Vocabulary Flashcards
1
Q
Accident
A
An unplanned, unforeseen event which occurs suddenly and at an unspecified place
2
Q
Accident insurance
A
A type of insurance that protects the insured against loss due to accidental bodily injury
3
Q
Accidental death and dismemberment
A
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
4
Q
Accidental death benefits
A
A policy rider that states the cause of death will be analyzed to determine if it complies with the policy description of accidental death
5
Q
acquired Immunodeficiency Syndrome (AIDS)
A
An infectious and incurable disease caused by the human immunodeficiency virus (HIV)
6
Q
Activities of Daily Living
A
Activities individuals must do every day such as moving about, getting dressed, eating, bathing, etc.
7
Q
Actual Charge
A
The amount a physician or supplier actually bills for a particular service or supply.
8
Q
Adhesion
A
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.
9
Q
Admitted (Authorized) Insurer
A
an insurance company authorized and licensed to transact insurance in a particular state
10
Q
Adult Day Care
A
A program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes.
11
Q
Adverse Selection
A
The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.
12
Q
Agent
A
an individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.
13
Q
Aleatory
A
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.
14
Q
Alien Insurer
A
An insurance company that is incorporated outside the United States
15
Q
Alzheimer’s Disease
A
A disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss
16
Q
Apparent Authority
A
the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
17
Q
Approved amount
A
The amount medicare determines to be reasonable for a service that is covered under part B of medicare.
18
Q
assignment
A
a claim to a provider or medical supplier to receive payments directly from Medicare.
19
Q
Attained Age
A
The age of the insured at a determined date
20
Q
Attending Physicians Statement (APS)
A
a statement usually obtained from the applicant’s doctor
21
Q
Avoidance
A
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)
22
Q
Basic Hospital Expense Insurance
A
Coverage that provides benefits for room, board and miscellaneous hospital expenses for a certain number of days during a hospital stay.
23
Q
Basic Medical Expense Insurance
A
Coverage for doctor visits, x-rays, lab tests, and emergency room visits; benefits however, are limited to specified dollar amounts.
24
Q
Beneficiary
A
the person who receives the proceeds from the policy when the insured dies.
25
Benefit Period
The length of time over which the insurance benefits will be paid for each illness, disability or hospital stay.
26
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.
27
Blanket Medical Insurance
A policy that provides benefits for all medical costs, including doctor visits, hospitalization, and drugs.
28
Boycott
an unfair trade practice in which one person refuses to do business with another until he or she agrees to certain conditions
29
Buyer's Guide
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
30
Cafeteria Plan
a selection of health care benefits from which an employee may choose the ones that he/she needs.
31
Capital Amount
A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.
32
Carriers
Organizations that process claims and pay benefits in an insurance policy.
33
Cease and Desist order
a demand of a person to stop committing an action that is in violation of a provision
34
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.
35
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.
36
Claim
a request for payment of the benefits provided by an insurance contract
37
Coercion
an unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance
38
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.
39
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.
40
Commissioner
the chief executive and administrative officer of the Insurance Dapartment
41
Comprehensive Policy
a plan that provides a package of health care services, including preventive care, routine physicals, immunization, outpatient services and hospitalization.
42
Comprehensive Major Medical
a combination of basic coverage and major medical coverage that features low deductibles, high maximum benefits, and coinsurance.
43
Concealment
the withholding of known facts which, if material, can void a contract
44
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
45
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.
46
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.
47
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.
48
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.
49
Contract
an agreement between two or more parties enforceable by law
50
Contributory
a group insurance plan that requires the employees to pay part of the premium
51
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.
52
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.
53
Custodial Care
Care that is rendered to help an insured complete his/her activities of daily living.
54
Death Benefit
the amount payable upon the death of the person whose life is insured
55
Deductible
the portion of the loss that is to be paid by the insured before any claim may be paid by the insurer.
56
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
57
Director
the chief executive and administrative officer of the Insurance Department
58
Disability
a physical or mental impairment, either congenital or resulting from an injury or sickness
59
Disability Income Insurance
health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill.
60
Disclosure
an act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation.
61
Domestic Insurer
an insurance company that is incorporated in the state
62
Domicile of insurer
Insurer's location of incorporation and the legal ability to write business in a state
63
Dread (specified) disease policy
a policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis)
64
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.
65
Eligibility Period
the period of time in which an employee has to sign up for a contributory group health plan.
66
Elimination Period
a waiting period that is imposed on the insured from the onset of disability until benefit payments begin
67
Emergency
an injury or disease which occurs suddenly and requires treatment within 24 hours.
