Health Insurance Terms Glossary

We know that learning the insurance lingo can be a little tricky.  For your convenience, here is a list of frequently used terms which will have you speaking insurance fluently in no time. 

Commonly-Used Key Health Insurance Terms

Accident Plan Insurance:  An accident plan provides coverage beyond what an individual’s primary health insurance policy would cover.  They are an ideal adjunct to high deductible health insurance plans.

Actual Cash Value:  A type of payout that pays for damages equal to the replacement value of damaged property, minus the depreciation amount.

Actuary:  This refers to someone who gathers data and other key information, for the purpose of providing an estimate on health or life insurance policies.

AD&D: A common abbreviation for accidental death and dismemberment, a specialized type of health/life insurance used to provide cash benefits in the event of a death caused by accident, or the non-life threatening loss of a limb.

Adjuster:  Someone employed by the insurance company who is in charge of evaluating losses and settling claims with policyholders.  Some adjusters do not represent the carrier, and instead act as independent contractors.  In these cases, they help negotiate claims and receive their compensation via an agreed amount of the final settlement.

Agent (Insurance):  An individual who represents and sells various brands of insurance policies; most agents are not exclusive to one brand, though some agents are contracted to represent one specific carrier.

Beneficiary:  In life insurance, the beneficiary is the person or party designated to receive or collect benefits, in the event of a policy holder's passing.

Benefits:  Benefits are what the customer (or policyholder) receives in exchange for his or her insurance premium, and received either prior to or after filing a claim. 

Broker (Insurance):  An insurance broker is another term for insurance agent.  Insurance brokers generally represent multiple carriers and offer a wide selection of insurance policies and coverage types, such as health, auto, renters, life, small group and others.

Binder:  A binder is something, usually a card or invoice, which offers temporary proof of an insurance policy.

Census (Group):  A term used in group health plans, which is essentially a list of all employees covered under the policy, and their corresponding personal data; including age, sex, company position, smoking status, and other health information.  

Coinsurance:  Refers to a type of policy which is split between two or more carriers, and most commonly done to minimize risk or losses.   

Copayment, Copay:  With a health insurance policy, this is the amount that the insured party must pay when seeing a physician, doctor’s office visits, exams, and other routine expenses.

Critical Illness Plan:  A type of complementary health insurance which is purchased to cover the expenses associated with major illnesses, such as cancer, stroke, heart attacks, cardiovascular disease, HIV and AIDS, and others.  Some Critical Illness Plans are designed only to cover cancer, strokes and heart attacks, as they account for 80% of all major illness claims in the United States.

Declaration:  Sometimes called a Dec Page, the policy’s declaration states the legal names and other information pertaining to the specifics of a policy, such as location, brand names, details, etc.

Dental Coverage:  A specialized type of health insurance which exclusively covers teeth, oral care, and dental procedures.

Deductible:  When settling a claim, the deductible represents the amount in which the policy holder is responsible for.   Policy premiums are often determined by the amount of a deductible.  Lower deductibles generally equate to higher premiums, and vice versa.

Disability Insurance:  Disability insurance, which is typically offered by employers as part of a comprehensive group plan, protects business owners financially by covering employees who have been seriously injured or disabled while on the job.  Disability benefits are paid directly to the worker who has been injured.

Emergency Roadside Assistance Insurance:  A type of auto insurance which covers the expenses of policyholders who become stranded when operating an insured vehicle. 

Endorsement:  An endorsement is a type of specialized homeowner’s insurance add-on that provides additional coverage based on unique circumstances or possessions. 

Exclusion:  A specific condition of a policy which has been excluded due to history, preexisting conditions, past claims, etc.

Family Plan:  This type of health insurance provides benefits for an entire family, and may include coverage for the main policy holder, spouse and children.

Group Plan:  Health insurance provided by an employer for the company's employees, can include medical benefits, dental insurance, vision coverage, disability, Rx discounts, life insurance, and several other types of health-related coverage.

High Deductible Plan:  An insurance policy where the monthly premiums are reduced in exchange for a higher deductible amount.

HRA – Health Reimbursement Account:  An HRA is a specialized type of insurance policy, where employers provide specified medical coverage for claims as they occur.  HRA’s have become increasingly popular among companies looking to reduce claims and promote a healthy workplace.

HSA – Health Savings Accounts:  An HSA is a unique form of health insurance where both the employee and the employer contribute to an account which is used exclusively to cover the cost of qualified medical and health expenses.  HSAs were introduced in 1993 under the Clinton administration.

HMO: The common and accepted abbreviation for Health Maintenance Organization.

Individual Insurance:  A common type of health insurance policy which provides coverage for one person.

In Network:  This refers to the doctors, hospitals and care centers within a specific network.  In most cases, premiums are lower for those who use the insurance carrier's network of physicians and specialists.

Insurance Fraud:  Insurance fraud involves the deliberate falsification or withholding of information with intent to collect monetarily.

Insurance Premium:  The amount paid by a policy holder to have their goods protected (insured).

Insurance:  Money is pooled together by policy holders in order to reduce the volume and severity of financial losses due to damage, theft, or other related calamity.

Liability Insurance:  The amount of money which the policy holder is responsible (liable) for when they have caused bodily harm to another person(s).

Life Insurance:  A type of insurance which pays cash benefits in the unlikely event of the policy holder's passing.  Life insurance is available in many types, including term life, whole life, variable life, universal life, and more.

