In considering
an insurance policy, individual health insurance policy, small
business health insurance plan, or self-employed health insurance
benefits program, it is imperative to create an understanding
of the insurance industry terms and jargon. We offer this guide
to help better understand and gain knowledge of the terms and
policy labels being used by the major insurance companies, agents,
and brokers offering a full spectrum of insurance coverage to
consumers in all 50 states.
Accidental Death Coverage: Accidental death coverage
is sometimes a part of your auto insurance policy's Personal
Injury Protection or First Party Benefits plans. If someone
who's covered dies from accident-related injuries, this type
of auto insurance coverage may provide a payment to the insured's
designated beneficiary.
Actual Cash Value: Frequently used in most auto insurance
policy papers especially in claim forms. Most consumers only
receive insurance proceeds for the actual cash value of their
vehicle. Determining a vehicle's cash value is usually the
result of subtracting any depreciation from the original price
of the vehicle.
Admitting Privileges: authority granted to a health
care professional to admit patients to a particular medical
facility, hospital or medical care treatment facility.
Advocacy: to encourage or support an activity that
helps a consumer, company, or organization to secure health
care coverage designed to best meet their unique needs.
Agent/Broker: Persons that market and coordinate insurance
policy programs for consumers. Agents can represent a single
insurance company or multiple providers. Brokers represent
consumers seeking to purchase insurance policy programs and
coverage.
Annuity: A legal policy provided by an insurance company
that enables consumers to allocate money annually that earns
interest at a guaranteed rate, tax-deferred, for a specific
period of time. These annuity dollars provide policyholders
with additional annual income stipends for a designated length
of time in the later years. Annuity policy programs are popular
because of the tax benefits, guaranteed annual income, and
security benefits that they provide.
Association: An affiliation or an alliance. A brotherhood,
club, fraternity or fellowship offering group or individual
health insurance plans customized to meet the needs of their
membership body.
Auto Insurance: An Auto insurance policy is a safe
guard for consumers that shields private passenger carrying
automotive vehicle owners from monetary losses if a vehicle
they own is involved in any type of accident. An agreement,
contract, or policy formed when a consumer and an insurance
company establish specific protections involving vehicle ownership.
Consumers agree to allocate funds call premiums and the insurance
company agrees to provide benefits that cover setbacks from
an accident involving a vehicle. Damages can include property,
physical injury, medical treatments, or death as established
in the auto insurance policy.
Benefit: to be useful or profitable to better, improve,
or help. In the Health insurance industry a benefit is the
actual amount made payable by the health insurance company
to a claimant, assignee, or beneficiary when the insured party
incurs a loss.
Bodily Injury Liability Coverage: Clauses that help
protect insurance policy holders that injure or maim a person
in an auto accident. The stipends are usually capped at pre
determined fixed amounts when the insurance policy is written.
Car Insurance: A Car insurance policy is a safe guard
for consumers that shields private passenger carrying automotive
vehicle owners from monetary losses if a vehicle they own
is involved in any type of accident. An agreement, contract,
or policy formed when a consumer and an insurance company
establish specific protections involving vehicle ownership.
Consumers agree to allocate funds call premiums and the insurance
company agrees to provide benefits that cover setbacks from
an accident involving a vehicle. Damages can include property,
physical injury, medical treatments, or death as established
in the car insurance policy.
Capitation: the fixed or set dollar payment cap that
a consumer or employer pays to a health maintenance organization
(HMO), for the services being offered by a health maintenance
provider regardless of usage levels. Providers are health
care professionals who assist patients. Typically providers
select doctors, physicians, hospitals, or professional health
care givers. The term can also be applied to nurses, nurse
practitioners, chiropractors, psychologists, and other health
care professionals who practice in specialized fields of medicine.
Case Management: a process enlisted by employers and
health insurance companies that result in individuals or groups
receiving premium health care and health insurance services.
Claim: the real or assumed right to demand something
as one's own. In the health insurance industry a claim is
usually an appeal by an insured individual or his health care
provider to the individual or group health insurance company
requesting said health insurance company to assume costs for
services rendered by a health care professional. An insurance
claim is a policyholder's demand to be compensated for financial
losses in the event of an accident or loss.
Claims Adjuster: An insurance company employee responsible
for researching and substantiating the settlement of an insurance
claim.
Co-Insurance: to guard, protect, safeguard, or shield,
co-insurance designates the set amount of money that an insured
individual is asked to pay for health care services, after
the insurance company has met the deductible. Usually a group
health insurance policy also outlines co-insurance or "co-payment."
