Insurance Glossary of Terms used in Visitors Health Insurance, Visitors Medical Insurance, Travel Health Insurance, Travel Medical Insurance
An unplanned, unforeseen event which occurs suddenly and at an unspecified place.
A type of insurance that protects the insured against loss due to accidental bodily injury.
Accidental Death and Dismemberment:
An insurance policy which pays a specified amount or a specified multiple of the insured’s benefit if the insured dies, loses his/her sight, or loses two limbs due to an accident.
Accidental Death Benefits:
A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.
Acquired Immunodeficiency Syndrome(AIDS):
An infectious and incurable disease caused by the human immunodeficiency virus (HIV).
Activities of daily living:
Activities individuals must do every day such as moving about, getting dressed, eating, bathing, etc.
The amount a physician or supplier actually bills for a particular service or supply.
A contract offered on a “take-it-or-leave-it” basis by an insurer, in which the insured’s only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
Admitted (Authorized) Insurer:
An insurance company authorized and licensed to transact insurance in a particular state.
Adult Day Care:
A program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes.
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
An insurance company that is incorporated outside the United States.
The disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss.
AM Best Rating:
The A.M. Best Company, is considered the most authoritative source of Insurance company
information. The company provides comprehensive data to insurance professionals. Founded in 1899 by Alfred M. Best, A.M. Best
is the world’s oldest source of insurance company ratings and information. Its Best’s Ratings are the industry’s standard measure of insurer financial performance.
Please note these ratings are assigned to usually the insurance underwriters of the policies you purchase and not to the policy or the policy administrator or the insurance agent.
Following are various AM Best ratings:
A+ : Superior
A : Excellent
A- : Excellent
B++: Very Good
B+ : Very Good
B : Fair
B- : Fair
C+ : Marginal
C : Weak
C- : Weak
D : Poor
E : Under Regulatory Supervision
F : In Liquidation
S : Rating Suspended
Additional, miscellaneous services provided by a hospital, such as x-rays, anesthesia, and lab work, but not hospital room and board.
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
The amount Medicare determines to be reasonable for a service that is covered under Part B of Medicare.
A claim to a provider or medical supplier to receive payments directly from Medicare.
The age of the insured at a determined date.
Attending Physician’s Statement (APS):
A statement usually obtained from the applicant’s doctor.
A method of dealing with risk (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he/she might choose never to fly in a plane).
Basic Hospital Expense Insurance:
Coverage that provides benefits for room, board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
Basic Medical Expense Insurance:
Coverage for doctor visits, x-rays, lab tests, and emergency room visits; benefits, however, are limited to specified dollar amounts.
Person(s) designated by the insured(s) that would receive the proceeds of an insurance policy upon death of the insured. You would typically assign a beneficiary at the time of completing the policy application.
Amount an insurance company pays to a claimant, assignee or beneficiary when the insured suffers a covered loss, injury, accident etc.
Benefit Period is the maximum time period up to which the plan will pay benefits for any one eligible condition. Some policies have a 12 month while others have a 6 month benefit period; usually this period can extend beyond the date of policy expiration.
The method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calender year, is designated as primary.
Blanket Medical Insurance:
A policy that provides benefits for all medical costs, including doctor visits, hospitalization, and drugs.
An unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions.
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
A selection of health care benefits from which an employee may choose the ones that he/she needs.
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
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 policy holder.
Organizations that process claims and pay benefits in an insurance policy.
Cease and Desist Order:
A demand of a person to stop committing an action that is in violation of a provision.
Certificate of Authority:
A documents that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate.
Certificate of Coverage:
A statement of coverage, also known as a Certificate of Insurance, that an individual receives when insured under a group contract. The certificate serves as proof of insurance, and outlines benefits and provisions.
Certificate of Insurance:
A written document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.
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.
An unfair trade practice in which an insurer user physical or mental force to persuade an applicant to buy insurance.
After paying the deductible, percentage or amount of covered expenses that the insured pays.
For example, an insurance policy brochure may mention that the policy will pay 80% of the first $5,000 and 100% thereafter of the usual and customary charges;
In some health insurance plans, it is also called “co-payment”.
e.g., Suppose you buy insurance policy with $50,000 policy maximum, $250 deductible per policy period and 80/20 co-insurance for the first $5000 and 100% coverage thereafter. Suppose you incur covered expense of $10,250. You pay first $250 deductible; then out of the remaining $10,000 covered expenses, you pay 20% of the first $5000 (i.e., $1000); the insurance policy pays for the remaining expenses (i.e. $9,000).
That means, you pay $250 + $1000 = $1250 total; and insurance company pays $4000 + $5000 = $9000.
A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance.
The chief executive and administrative officer of the Insurance Department.
A vehicle or service licensed to carry passengers for hire on a regularly scheduled basis. Good examples are airplanes, trains etc.
Common carrier AD&D beneficiary:
If the insured person gets into an accident(while in plane for example), either loses hand, foot, eye etc. or dies, the insurance company will pay money. You should specify enter the name of the relative to whom that money should go to (in case of death) as ‘Common Carrier AD&D Beneficiary’. That is usually close relative like son, daughter, son-in-law etc. If you are buying insurance for your mother and father both, please do not put any of their names in the beneficiary. This question is for who should that money go to in case both die.
A plan that provides a package of health care services, including preventive care, routine physicals, immunization, outpatient services and hospitalization.