Limits:  The maximum amount that can/will be paid for an insured item.

Liability Limits:  The maximum amount of liability insurance which can be paid for bodily injury or property damage.

Long Term Care:  A type of health insurance policy that covers many of the expenses associated with elderly care.  These include nursing home, in-home care, hospice, nursing, and others.

Long Term Disability:  A more extensive type of disability insurance coverage, which provides protection for employees whose injuries surpass the three month mark.  Long-term disability insurance plans will generally provide coverage until the injured employee turns 65.

Mandatory Insurance:  A minimum amount of insurance coverage required by the state, most often associated with auto and homeowners policies.

Max Out-of-Pocket:  The maximum amount a policy holder will ever have to pay in one calendar year, as stated in the terms and agreements of said policy.

Medical Coverage:  Insurance coverage which pays for medical and funeral expenses or bodily injury expenses resulting from an accident.

Medicare Supplement:  Often referred to as Medigap, this type of state-provided health insurance policy helps offset the medical and other health expenses for individuals over age 65, and retirees.  There are many types of medicare supplements available for those seeking increased coverage, such as drug coverage, medical, vision and dental.

Medicare Advantage:  Whereas Medicare is provided by the state, Medicare Advantage is offered by a private institution, most commonly a major health insurance corporation. 

Medicare Part D Prescription:  A type of medicare supplement which covers the cost of prescription medications, for adults over 65 years of age.

Office Visits:  Refers to routine doctor's office appointments, most major health insurance carriers offer discounted rates on office visits as part of their plans.

Out of Network:  Refers to doctors, physicians, surgeons, hospitals, urgent care facilities and others, which are not included in the insurance carriers selected network of health providers.  Using out of network doctors generally results in a higher copay or maximum out of pocket expense.

Policy:  A policy is the actual written contract for auto, home, RV, motorcycle or other insurance between a policyholder and the insurance carrier or company.  In their physical form, polices provide proof of insurance coverage.

PPO: The common abbreviation for Preferred Provider Option, a type of medical coverage where policy holders agree to use doctors and specialists within a fixed network of healthcare providers.  

Preventative Services:  Any medical process which is performed in an attempt to inhibit more serious disease and illness down the road.  Physicals, heart scans, PET scans and others all fall under the blanket of preventative services.

Proof Of Loss:  Any form of official document or footage which demonstrate or confirms a loss, resulting in grounds for a justified claim.

Quote:  The written proposal for a new or revised health insurance policy.

Rx:  The common abbreviation for prescription drugs or medications.

Rx AFFILIATE:  A policy or health insurance supplement which helps cover the expense of prescription medications.

Self-Employed Insurance:  A type of health insurance plan, usually a family policy or small group plan, which covers the medical expenses of the self-employed and/or their immediate family members.

Short Term Disability:  Short-term IL disability insurance can provide either 13 or 26 months of coverage against any type of injury. 

Short Term Insurance Plans:  A type of temporary insurance plan which provides coverage during a specified period of time.  Short term policies are traditionally purchased by those who are waiting for a permanent policy to take effect.

Small Group Insurance:  An insurance plan purchased by the owner(s) of a small business, which provides medical coverage to its employees.  Small group plans generally require that each employee pay a fixed portion of their full premium.  Covers the cost of copayments, office visits, ER visits, urgent care, medical procedures, and in some cases, vision, dental, chiropractic, and other qualified health expenses.

Supplemental Insurance Plans:  Supplemental insurance is a unique type of insurance add-on that designed to help cover the cost of fixed expenses when injured or out of work.  Supplemental insurance can be used to pay for expenses such as utility bills, mortgage payments, food and groceries and other common expenses.

Term Life Insurance:  A type of life insurance policy which offers benefits during a specified period of time.  Term life is the most affordable type of life insurance, as it does not offer the lifetime protection associated with whole life policies.

Territories:  A specific, defined geographic location that insurance companies use in order to properly classify insurance rates and premiums.  Premiums are traditionally higher in urban areas as opposed to rural locations, due to population, crime rates and various other factors.

Underwriting:  The process of reviewing, examining, accepting or rejecting insurance risk, as performed by a designated insurance underwriter.

Unearned Premium:  The total amount of premiums to be received by the insurance carrier, even if coverage or protection has yet to be provided.

Variable Life:  A type of life insurance policy that builds cash value over time, which can then be reinvested.  These are generally considered to be at the pinnacle of life insurance options. 

Vision Insurance: A type of specialized healthcare coverage which offsets the costs associated with eye health and vision procedures, such as optical surgery, glasses, eye exams and more.

Universal Life:  A type of life insurance policy, which provides guaranteed death benefits and can accumulate value over time.  They are considered to be an intermediary between low-cost term life and more expensive whole life policies.

Urgent Care:  A privately owned medical facility, similar in nature to a hospital's emergency room.  The copayment for Urgent Care treatment is typically less than an ER visit, though higher than a regular office visit.

Whole Life Insurance:  A type of all-inclusive life insurance policy which provides benefits over the course of the policy holder’s entire life.  Whole life premiums are traditionally higher than term life premiums, due to the increased protection they offer.

Need more information on how to better understand the process of shopping for IL health insurance?  Call Premier today at 800-369-0287 or e-mail us through out website's SSL-secured contact page.

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