Vocabulary Flashcards
Accident
An unplanned, unforeseen event which occurs suddenly and at an unspecified place
Accident insurance
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 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.
Actual Charge
The amount a physician or supplier actually bills for a particular service or supply.
Adhesion
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.
Adverse Selection
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
Agent
an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.
Aleatory
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.
Alien Insurer
An insurance company that is incorporated outside the United States
Alzheimer’s Disease
A disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss
Apparent Authority
the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
Approved amount
The amount medicare determines to be reasonable for a service that is covered under part B of medicare.
assignment
a claim to a provider or medical supplier to receive payments directly from Medicare.
Attained Age
The age of the insured at a determined date
Attending Physicians Statement (APS)
a statement usually obtained from the applicant’s doctor
Avoidance
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.
Beneficiary
the person who receives the proceeds from the policy when the insured dies.
Benefit Period
The length of time over which the insurance benefits will be paid for each illness, disability or hospital stay.
Birthday Rule
The method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calendar year, is designated as primary.
Blanket Medical Insurance
A policy that provides benefits for all medical costs, including doctor visits, hospitalization, and drugs.
Boycott
an unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions
Buyer’s Guide
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
Cafeteria Plan
a selection of health care benefits from which an employee may choose the ones that he/she needs.
Capital Amount
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
Carriers
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 document 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 Insurance
A written document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.
Claim
a request for payment of the benefits provided by an insurance contract
Coercion
an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance
Coinsurance
an agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
Coinsurance Clause
a provision that states that the insurer and insured will share the losses covered by the policy in a proportion agreed upon in advance.
Commissioner
the chief executive and administrative officer of the Insurance Dapartment
Comprehensive Policy
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.
Concealment
the withholding of known facts which, if material, can void a contract
Conditional Contract
a type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable
Consideration
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.
Consideration Clause
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 law that provides for 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 case of loss of eligibility due to death of the insured, divorce, or attainment of the limiting age.
Consumer Report
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.
Contract
an agreement between two or more parties enforceable by law
Contributory
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 that one policy, thus avoiding claims overpayments.
Copayment
an arrangement in which an insured must pay a specified amount for services “up front” and the provider pays the remainder of the cost.
Custodial Care
Care that is rendered to help an insured complete his/her activities of daily living.
Death Benefit
the amount payable upon the death of the person whose life is insured
Deductible
the portion of the loss that is to be paid by the insured before any claim may be paid by the insurer.
Defamation
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
Director
the chief executive and administrative officer of the Insurance Department
Disability
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.
Disclosure
an act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation.
Domestic Insurer
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)
Dual Choice
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.
Eligibility Period
the period of time in which an employee has to sign up for a contributory group health plan.
Elimination Period
a waiting period that is imposed on the insured from the onset of disability until benefit payments begin
Emergency
an injury or disease which occurs suddenly and requires treatment within 24 hours.
endodontics
an area of dentistry that deals with diagnosis, prevention and treatment of the dental pulp within natural teeth at the root canal
enrollment period
the amount of time and employee has to sign up for a contributory group health plan
estoppel
a legal impediment to denying a fact or restoring a right that has been previously waived
excess charge
the difference between the medicare approved amount for a service or supply and the actual charge
expiration
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.
exposure
a unit of measure used to determine rates charged for insurance coverage
express authority
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.
Fiduciary
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.
Foreign Insurer
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.
fraud
the intentional misrepresentation or deceit with the intent to induce a person to part with something of value
