Life, health, disability, and property insurance concepts tested on the CFP insurance planning domain.
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- What is term life insurance?
- Insurance providing death benefit coverage for a specified period (term), with no cash value; coverage ends at term expiration.
- What is whole life insurance?
- Permanent life insurance providing lifetime death benefit coverage and accumulating a cash surrender value.
- What is universal life (UL) insurance?
- Flexible permanent insurance with adjustable premiums and death benefits, and a cash value account credited with interest.
- What is variable life insurance?
- Permanent insurance whose cash value is invested in subaccounts (stocks, bonds), fluctuating with market performance.
- What is variable universal life (VUL) insurance?
- Combines variable life's market-linked cash value with universal life's flexible premiums and death benefits.
- What is convertible term insurance?
- Term policy allowing the insured to convert to permanent coverage without medical underwriting before conversion deadline.
- What is renewable term insurance?
- Term policy allowing renewal for another term at the end, without new medical underwriting, though premiums increase.
- What is level term insurance?
- Term life insurance with constant death benefit and level premiums throughout the policy term.
- What is decreasing term insurance?
- Term insurance where the death benefit decreases over time while premiums remain level.
- What is the contestability period in life insurance?
- Typically 2 years from issuance, during which the insurer may contest the policy based on material misstatements.
- What is insurable interest in life insurance?
- The financial interest a person has in another person remaining alive, required to prevent wagering contracts.
- What is a health insurance deductible?
- The amount an insured must pay out-of-pocket before the insurer begins to cover eligible expenses.
- What is the difference between a copay and coinsurance?
- Copay is a fixed dollar amount per service; coinsurance is a percentage of the allowed cost the insured pays.
- What is an out-of-pocket maximum in health insurance?
- The maximum annual amount an insured must pay in deductibles, copays, and coinsurance before coverage becomes 100%.
- What is a PPO (Preferred Provider Organization)?
- A health plan offering in-network providers at lower costs and out-of-network providers at higher costs; referrals not required.