Whether your looking for health, supplemental, dental or vision, our Glossary will help you understand some of the terminology used when researching insurance plans and getting quotes. If you have further questions on what any of these terms mean, please don’t hesitate to contact us at any time. 

Accident – an unexpected event or circumstance without deliberate intent.

Accident Insurance – insurance for unforeseen bodily injury.

Accident Only – an insurance contract that provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by or necessitated as a result of accident or specified kinds of accident.

Accidental Bodily Injury – unexpected injury to a person.

Accidental Death & Dismemberment or AD&D – an insurance contract that pays a stated benefit in the event of death and/or dismemberment caused by accident or specified kinds of accidents.

Allowable charge – sometimes known as the “allowed amount,” “maximum allowable,” and “usual, customary, and reasonable (UCR)” charge, this is the dollar amount considered by a health insurance company to be a reasonable charge for medical services or supplies based on the rates in your area.

Benefit – the amount payable by the insurance company to a plan member for medical costs.

Benefit level – the maximum amount that a health insurance company has agreed to pay for a covered benefit.

Benefit year/period – the amount of months chosen for the coverage period for which health insurance benefits are calculated, not necessarily coinciding with the calendar year. Health insurance companies may update plan benefits and rates at the beginning of the benefit year.

Claim – a request by a plan member, or a plan member’s health care provider, for the insurance company to pay for medical services.

Co-insurance – this is referring to the percentage amounts that the insurance company and the insured will each pay towards the cost of covered healthcare services after the plan deductible has been met. The co-insurance amount is usually a percentage. For example, if the co-insurance in your plan is 80/20, this means that the insurance company will pay 80% and you will pay 20% towards the cost of covered healthcare services after meeting the chosen plan deductible. (ex: Hospital bill costs are $1,000 – Insurance company pays $800, you pay $200.) Typical co-insurance options are 50/50 – 70/30 – 80/20 – and 100/0. 

Coordination of benefits – a system used in group health plans to eliminate duplication of benefits when you are covered under more than one group plan. Benefits under the two plans usually are limited to no more than 100% of the claim.

Copayment or Copay – one of the ways you share in your medical costs. You pay a flat fee for certain medical expenses (ex: $35 for every visit to the doctor), while your insurance company pays the rest.

Deductible – the total dollar amount that the insured must pay towards medical expenses before the insurance company starts paying the selected co-insurance percentage. 

Deductible then Co-insurancethis is a phrase used to explain how a particular benefit or benefits are covered. It means that the selected policy deductible must be met, and once it is, then the insurance company will begin paying the selected co-insurance percentage. (ex: a deductible of $500 must be met before the insurance company will start to pay 80% towards covered healthcare services throughout the policy period.)

Dependent – any individual, either spouse or child, that is covered by the primary insured member’s plan.

Drug formulary – a list of prescription medications covered by your plan.

Effective date – the date on which a policyholder’s coverage begins.

Exclusion or limitation – any specific situation, condition, or treatment that a health insurance plan does not cover.

Explanation of benefits – the health insurance company’s written explanation of how a medical claim was paid. It contains detailed information about what the company paid and what portion of the costs you are responsible for.

Guaranteed Issue – The right to purchase insurance without physical examination; the present and past physical condition of the applicant are not considered.

Guaranteed Renewable – A policy provision in many products which guarantees the policyowner the right to renew coverage at every policy anniversary date. The company does not have the right to cancel coverage except for nonpayment of premiums by the policyowner; however, the company can raise rates if they choose.

Hazardous Activity – Bungee jumping, scuba diving, horse riding and other activities not generally covered by standard insurance policies. For insurers that do provide cover for such activities, it is unlikely they will cover liability and personal accident, which should be provided by the company hosting the activity.

Health Maintenance Organization (HMO) – Prepaid group health insurance plan that entitles members to services of participating physicians, hospitals and clinics. Emphasis is on preventative medicine, and members must use contracted health-care providers.

In-network provider – a health care professional, hospital, or pharmacy that is part of a health plan’s network of preferred providers. You will generally pay less for services received from in-network providers because they have negotiated a discount for their services in exchange for the insurance company sending more patients their way.

Individual health insurance – health insurance plans purchased by individuals to cover themselves and their families. Different from group plans, which are offered by employers to cover all of their employees.

Lifetime Maximum the total maximum dollar amount that an insurance company will pay for healthcare services throughout the policy period.

Network – the group of doctors, hospitals, and other health care providers that insurance companies contract with to provide services at discounted rates. You will generally pay less for services received from providers in your network.

Out-of-pocket MaximumThe total maximum dollar amount that the insured could possibly pay throughout the policy period for covered healthcare services. Beyond this amount, the insurance company will pay 100% of covered expenses for the remainder of the policy period. In some cases, this amount is in addition to the policy deductible. You may also have the option to choose the out-of-pocket maximum amount that you would like in your plan. 

Out-of-network provider – a health care professional, hospital, or pharmacy that is not part of a health plan’s network of preferred providers. You will generally pay more for services received from out-of-network providers.

Payer – the health insurance company whose plan pays to help cover the cost of your care. Also known as a carrier.

Pet Insurance Plans – veterinary care plan insurance policy providing care for a pet animal (ex: dog or cat) of the insured owner in the event of its illness or accident.

Policy – a written contract ratifying the legality of an insurance agreement.

Policy Period – time period during which insurance coverage is in effect.

Pre-existing condition – a health problem that has been diagnosed, or for which you have been treated, before buying a health insurance plan.

Preferred provider organization (PPO) – a health insurance plan that offers greater freedom of choice than HMO (health maintenance organization) plans. Members of PPOs are free to receive care from both in-network or out-of-network (non-preferred) providers, but will receive the highest level of benefits when they use providers inside the network.

Premium – the amount you or your employer pays each month in exchange for insurance coverage.

Provider – any person (ex: doctor, nurse, dentist) or institution (ex: hospital or clinic) that provides medical care.

Rider – coverage options that enable you to expand your basic insurance plan for an additional premium. A common example is a maternity rider.

Short-term Disability – a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less.

Short-Term Medical – policies that provide major medical coverage for a short period of time, typically 30 days up to 12 months. These policies may be renewable for multiple periods.

Term – period of time for which policy is in effect.

Underwriting – the process by which health insurance companies determine whether to extend coverage to an applicant and/or set the policy’s premium.

Waiting period – the period of time beginning with a policy’s effective date during which an insurance company may not pay for certain benefits or procedures (ex: a waiting period of 6 months would mean that a specific benefit or procedure wouldn’t be covered until after the 6 months have passed.)