Health and Accident Insurance Vocab & Notes Chap 1B Flashcards
A general way of describing insurance against loss through sickness or accidental bodily injury. It is also called accident and health, accident and sickness, sickness and accident, or disability insurance. It is important to remember the general term applies to many different types of insurance, not just the medical insurance that pays for doctor and hospital visits.
Health Insurance
A form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. Although designed to protect one’s income, there are typically rules and regulations in place limiting the benefits of a disability policy to one’s income level, and typically only allowing protection for a portion of their income.
Disability (income) Insurance
This insurance pays benefits for nonsurgical doctors’ fees commonly rendered in a hospital; sometimes pays for home and office calls.
Medical expense insurance
A short-term policy purchased on an provisional basis typically when in between jobs or waiting for a new policy to start.
Interim Coverage
The purest form of accident insurance. It provides the insured with a lump-sum benefit amount in the event of death or permanent disability under accidental circumstances.
Accidental death and dismemberment insurance (AD&D insurance)
Insurance under which the insured is not entitled to share in the divisible surplus of the company.
A Nonparticipating plan
A plan under which the policy owner receives shares (commonly called dividends) of the divisible surplus of the company.
A Participating Plan of insurance
______________ and ________________was designed to increase health insurance quality and affordability, lower the uninsured rate by expanding insurance coverage and reduce the costs of healthcare. It introduced mechanisms including mandates, subsidies and insurance exchanges. The law requires insurers to accept all applicants, cover a specific list of conditions and charge the same rates regardless of pre-existing conditions or sex. Nicknamed Obamacare, only applies to specific medical coverage. It does NOT apply to ALL health insurance policies.
The Patient Protection and Affordable Care Act
Insurance that provides coverage for a group of persons, usually employees of a company, under one master contract. ________________ plans are available to employers, trade and professional associations, labor unions, credit unions, and other organizations. Insurance is extended to individuals in the group through the master contract. This normally does not require individual underwriting nor evidence of insurability. The employer or the association is the policyowner and is responsible for premium payments. The employer may pay the entire premium or may require some contribution from each member to cover the insurance cost.
Group Health Insurance
_______________ define the rights of the insurer to cancel the policy at different points during the life of the policy. There are five principal classifications: cancellable, optionally renewable, conditionally renewable, guaranteed renewable, and noncancellable. Generally speaking, the more advantageous the___________________ to the insured, the more expensive the coverage.
Renewability Provisions
________________ allows the insurer to terminate the policy at any time. This type of renewability is prohibited in most states.
Cancellable Policies
______________________ give the insurer the option to terminate the policy on a date specified in the contract. If the insurer decides to renew (not cancel) the policy, they also have the option (and usually choose to) increase the premiums on the anniversary date.
Optionally Renewable policies
________________________ give the insurer the option to terminate the policy only in the event of one or more conditions stated in the contract. Typically, these conditions are age related. If the insurer decides to renew (not cancel) the policy, they also have the option (and usually choose to) increase the premiums on the anniversary date.
Conditionally Renewable policies
______________________ specify that the policy MUST be renewed (usually until the insured reaches a specified age). However, the insurer still has the option (and usually choose to) increase the premiums on the anniversary date. Medicare supplement policies and long-term care policies are the most common types.
Guaranteed Renewable policies
___________________ state the policy cannot be cancelled nor can its premium rates be increased under any circumstances. Disability policies are the most common ________________________.
Noncancellable Policies
________________ are for predetermined terms of a year or less (typically short-term health insurance) and are considered temporary.
Nonrenewable policies
___________________ are benefit arrangements in which employees can pick and choose from a menu of benefits, thus tailoring the benefits package to their specific needs. Taxation of _________________ is regulated by Section 125 of the Internal Revenue Code, thus sometimes referred to as a Section 125 plan.
Cafeteria Plans
___________________ provide a way to help a business continue in the event an owner or key employee dies, or in the event of a disabling sickness or injury.
Business Continuation Plans
This insurance is a form of disability income coverage designed to pay necessary ______________________, should the insured business owner become disabled. Overhead expenses include such things as rent or mortgage payments, utilities, telephones, leased equipment, employees’ salaries, and the like. This includes all the expenses that would continue and must be paid, regardless of the owner’s disability. ____________________ policies do not include any compensation for the disabled owner
Business Overhead Expense Insurance
Agreements between business co-owners that provides that shares owned by any one of them who becomes disabled shall be sold to and purchased by the other co-owners or by the business using funds from disability income insurance. The buy-out plan usually contains a provision allowing for a lump-sum payment of the benefit, thereby facilitating the buyout of the disabled’s interest. The policy is legally binding and proceeds are normally received tax-free.
Disability Buy-Sell plans (disability buy-out agreement)