FREE Life and Health Insurance Study Guide 2026: A Complete Walkthrough

This free life and health insurance study guide walks through the highest-yield content the state producer licensing exam tests, organized into five modules that mirror the standard NAIC-model content outline — Insurance Basics, Life Insurance, Annuities, Health & Accident Insurance, and State Regulations & Ethics.^[1]

It is interactive, not a wall of text: every module has worked scenarios, comparison tables, labeled diagrams, exam tips, and built-in flashcards, taught the way the exam is actually tested — the distinctions a producer must know cold, like term vs permanent insurance, own-occ vs any-occ disability, and the four parts of Medicare.

Read it module by module, then round out your prep with our practice questions and flashcards. Because this exam is state-administered(by PSI, Pearson VUE, or Prometric for your Department of Insurance), the General Knowledge content below is consistent nationwide; your state’s specific law section is separate, so verify it against your state’s candidate handbook.

Life & Health Exam Snapshot

Because the exam is state-administered, the exact number of questions, time limit, and fees vary by state— always confirm them on your Department of Insurance candidate handbook or the testing vendor’s bulletin. What does not vary much is the General Knowledge content: the life, health, annuity, and general-principles material this guide teaches is consistent nationwide because it follows the NAIC model framework.^[1]

The percentages above show how this guide allocates its teaching, not an official blueprint — every state weights its sections differently. Life and Health together dominate, so the policy types, provisions, riders, and the disability/Medicare content deserve the most study time.

How the Exam Is Built

The Life & Health producer exam exists to confirm you can sell life and health insurance competently and ethically. It is split into two halves: a General Knowledge section testing universal insurance concepts, and a State Lawsection testing your specific state’s insurance code and producer rules. This guide teaches the General Knowledge content as five modules and points you to your state handbook for the law section.^[1]

• Insurance Basics & General — risk and insurable interest, the legal contract, the parties and producer authority, and underwriting: the framework everything else sits on.
• Life Insurance — term vs permanent policies, the standard provisions, riders, the nonforfeiture/dividend/settlement options, beneficiaries, and how life insurance is taxed.
• Annuities & Retirement — the accumulation and payout phases, fixed/variable/indexed and immediate/deferred annuities, payout options, taxation, and qualified plans.
• Health & Accident Insurance — disability income, medical expense and managed care, long-term care, the ACA, Medicare and Medicaid, and group coverage with COBRA and HIPAA.
• State Regulations & Ethics — licensing and the regulator, the unfair trade practices, fiduciary duty and the handling of premiums, suitability, and replacement rules.

Insurance Basics & General

Insurance Basics is the foundation of the General Knowledge section. Before any product, the exam tests how insurance works as a risk-transfer mechanism, the law that governs the contract, who the parties are, and how an insurer decides whom to insure.^[1]

Risk, Hazards & Insurable Interest

Insurance handles pure risk — situations with only a chance of loss or no loss. Speculative risk (loss, no loss, or gain, like gambling) is not insurable. Insurers pool many similar pure risks and rely on the law of large numbers: the more exposures pooled, the more accurately losses can be predicted and priced.

A peril is the cause of a loss (e.g. illness); a hazard is a condition that increases the chance of loss (a physical hazard like a dangerous job, a moral hazard like intent to defraud, or a morale hazard like carelessness). The four ways to handle risk are to avoid, reduce, retain, or transfer it — insurance is risk transfer.

Insurable interest is the requirement that prevents wagering on lives: you must stand to suffer a genuine loss from the insured’s death. For life insurance it must exist only at the time of application (inception), not at death — the opposite of property insurance. You have it in yourself, a spouse, a dependent, a business partner (for a buy-sell), a key employee, and a debtor (up to the loan).^[1]

The Insurance Contract

A valid contract needs four elements: offer and acceptance(the application is usually the offer; the insurer’s issuance as applied for is the acceptance), consideration(the premium and the applicant’s statements in exchange for the insurer’s promise), competent parties, and a legal purpose.

