Life Health Insurance

Life and Health Insurance

When to Use

• Explain life, health, disability, and LTC products and how individual vs group markets differ
• Walk through underwriting: risk classification, evidence of insurability, rate classes, appeals
• Clarify policy mechanics: face amount, beneficiaries, riders, exclusions, contestability
• Describe health plan design: networks, cost sharing, essential health benefits (ACA overview)
• Frame Medicare/Medicaid program context at overview level (not enrollment legal advice)
• Outline claims and benefits administration: life death claims, health claims, appeals, EOBs
• Compare distribution models (career agent, independent, broker, MGA, worksite)
• Interpret life/health metrics (lapse, persistency, loss ratio, MLR, benefit ratio)
• Outline state DOI, NAIC, ACA, and HIPAA privacy concepts—not legal or actuarial sign-off

When NOT to Use

• Property, casualty, GL, workers comp, or commercial auto lines → property-casualty-insurance
• Defined benefit pensions, 401(k), or retirement plan administration → pension-retirement-funds
• Loss development triangles, IBNR, mortality table construction, or appointed-actuary work → actuary
• Actuarial consulting SOW, due diligence engagement design, or opinion support governance → actuarial-consulting
• Legal interpretation of policy wording, coverage disputes, or regulatory enforcement → commercial-counsel
• Corporate FP&A, investor metrics, or non-insurance financial modeling → financial-analyst (if installed)
• SOC 2 / ISO control mapping without insurance operations context → compliance-engineer
• Executive strategy without insurance domain detail → business-consultant

Related skills

Core Workflows

1. Engagement scoping

Before analysis:

1. Segment — Life vs health vs DI/LTC; individual vs group; admitted vs worksite 2. Product — Term, permanent, major medical, ASO, Medicare supplement, etc. 3. Decision — Quote, renewal, claim, benefit design, reinsurance placement, filing context 4. Jurisdiction — State(s), ACA market, Medicare/Medicaid program rules (overview) 5. Materiality — Face amount, member months, network, stop-loss, prior claims experience

See `references/life_health_insurance_scope.md`.

2. Life underwriting and products

1. Define insurable interest and purpose (protection, estate, business) 2. Collect application, labs, APS, financials, and MIB/inspection where applicable 3. Assign risk class (preferred, standard, substandard, table ratings) 4. Select product: term, whole, universal, variable (overview of tradeoffs) 5. Structure face amount, beneficiaries, and riders (Waiver, ADB, etc.) 6. Bind with contestability and suicide clause awareness; track in-force changes

See `references/life_products_and_underwriting.md`.

3. Health products and markets

1. Classify market: individual ACA, small/large group, self-funded ASO, government 2. Map benefit design: deductible, copay, coinsurance, OOP max, network tier 3. Note risk adjustment, pooling, and stop-loss for group blocks 4. Outline Medicare (Parts A–D, MA, Medigap) and Medicaid (overview only) 5. Align distribution and compensation (commission, PEPM, bonuses) to segment

See `references/health_products_and_markets.md`.

4. Disability, LTC, and riders

1. Distinguish short-term vs long-term disability definitions (own occ vs any occ overview) 2. Set elimination period, benefit period, and offsets (SSDI, workers comp) 3. Frame LTC triggers (ADLs, cognitive), benefit pool, inflation options 4. Inventory riders: waiver of premium, ADB, chronic illness, guaranteed insurability 5. Escalate contract interpretation to commercial-counsel

See `references/disability_ltc_and_riders.md`.

5. Claims and benefits administration

1. Life — death claim intake, proof of death, beneficiary verification, contestability check 2. Health — eligibility, authorization, claim adjudication, COB, appeals (internal/external overview) 3. Establish reserves directionally; detail with actuary 4. Manage fraud/SIU referrals and documentation standards 5. Close with file quality; feed experience to underwriting and product

See `references/claims_benefits_and_administration.md`.