68
endodontics
an area of dentistry that deals with diagnosis, prevention and treatment of the dental pulp within natural teeth at the root canal
69
enrollment period
the amount of time and employee has to sign up for a contributory group health plan
70
estoppel
a legal impediment to denying a fact or restoring a right that has been previously waived
71
excess charge
the difference between the medicare approved amount for a service or supply and the actual charge
72
expiration
the date specified in the policy as the date of termination
73
explanation of benefits (EOB)
a statement that outlines what services were rendered, how much the insurer paid, and how much the insured was billed.
74
explanation of medicare benefits
a statement sent to a medicare patient indicating how the medicare claim will be settled.
75
exposure
a unit of measure used to determine rates charged for insurance coverage
76
express authority
the authority granted to an agent by means of the agent's written contract
77
extended care facility
a facility which is licensed by the state to provide 24 hour nursing care
78
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.
79
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.
80
Fiduciary
an agent/broker who handles insurer's funds in a trust capacity
81
Flexible Spending Account (FSA)
a salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.
82
Foreign Insurer
an insurance company that is incorporated in another state
83
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.
84
fraud
the intentional misrepresentation or deceit with the intent to induce a person to part with something of value
85
free look
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 or days and surrender it in exchange for a full refund of premium if not satisfied for any reason.
86
Gatekeeper Model
a model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals.
87
Grace Period
period of time after the premium due date in which premiums may still be paid, and the policy and its riders remain in force
88
Group Disability Insurance
a type of insurance that covers a group of individuals against loss of pay due to accident or sickness
89
Group Health Insurance
health coverage provided to members of a group
90
hazard
a circumstance that increases the likelihood of a loss
91
Moral Hazard
the effect of a person's reputation, character, living habits, etc. on his/her insurability
92
Morale Hazard
the effect a person's indifference concerning loss has on the risk to be insured
93
Physical Hazard
a type of hazard that arises from the physical characteristics of an individual, such as physical disability due to either current circumstance or a condition present at birth
94
Health Insurance
Protection against loss due to sickness or bodily injury
95
Health Maintenance Organization (HMO)
a prepaid medical service plan in which specified medical service providers contract with the HMO to provide services. The focus of the HMO is preventive medicine.
96
Health Reimbursement Accounts (HRAs)
plans designed to help individuals save for qualified health expenses.
97
Home Health Agency
an entity certified by the insured's health plan that provides health care services under contract
98
Home Health Care
type of care in which part-time nursing or home health aide services, speech therapy, physical or occupational therapy services are given in the home of the insured.
99
Home Health Services
a covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured.
100
Hospice
A facility for the terminally ill that provides supportive care such as pain relief and symptom management to the patient and his/her family. Hospice care is covered under part A of Medicare.
101
Hospital Confinement Rider
an optional disability income rider that waives the elimination period when an insured is hospitalized as an inpatient.
102
Implied Authority
Authority that is not expressed or written into the contract, but which the agent s assumed to have in order to transact business of insurance for the principal.
103
Income Replacement Contracts
policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness
104
Indemnify
to restore the insured to the same condition as prior to loss with no intent of loss or gain.
105
Insolvent Organization
a member organization which is unable to pay its contractual obligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction.
106
Insurability
the acceptability of an applicant who meets an insurance company's underwriting requirements for insucance.
107
Insurance
a contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against loss by a specified future contingency or peril in return for payment of a premium
108
Insured
the person or organization that is protected by insurance; the party to be indemnified
109
Insurer
an entity that indemnifies against losses, provides benefits, or renders services (also known "company" or "insurance company")
110
Insuring Clause
a general statement that identifies the basic agreement between the insurance company and the insured, usually located on the first page of the policy
111
Intentional injury
an act that is intended to cause injury. Self-inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered.
112
Intermediaries
organizations that process inpatient and outpatient claims on individuals by hospitals, skilled nursing facilities, home health agencies, hospices, and certain other providers of health services.
113
Intermediate Care
a level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses
114
Investigative Consumer Report
a report similar to a consumer report, but one that also provides information on the consumer's character, reputation and habits
115
Lapsy
termination of a policy because the premium has not been paid by the end of the grace period
116
Law of large numbers
a principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss.
117
Limited Policies
health insurance policies that cover only specific accidents or diseases
118
Limiting Charge
the maximum amount a physician may charge a Medicare beneficiary for a covered service if the physician does not accept assignment of the Medicare approved amount.
119
Lloyd's Associations
organizations that provide support facilities for underwriters or groups of individuals that accept insurance risk
120
Long-Term care (LTC)
health and social services provided under the supervision of physicians and medical health professionals for persons with chronic diseases or disabilities. Care is usually provided in a Long-Term Care Facility which is a state licensed facility that provides services.