Insurance contracts also have special characteristics: they are aleatory (unequal dollar exchange tied to chance), unilateral (only the insurer makes an enforceable promise), conditional (benefits depend on conditions being met), and a contract of adhesion (drafted by the insurer, so ambiguities favor the insured). Both parties owe utmost good faith.

Statements on a life or health application are representations (true to the best of the applicant’s knowledge), not warranties (guaranteed absolutely true), so an innocent error generally won’t void the policy. Concealment (silence on a material fact) and material misrepresentation, however, can let the insurer rescind during the contestable period.^[1]

Parties, Producers & Authority

The insurer issues the policy; the insured is the person whose life/health is covered; the owner holds the policy rights (often the same as the insured); and the beneficiary receives the death benefit. A producer represents the insurer when an agent, or the client when a broker.

A producer’s authority comes in three forms: express (spelled out in the agency contract), implied (reasonably needed to carry out express authority), and apparent(authority a third party reasonably believes the producer has, based on the insurer’s conduct). Insurers come as stock companies (owned by shareholders, nonparticipating) or mutual companies (owned by policyowners, participating/dividend-paying), and as admitted (state-licensed, guaranty-fund backed) or non-admitted/surplus lines insurers.^[1]

Underwriting & Risk Classification

Underwriting is how an insurer decides whom to insure and at what price, with the goal of guarding against adverse selection. The producer performs field underwriting — gathering accurate information and completing the application correctly, which is the primary source of underwriting information.

Other sources include the producer’s report, the Medical Information Bureau, an Attending Physician Statement, medical/paramedical exams, and consumer or inspection reports (which require notice to the applicant under the Fair Credit Reporting Act). The underwriter then assigns a risk class: preferred (best rates), standard, substandard/rated (insurable but higher risk), or declined.^[1]

Life Insurance

Life Insurance is the heaviest part of the General Knowledge section. The exam tests the policy types and the distinctions between them, the standard provisions, the riders that customize a policy, the options that handle cash value and proceeds, and how it is all taxed.^[1]

Term vs Permanent Policies

Term is temporary, pure protection for a set period with no cash value — the cheapest way to buy a given death benefit. It comes as level (face and premium level), decreasing (declining face, often for a mortgage), and annual renewable (ART) (renews yearly, rising premium). It can be renewable (renew without new evidence) and convertible (convert to permanent without new evidence).

Whole life is permanent: a level premium, a guaranteed level death benefit, and a guaranteed cash value that endows at age 100/121. Variants include limited-pay (paid up early) and single-premium (one lump sum).

Universal life adds a flexible premium and an adjustable death benefit (Option A level / Option B increasing), with a current interest rate on the cash value. Variable life and VUL invest the cash value in separate-account subaccounts the owner directs — the owner bears the risk and a securities license is required.^[1]

Policy Provisions

Standard life provisions show up all over the exam. The entire contract provision says the policy plus the attached application are the whole contract. The insuring clausestates the insurer’s promise to pay.

The free look gives the owner a window (commonly 10 days) after delivery to return the policy for a full refund. The grace period (commonly 30/31 days) keeps the policy in force while an overdue premium is paid.

The incontestability clause bars the insurer from contesting the policy for application misstatements after about two years (fraud excepted in many states). The misstatement of age or sex provision adjusts the benefit to what the premium would have bought at the correct age/sex rather than voiding the policy. Other provisions include reinstatement, the policy loan and automatic premium loan, assignment, and the suicide clause (1–2 years).^[1]

Riders

Riders customize a policy. The waiver of premium rider pays the premiums during the insured’s total disability. The guaranteed insurability rider lets the insured buy more coverage at set dates with no new exam. The accidental death (AD&D) rider pays extra (often double) for accidental death only.