6. Reinsurance, metrics, and regulation

1. Select life/health reinsurance structures (YRT, coinsurance, excess, stop-loss) 2. Compute lapse, persistency, loss ratio, MLR (health) with defined numerators 3. Separate attritional vs large claims in health narrative 4. Outline NAIC, state DOI, ACA reforms, and HIPAA privacy context (not legal advice) 5. Map distribution economics and MGA/program oversight

See `references/reinsurance_metrics_and_regulatory.md`.

Deliverable standards

Always label preliminary coverage positions and regulatory comments as not legal or actuarial advice; escalate to qualified professionals for filings, sign-off, and disputes.

When to load references

• Scope and segments → references/life_health_insurance_scope.md
• Life products and underwriting → references/life_products_and_underwriting.md
• Health products and markets → references/health_products_and_markets.md
• Disability, LTC, riders → references/disability_ltc_and_riders.md
• Claims and administration → references/claims_benefits_and_administration.md
• Reinsurance, metrics, regulation → references/reinsurance_metrics_and_regulatory.md

Claims, Benefits, and Administration

Purpose

Describe life and health claims intake, adjudication, appeals, and operational controls—without legal advice or actuarial reserve sign-off.

Life insurance claims (death)

Intake checklist

1. Notification — caller identity, policy number, date/time/cause of death 2. Proof of death — certified death certificate; foreign death documentation 3. Beneficiary verification — identity, insurable interest if contested 4. Policy status — in-force, grace, lapsed with reinstatement pending 5. Contestability / suicide — within statutory windows?

Adjudication steps

• Confirm face amount, any outstanding loans, and ADB already paid
• Apply reinsurance notification per treaty
• Pay lump sum or settlement options (interest, annuity—product specific)
• Document 1099 and tax reporting handoff (not tax advice)

Common issues

• Multiple beneficiaries — per stirpes vs per capita designations
• Minor beneficiaries — UTMA/trust requirements
• Corporate-owned life insurance (COLI) — notice and consent rules (overview)
• Murder/contest — legal hold; escalate immediately

Health claims administration

Eligibility and enrollment

• Effective dates — new hire waiting periods, life events (marriage, birth)
• COBRA — continuation qualifying events (overview)
• Terminations — retroactive adjustments and overpayment recovery

Adjudication flow

1. Provider submission — CMS-1500 / UB-04 or electronic 837 2. Edits — eligibility, duplicate, coding, medical policy 3. Pricing — fee schedule, DRG, percent of billed, reference-based pricing 4. Member liability — deductible, copay, coinsurance, OOP accumulator 5. EOB / EOP — member explanation; provider remittance

Utilization management

• Prior authorization — elective procedures, imaging, specialty drugs
• Concurrent review — inpatient continued stay
• Appeals — clinical vs administrative; peer-to-peer

Coordination of benefits (COB)

• Primary vs secondary — birthday rule (dependents), Medicare secondary payer rules (overview)
• Subrogation — injury when third party liable

Appeals (overview)

Do not provide legal strategy—route disputes to commercial-counsel.

Fraud, waste, and abuse

• SIU referral triggers: inconsistent statements, provider patterns, staged claims
• Recovery — subrogation, overpayment, provider sanctions (program integrity)
• Balance false positive triage with anti-false-positive-decision-making when analytics-driven

Benefits administration (group)

• Open enrollment — elections, QLE changes, evidence of insurability for late entrants
• Billing — premium remittance, ASO claim funding, stop-loss reporting
• Reporting — census, large claim listings, aggregate stop-loss calculators

Reserving direction (not actuarial advice)

• Life — claim reserves usually short-tail once proof established
• Health — IBNR on incurred but not reported; lag by line (professional, facility, Rx)
• DI/LTC — long-tail claim reserves; active life reserves on LTC

Quantitative methods → actuary.