121
Long-Term Disability Insurance
a type of individual or group insurance that provides coverage for illness until the insured reaches age 65 and for life in the case of an accident.
122
Loss
the reduction, decrease, or disappearance of value of the person or property insured in a policy, by a peril insured against.
123
Loss of income Insurance
Insurance that pays benefits for inability to work because of disability resulting from accidental bodily injury or sickness.
124
Major Medical Insurance
a type of health insurance that usually carries a large deductible and pays covered expenses up to a high limit whether the insured is in or out of the hospital
125
Medicaid
a medical benefits program jointly administered by the individual states and the federal government.
126
Medical Expense Insurance
a type of insurance that pays benefits for medical, surgical, and hospital costs.
127
Medical Information Bureau (MIB)
an information database that stores the health histories of individuals who have applied for insurance in the past. Most insurance companies subscribe to this database for underwriting purposes.
128
Medical Savings account
an employer-funded account linked to a high deductible medical insurance plan
129
Medicare
the United States federal government plan for paying certain hospital and medical expenses for persons who qualify
130
Medicare Supplement Insurance
a type of individual or group insurance that fills the gaps in the protection provided by Medicare, but that cannot duplicate any Medicare benefits.
131
Medigap
Medicare supplement plans issued by private insurance companies that are designed to fill some of the gaps in Medicare
132
Misrepresentation
false statement or lie that can render the contract void
133
Morbidity Rate
the ratio of the incidence or sickness to the number of well persons in a given group of people over a given period of time
134
Morbidity table
a table showing the incidence of sickness at specified ages
135
Multiple-Employer Trust (MET)
a group of small employers who do not qualify for group insurance individually, formed to establish a group health plan or self-funded plan.
136
Multiple Employer Welfare Association (MEWA)
An entity of at least two employers, other than a duly admitted insurer, that establishes an employee benefit plan for the purpose of offering or providing accident and sickness or death benefits to the employees
137
Mutual Companies
Insurance organizations that have no capital stock, but are owned by the policy holders
138
Nonadmitted (nonauthorized)
an insurance company that has not applied for, or has applied and been denied a Certificate Of Authority and may not transact insurance in a particular state.
139
Nonauthorized (Nonadmitted)
an insurance company that has not applied for, or has applied and been denied a Certificate Of Authority and may not transact insurance in a particular state.
140
Noncancellable
an insurance contract that the insured has a right to continue in force by payment of premiums that remain the same for a substantial period of time
141
Nonmedical
a life or health insurance policy that is underwritten based on the insured's statement of health rather than a medical examination
142
Nonrenewal
A termination of a policy by an insurer on the anniversary or renewal date.
143
nonresident agent
an agent licensed in a state in which he or she is not a resident
144
Notice of Claim
a provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss
145
Omnibus Budget Reconciliation Act
a federal law which extends the minimum COBRA continuation of group health care coverage from 18 to 29 months for qualified beneficiaries who are disabled at the time of qualification
146
Oral Surgery
operative treatment of the mouth such as extractions of teeth and related surgical treatment
147
orthodontics
a special field in dentistry which involves treatment of natural teeth to prevent and/or correct dental anomalies with braces or appliances
148
out-of-pocket costs
amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion
149
over insurance
an excessive amount of insurance that would result in overpayment to the insured in the event of a loss
150
partial disability
ability to perform some, but not all, of the duties of the insured's occupation as a result of injury or sickness
151
payment of claim
a provision that specifies to whom claims payments are to be made.
152
peril
the cause of a possible loss
153
periodontics
a specialty of dentistry that involves treatment of the surrounding and supporting tissue of the teeth such as treatment for gum disease
154
permanent disability
disability from which the insured does not recover
155
persistency
the tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer
156
personal contract
an agreement between an insurance company and an individual that states that insurance policies cover the individuals insurable interest
157
Physical exam and Autopsy
a provision that allows an insurer, at its own expense, to have an insured physically examined when a claim is pending or to have an autopsy performed where not prohibited by law.
158
policyholder
the person who has possession of the policy, usually the insured.
159
policyowner
the person who is entitled to exercise the rights and privileges in the policy. this person may or may not be the insured.
160
Preferred Provider Organization (PPO)
an organization of medical professionals and hospitals who provide services to an insurance company's clients for a set fee
161
Preferred Risk
an insurance classification for applicants who have a lower expectation of incurring loss, and who, therefore, are covered at a reduced rate.
162
Premium
a periodic payment to the insurance company to keep the policy in force.
163
Presumptive Disability
a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
164
Primary Policy
a basic, fundamental insurance policy which pays first with respect to other outstanding policies.
