of a period (10–20 yrs). Best for buyers who prioritize cash value grow…Surrender ValueMasteredCh 6 · PremiumsThe amount available in cash upon voluntary termination of a policy before it becomes payable by death or maturity.Survivor BenefitsMasteredCh 12 · Disability & SurvivorsMonthly income from the deceased worker's PIA: surviving spouse — 100% at FRA, ~71.5% at age 60, any age while caring for a child under 16 · children …Survivorship Life (Second-to-Die)MasteredCh 4 · Special ProductsCovers two+ lives, pays at the LAST death. Cheaper than separate policies; used in estate planning to fund estate taxes.T
Tax Treatment of PremiumsMasteredCh 6 · TaxationIndividual life premiums are a personal expense — NOT tax-deductible. Narrow exceptions: premiums paid on a policy owned by and payable to a qualified…Tax-Qualified LTC & TaxationMasteredCh 17 · Long-Term CareHIPAA-qualified policies must: pay nothing Medicare reimburses · trigger on 2 of 6 ADLs or severe cognitive impairment · be at least guaranteed renewa…Tax-Sheltered Annuity — 403(b) / 501(c)(3)MasteredCh 9 · Uses & SuitabilityA qualified annuity plan reserved for employees of non-profit charitable, educational, and religious organizations (public schools, churches, etc.). C…Taxable Wage BaseMasteredCh 12 · Characteristics & FundingThe maximum annual earnings subject to the Social Security portion of FICA tax, indexed yearly to the national average wage index. Applies to employer…Taxation of Cash Value & Surrender (Cost Basis)MasteredCh 6 · TaxationCash value interest grows tax-deferred. Cost basis = total premiums paid − dividends received. On surrender (cost recovery rule): the amount above the…Taxation of Death ProceedsMasteredCh 6 · TaxationA lump-sum death benefit is income-tax-free to the beneficiary (exception: the transfer-for-value rule when a policy was sold before death). Paid in i…Taxation of Disability InsuranceMasteredCh 16 · Group & TaxationThe IRS taxes each dollar ONCE — premium in or benefit out. Individual policies: after-tax premiums → tax-free benefits. Group: employer-paid (deducti…Taxation of Medical Expense InsuranceMasteredCh 15 · Tax-Advantaged AccountsBenefits received are NOT taxable (they offset expenses). Employees itemizing may deduct premiums + unreimbursed costs exceeding 7.5% of AGI. Self-emp…Taxation of Policy DividendsMasteredCh 6 · TaxationDividends are tax-exempt (a return of excess premium). Dividends above total premiums paid are taxable. Interest earned on accumulated dividends is ta…Taxation of Policy LoansMasteredCh 6 · TaxationStandard policy: loans are NOT taxable (they reduce equity; loan interest isn't deductible). MEC: loans/withdrawals are taxed interest-first (LIFO) to…Taxation of Social Security BenefitsMasteredCh 12 · Characteristics & FundingBenefits become partly subject to federal income tax when combined income — AGI + tax-exempt interest + half of benefits — exceeds $25,000 (single) or…Temporary Insurance AgreementMasteredCh 7 · Receipts & Effective DateLimited coverage between application/first premium and policy issue. Usually pays only if the insurer would have issued the policy but for the death —…Term (Temporary) LifeMasteredCh 4 · Term LifePure protection for a limited period. Pays only if the insured dies during the term. No cash value. Greatest death benefit per premium dollar.Terminally IllMasteredCh 6 · Viatical & Life SettlementsNot expected to survive a medical condition for more than 24 months.Termination of AppointmentMasteredCh 20 · AppointmentsAn appointing entity may terminate an appointee anytime (subject to contract rights) but must give the appointee at least sixty (60) days' advance not…Tertiary Beneficiary & SuccessionMasteredCh 18 · BeneficiariesThe third in line for policy death proceeds, paid only if the insured outlives both the primary (first, receives proceeds income tax-free) and seconda…The 20/40 Rule (Disability)MasteredCh 12 · Coverage & EligibilityTo qualify for disability benefits, a worker age 31 or older must have earned 20 quarters of coverage within the 40 quarters (10 years) ending when th…The Application — Three PartsMasteredCh 7 · The ApplicationPart I — General: name, age, sex, occupation, income, policy type/amount, beneficiary, other/pending insurance, hazardous hobbies, tobacco, replacemen…The Five Covered Loss CategoriesMasteredCh 13 · Covered LossesHealth insurance addresses at least five distinct loss categories: (1) Medical expense — reimbursement for hospital, surgical, physician, and outpatie…The Six Activities of Daily LivingMasteredCh 17 · Long-Term CareBathing · Dressing · Toileting · Transferring · Continence · Eating. 