Pre-Class Glossary Flashcards
Producer
Another name for a licensed agent (that’s soon to be you!). An agent “produces” new business for an insurance company that a customer “consumes.”
Resident Producer
An agent who holds an insurance license in the state in which they live. (You will get your licensed for the state of PA!)
Non-Resident Producer
An agent who is licensed in another state besides the state they live in known as their resident state.
Annual Enrollment or Election Period (AEP)
the time of year that individuals across the country can sign up for, change, or disenroll from an insurance plan. The AEP runs from October 15 to December 7 each year
Insurer
Any insurance company (EXs: Optum, United Healthcare)
Insured
The person covered by an insurance policy. (Tip: the ending has an “ED” like the name of a person is “Ed.”)
Deductible
The amount the insured pays for covered health care services before your insurance plan starts to pay. After you meet your deductible, you usually pay only a copayment or coinsurance.
Coinsurance
The amount an insured must pay at all times to satisfy a claim after the insurance has paid.
Beneficiary
The receiver of insurance policy benefits. In other words, the person who would receive the “pay out/benefits” from the insurance company. (EX: if a parent were to pass away, typically the child- “beneficiary”- receives life insurance money because the parent had a life insurance policy.)
Assignment of Benefits
Tells insurance company what they must pay the doctor/hospital. What your insurance company will cover on a medical bill.
Benefit Period
the time during which insured is receiving benefits.
Premium Mode
How often an insured pays their premium, can be weekly, monthly, quarterly, etc.
Appointments
When an insurance company aligns with an agent to sell their products. Appointments are filed with the State Department of Insurance.
Right to Examine (Free Look)
The period of time a new insured has to return the policy for a full refund.
Grace Period
The period of time an insured has to make a premium payment past their due date
Coordination of Benefits
When 2 or more insurance coverages work together to ensure they do not duplicate benefits.
Contributory
You pay part of the premiums.
Non-Contributory
You pay none of the premium.
Fully Contributory
You pay all the premium.
Pre-Existing Conditions
An illness or disease you may have had prior to applying for new insurance coverage.
Pre-Existing Condition Exclusion
When a pre-existing condition is not covered for a certain period of time on new insurance coverage.
Adverse Selection
When an insurance company covers someone who has a lot of risk or pre-existing conditions.
Health Maintenance Organization (HMO)
Health care plan stressing preventive health care. Persons generally enroll voluntarily by paying a fixed fee periodically. (EX preventative care is a yearly physical that comes as a standard part of your insurance plan but you must go to a doctor that is within your network).
Preferred Provider Organizations (PPO)
A collection of providers that offer services at prearranged discount prices. You pay for each service, rather than the service being apart of your plan like an HMO. (EX a yearly physical at a set rate is not included in this plan but you are not required to get a physical.)
Risk
The potential for loss (EX: The car you are driving each day – You take a risk driving it)
Hazard
A condition or situation that creates or increases a chance of loss (EX: a patch of ice on the road while driving)
Peril
Something that can cause a financial loss, (EX: the car (risk) sliding on the ice (hazard) and slamming into a tree (peril)).
Loss
The unintentional decrease in the value of an asset due to peril (the injuries to the driver and damage to the car that will cost money to fix.)
Indemnity
Insurance company paying money to treat injuries and repair damaged property (EX: the insurance company “indemnified” the driver by paying the car repair bill.)
Insurable Interest
Having a vested interest in someone surviving (EX: a child has insurable interest in their parent, a business partner has insurable interest in another business partner, but people who are unrelated or uninterested in each other in any way do not.)
Law of Large Numbers
Basic principle of insurance that the larger the number of individual risks combined into a group, the more certainty there is in predicting the degree or amount of loss that will be incurred in any given period.
Morbidity
The expected amount of sickness in a large group.
Mortality
The expected amount of death in a large group.
Representation
Stating what you think is true on an insurance application.
Misrepresentation
Lying on an application.
Concealment
Purposefully hiding the truth on an application.
Fraud
Intentionally lying or hiding the truth in order to cheat another party out of something that has economic value.
Underwriter
An insurance company employee that signs and accepts liability under an insurance policy, thus guaranteeing payment in case loss or damage occurs.
Medicare
Federally sponsored health insurance and medical program; administered under provisions of the Social Security Act.
Medicaid
Provides medical care for the needy under joint federal-state participation.
Stop-Loss (Out-of-Pocket Maximum)
The maximum amount an insured will pay before the insurance starts to pay everything 100%.
Medicare Part A
Covers hospital charges.
Medicare Part B
Cover’s doctor’s charges.
Medicare Part C
An HMO or PPO type coverage, offered by private insurance companies.
Medicare Part D
Drug Coverage.
Medicare Supplements
Private Insurance plans that coordinate with Medicare Parts A & B to pay costs they don’t cover.
Long-Term Care
Insurance for people who need assistance for activities of daily living, such as dressing, eating, bathing.
Claims Experience
The number of, and how often, a person or group files claims.