Service metrics

Documentation standards

• Timestamp all coverage decisions with policy/plan section cites
• Separate preliminary vs final determinations
• Retain clinical review notes and peer-to-peer outcomes
• Log regulatory correspondence for complaints and external reviews

Escalation matrix

Disability, Long-Term Care, and Riders

Purpose

Cover ancillary protection products and life/health riders that modify base coverage—definitions, design choices, and underwriting notes at overview level.

Disability income insurance (DI)

Short-term disability (STD)

• Elimination period — days (often 0–14) before benefits start
• Benefit period — weeks to months (e.g., 13–26 weeks)
• Benefit amount — % of weekly earnings (caps apply)
• Employer-paid vs voluntary — tax treatment of benefits differs (overview)

Long-term disability (LTD)

• Elimination period — 90–180 days common after STD exhausts
• Benefit period — to age 65/67 or limited (2-year, 5-year)
• Definition of disability:
• Own occupation — cannot perform own job (often limited duration)
• Any occupation — cannot perform any job for which suited by education/experience
• Partial / residual — proportional benefit for income loss

Underwriting factors

• Occupation class (manual vs professional)
• Income documentation (W-2, tax returns, financials for owners)
• Medical history (musculoskeletal, mental/nervous limitations common)
• Offsets: SSDI, workers compensation, other income sources

Policy provisions

• Elimination period — consecutive vs accumulated disability days
• COLA rider — benefit inflation during claim
• Future increase option — increase coverage without full underwriting
• Social insurance substitute — reduced benefit when SSDI awarded

Long-term care (LTC)

Benefit structure

• Daily or monthly benefit — pool of money or indemnity
• Benefit period — years of coverage or lifetime
• Elimination period — days of care before benefits (calendar vs service day)
• Inflation protection — simple vs compound; critical for long horizons

Benefit triggers (overview)

• ADLs — bathing, dressing, eating, toileting, transferring, continence (count thresholds)
• Cognitive impairment — supervision need (e.g., Alzheimer’s)
• Plan of care — physician/certified practitioner certification

Product types

• Standalone LTC — dedicated policy
• Hybrid — life or annuity with LTC/chronic illness acceleration
• Partnership programs — state Medicaid asset disregard (state-specific)

Underwriting

• Morbidity focus; cognitive family history
• Marital status and informal caregiver support may affect pricing
• Rate stability history matters—review carrier rate increase filings

Common life riders

Health plan “riders” and endorsements

• Vision / dental — limited benefit schedules
• Abortion / fertility — state and employer mandate interactions (legal review)
• Out-of-network — balance billing protections (federal/state evolving)
• Wellness — incentives; not insurance risk transfer

Coordination and offsets

• DI vs STD sequencing and reverse offsets
• LTC elimination period credit for informal care (policy-specific)
• Medicare primary/secondary rules when LTC coordinates with health (overview)

Claims considerations

• DI: ongoing proof of disability, RTW programs, rehabilitation
• LTC: care provider invoices, benefit triggers, cognitive assessments
• Document rider effective dates and exclusions in claim file

Escalation

• Reserve and pricing for DI/LTC blocks → actuary
• Definition disputes, ERISA preemption, bad-faith → commercial-counsel

Health Products and Markets

Purpose

Explain health insurance product structures, market segments, and benefit design at overview level—including ACA and government program context without enrollment or legal advice.

Market segments

Benefit design building blocks

ACA overview (not legal advice)

• Essential health benefits — state benchmark package for individual/small group
• Community rating — adjusted for age, tobacco, geography, family size (individual)
• Guaranteed issue / renewal — no medical underwriting on individual ACA
• Risk adjustment — transfers between carriers based on member morbidity
• Medical loss ratio (MLR) — minimum premium spent on claims/rebates (individual/small group)
• Metal tiers — actuarial value bands (Bronze–Platinum)

Group funding arrangements

Fully insured

Carrier bears underwriting risk; employer pays premium; state premium tax may apply.