The accelerated death benefit rider lets a terminally ill insured collect part of the death benefit early from the insurer — distinct from a viatical settlement, where the policy is sold to a third party. Term riders add coverage on a spouse or children, the return of premium rider refunds premiums if the insured survives, and the payor rider waives premiums on a juvenile policy if the adult payer dies or is disabled.^[1]

Nonforfeiture, Dividend & Settlement Options

Three sets of options recur constantly. Nonforfeiture options decide what happens to a whole life policy’s cash value if the owner stops paying: take the cash surrender value, buy a reduced paid-up policy, or take extended term insurance (the automatic default — full face amount as term for a limited time).

Dividend options apply to participating policies: cash, reduce the premium, accumulate at interest (the interest is taxable), paid-up additions, or one-year term. Settlement options control how proceeds are paid: lump sum, interest only, fixed period (set how long), fixed amount (set the dollar amount), or life income (annuitized).^[1]

Beneficiaries & Taxation

Beneficiaries can be primary or contingent (secondary), and revocable (changeable anytime) or irrevocable (consent needed to change). Per stirpes passes a deceased beneficiary’s share to their heirs; per capita splits it among survivors.

The common disaster provision presumes the insured survived a simultaneous death, routing proceeds to the contingent beneficiary. Naming the estate exposes proceeds to probate and creditors — usually avoided.

On taxation, a lump-sum death benefit is generally income-tax-free to the beneficiary, and cash value grows tax-deferred. But a policy overfunded faster than the 7-pay test allows becomes a modified endowment contract (MEC): its withdrawals and loans are taxed LIFO (gains first) with a possible 10% penalty before age 59½. A 1035 exchange lets you swap one life/annuity/LTC contract for another tax-free.^[2]

Annuities & Retirement

Annuities are the mirror image of life insurance: life insurance protects against dying too soon, while an annuity protects against living too long — outliving your savings. The exam tests their phases, types, payout options, and taxation, plus the qualified-plan context.^[1]

Annuity Basics & Phases

An annuity has two phases. In the accumulation (pay-in) phase, premiums are paid and the value grows tax-deferred. In the annuitization (pay-out) phase, the accumulated value is converted into a stream of income. The owner controls the contract, the annuitant’s life measures the payout, and the beneficiary receives any death benefit during accumulation.^[1]

Annuity Types & Payout Options

Annuities are classified two ways. By how the value grows: a fixed annuity credits a guaranteed rate (the insurer bears the risk), a variable annuity invests in subaccounts (the owner bears the risk; a securities license is required), and an indexed annuity links interest to a market index with a guaranteed floor. By when income starts: immediate (SPIA — income within ~1 year of a single premium) or deferred (income delayed, allowing growth first).

Payout options trade income size for guarantees. Life-only (straight life) pays the largest income for life but stops at death with nothing to heirs. Life with period certain guarantees a minimum number of payments. Installment or cash refund guarantees the annuitant gets back at least the premium paid. Joint and survivor pays over two lives.^[1]

Annuity Taxation & Qualified Plans

A nonqualified annuity grows tax-deferred; withdrawals before annuitization are taxed LIFO (gains out and taxed first), with a 10% penalty on the taxable amount before age 59½. During annuitization an exclusion ratio splits each payment into a tax-free return of cost basis and taxable interest.^[2]

Annuities often fund retirement plans. A qualified plan (401(k), traditional IRA, SEP/SIMPLE, 403(b)) uses pre-tax contributions and tax-deferred growth, with withdrawals taxed as ordinary income and required minimum distributions in retirement. A Roth IRA is the reverse — after-tax contributions, tax-free qualified withdrawals.^[2]

Health & Accident Insurance

The Health & Accident half covers a lot of ground: disability income, medical expense and managed care, long-term care, the ACA, the government programs (Medicare and Medicaid), and group coverage with its continuation rules. Health insurance is priced on morbidity, not mortality.^[1]

Disability Income Insurance

Disability income (DI) replaces lost income. The two key timing terms are the elimination period (the unpaid waiting period before benefits start — a “time deductible”) and the benefit period (how long benefits are paid). A longer elimination period lowers the premium.