Comprehensive Major Medical:
A combination of basic coverage and major medical coverage that features low deductibles, high maximum benefits, and coinsurance.
The withholding of known facts which, if material, can void a contract.
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
The binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium, the consideration on the part of the insurer is the promise to pay in the event of loss.
A part of the insurance contract that states that both parties must give something of value for the transfer of risk, and specifies the conditions of the exchange.
Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985:
The US law that provides the insured the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer eligible, and for the insured’s dependents for up to 36 months in cases of loss of eligibility due to death of the insured, divorce, or attainment of the limiting age.
A written and/or oral statement regarding a consumer’s credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
An agreement between two or more parties enforceable by law.
A group insurance plan that requires the employees to pay part of the premium.
Coordination of Benefits:
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy, thus avoiding claims over payments.
A predetermined flat fee that the insured pays for healthcare services, in addition to what the insurance covers. Copay is usually not specified in percentage of the total healthcare cost. e.g., you pay $10 for a visit to the doctor’s office, no matter how much the doctor’s office visit charge is.
An arrangement in which an insured must pay a specified amount for services “up front” and the provider pays the remainder of the cost.
Care that is rendered to help an insured complete his/her activities of daily living.
In most plans, insurance coverage can be purchased in the combination of monthly and/or 15 days increments to suit your needs. e.g., for a trip of 3.5 months, you can choose 3 monthly increments and one 15 days increment. Effective date for insurance coverage can be the date of departure from home country, or it can be any other later date specified by insured. It is wise to have the insurance effective date same as the date when you depart from home country for the destination and end date same as the date you arrive back in the home country so that you will be covered for any medical emergencies(for covered expenses) even during your journey.
The amount payable upon the death of the person whose life is insured.
Amount to be paid by the insured person before the insurance company begins to pay for the covered expenses. Deductible may be either per sickness/injury or once per policy period or once per year depending upon the insurance policy you purchase. You will not get receive any reimbursement later from insurance company for the deductible you pay.
e.g., Let us consider that you have purchased an insurance policy with a $50,000 policy maximum, $250 deductible per policy period and 80/20 co-insurance.
Suppose you incur a covered expense of $10,250; then the insurance company will pay the covered expenses according to policy terms after you make a a payment of the deductible (i.e. $250).
An unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person’s or company’s reputation.
Denial of claim:
Refusal by an insurance company to honor a a request by an insured (or his/her healthcare provider) to pay for healthcare services. This would usually be due to pre-existing conditions.
The chief executive and administrative officer of the Insurance Department.
A physical or mental impairment, either congenital or resulting from an injury or sickness.
Disability Income Insurance:
Health insurance that provides periodic payments to replace an insured’s income when he/she is injured or ill.
An act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation.
An insurance company that is incorporated in the state.
Domicile of Insurer:
Insurer’s location of incorporation and the legal ability to write business in a state.
Dread (Specified) Disease Policy:
A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis).
A federal requirement that employers who have 25 or more employees, who are within the service area of a qualified HMO, who pay minimum wage, and offer a health plan, must offer HMO coverage as well as an indemnity plan.
The period of time in which an employee may enroll in a group health care plan without having to provide evidence of insurability.
A waiting period that is imposed on the insured from the onset of disability until benefit payments begin.
An injur or disease which occurs suddenly and requires treatment within 24 hours.
Coverage for emergency medical evacuation to the nearest qualified medical facility or the country of residence, as determined by the insurance company; expenses for reasonable travel and accommodations resulting from the evacuation; and the cost of returning to either the country of residence or the country where the evacuation occurred, up to reasonable maximum limit.
Emergency reunion coverage for certain maximum amount, and for certain maximum duration such as 15 days, for the resonable travel and lodging expenses of a relative or friend during an emergency medical evacuation: generally either the cost of accompanying the insured during the evacuation or traveling from the country of residence to be reunited with the insured.
An area of dentistry that deals with diagnosis, prevention and treatment of the dental pulp within natural teeth at the root canal.
The amount of time an employee has to sign up for a contributory group health plan.
A legal impediment to denying a fact or restoring a right that has been previously waived.
The difference between the Medicare approved amount for a service or supply and the actual charge.
Healthcare services not covered by an insured’s health insurance policy. This would usually be due to pre-existing conditions or due to the limitation of the insurance plan.
The date specified in the policy as the date of termination.
Explanation of Benefits (EOB):
A statement that outlines what services were rendered, how much the insurer paid, and how much the insured was billed.
Explanation of Medicare Benefits:
A statement sent to a Medicare patient indicating how the Medicare claim will be settled.
A unit of measure used to determine rates charged for insurance coverage.
The authority granted to an agent by means of the agent’s written contract.
Extended Care Facility:
A facility which is licensed by the state to provide 24 hour nursing care.
Extension of Benefits:
A provision that allows coverage to continue beyond the policy’s expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date. This coverage continues only until the employee returns to work or the dependent leaves the hospital.
Fair Credit Reporting Act:
A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used.
An agent/broker who handles insurer’s funds in a trust capacity.
Flexible Spending Account (FSA):
A salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
An insurance company that is incorporated in another state.
Fraternal Benefit Societies:
Life or health insurance companies formed to provide insurance for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government.
The intentional misrepresentation or deceit with the intent to induce a person to part with something of value.
A period of time, usually required by law, during which a policy owner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for any reason.