Self-funded (ASO)

Employer bears claim risk; TPA administers; stop-loss (specific and aggregate) from insurer.

Medicare overview

Medigap — supplements Original Medicare cost sharing (not with MA in most cases).

Enrollment periods and penalties — operational/compliance teams; legal for interpretations.

Medicaid overview

• State-administered, federal-state funded
• Eligibility by income, category, expansion status
• Managed care organizations (MCOs) common
• CHIP — children’s coverage companion program

Provider and payment mechanics (overview)

• Fee-for-service vs capitation vs bundled arrangements
• Prior authorization and utilization management
• Claim repricing — PPO discounts, reference-based pricing (group)
• Pharmacy benefit managers (PBMs) — formulary, rebates (transparency rules evolving)

Distribution and compensation

• Broker/consultant — PEPM fees, commissions on fully insured
• General agency — override structures
• Worksites — enrollment technology, payroll billing
• Disclose conflicts when comparing insured vs self-funded recommendations

Health metrics (preview)

Detail in references/reinsurance_metrics_and_regulatory.md.

Escalation

• Morbidity trend studies, rate filings, reserve opinions → actuary
• ERISA fiduciary, HIPAA breach, ACA enforcement → commercial-counsel / compliance teams

Life and Health Insurance Scope

Purpose

Define what life and health insurance covers, how individual and group markets differ, and the major product families agents and operators encounter in underwriting, administration, and distribution.

Life vs health vs ancillary

Individual vs group

Major life product types (overview)

• Term life — level premium for term; no cash value; lowest cost per $1,000
• Whole life — lifetime coverage; fixed premiums; guaranteed cash values
• Universal life (UL) — flexible premiums; cost of insurance charges; cash value sensitivity to interest
• Variable UL / VUL — cash value in separate accounts; securities regulation overlay
• Final expense / burial — small face amounts; simplified issue common

Major health product types (overview)

• Major medical (individual/group) — comprehensive medical; ACA essential health benefits on individual/small group
• High-deductible health plans (HDHP) — paired with HSAs where eligible
• Self-funded (ASO) — employer bears claim risk; stop-loss from insurer
• Medicare-related — Supplement (Medigap), Part D, Medicare Advantage (overview)
• Dental / vision — limited benefit; often voluntary

Market segments

Key stakeholders

• Policyholder / certificate holder — contract party or enrolled member
• Plan sponsor — employer or association (group)
• Producer — agent, broker, or general agent
• TPA / ASO administrator — claims payor for self-funded plans
• Reinsurer — mortality/morbidity risk transfer
• Regulators — state insurance departments; CMS (Medicare/Medicaid); HHS (ACA, HIPAA privacy rules overview)

Distinction from P&C

Life/health focuses on human longevity and morbidity, tabular or experience-based morbidity pricing, and long-duration contracts (life, LTC). P&C focuses on property damage and liability with different triggers, forms, and cat accumulation. Route P&C-specific questions to property-casualty-insurance.

Distinction from pensions

Retirement plan design, funding, and fiduciary duties for pension/401(k) plans belong in pension-retirement-funds. Life products may be used for retirement income (annuities) but this skill covers insurance company life/health blocks, not ERISA plan administration depth.

Escalation paths

Life Products and Underwriting

Purpose

Support life product selection, underwriting workflow, and risk classification at operational overview level—not appointed actuary pricing or legal contract interpretation.

