Accidental Death and Dismemberment (AD&D)
Known as AD&D, this coverage is available on a life or disability policy as an "option benefit". AD&D pays scheduled amounts in the event of an accidental death or dismemberment.
Assisted Daily Living Facility
A housing facility which provides food, shelter and limited personal care along with the capacity to respond to unscheduled medical needs
Beneficiary
The person, persons, or entity designated to receive benefits upon the death of the insured
Business Overhead Expense
Coverage which helps keep a business operating when a business owner is disabled. It provides short-term benefits to cover fixed operating expenses during total or partial disability
Coinsurance
The portion, (usually expressed as a percentage) of covered expenses that are the responsibility of the insured up to a specified dollar limit. For example, 20% of the first $10,000 of expenses is $2,000 of coinsurance.
Copay
A payment an insured makes to an in network provider at the time services are received. In most cases copays to not count towards satisfying a deductible or coinsurance.
Deductible
The amount that must be paid out of pocket by the insured for a covered expense prior to the insurance policy begins paying benefits.
Deferred Compensation Plan
A plan established by an employer to provide benefits to an employee at a later date, such as after retirement
Disability Income Insurance Coverage
Health insurance under which benefits are payable in regular installments designed to replace some of the insured's income when he or she is totally disabled as defined in the policy
Elimination Period
The policy deductible, or the amount of time (usually a number of days) the insured elects to wait before disability or long term care benefits are paid. Typically, the longer an individual can wait before receiving funds from the insurance company, the lower the price of the policy.
Guarantee of Insurability
An optional disability income policy benefit that enables an insured to make increases to his or her policy on specified dates. Evidence of financial insurability is required but no evidence of medical insurability is required.
Guaranteed Minimum Death Benefit
Variable annuity contract owners may have the option of assuring that their beneficiaries will receive a guaranteed minimum death benefit that protects their principal against market fluctuations. With this option, beneficiaries receive either the contract value on the date the claim is approved or the highest contract value on any policy anniversary date, whichever is greater. There may be an additional cost for this benefit. Refer to the variable annuity's prospectus for complete information on risks, fees and expenses.
Health Savings Account (HSA)
Also known as an HSA, this is a type of account that you can put money into to save for health-related expenses on a tax-free basis. You can contribute to a health savings account only if you: 1. Have a high deductible health plan (HDHP). 2. Have no other medical insurance coverage, including Medicare - however, you are permitted to have other types of health-related insurance, such as accident, disability, dental care, vision care, or long-term care. 3. Cannot be claimed as a dependent on someone else's tax return. Both you and your employer can make contributions to your HSA. However, the total amount of the contributions cannot be more than an annual limit set by the government. For 2010, if you have HDHP coverage only for yourself, you can contribute up to $3,050. If you have family HDHP coverage you can contribute up to $6,150.
Home Care
Provides long-term care for those with considerable assistance needs. Services include medical, nursing, personal care, social and assisted daily living assistance. Generally reserved for those who do not need acute care but require more attention than is provided in an assisted living facility. Skilled nursing home care is daily nursing care which can only be performed by or under the direct supervision of skilled medical personnel.
In-Network
The use of health care providers who have contracted with the health plan to provide the medical services for a predetermined rate of reimbursement.
Key Person Policy
An insurance policy that reimburses a business for financial loss during a key employee's disability until recovery or a suitable replacement can be found
Long-Term Care
This type of coverage includes medical and non-medical care to people who have a chronic illness or disability. This care can be provided at home, in the community, in assisted living or in nursing homes. It is important to remember that you may need this type of care at any age.
Lump Sum Distribution
A single payment to a beneficiary covering the entire amount of an agreement. Participants in Individual Retirement Accounts, pension plans, profit sharing, and executive stock option plans generally can opt for a lump sum distribution if the taxes are not too burdensome when they become eligible.
Out of Pocket Maximum
The total amount, in dollars, that the insured is responsible for during a given period, usually a calendar year. It is usually the combination of the policy deductible and the coinsurance limit.
Out-of-Network
The use of health care providers who have not contracted with the health plan to provide the medical services.
Partial Disability
Built into some disability policies, available as a rider with others, this provision pays a portion of the total disability benefit to insured people who are unable to perform one or more of their occupational duties because of disability.
Participating Provider
A doctor, hospital, group practice, nurse, nursing home, pharmacy, or other allied health professional or entity that has a direct or indirect contractual arrangement with a managed care group to provide "In-Network" covered services to members.
Pre-Tax
Most contributions are made to a retirement plan before taxes are calculated. Your taxable pay is reduced by the amount contributed to a retirement plan. Taxes will be due upon distribution.
Preferred Provider Organization (PPO)
An insurance plan in which member hospitals and/or doctors contract with a third party payer to deliver services for negotiated fees, usually at a reduced rate.
Premium
The financial cost of obtaining an insurance policy. The payment or a series of payments paid to the Insurer to put an insurance policy in force and to keep it in force.
Principal
The original amount of money invested or loaned
Residual Disability Benefit
Built into some policies, available as an option with others, this benefit pays the insured a portion of the total disability benefit after a return to work based on the percentage of income lost due to the disability
Risk
Uncertainty regarding the expected rate of return and/or principal value or loss of an investment.
Service Area
The geographical area covered by a network of health care providers.
Short-Term Disability (STD)
Short-term disability (STD) insurance pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time (typically three, six, nine or twelve months) due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance).
Specialist/Specialty Care Physician
Providers whose practices are limited to treating a specific disease (e.g., oncologists), specific parts of the body (e.g., ear, nose and throat), or specific procedures (e.g., oral surgery).
Term Life Insurance
Life insurance under which the benefit is paid if the insured person dies during a specified period of time. Benefits are not payable if the insured person survives to the end of the term.
Third Party Administrator (TPA)
An organization that provides administrative services including claims processing and underwriting for employers or insurance companies. TPAs are organizations with expertise and capability to administer all or a portion of the claims process. Self-insured employers will often contract with TPAs to handle their insurance functions.
Total Disability
Insured people are considered totally disabled if they are unable to perform the important duties of their regular occupation because of injury or sickness, they aren't working in another gainful occupation and they are under a physician's care.
Universal Life Insurance
A form of life insurance-first marketed in the early 1980s-that combines the economical protection of term life insurance with a cash value portion. Premiums are invested in a tax-deferred account earning interest. The policy is flexible; that is, as age and income change, a policyholder can increase or decrease premium payments and coverage, or shift a certain portion of premiums into the account, without additional sales charges.
Variable Universal Life
Variable universal life provides a death benefit where the cash value varies with performance of an underlying portfolio of investments.
Waiver of Premium
A provision in an insurance policy that allows payment of insurance premiums to be permanently or temporarily stopped in the event the policyholder becomes disabled or seriously ill. If you have a waiver of premium provision in your long-term care or disability insurance policy, you may qualify to stop paying premiums once you've begun collecting benefits. A waiver of premium provision may slightly increase the cost of your insurance.
Whole Life Insurance
Life insurance under which coverage remains in force during the policyholder's entire lifetime, provided premiums are paid as specified in the policy.