Financial Protection with Insurance, Part 2 Table of Contents
Chapter 4: Annuities	184
Annuity Choices	184
Joint and Survivorship Annuities	184
Guaranteed and Life-time-certain	185
Level Annuities	185
Capital-Back Guaranteed Annuities	185
Escalating Annuities	186
Inflation-Linked Annuities	186
Enhanced Annuities	186
Annuity History	187
Agents Must Understand Terminology	190
Annuity Basics	194
Choosing Between Fixed and Variable	195
Choosing Between a Lifetime and Term	196
Company Financial Strength	198
Annuity Extras	198
Principal Protection	198
Cost of Living Protection	198
The Ups and Downs of Annuities	199
Principle Protection	199
Tax Efficiency	199
Supplementing Other Retirement Income	200
Reasons to Buy an Annuity	200
Reasons to Avoid Buying Annuities	200
Making the Right Annuity Choices	201
Many Annuity Choices	202
Annuities for Retirement	204
Everyone is Living Longer These Days	204
Putting Off Retirement	205
Fixed-Rate Annuities	207
How Fixed Rate Annuities Work	207
Variable Annuities	209
Annual Expenses	210
Funding Variable Annuities	210
Variable Annuity Fees	211
Variable Annuity Death Benefit	211
Surrender Fees	211
Early Withdrawal Penalty	211
Taxation	211
Equity-Indexed Annuities	212
COVID-19 and Annuities	212
The Future Outlook	213
Insurer Investments were Affected	214
Insurance Producers May Struggle	215
Assessing COVID-19 Impact	216
Financial and Practical Impact on Insurers	217
Short and Long-Term Insurance Impacts	218
The Life Insurance Industry in America and Around the World	219
Underwriting During the Aids Crisis May be Similar	219
Non-Health Elements Affecting Policy Underwriting	219
Underwriting Life Insurance Products in these COVID-19 Times	219
Applications for Annuity and Life Insurance Policies	221
Policy Provisions Now Apply to COVID-19	223
Suitability in Annuity Transactions Model Regulation	224
Section 1. Purpose	226
Section 2. Scope	227
Section 3. Authority	227
Section 4. Exemptions	227
Section 5. Definitions	228
Section 6. Duties of Insurers and Producers	230
Best Interest Obligations	230
Disclosure Obligations	232
Conflict of Interest Obligation	233
Documentation Obligation	233
Application of the Best Interest Obligation	234
When Annuity Transactions are Not Based on a Producer’s Recommendation	234
Supervision System	235
Prohibited Practices	237
Safe Harbor	237
Section 7. Producer Training	238
Section 8. Compliance Mitigation; Penalties; Enforcement	239
Section 9. Recordkeeping	240
NAIC Model Law Appendix A	240
NAIC Model Law Appendix B	242
NAIC Model Law Appendix C	243
Chapter 5: Health Insurance	244
Adverse Selection in Insurance	244
The Potential Future of the Affordable Care Act	247
Without Insurance Health Care is Expensive in the U.S.	248
Short–Term or Temporary Health Insurance	252
Health Insurance Plans Offer Variety	254
Manage Care Plans	254
Health Maintenance Organizations (HMOs)	255
Point-of-Service Plans (POS)	255
Preferred Provider Organizations (PPO)	256
Catastrophic Coverage	256
Health Savings Accounts (HAS)	257
Hospital Indemnity Policies	257
Critical Illness Insurance	258
Cancer Insurance	259
Accidental Death and Dismemberment Policies	259
Identity Theft Insurance	260
Long-Term Care Nursing Home Policies	261
Defining Long-Term Care	263
Partnership for Long-Term Care Begins	265
Partnership Policies Created	267
Medicaid is the Largest Nursing Home Payor	267
DRA of 2005 Provides Asset Protection	268
Agent and Consumer Education	269
Policy Benefits	269
Inflation Protection	269
Program Benefits	270
Making Benefit Choices	270
Daily Benefit Options	272
Determining Benefit Length	273
Policy Structure	273
Home Care Options	273
Simple and Compound Protection	274
Required Rejection Form	274
Elimination Periods in LTC Policies	274
Policy Type	275
Restoration of Policy Benefits	275
Preexisting Periods in Policies	275
Deciding Between Policy Types	276
Nonforfeiture Values	277
Waiver of Premium	277
Unintentional Lapse of Policy	278
Policy Renewal Features	278
Items Not Covered by the LTC Policy	279
Extension of Benefits	279
Affordability Contracts	279
Standardized Definitions	280
Minimum Partnership Requirements	280
Benefit Duplication	280
Partnership Publication	280
Truly a Partnership	281
Saving Assets from Medicaid Qualification	282
Accessing Policy Benefits	283