The definition of disability matters most: own-occupation pays if you can’t do your job; any-occupation pays only if you can’t do any suitable job.

Other features include residual/partial benefits (proportional to lost income), presumptive disability (automatic for severe losses like sight or two limbs), and a COLA rider. Business DI products include business overhead expense, key person, and buy-sell. On taxation: employer-paid benefits are taxable; individually-paid benefits are tax-free.^[1]

Medical Expense & Managed Care

Major medical covers large medical expenses with a deductible (paid before the plan pays), coinsurance (a percentage shared, e.g. 80/20), copays (flat fees), and an out-of-pocket maximum (after which the plan pays 100%). Managed care controls cost: HMOs use in-network providers and a primary-care gatekeeper (paid by capitation), PPOs allow in- and out-of-network care with no referral, and POS plans blend the two.

Tax-advantaged accounts pair with health plans: an HSA requires a qualified High-Deductible Health Plan and offers a triple tax advantage (deductible contributions, tax-free growth, tax-free qualified withdrawals). FSAs are employer salary-deferral accounts (use-it-or-lose-it); HRAs are employer-funded and employer-owned.^[4]

Long-Term Care & the ACA

Long-term care (LTC) insurance covers custodial and skilled care — nursing home, assisted living, and home care — when a person can no longer perform the Activities of Daily Living (eating, bathing, dressing, toileting, transferring, continence; inability to do two of six is a common trigger) or has a cognitive impairment. Tax-qualified LTC policies offer favorable tax treatment, and state Partnership programs protect assets from Medicaid spend-down.

The Affordable Care Act (ACA) reshaped individual major medical: guaranteed issue with no pre-existing condition exclusions, ten essential health benefits, metal tiers (Bronze through Platinum), a medical loss ratio (80%/85%), dependent coverage to age 26, no lifetime limits, and income-based premium tax credits.^[4]

Medicare & Medicaid

Medicare is the federal program for those 65+ and certain disabled people. Part A is hospital insurance (usually premium-free), Part B is medical insurance (monthly premium, ~80% after the deductible), Part C (Medicare Advantage) is a private plan that replaces Original Medicare, and Part D covers drugs. A Medicare Supplement (Medigap) fills the gaps in Original Medicare but can’t be used with a Part C plan.

Medicaid is different: a joint federal-state, means-testedprogram for low-income individuals, with eligibility based on income and assets rather than age. The two can interact — a “dual eligible” person qualifies for both.^[3]

Group Coverage, COBRA & HIPAA

Group insurance covers a group under one master contract held by the employer; members receive certificates of coverage. Group plans control adverse selection with open-enrollment windows and minimum participation. When members leave, the conversion privilege lets them convert to an individual policy (often within 31 days) without evidence of insurability.

COBRA lets qualified beneficiaries keep group health coverage after a qualifying event — generally 18 months (up to 36 for certain events) — by paying up to 102% of the full premium. HIPAA portability uses a certificate of creditable coverage so prior coverage credits against a new plan’s pre-existing condition limitation. Renewability ranges from optionally/conditionally renewable up to guaranteed renewable and noncancelable.^[5]

Regulations & Ethics

The General Knowledge section also tests regulation and market conduct — the rules that protect consumers and keep producers honest. (Your state’s specific insurance code is tested in the separate State Law section.) Insurance is regulated primarily at the state level under the McCarran-Ferguson Act.^[1]

Licensing & Regulation

A producer must be licensed and, to act for a particular insurer, often appointed by it. Producers complete continuing education (hours plus an ethics requirement set by each state) to renew, and may hold resident, nonresident (by reciprocity), or temporary licenses. The state Insurance Commissioner/Director regulates the industry: issuing and revoking licenses, examining insurers, holding hearings, and issuing cease-and-desist orders.