165
Principal amount
the full face value of a policy
166
private insurance
insurance furnished by nongovernmental insuring organizations
167
Pro Rata Cancellation
termination of an insurance policy, with an adjustment of the premium charge in proportion to the exact coverage for all certain conditions begins.
168
producer
insurance agent or broker
169
proof of loss
a claim form that a claimant must submit after a loss occurs
170
Prosthodontics
a special area of dentistry that involves the replacement of missing teeth with artificial devices like bridgework or dentures.
171
provider
any group or individual who provides health care services
172
pure risk
the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no charge
173
Rate Service Organization
an organization that is formed by, or on behalf of, a group of insurers to develop rates for those insurers, and to file the rates with the insurance department on behalf of its members. They may also act as a collection point for actuarial data.
174
Rebating
any inducement offered in the sale of insurance products that is not specified in the policy.
175
Reciprocal Exchange
an unincorporated group of individuals who mutually insure one another, each separately assuming a share of each risk.
176
Reciprocity
a situation in which two parties provide the same help or advantages to each other (for example, Producer A living in state A can transact business as a nonresident in state B if state B's resident producers can transact business in State A)
177
Recurrent Disability
a policy provision that specifies the period of time during which the recurrence of an injury or illness will be considered a continuation of a prior period of disability
178
reduction
lessening the possibility or severity of a loss
179
reinsurance
a form of insurance whereby one insurance company (the reinsurer) in consideration of a premium paid to it, agrees to indemnify another insurance company (the ceding company) for part or all of its liabilities from insurance policies it has issued.
180
Renewability Clause
a clause that defines the insurance company's and the insured's right to cancel or renew coverage
181
Representations
statements made by the applicant on the insurance application that are believed to be true, but are not guaranteed to be true
182
Rescission
the termination of an insurance contract due either to material misrepresentation by the insured or by fraud, misrepresentation, or duress on the part of the agent/insurer.
183
Reserve
an amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policy holders.
184
Residual disability
type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to perform at the same level as before becoming disabled
185
Respite Care
a type of temporary health or medical care provided either by paid workers who come to the home or by a nursing facility where a patient stays to give a caregiver a short rest.
186
Restorative care
an area of dentistry that involves treatments that restore functional use to natural teeth such as fillings or crowns
187
rider
any supplemental agreement attached to and made a part of the policy indicating the policy expansion by additional coverage, or a waiver of a coverage or condition.
188
Risk
uncertainty as to the outcome of an event when two or more possibilities exist
189
Pure risk
the uncertainty or chance of a loss occurring in a situation that can only result in a loss or no change
190
Risk Retention group
a liability insurance company owned by its members, which are exposed to similar liability risks by virtue of being in the same business or industry
191
Speculative Risk
the uncertainty or chance of a loss occurring in a situation that involves the opportunity for either loss or gain
192
Standard Risk
an applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.
193
Substandard risk
an applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium.
194
Service Plans
insurance plans where the health care services rendered are the benefits instead of monetary benefits.
195
Short-Rate cancellation
canceling the policy with a less that proportioinate return or premium
196
Short-Term Disability Insurance
a group or individual policy that covers disabilities of 13 to 26 weeks, and in some cases for a period of up to two years.
197
Sickness
a physical illness, disease, or pregnancy, but not a mental illness
198
Skilled nursing care
daily nursing care or skilled care, such as administration of medication, diagnosis, or minor surgery that is performed by or under the supervision of a skilled professional.
199
Standard Provisions
requirements approved by state law that must appear in all insurance policies
200
Superintendent (commissioner, director)
the head of the state department of insurance
201
Termanilly Ill
in most states, this is defined as a patient who is expected to die within 6 months of a specific illness or sickness.
202
total disability
a condition which does not allow a person to perform the duties of any occupation for payment as a result of injury or sickness
203
twisting
a form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when its to the insured's disadvantage
204
underwriter
a person who evaluates and classifies risks to accept or reject them on behalf of the insurer
205
underwriting
the process of reviewing, accepting or rejecting applications for insurance
206
unearned premium
the portion of premium for which policy protection has not yet been given
207
Unilateral Contract
a contract that legally binds only one party to contractual obligations after the premium is paid.
208
Utmost good faith
the fair and equal bargaining by both parties in forming the contract, where the applicant must make full disclosure of risk to the company, and the insurance company must be fair in underwriting the risk.
209
Waiting period
time between the beginning of a disability and the start of disability insurance benefits
210
Waiver
the voluntary abandonment of a known or legal right or advantage
211
Warranty
a material stipulation in the policy that if breached may void coverage
212
Workers Compensation
benefits required by state law to be paid to an employee by an employer in the case of injury, disability, or death as the result of an on-the-job hazard.