'Substantial assistance' = hands-on help OR stand-by assistance (caregiver within…Time Limit on Certain Defenses (Incontestability)MasteredCh 18 · Mandatory ProvisionsMandatory provision making an individual health policy incontestable after a set period: in Florida, 2 years (F.S. 627.607) — the NAIC Model Act allow…Time Payment of ClaimsMasteredCh 18 · Claims ProvisionsMandatory provision requiring the insurer to pay a claim immediately upon receiving proof of loss. Periodic benefits (disability income) must be paid …Top-Heavy PlanMasteredCh 11 · ERISA RulesA plan where key employees' account balances exceed 60% of the plan's total accrued value. Top-heavy rules force minimum employer contributions for al…TortMasteredCh 3 · Contract LawA private/civil wrong (independent of a contract) heard in civil court. Negligence is the classic tort behind insurance claims.Traditional IRAMasteredCh 11 · IRAsIndividual retirement account: anyone of any age with EARNED income may contribute up to the annual limit or 100% of compensation, whichever is less (…Transacting Insurance (Florida)MasteredCh 20 · DefinitionsAny of the following, done in connection with the business of insurance: solicitation or inducement, preliminary negotiations, effectuation of a contr…Transfer-for-Value RuleMasteredCh 6 · TaxationIf a life policy is sold or transferred for valuable consideration before the insured's death, the death benefit loses its income-tax-free status — th…Trial ApplicationMasteredCh 7 · Receipts & Effective DateAn application submitted WITHOUT the initial premium. Even if approved and issued, the policy is not effective until the first premium is collected (t…TwistingMasteredCh 20 · Marketing PracticesKnowingly making misleading representations, incomplete or fraudulent comparisons, or fraudulent material omissions about any insurance policies or in…U
UL Death Benefit — Option A vs Option BMasteredCh 4 · Universal & VariableOption A (1) = LEVEL death benefit — NAR shrinks as cash value grows. Option B (2) = INCREASING death benefit = face + cash value — costs more.Unaffiliated Insurance AgentMasteredCh 20 · AppointmentsA licensed agent who appoints themselves and holds NO appointment from any insurer — practicing as an independent consultant analyzing or abstracting …Underwriting (Risk Selection)MasteredCh 7 · Insurable Interest & UnderwritingThe process of reviewing an applicant's risk profile to decide whether they're insurable and at what rate. Primary purpose: protect the insurer agains…Underwriting DepartmentMasteredCh 1 · Industry BasicsReviews applications, approves or declines coverage, and assigns risk classifications.Unfair Claim Settlement Practices (Florida)MasteredCh 20 · Marketing PracticesUnfair/deceptive when knowingly committed or performed with such frequency as to indicate a general business practice: settling claims based on docume…Unfair Discrimination (Florida)MasteredCh 20 · Marketing PracticesProhibited acts include: unfair discrimination between individuals of the same actuarially supportable class and equal expectation of life in rates, d…Unfair vs Legal DiscriminationMasteredCh 7 · Policy Issue & DeliveryProhibited (unfair): refusing to insure solely because of race, color, creed, marital status, sex, or national origin (F.S. 626.9541(1)(x)1) — or beca…Uniform Individual Accident & Sickness Policy Provisions (NAIC)MasteredCh 18 · NAIC Model LawNAIC model law adopted by nearly all states standardizing individual health contract wording: 12 MANDATORY provisions (must appear in every individual…Uniform Simultaneous Death ActMasteredCh 6 · Special SituationsIf the insured and primary beneficiary die in a common disaster and the order of death can't be determined, the insured is presumed to have survived (…Unilateral ContractMasteredCh 3 · Contract CharacteristicsOnly one party (the insurer) makes an enforceable promise. The insured never promises to pay premiums — the insurer simply cancels if unpaid.Uninsurable RiskMasteredCh 19 · Risk ClassificationAn applicant whose risk is so significant that no coverage is offered — the application is rejected. Examples: terminal illness, fraud.Universal Life (UL)MasteredCh 4 · Universal & VariableFlexible premiums + adjustable death benefit + unbundled (itemized costs) + interest-sensitive cash value. Buys YRT term inside; only the first premiu…Unlawful Use of DesignationsMasteredCh 20 · Marketing RulesIn any sales presentation or solicitation, a licensee may NOT use a designation or title that falsely implies special financial knowledge/training or …Unlicensed EntityMasteredCh 20 · DefinitionsAny individual or company required to be licensed under Florida law for an activity but not so licensed. Licensure is one of Florida's key consumer-pr…Unpaid PremiumsMasteredCh 18 · Optional ProvisionsOptional provision letting the insurer deduct any premium due and unpaid from claim benefits — typically when a covered loss occurs during the grace p…USA PATRIOT Act — AML ProgramsMasteredCh 7 · Underwriting Info SourcesRequires insurers to maintain a written anti-money-laundering (AML) program with four required elements: (1) risk-based policies, procedures and inter…Usual, Customary & Reasonable (UCR)MasteredCh 15 · Basic PlansNon-scheduled plans pay based on what 70–80% of practitioners in the geographic region charge for the service. UCR is the maximum eligible basis — cha…Utilization Review (Case Management)MasteredCh 14 · Cost ContainmentA specialist (often an RN) inside the insurer reviews large claims and treatment alternatives. Three timings: prospective (pre-certification BEFORE ad…Utmost Good FaithMasteredCh 3 · Contract LawBoth parties must disclose all material facts — no concealment or deceit.V
Valued ContractMasteredCh 1 · Industry BasicsPays a fixed, predetermined amount regardless of actual loss. This is how life insurance works.Variable AnnuityMasteredCh 9 · Fixed, Variable & IndexedPremiums are invested in securities through the insurer's SEPARATE account, so the OWNER assumes the investment risk — payments rise and fall with per…Variable Life (VL)MasteredCh 4 · Universal & VariableFixed premium, guaranteed minimum death benefit. Cash value goes into a separate account chosen by the owner — owner bears all investment risk.Variable Universal Life (VUL)MasteredCh 4 · Universal & VariableHybrid: UL's flexible premium and adjustable death benefit + VL's investor-directed separate-account cash value (no guaranteed return). Requires a sec…VestingMasteredCh 11 · ERISA RulesThe schedule under which employees' rights to employer-contributed funds become nonforfeitable with years of service. ERISA minimums depend on the pla…VGLI — Veterans' Group LifeMasteredCh 8 · Military & FederalLets a servicemember convert SGLI to renewable term after separating from service. SGLI/VGLI may later be converted to permanent coverage with a comme…Viatical SettlementMasteredCh 6 · Viatical & Life SettlementsThe sale of an existing life policy to a third party for a percentage of the face value; the buyer pays remaining premiums and collects the death bene…ViatorMasteredCh 6 · Viatical & Life SettlementsThe original policy owner who sells their policy in a viatical settlement.Vision Care & Hearing PlansMasteredCh 13 · Limited Policies — ServicesVision care pays reasonable-and-customary charges for eye exams by ophthalmologists and optometrists, with partial coverage for fitting, contact lense…Void vs VoidableMasteredCh 3 · Contract LawVoid = never legally in force (missing a CLOC element). Voidable = valid, but one party may set it aside (e.g., insurer voiding for material misrepres…W
WaiverMasteredCh 3 · Contract LawThe voluntary giving up of a known right — usually by the insurer (e.g., accepting a late premium waives the right to deny for it).Waiver of Cost of Insurance (Monthly Deduction)MasteredCh 5 · RidersThe universal life version of waiver of premium: on disability the insurer waives only the monthly cost of insurance, not the full flexible premium.Waiver of Premium RiderMasteredCh 5 · RidersIf the insured becomes totally disabled, the insurer pays the premiums after a waiting period (usually 6 months). Cash value and dividends continue as…War Clause — Status vs ResultsMasteredCh 5 · ExclusionsStatus clause = NO coverage while in the military (even on furlough). Results clause = no coverage only if death results from military activity.WarrantyMasteredCh 3 · Contract LawA statement guaranteed to be true that becomes part of the contract. Presumed material. Common in property/casualty; rare in life/health applications.Wellness Rebates and Experimental TreatmentsMasteredCh 22 · Required CoveragesWellness rebate: an individual health policy may rebate premium when the insured enrolls and participates in a health wellness, maintenance, or improv…Whole (Permanent) LifeMasteredCh 4 · Whole LifeFixed level death benefit + fixed level premium + cash value. Permanent — never needs renewing or converting. Designed to mature/endow at age 100 (cas…Withdrawals: LIFO Taxation & the 10% PenaltyMasteredCh 9 · Annuity TaxationEarly withdrawals, loans, and surrenders from a deferred annuity are taxed LIFO — earnings come out FIRST and are taxed as ordinary income (contracts …Workers NOT Covered by Social SecurityMasteredCh 12 · Coverage & EligibilityMost federal employees hired before 1984 (Civil Service Retirement) · about 25% of state/local government workers who elect a state pension instead · …Workers' CompensationMasteredCh 16 · Social InsuranceState-mandated liability insurance paying medical, disability, and survivor benefits for work-related injuries and occupational disease — wage-based u…No terms match.