The NAIC develops the model laws and regulations that states adopt, which is why the General Knowledge content is so consistent nationwide, even though the NAIC itself has no direct enforcement power.^[1]

Market Conduct & Unfair Trade Practices

The Unfair Trade Practices Act prohibits several abuses the exam loves to test. Misrepresentation is making false statements about a policy or insurer. Twisting is using misrepresentation to convince a client to replace a policy at another insurer; churning is the same abuse within the same insurer.

Rebating is giving an inducement not in the policy to make a sale. Others include defamation, coercion, and false advertising.^[1]

Fiduciary Duty, Suitability & Replacement

A producer who collects premiums owes a fiduciary duty: those funds belong to the insurer/insured and must be held in trust and remitted promptly — never commingled with personal funds. Suitability rules require reasonable grounds that a recommendation fits the client, and annuity sales carry a heightened best-interest standard, especially for seniors.

Replacement of an existing policy is allowed but tightly regulated: the producer must give the required disclosures and notice, and the existing insurer gets a chance to conserve the policy. Many states extend the free look on a replacement. Federal law also applies — 18 U.S.C. 1033/1034 bars those convicted of certain crimes from the business without consent, and Gramm-Leach-Bliley and HIPAA protect consumer privacy.^[1]

How to Use This Study Guide

Work through the guide one module at a time. After each module, check it off in the contents to raise your exam-readiness score, then drill the same content in our free practice questions and flashcards — active recall and timed practice are what move knowledge into exam-day performance.

• Spend the most time on Life and Health. Together they dominate the General Knowledge section — the policy types, provisions, riders, disability, and Medicare are the densest, most-tested content.
• Master the classic contrasts. Term vs permanent, own-occ vs any-occ, viatical vs accelerated death benefit, twisting vs churning, and Medicare A/B/C/D recur all over the exam.
• Don’t skip your state law. This guide teaches the universal General Knowledge content; your state’s code, license rules, and required provisions are a separate section — budget time for it.
• Learn the taxation rules cold. Death benefits, cash value, MECs, annuity LIFO, and qualified vs Roth treatment are reliable point-scorers.
• Then prove it. When a module feels easy, confirm it with our practice questions and flashcards — aim for 80%+.

Common questions Life & Health candidates search and get asked — each answered briefly and backed by an official source (NAIC, IRS, CMS/Medicare.gov, HHS, or DOL). Tap any card to test yourself.

Life & Health Glossary

Key life and health insurance terms in one place. Hover any dotted term throughout the guide for its definition; the full list is below.

producer

The modern license term for an insurance agent or broker — a person licensed to solicit, negotiate, or sell insurance.

insurable interest

A genuine financial or emotional stake in another's continued life. For life insurance it must exist only at the time of application (inception), not at death.

pure risk

A risk involving only the chance of loss or no loss (no chance of gain) — the only kind of risk that is insurable.

speculative risk

A risk involving the chance of loss, no loss, or gain (such as gambling) — not insurable.

adverse selection

The tendency of higher-than-average risks to seek or keep insurance more than good risks, controlled by underwriting.

law of large numbers

The principle that the more similar exposures an insurer pools, the more accurately it can predict losses and price premiums.

morbidity

The incidence of sickness and disability in a group — used to price health insurance.

mortality

The incidence of death in a group — used to price life insurance.

aleatory

A contract in which the dollars exchanged are unequal and depend on an uncertain event; insurance contracts are aleatory.

unilateral

A contract in which only one party (the insurer) makes a legally enforceable promise.

contract of adhesion

A take-it-or-leave-it contract drafted by one party; ambiguities are interpreted in favor of the insured.

utmost good faith

The duty of both parties to deal honestly and disclose all material facts.

representation

A statement on an application believed true to the best of the applicant's knowledge (the standard for life/health apps).

warranty

A statement guaranteed to be absolutely true; a breach can void coverage even if immaterial.

concealment

The intentional failure to disclose a material fact the insurer needs to evaluate the risk; can void the policy.

material fact

Information that would affect the insurer's decision to issue a policy or set its premium.

waiver

The voluntary giving up of a known legal right.

estoppel

Being barred from asserting a right because of prior conduct the other party relied on.

underwriting

The process of evaluating, classifying, and pricing risks to decide whether and how to insure an applicant.