Co-insurance is normally listed as a percentage. For example,
an employee pays 10 percent of total fees for any healthcare
service and the employer or designated health insurance provider
covers the remaining balance.
Co-Payment: a set or flat fee that a consumer is obligated
to pay for specific healthcare service. This amount is separate
from the fees being covered by the health insurance company.
For example, most Health Maintenance Organizations - HMO's
use a ten-dollar co-payment for every doctor office visit,
regardless of the type or level of medical services received
during the actual stay.
Collision Coverage: Language that defines how much
money will be provided to the policyholder to help cover the
cost of repairs or replacements that result in a vehicular
accident.
Comprehensive Coverage: This language provides payment
for vehicle repair following a vandalism, fire, or theft.
Caps are usually set to cover car repair or vehicle replacement
when consumers purchase an auto insurance policy.
Continuously Insured: Number of consecutive years
a consumer has been covered by a major insurance company.
Deductible: to take away one quantity from another
or subtract. The actual dollar amount an insured individual
is asked to pay for healthcare expenses prior to any health
insurance, or self-insured health insurance company payments.
Many health insurance and Group health Insurance rates are
based on annual deductible figures.
Denial Of Claim: Refusal by a health insurance company
to recognize a claim by an insured individual or his health
insurance provider, to cover the fees for health care services
received from a registered medical professional.
Dependent Worker: A worker or member in a family or
company that does not have a large personal income.
Depreciation: Depreciation is the loss or reduction
in value of a specific item due to erosion or degradation,
or disfavor.
Effective Date: The actual date that your insurance
policy and coverage terms take effect.
Employee Assistance Programs (Heaps): Specialized
health care services such as mental health counseling being
offered by health insurance companies or corporate employers.
Usually individuals or employers do not have to pay directly
for health care services provided through an established employee
assistance program.
Endorsements: Endorsements are revisions to the original
insurance policy agreement. Also known as riders, endorsement
revisions often times are used to change deductible amounts
or possibly to bring an additional vehicle into an existing
auto insurance coverage program.
Exclusions: Having or exercising the power or limit
inclusion. In the Medical services industry exclusions represent
insured health care items not paid for or covered by an individual
health insurance policy.
Fixed Annuity: Provides insurance consumers with an
ensured amount of principal or interest on their assets. The
amount of annual interest earned is guaranteed at a specific
level set forth in the annuity policy agreement.
Full Coverage: An insurance policy that lists all
coverage factors, as legally required in a designated state.
This term does not guarantee full coverage to a policyholder.
Guaranteed Annuity: There are two types of annuities,
fixed and variable. A fixed annuity provides you with a guaranteed
of principal and interest. Your principal earns a current
level of interest that can't fall below the specified minimum
in your annuity contract. A variable annuity provides you
the opportunity to invest in separate contracts that are run
similar to mutual funds and offer you the opportunity to have
professional money management with current tax-deferral. Fixed
annuities are not subject to any market risk while variable
annuities are subject to market risks.
Health Care Decision Counseling: Specialized Services,
usually provided by health insurance companies or employers,
that meet with individual insurance consumers to clarify benefits,
risks and real dollar costs of specific medical tests and
treatments. Health care decision counseling is usually discreet.
Service offers assistance to consumers creating more informed
selections of health insurance, medical care, and reassurance
that decisions made were appropriate for the medical program
required of the circumstances.
Health Maintenance Organizations (HMO's): represent
a group of health insurance policy holders in which individuals
or their employers allocate a monthly fee for medical services,
instead of per service pricing. The monthly HMO dues usually
remain fixed, regardless of the type or level of medical service
received. Professional Medical Services are performed by certified
practitioners and physicians employed by, or under service
contract with the Health Maintained Organization. Several
types of HMO Insurance companies are available with guidelines
on medical facilities and the health treatment services they
offer.
Indemnity: An established amount of money or compensation
to be paid that covers an insured loss.
Indemnity Health Plan: known as fee for service health
insurance programs, indemnity programs were very popular before
the establishment of HMO, IPA, and PPO plans. With indemnity
plans, the health insurance consumer pays a set percentage
of the total costs of the health care treatment, and the health
insurance company pays the remaining percentage. The costs
of medical treatment are defined by the health insurance provider
and vary by doctor. Indemnity health plans allow health insurance
consumers an opportunity to become actively involved in selecting
the actual medical care professional or physicians.
Independent Practice Associations: IPA coverage resembles
traditional HMO plans, except consumers receive medical treatment
in a doctor's office, rather than a large treatment facility
or hospital.
