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Activities of Daily Living
Bathing, preparing/eating meals, moving, getting out of bed,
dressing, and using a toilet. Daily Living Activities are often
associated with Long Term Care and Disability insurance policies.
Agent
Independent Agent: An agent that
represents at least two different insurance carriers.
Broker Agent: An agent who
searches the entire insurance market to place an applicant's
coverage to maximize protection and minimize cost. This
definition best describes the agents of MAZ Insurance.
Career Agent (Or Direct Agent):
An agent who represents only one insurance carrier.
Beneficiary
The person, charity, church, or entity that receives the benefit payment
when the insured dies (life) or becomes disabled (disability).
Benefit Period
In disability insurance, this is the
time frame in which the insured is guaranteed to receive the payments (ex. 2
years, 5 years, lifetime, etc).
Cash Value
Permanent life insurance policies have
a personal cash value that grows inside the policy. The owner is free
to use this money for whatever he/she feels necessary. Certain tax
advantages may exist as well.
Claim
A demand made by the insured, or the insured's beneficiary, for payment of
the benefits as provided by the policy.
Company Rating
All insurance companies have a company
financial rating (usually provided by Standard & Poor's and/or A.M. Best).
A good rating signifies the insurance company's ability to pay the insurance
policy should the time arrive. Any company with a rating of at least
an "A" is usually very good.
Conversion Option
An important life insurance feature
that the majority of people don't realize exists. A conversion options
allows someone to convert a term policy into a permanent policy WITHOUT
proving insurability.
Copayment
In health insurance, it is a pre-determined, flat fee an individual pays for
healthcare services. ie. $25 for a doctor's visit.
Coverage
The scope of protection provided under an insurance policy.
Deductible
Amount of loss that the insured pays before the insurance kicks in.
Elimination Period
In disability insurance, this is the
time frame between when you are first disabled, and when you begin to
receive your payments (ex. 30 days, 60 days, etc.)
HMO
Health Maintenance
Organization. Includes a network of providers, however, every HMO
plan must choose a primary care physician, which acts as the "gatekeeper"
to the rest of the network.
HSA
Health Savings Account.
Combines a high deductible health insurance plan with a tax-favored
savings account. Money left in the savings account earns interest
and is yours to keep.
Insured
This is whom the policy is written
for. Typically, this is also the owner. Once this person dies or
becomes disabled, the beneficiary will receive the benefit.
Own Occupation
In disability insurance, it is a contract provision that allows
policyholders to collect benefits if they are still working, but cannot work
in their original occupation. For most policies, this is an additional rider
that can be added at the time of the application.
Owner
This person is almost always the
insured, and has total control over the policy. However, this may not
be the case for business owners.
Out-of-Pocket Limit
In health insurance, it is a pre-determined amount of money that an
individual must pay before the insurance carrier will pay 100% of the
healthcare expenses.
Policy
The written contract effecting insurance, or the certificate thereof, by
whatever name called, and including all clause, riders, endorsements, and
papers attached.
PPO
Preferred Provider Organization. This organization is
composed of physicians, hospitals, and other providers which provides
health care services at a reduced fee.
Pre-Existing Condition
A coverage limitation included in many health insurance
policies which states that certain physical or mental conditions,
either previously diagnosed or which would normally be expected to
require treatment prior to issue, will not be covered under the new
policy for a specified period of time.
Premium
The price of the insurance protection for a specified risk for
a specified period of time.
Renewal
The automatic re-establishment of in-force status effected by
the payment of another premium.
Residual Premium
In disability insurance, a benefit paid when you suffer a loss
of income due to a covered disability or if loss of income persists. This
is typically in the form of a rider that can be added to your policy at
the time of the application.
Surrender Charge
With life insurance, it is a fee charged to a policy holder
when a life insurance policy or annuity is surrendered for its cash
value.
Underwriter
The individual trained in evaluation risks and determining
premiums, rates and coverages. This person is separate from an agent.
Underwriting
The process of selecting risks for insurance and classifying
them according to their degrees of insurability so that
appropriate rates may be assigned. The process also includes
rejection of those risks that do not qualify. Agents are not part
of this process.
For a complete listing of definitions, please click on
AM
Best's Glossary of Terms. |
