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MI Pre-Insurance Lic

L-M Vocabulary Words

TermDefinition
Lapse Termination of a policy due to non-payment.
Law of Large Numbers A mathematical principle of probability. Losses in a given category will come closer to a predictable number as the number of units (policies issued) increases. The larger the sample - the more accurate
Level Premium The cost remains unchanged, fixed, constant or guaranteed for the life of the policy.
Level Term Insurance A type of term insurance in which the death benefit remains constant over the policy's termj.
License Certification by the state's Division of Insurance that allows an individual to solicit insurance applications.
Life Annuity A contract offered by the life insurance industry that provides stipulated payments at regular intervals (usually monthly) for the life of the annuitant with no refund provisions once the annuitant dies.
Life Expectancy The average duration of the life remaining for a number of persons of the same age, according to a mortality table; the statistical probability of a person reaching a given age.
Life Income Settlement A life insurance settlement option that uses the policy proceeds to purchase an immediate annuity for the beneficiary.
Life Insurance A policy that will pay a stated amount to a beneficiary upon death of the insured.
Life Settlement A financial transaction in which a policyowner possesses an unneeded or unwanted life insurance policy. Policyowner can sell policy to 3rd party (not life insurance company).
Lifetime Maximum Benefit With medical expense insurance, it is the maximum benefit that the insurer will pay out over the length of the policy's duration.
Limited Pay Life A form of whole life insurance were premiums are paid for a specified number of years or to a specified age of the insured.
Limited Policies Restricted benefit policies as to named illnesses, accidents only, travel insurance, etc.
Loading A factor used to compute gross premium.
Loan Value The amount that can be borrowed from a permanent life insurance policy; usually a stated percentage of the cash value.
Long-Term Care A broad range of continuing services (both medical and personal assistance) for individuals who aren't expected to get better.
Long-Term Care Policy A type of health insurance that provides stated benefits for long-term care services typically taking place in a nursing home or home health care.
Loss Sharing A basic economic principle of insurance whereby a large group of insureds contribute a small amount (premium) to cover the possibility of large losses of a few. Also known as risk pooling.
Lump Sum Payment of the entire amount of proceeds from an insurance policy as opposed to a settlement option which pays the proceeds over time.
Major Medical Expense A health insurance policy that offers broad coverage and high benefits for hospitalization, surgeries and physician services subject to deductibles and coisnsurance.
Managed Care System of delivering health care and health care services by selected providers, programs of ongoing quality control and utilization review and financial incentives for members to use these selected providers and procedures.
Master Policy Issued to an employer under a group plan. Contains all insuring clauses and employee benefits. Individual insured employees receive a certificate of insurance, summarizing coverage.
Material Substantial and important information that could influence an outcome or action. i.e. statements on an application
Mature Date upon which life insurance proceeds become payable to the beneficiary, typically at death of the insured.
Maturity Value The life insurance policy proceeds become payable to the beneficiary, typically at death of the insured.
Maximum Out-Of-Pocket Annual cost paid by a policyowner or member for deductibles, coinsurance or copayments.
Medicaid State and Federal government sponsored health care program for low income individuals who are age 65 or older, blind or disabled, or families with dependents.
Medical Expense Insurance A broad category of health insurance that reimburses the insured for out-of-pocket medical expenses due to physician care, hospitalization, surgeries, etc.
Medical Information Bureau (MIB) Nonprofit organization that collects medical data for life and health insurance applicants for member insurance companies.
Medial Savings Account (MSA) An account inn which individuals contribute to pay for medical care or insurance. It was replaced by the HSA
Medicare Federal government sponsored health care program for individuals age 65 and older
Medicare Assignment An approved necessary and reasonable medical service that Medicare pays.
Medicare Part A Compulsory hospitalization insurance funded by all workers through FICA Insurance Contributions Act) taxation. Provides coverage for inpatient care
Medicare Part B Voluntary coverage for supplementary medical insurance to pay some of the costs of physician and medical services on an outpatient basis. The Medicare Beneficiary pays a monthly premium.
Medicare Part C Program that offers a variety of Medicare managed care choices.
Medicare Part D Prescription drug benefit program offered to Medicare beneficiaries who pay a monthly premium and an annual deductible to share the cost of prescription drugs with Medicare
Medicare Supplement Policy (Medigap Policy) Health insurance policy offered by commercial health insurers to fill the gaps (including deductibles and coinsurance) in Medicare Coverage.
Member Anyone (employee or dependent) covered by a managed care plan. AKA - Insured
Miscellaneous Expense With health insurance, charges other than room and board for a hospital stay. I.e. x-ray, tests, labs.
Misrepresentation Agent/Company - Deliberate false representation of the policy, terms & benefits. Applicant - deliberate false representation of the health or other condition of the insured.
Misstatement of Age or Gender Provision A condition that states if the insured misstated (intentionally or unintentionally) age or gender the insurance company will adjust the benefit payable to what the premiums paid should have purchased.
Modified Endowment Contract (MEC) A federal tax law that limits high amounts of premium into a cash value life insurance policy. If paid up in 7 years - cash value distributions can be taxed and penalized. Discourages use for investment or tax shelter
Morbidity The incidence or extent of illness, injury or disability in a defined population.
Mortality The incidence or extent of death in a defined population.
Mortality Table A listing of mortality experience of individuals by age. It permits an actuary to calculate how long a male or female of a given age group may be expected to live.
Mortgage Insurance The use of life insurance, usually decreasing term, to pay off a debt (mortgage) at the insured homeowner's death.
Mutual Insurer An insurance company owned by policyholders.
Created by: Rosemj42