Insurance Claim Report: These reports list details
of an insurance claim that have been issued with most insurance
companies. These reports are usually compilations from consumer
reporting agencies or underwriting exchange organizations
that gather insurance claim data from a host of insurance
companies.
Insurance Score: Calculations designed to help determine
the level of future insurance claims based on a consumer's
personal credit rating and history.
Insured: A consumer or policyholder covered by an
insurance policy.
Judgment: A legally binding determination or ruling
set froth by a legal jurisdiction or court. Judgments usually
determine who is financially responsible to cover any monetary
costs as a result of an accident involving an insured consumer.
Liability: An obligation reflecting legal indebtedness
or possible financial exposures.
Liability Coverage: Protects consumers from financial
obligations to cover physical injury or property damages that
occur in an accident. Most insurance quotes include bodily
injury and property damage clauses.
Long-Term Care Policy: health Insurance coverage that
specifies designated services for an exact period of time.
Long-term care Health Insurance programs and fee structures
vary significantly. Some LTC insurance programs cover medical
services such as: nursing home stays, in-home health care
service, and long term custodial healthcare.
LOS: length of stay health insurance coverage is used
by insurance companies and employers to establish the designated
length of stay an individual can claim for a hospital or in-patient
treatment facility.
Managed Care: A medical service system designed to
better manage the cost and quality of medical services that
insurance policy holders receive. Many managed care health
insurance programs work with HMO and PPO boards to promote
use of specific health treatment procedures. Managed care
health insurance plans also educate and work with consumers
to improve overall health by addressing disease prevention.
Maximum Dollar Limit: The cap or highest amount of
money that a health insurance company will pay for claims
processed in a specific time period. These could be based
on or described in terms of type of medical condition or service
treatment. Many times lifetime specifications are used rather
than yearly limits.
Medigap Insurance Policies: health insurance offered
by a private medical insurance company, not the state or federal
government. This does not represent Medicaid or Medicare.
These medical insurance plans are developed to cover some
of the medical costs that Medicaid and Medicare do not recognize.
Medical Payments Coverage: This insurance coverage
covers hospital or medical treatment bills and sometimes funeral
expenses if a primary operator or passengers are critically
injured or killed in an insured passenger vehicle.
No-Fault Insurance: Type of auto insurance coverage
establishing how an insurance company will settle a claim
covered by their policy. Many times responsibility does not
need to be assigned prior to an insurance claim being settled.
No-Fault States: States that require insurance companies
to cover a policyholder's financial losses, regardless of
who has been determined legally responsible for an accident.
Many no-fault states also prohibit the right to legally pursue
damage claims. In states that do not recognize no-fault obligations,
insurance companies are obligated to cover financial losses
that occur as a result of an accident involving a policyholder.
Open-ended HMOs: HMO programs that allow enrolled
participants to use out-of-plan medical professionals and
still redeem partial or full payment for the health care services
provided in a standard indemnity health insurance plan.
Out-Of-Plan: refers to doctors, hospitals, and other
medical treatment service providers who are not actually participants
in a health insurance program (such as an HMO or PPO). Costs
depend on the health insurance plan and type of health services
performed by any out-of-plan medical professionals that are
not covered, or only partly covered by the group health insurance
company.
Out-Of-Pocket Maximum: fixed sum of money that any
single insured person must pay using their own money or funds,
prior to a national health insurance company covering a consumers'
health care bills in full.
Outpatient: Any person that undergoes health care
or medical treatment on an outpatient basis that does not
mandate an overnight hospital stay. Many major health insurance
companies publish lists of specific medical treatments, tests,
and services that are not recognized unless they are performed
on an outpatient basis. This term can also pertain to ambulatory
care or to list specific medical treatment facilities that
offer specialty surgeries.
Policy Expiration Date: The calendar date that an
insurance policy ends if it is not renewed. This validation
end date is usually listed on the declarations page of an
insurance policy, and is referred to often on insurance renewal
notice documents.
Policy Term: Specific length of time an insurance
policy is valid.
Pre-Admission Certification: can also be names pre-certification
review, that means a medical case manager or certified health
insurance associate must request admittance to a medical treatment
facility, before being physically admitted to the facility.
The health insurance policyholder usually assembles pre-admission
certification documents. Physicians, Surgeons, or nurses may
contact the patient. This avoids patients from early exposure
to unnecessary health care treatment services.
Pre-Admission Review: A review of a patient's health
status or physical condition, before admission is granted
to an inpatient medical facility or hospital. Pre-admission
reviews administered by health insurance representatives in
cooperation with the doctor, HMO, PPO or health insurance
provider.
Preadmission Testing: Medical tests conducted prior
to hospital or health care facility admission.