Asset Repositioning	285
Partnership Participation Does Not Guarantee Medicaid Qualification	286
Policy Considerations for Non-Partnership Traditional LTC Policies	286
Underwriting for Policy Issue	287
NAIC Model Regulations	288
Partnership Plans Protect Assets, Not Income	289
Application Age Affects Cost	289
Reducing Benefits to Save Premium	290
Example	291
Policy Renewal	291
Policy Review: 30-Day “Free Look”	291
“Notice to Buyer”	292
Policy Schedule	292
Policy Terminology	293
Elimination Periods in Policies	297
Policy Termination	297
Mental Impairments of Organic Origin	297
Hospitalization Requirements	298
Home and Community-Based Benefits	298
Bed Reservation Benefit	299
Waiver of Premium	299
Selecting Other Types of Care	300
No Policy Covers Everything	300
Age Misstatement	301
Third-Party Notification	302
Reinstatement of a Lapsed Policy	302
Section 6021: Expansion of State LTC Partnership Program	303
NAIC 2000 Model Act	305
“Level Premium” Does Not Mean Unchanging Rates	306
Financial Requirements for Rate Increases	307
Rate Certification from the Insurer’s actuary	307
Consumer Disclosure	307
LTC Personal Worksheet	307
Determining Policy Suitability	308
Consumer Publications	308
Post Claim Underwriting	309
Tax-Qualified Policy Statement	309
Replacement Notices	310
Policy Conversion	310
An Overview	310
The Model Act Applies to All	311
Policy Renewable Provisions	312
Payment Standards Must be Defined	312
Preexisting Standards	312
Policy Type Must Be Identified	312
Activities of Daily Living (ADL)	312
Life Insurance Policies with Accelerated Benefits	313
Nonforfeiture Provisions	313
Extension of Benefits	313
Home Health & Community Care	314
Additional Provisions for Group Policies	314
Outline of Coverage	314
Policy Delivery	314
No Field Issued LTC Policies	314
Policy Advertising and Marketing	315
Prominent Statement Required Regarding Claims Not Covered	315
Prior to the Sale	315
Twisting and High-Pressure Tactics: Simply Illegal	316
Association Marketing	316
Following the Sale	316
Failure to Pay Premiums	317
In Conclusion	317
A Few Unusual Policies	318
Riot Insurance	318
Fantasy Football Insurance	318
Athlete Loss-of-Value Insurance	318
Hole-in-One Price Insurance	318
Body-Part Insurance	319
Paranormal Insurance	319
Death-by-Laughter Insurance	319
Change-of-Heart Insurance	319
Lottery Insurance	319
Kidnapping & Ransom Insurance	320
Key Person or Essential Employee Insurance	320
Multiple-Birth Insurance	320
Bicycle Insurance	320
Surety Bond & Insurance	320
Chapter 6: Insurance Ethics	322
What Ethical Agents Know	322
Insurance Perceptions	322
Establishing Ethical Goals	324
Example	327
Why be Ethical?	328
Following the Law	328
Ethics in the Workplace	329
Ethics Are the Same Regardless of the Name Used	330
Understanding How the Past Affects the Future	332
Companies Set Ethical Guidelines	337
Examples	341
Promoting Ethical Behavior	341
An Ethical Theory: Egoism	344
Is It Possible to Teach Ethical Behavior to Other People?	345
What is The Scope of Ethics?	345
What Does it Take to be A Moral Person?	347
What Quality of Work Does the Individual Want to Perform?	348
What is The Legacy Desired?	348
Who Determines Ethics?	349
Example #1	350
Example #2	351
What Are An Individual’s Responsibilities to Other Moral People?	351
The Theory of Objectivist Ethics	354
Holding an Ethical Code	355
Example	356
Sympathy/Empathy	362
Looking Professional	363
Courtesy	363
Mores	364
Measuring the Ethical Values of Others	368
General Education and State Mandated CE	369
Getting Education in a Timely Manner	371
Laying Out Policy Benefits and Limitations	373
Policy Replacement	376
When the Agent Allows Misconceptions	377
When the Premiums Seem too High to the Client	379
Obtaining Proper Application Signatures	379
Keeping in Touch After the Sale	380
Selling the “Fast Buck” Items	380
Commingling Funds	381
Professional Investment Advisors	382
Preparing for Tomorrow	383
Fixed and Variable Income	383
Financial Management	383
Due Diligence	385
Due Diligence Technical Versus Common-Sense Approach	388
Telling the Truth Requires Responsibility and Accountability	394
Public Images	401
Selecting Insurers to Represent	402
Does Legal Also Mean Ethical?	402
Last Page	405

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