MIB

The Medical Information Bureau — a clearinghouse where member insurers share coded medical/risk data to detect fraud and omissions.

APS

An Attending Physician Statement — a report from the applicant's own doctor requested during underwriting.

field underwriting

The producer's role in accurately completing the application and screening risks before submission.

stock insurer

An insurer owned by shareholders that issues nonparticipating policies (no dividends).

mutual insurer

An insurer owned by its policyowners that issues participating (dividend-paying) policies.

term life insurance

Temporary life insurance for a set period with no cash value; it pays only if the insured dies during the term.

whole life insurance

Permanent life insurance with a level premium and guaranteed cash value that endows at age 100/121.

universal life insurance

Permanent insurance with a flexible premium and an adjustable death benefit; cash value earns a current interest rate.

variable life insurance

Permanent insurance whose cash value is invested in separate-account subaccounts the owner directs; requires a securities license.

cash value

The living, savings element of a permanent policy that the owner can borrow against or surrender.

free look period

A window after policy delivery (commonly 10 days) to examine the policy and return it for a full refund.

grace period

A period after a premium due date (commonly 30/31 days) during which an overdue premium keeps the policy in force.

incontestability clause

After the policy is in force ~2 years, the insurer can no longer contest it for application misstatements (except fraud in many states).

reinstatement

Restoring a lapsed policy by paying back premiums with interest and providing new evidence of insurability.

automatic premium loan

An optional provision that borrows from cash value to pay an overdue premium and prevent lapse.

nonforfeiture options

What a whole life owner can do with cash value at surrender: cash surrender value, reduced paid-up, or extended term.

extended term

The default nonforfeiture option — uses cash value to buy paid-up term insurance for the same face amount.

reduced paid-up

A nonforfeiture option that buys a smaller, fully paid-up policy of the same type.

dividend options

Choices for a participating policy's dividend: cash, reduce premium, accumulate at interest, paid-up additions, or one-year term.

settlement options

Ways the death benefit is paid out: lump sum, interest only, fixed period, fixed amount, or life income.

waiver of premium

A rider that pays the policy's premiums during the insured's qualifying total disability.

guaranteed insurability

A rider letting the insured buy more coverage at set future dates without new evidence of insurability.

accelerated death benefit

A rider/provision letting a terminally ill insured collect part of the death benefit early from the insurer.

viatical settlement

Selling an existing life policy to a third party for cash; the buyer becomes owner and beneficiary.

contingent beneficiary

The secondary beneficiary who receives the death benefit only if no primary beneficiary survives the insured.

irrevocable beneficiary

A beneficiary whose written consent is required to change the designation or take certain policy actions.

per stirpes

A beneficiary distribution where a deceased beneficiary's share passes to their own heirs (by branch).

common disaster provision

If the insured and primary beneficiary die together, the insured is presumed to survive, so proceeds go to the contingent beneficiary.

modified endowment contract

A life policy overfunded faster than the 7-pay limit; loses favorable tax treatment (LIFO taxation, possible 10% penalty).

7-pay test

The IRS test that determines whether a life policy is a MEC, based on premiums paid in the first seven years.

1035 exchange

A tax-free exchange of one life, annuity, or LTC contract for another like-kind contract under IRC Section 1035.

annuity

A contract that converts a sum of money into a stream of income, protecting against outliving one's assets.

accumulation phase

The pay-in phase of an annuity, when premiums are paid and the value grows tax-deferred.

annuitization

The pay-out phase, when an annuity's accumulated value is converted into an income stream.

fixed annuity

An annuity crediting a guaranteed minimum interest rate; the insurer bears the investment risk.

variable annuity

An annuity invested in separate-account subaccounts; the owner bears the risk and a securities license is required to sell it.

indexed annuity

An annuity crediting interest linked to a market index with a guaranteed floor; caps and participation rates limit the upside.

exclusion ratio

The portion of each annuity payment that is a tax-free return of cost basis vs taxable interest during annuitization.

qualified plan

An IRS-approved retirement plan with pre-tax contributions and tax-deferred growth (e.g. 401(k), traditional IRA).

