A – D
Accidental Death Benefit Rider
An additional cash benefit paid in addition to other benefits when a death is a result of an accident.
Acceptance
When an insurance company agrees to insure a person.
Accumulation Period
The length of time a policyholder has to incur covered expenses to satisfy a required deductible and/or
calendar year or plan year maximum.
Agent
A licensed salesperson who represents one or more health and/or life insurance companies and sells their
products to consumers.
Appeal
An action made by policyholders if they disagree with a decision to deny a request for healthcare services
or payment for services. Policyholders may also make an appeal if they disagree with a decision to stop
services that they are receiving.
Application
A signed request for health or life insurance providing information about the prospective policyholder.
Assignment
Giving rights and/or benefits under a policyholder's insurance policy to someone else.
Attained Age
The age of the insured person at a particular time.
Automatic Bank Withdrawal (Electronic Funds Transfer)
A payment option that allows policyholders to pay their monthly premiums by having the company automatically
withdraw money directly from the policyholders’ bank account.
Beneficiary
A person who receives benefits through a health or life insurance policy.
Benefit Accumulation
Amount that has been paid for a covered person during the calendar year or plan year.
Cancer Insurance
Coverage designed to provide policyholders with cash benefits during covered cancer treatments. It can also
help protect income and savings from expenses that aren’t covered by a health insurance policy, including
but not limited to deductibles, out-of-network specialists, experimental cancer treatment and travel expenses.
Coinsurance
A percentage of the cost policyholders pay out-of-pocket when their plans do not cover 100% of the cost. For
example, a plan may cover 80% of the cost of policyholders' treatment; the policyholders would then be
responsible for the other 20% "coinsurance".
Copay
A dollar amount or percentage that policyholders pay when their plan does not cover 100% of the cost of their
medical care.
Death Benefit
The amount payable after the death of the person whose life is insured.
Deductible
A dollar amount that policyholders may be required to pay out-of-pocket before the plan begins to provide coverage.
Dental Insurance
Insurance designed to pay a portion of the costs associated with dental care.
Dependent Coverage
Insurance coverage that extends to the policyholder's dependents, including spouse and dependent children.
E - H
Effective Date
Date on which the policyholder's coverage begins.
Eligibility
Requirements that must be satisfied by people who wish to be insured.
Explanation of Benefits (EOB)
A statement for policyholders explaining how their health insurance benefits were paid.
Guaranteed Renewable
Guarantees the policyholder the right to continue the policy in force. The insurance company cannot cancel the policy if the policyholder pays the applicable premium. Premium rates can change on a class basis.
Guaranteed Cash Value
In Whole Life insurance; the amount the policy is guaranteed to be worth to the policyholder.
Health Insurance Portability and Accountability Act (HIPAA)
The Health Insurance Portability and Accountability Act was passed by Congress in 1996. HIPAA does the following:
- Provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs;
- Reduces health care fraud and abuse;
- Mandates industry-wide standards for health care information on electronic billing and other processes; and
- Requires the protection and confidential handling of protected health information
Health Maintenance Organization (HMO)
Sometimes called "managed care organizations," HMOs contract with doctors and hospitals who agree to accept
their payments. In an HMO, policyholders receive care from the doctors, hospitals and other providers who
contract with the HMO.
Hospital Indemnity Insurance
A type of insurance that pays a fixed amount for each day of hospital confinement.
I - P
In force
Refers to the status of an insurance policy that is currently providing coverage for one or more insured persons.
Insurability
Refers to the ability to qualify for a policy of insurance.
Insured
The person whose life or health is insured under the insurance contract.
Issue Age
The age of the insured on the effective date of the policy.
Life Insurance
A contract between the policyholder and the insurer, where the insurer promises to pay a designated beneficiary
a sum of money upon the death of the insured person.
Limitations and Exclusions
Conditions listed in a policy for which benefits are not paid.
Maximum Annual Benefit
Also called the "Annual Maximum Benefit," it refers to how much an insurance policy will pay for services
associated with the policy each year. The maximum annual benefit resets each year, according to the terms of
the policy.
Medicare Advantage
Medicare -approved health plan options. When people join one of these plans, they generally get all of their
Medicare-covered healthcare through that plan. Medicare Advantage plans (called MA plans) combine Part A (hospital
insurance) and Part B (medical insurance) together in one plan, and they can also be combined with Part D
prescription drug coverage (called MA-PD plans).
Medicare SELECT1
Similar to Medicare Supplement insurance, a basic Medicare SELECT policy works with Original Medicare coverage to help pay some of the out-of-pocket costs like copayments, coinsurance, and the annual Medicare deductibles. With a Medicare SELECT policy insured’s must use network hospitals.
Medicare Supplement1
Policies that are sold by private insurance companies. They are sometimes called "Medigap” Policies. A basic Medicare Supplement policy works with Original Medicare coverage to help pay some of the out-of-pocket costs like copayments, coinsurance, and the annual Medicare deductibles. They pay for the “gaps” in Medicare coverage.
Medigap policies must follow the Federal and State laws that are designed to protect beneficiaries. A Medigap policy can only cover one person, so if you are married, both you and your spouse must buy separate policies.
Network
A group of physicians, hospitals and other medical care professionals that an insurance plan has contracted
with to deliver medical services to its policyholders.
Out-of-network Provider
Also called "non-participating provider", this term refers to providers who are not part of the network. The
use of out-of-network providers may result in lower or no benefit amounts payable as a result of services rendered.
Original Medicare
Insurance coverage provided by the U.S. Government. Part A is hospital insurance. Part B is medical insurance.
Beneficiaries have their choice of doctors, hospitals and other providers and usually pay a monthly premium
for Part B.
Precertification
Authorization from an insurance company approving non-emergency inpatient hospital treatment
Preferred Provider Organization (PPO)
A type of Medicare Advantage Plan that includes all Medicare Part A (hospital insurance) and Medicare Part B
(medical insurance) benefits. PPO plans are designed to reduce the cost of healthcare by contracting with
certain doctors, labs, and hospitals to provide care at a discounted rate for members. A PPO plan has a list
(called a "network") of physicians and other providers that members may go to. However, members have the
flexibility to go to any doctors, specialists, or hospitals that aren't on the plan's list for similar or
different costs, depending on the plan.
Private Fee-for-Service (PFFS) Plans
A type of Medicare Advantage Plan that includes all Medicare Part A (hospital insurance) and Part B (medical
insurance) benefits. These plans give members the freedom to choose any doctor or hospital that accepts
Medicare and the plan's terms and conditions.
Policy
Legal document detailing policyholders' coverage.
Policyowner
The person who enters into the insurance contract with the insurer and actually owns the policy.
Premium
The amount that an individual must pay to a health or life insurance company for coverage.
Provider
Any type of healthcare professional, including a doctor, hospital or specialist.
Q - Z
Rate Sheet
A listing of premium amounts for a particular policy.
Reinstatement
The process by which an insurer puts back into force an insurance policy that has been terminated for nonpayment of premiums.
Renewable
When a policy can be renewed without evidence of insurability.
Rider
A written addition or amendment to an insurance policy that adds or limits the benefits payable under the policy.
Underwriter
A person who evaluates proposed risks and determines whether or not to accept the insurance application.
Yearly deductible
The annual amount the insured must pay for eligible expenses before the insurer will begin to pay for services.