Product comparison (protection focus)

Underwriting workflow

1. Application — demographics, health history, avocation, financials (amount justification) 2. Evidence — paramed exam, labs, APS, MVR, MIB, Rx check, inspection (large face) 3. Risk assessment — mortality risk vs standard; table ratings or exclusions 4. Offer — approved as applied, counteroffer (rated/reduced), or decline 5. Issue — policy delivery, free-look period, first premium 6. Post-issue — reinstatements, increases (GI rider), conversions (term to permanent)

Risk classification

Financial underwriting

• Human life value / income multiples for face amount reasonableness
• Business insurance — key person, buy-sell; entity ownership and buyout agreements
• Collateral assignment — lender protection on loans
• Escalate complex estate or tax structuring to qualified advisors (not this skill)

Policy provisions (life)

• Beneficiaries — primary/contingent; revocable vs irrevocable; minor trusts
• Contestability — typically 2-year window (jurisdiction-specific)
• Suicide clause — often 2-year limitation on death benefit
• Grace period — premium payment leniency before lapse
• Non-forfeiture — reduced paid-up, extended term (permanent products)
• Policy loans — against cash value (interest and collateral effects)

Reinsurance touchpoints (life)

• Automatic binding limits — facultative above retention
• YRT (yearly renewable term) — common for term reinsurance
• Coinsurance — share premiums and benefits on permanent blocks
• Data requirements: issue age, class, face, facultative evidence package

Metrics (life in-force)

Clarify numerator/denominator and whether annualized or cohort-based.

Common pitfalls

• Quoting rated premium without documenting table and flat extras
• Ignoring conversion deadlines on term policies
• Mixing illustrated non-guaranteed elements with guaranteed ledgers on UL/VUL
• Underwriting foreign travel/residency without carrier guidelines

Escalation

• Pricing indications, profit testing, reserve methods → actuary
• Wording disputes, beneficiary litigation → commercial-counsel

Reinsurance, Metrics, and Regulatory Overview

Purpose

Summarize life/health reinsurance structures, key performance metrics, and regulatory frameworks at educational overview—not legal, tax, or actuarial filing advice.

Life reinsurance structures

Data and reporting

• Bordereaux — policy-level issue data, class, face, status
• Claims bordereaux — paid/ outstanding death claims
• Experience settlements — true-up of mortality gains/losses (treaty-specific)

Health reinsurance

Distribution economics

Document conflicts of interest when recommending product or funding type.

Key metrics

Life

Health

Always footnote incurred vs paid, gross vs net of reinsurance, and ASO fee treatment.

Disability / LTC

Regulatory overview (not legal advice)

State insurance departments

• Licensing — companies, agents, brokers
• Market conduct — claims practices, advertising, replacement
• Financial examination — RBC, statutory reporting (NAIC blanks overview)
• Form and rate filing — prior approval vs file-and-use (varies by line/state)

NAIC (overview)

• Model laws and regulations; accreditation of state regulators
• RBC — risk-based capital for insurers
• Own Risk and Solvency Assessment (ORSA) — ERM reporting for larger insurers
• Principles-based reserving — VM-20/VM-22 context for life (directional)

ACA (health)

• Market reforms, MLR rebates, risk adjustment
• Section 1557 nondiscrimination (operational/compliance teams)
• Federal exchange vs state-based exchange administration

HIPAA (privacy context only)

• PHI protections for health plans and clearinghouses
• Minimum necessary, BAAs with vendors, breach notification rules
• Not a substitute for privacy officer or counsel on incidents

Medicare / Medicaid

• CMS oversight of MA, Part D, program integrity
• State Medicaid contracts and MCO regulation
• Anti-fraud: FCA, CMPs—escalate to compliance/legal

Financial reporting touchpoints

• Statutory accounting — SAP vs GAAP differences (overview)
• IFRS 17 — insurance contract measurement—coordinate with ifrs and actuary
• DAC and deferred acquisition costs — product-specific amortization (overview)

Operational governance

• Illustration regulation (life) — compliant ledgers and disclosures
• Replacement regulation — life and health policy exchanges
• Market conduct exams — document retention, complaints log

Reasonability checks

• [ ] Metrics use consistent earned premium vs written
• [ ] Reinsurance shown gross and net where material
• [ ] Lapse definition matches carrier (COI lapse vs termination)
• [ ] MLR uses ACA numerator/denominator when reporting ACA business
• [ ] Regulatory statements labeled overview; filings to qualified professionals

Escalation