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Glossary

Accident

A sudden, unexpected, unforeseen and unintentional event exclusively attributable to an external cause resulting in bodily injury. Many insurance policies exclude injury caused or contributed to by the consumption of or abuse of any alcohol, drugs or medications by the insured person.

AD&D

AD&D stands for Accidental Death and Dismemberment.

Age

Age can be interpreted differently by different Insurance companies. It could be the insured age either at the time of application or at the time of the policy effective date.

Aggregate Limit

Aggregate limit includes the total number or the maximum value of insured losses resulting from any one accident or event causing loss.

Beneficiary

A Beneficiary is a Person(s) designated by the insured(s) that would receive the proceeds of an insurance policy upon death of the insured. One would typically assign a beneficiary at the time of completing the policy application.

Benefit

The Benefit is the amount an insurance company pays to a claimant, assignee or beneficiary when the insured suffers a covered loss, injury, accident etc.

Benefit Period

This is the maximum time period up to which the plan will pay benefits for any one eligible condition. Some policies have a 12 month benefit period while others have a 6 month benefit period; usually this period can extend beyond the date of policy expiration.

Carrier

Insurance Company that actually underwrites and issues the insurance policy. The term refers to the fact that the company carries (or assumes) certain risks for the policyholder.

Child

Insurance Company that actually underwrites and issues the insurance policy. The term refers to the fact that the company carries (or assumes) certain risks for the policyholder.

Claim

Request by the insured (or his/her provider) to an insurance company to pay for services obtained from a health care provider. The claim is usually submitted in a pre-determined format or a claim form.

Co-Insurance or co-payment

After your deductible is met, co-insurance is the percentage of the covered medical expenses that you, the insured person, must pay. For instance, if your health plan has an 80/20 co-insurance rate, your insurance plan pays for 80% of your eligible medical expenses and you are responsible for the remaining 20%. Example: If you buy an insurance policy with $50,000 policy maximum, $250 deductible per policy period and 80/20 co-insurance for the first $5,000 and 100% coverage thereafter. Suppose you incur medical claim for a covered condition of $10,250. You pay first $250 deductible; then out of the remaining $10,000 covered expenses, you pay 20% of the first $5,000 (i.e., $1,000); the insurance policy pays for the remaining expenses (i.e. $9,000). That means, you pay $250 + $1,000 = $1,250 total; and insurance company pays $4,000 + $5,000 = $9,000

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