Roth IRA

A retirement account funded with after-tax dollars whose qualified withdrawals are entirely tax-free.

elimination period

An unpaid waiting period after a disability begins, before disability income benefits start — a 'time deductible.'

benefit period

The maximum length disability income benefits are paid once the elimination period ends.

own-occupation

A disability definition paying if the insured cannot do their own job, even if able to do another.

any-occupation

A stricter disability definition paying only if the insured cannot do any job for which they are suited.

presumptive disability

Certain severe losses (sight, hearing, two limbs) that are automatically presumed total disability.

HMO

A Health Maintenance Organization — a managed plan using in-network providers and a primary-care gatekeeper, paid by capitation.

PPO

A Preferred Provider Organization — a managed plan allowing in- and out-of-network care with no referral required.

HSA

A Health Savings Account paired with a qualified High-Deductible Health Plan, offering a triple tax advantage.

long-term care insurance

Coverage for custodial/skilled care that triggers when a person cannot perform Activities of Daily Living.

Activities of Daily Living

Eating, bathing, dressing, toileting, transferring, and continence — used as LTC benefit triggers.

Medicare Part A

Hospital insurance: inpatient hospital, skilled nursing after a qualifying stay, hospice; usually premium-free.

Medicare Part B

Medical insurance: physician, outpatient, and preventive care; requires a monthly premium.

Medicare Advantage

Medicare Part C — a private plan that replaces Original Medicare, usually bundling drug coverage and extras.

Medicare Supplement

Medigap — standardized private policies that fill the gaps in Original Medicare; not usable with a Part C plan.

Medicaid

A joint federal-state, means-tested program providing health coverage to low-income individuals.

COBRA

A federal law letting qualified beneficiaries keep employer group health coverage (18/36 months) at up to 102% of premium.

creditable coverage

Prior health coverage documented so a new plan can credit it against a pre-existing condition limitation (HIPAA).

guaranteed renewable

A renewability provision: the insurer must renew but may raise premiums by class.

noncancelable

A renewability provision: the insurer must renew AND cannot raise the premium.

twisting

An unfair trade practice: using misrepresentation to induce a client to replace an existing policy to their detriment.

churning

Replacing a policy within the same insurer using its own values, to the client's detriment.

rebating

Giving a client an inducement not stated in the policy to buy insurance — illegal in most states.

fiduciary responsibility

A producer's duty to hold client premiums in trust, separate from personal funds, and remit them promptly.

suitability

The duty to have reasonable grounds that a recommendation (especially an annuity) fits the client's needs and finances.

replacement

Terminating or reducing an existing policy to buy a new one; tightly regulated with disclosure and conservation rules.

NAIC

The National Association of Insurance Commissioners — develops the model laws and regulations that states adopt.

Life & Health Study Guide FAQ

References

1. 1.National Association of Insurance Commissioners (NAIC). “Consumer Insurance Guides & Model Laws (life, annuities, health, disability, market conduct).” NAIC. ↑
2. 2.Internal Revenue Service (IRS). “Publication 575 (Pension & Annuity Income) and life insurance taxation guidance.” IRS. ↑
3. 3.Centers for Medicare & Medicaid Services (CMS). “Medicare Basics — Parts A, B, C, and D.” Medicare.gov. ↑
4. 4.U.S. Department of Health & Human Services (HHS). “HealthCare.gov Glossary & the Affordable Care Act.” HealthCare.gov. ↑
5. 5.U.S. Department of Labor (DOL). “COBRA Continuation Health Coverage.” DOL. ↑
6. 6.Social Security Administration (SSA). “Disability Benefits & Social Security Programs.” SSA. ↑

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