Pre-existing Conditions: medical conditions outside
of health insurance coverage as the condition or ailment existed
before the health insurance policy was granted.
Preferred Provider Organizations (PPOs): a group that
offers discount health insurance rates that offer doctors
from a pre-determined list of professional care givers. If
a doctor not included in the PPO plan is selected, the health
insurance policyholder must cover the all fees for the medical
treatment.
Primary Care Provider (PCP): A doctor responsible
for administering a health insurance consumer's health care
needs. PCP is usually the medical care gatekeeper, sending
the patient too more specialized physicians for specialist
care.
Primary Driver: The consumer that operates the insured
vehicle most often.
Primary Policyholder: The consumer designated to function
as the primary contact person with the insurance company.
The insurance policy usually lists the name of this consumer
who is essentially responsible for any premiums associated
with the coverage.
Property Damage Liability Coverage: Protects car insurance
or auto insurance policyholders from financial requirements
related to property damage that occurs as a result of a car
accident. Property damage insurance premiums help covers the
costs of damaged property and also helps pay some legal expenses
incurred from lawsuits that result. Property Damage policy
clauses usually include a cap or ceiling limit established
upon acceptance of the car insurance coverage or auto insurance
policy.
Provider: health care professionals who perform specific
professional medical services. Many times this refers specifically
to physicians. Sometimes this also relates health care professionals
such as treatment centers, nurses, physical therapists, and
other specialized doctors.
Reasonable and Customary Fees: fees set forth by health
care providers within a designated state or geographic market
area. These phrases are often used by medical plans as the
set amount of money that approves a specific medical test
or surgical procedure. If the medical fees are greater than
the pre-approved amount, the individual receiving the service
is responsible for paying the difference. Sometimes, however,
if an individual questions his doctor concerning the fees,
some professionals will lessen the amount that any insurance
company has listed as customary.
Rental Car Reimbursement: An optional item found in
many car insurance or auto insurance policy programs that
assists in covering rental car payments if the insured vehicle
is lost, stolen, damaged, or not operating as a result of
an accident.
Risk: The probability percentage of loss or the amount
of possible loss to the holding medical insurance company.
Risk represents probabilities including the: likelihood of
complicated surgery, prescription drug side effects, chance
of infection, or the length of suffering caused by a lifestyle
choice. Consumers increase their risk of obtaining cancer
if they partake in smoking tobacco.
Second Opinion: an additional review by another doctor
or surgeon, when a first surgeon registers a diagnosis or
suggests a type of surgery to any individual health care consumer.
Patients are encouraged to obtain a second opinion when a
doctor urges complicated or difficult surgical procedures
to patients with a serious medical problem.
Second Surgical Opinion: assumed health care benefits
in most group health insurance plans. An opinion detailed
by second surgeon, when the first opinion encourages surgery
to a health services consumer.
Secondary Driver: An additional vehicle operator listed
on a car insurance or auto insurance policy insured to operate
the vehicle covered in the policy in addition to the primary
operator.
Short-Term Disability: injury or sickness that prevents
a consumer from attending work for a brief period of time.
The definition of short-term disability usually varies by
Health Insurance Company and corporate employers. Short-term
disability insurance coverage is offered to ensure a health
care consumer receives full employment wages during a leave
of absence required from a physical injury or medical illness
that prevents a health care consumer from attending work on
a regular basis.
Towing Coverage: An optional item included in many
car insurance or auto insurance policies, that provides monetary
benefits to cover towing of a vehicle that stops operating
as a result of an accident.
Triple-Option: a medical Insurance policy that provides
three separate options that an individual is allowed to choose
from. Often times, these three choices can include: a Health
Maintenance organization - HMO, Preferred Provider Organization
- PPO, or indemnity.
Usual, Customary and Reasonable (UCR) or Covered Expenses:
A fixed cost incurred for medical services and treatment supplies
that are deemed necessary, preferred by a doctor, or provided
in treatment.
Variable Annuity: Provides insurance consumers the
option of investing in multiple financial programs that function
similar to mutual funds in a portfolio manner that includes
tax deferred earning capabilities. Variable annuities present
both risks and rewards superior to Fixed Annuity insurance
programs and are subject to market fluctuations.
VIN: Stands for Vehicle Identification Number, a number
used to identify every passenger vehicle. This number is similar
to a serial number, that outlines specifics of every vehicle
usually the production year, manufacturer, and model name.
These VIN number needs to be listed on an auto insurance or
car insurance policy agreement forms.
Waiting Period: A period of time when a health insurance
policyholder is not covered by a medical insurance policy
for a specific health services treatment.
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