Financial Lit-Ch 27

health insurance

a plan for sharing the risk of high medical costs related to injury or illness

group insurance

the most common type of this kind of insurance; all those insured have the same coverage and pay a set premium; often obtained through employers

COBRA

a law that allows people who leave employment to continue their health insurance under the company plan for 18 months

HIPAA

limits the pre-existing conditions that group plans may exclude; it makes it illegal for an insurer to deny coverage based on health status, though it does not limit the amount the insurer may charge

pre-existing conditions

medical conditions or symptoms that were known to the participant or diagnosed within a certain time period before the effective date of the plan

double coverage

a group health insurance provision that specifics how the insurers will share the cost when more than one policy covers a claim

Flex 125 Plan

employee benefit program that allows employees to set aside money, pretax, to help pay deductibles, co-payments, and other health expenses not covered by insurance; however if you don't use it, you lose it

supplemental insurance

a secondary insurance policy used to help pay high deductibles and co-payments

individual insurance policies

health insurance coverage not as part of a group; requires an exam; is usually expensive

basic health insurance

medical, hospital, surgical costs

medical coverage

covers physician care that does not include surgery such as office visits, x-rays, and lab tests

hospital coverage

covers hospital bills for room, board, and medication

surgical coverage

covers surgeon's fees

major medical coverage

protection against catastrophic expenses of a serious injury or illness; usually has a lifetime maximum

stop-loss provision

insurance clause that caps a maximum that the insured has to pay during any calendar year

dental insurance

covers dental exams, cleaning, and dental x-rays, and fillings

vision insurance

covers eye exams

unmanaged care

a plan that allows participants to chose any doctor and to be reimbursed for a portion of the expenses incurred after a deductible is met

managed care

health care plan that relies on a network of health care providers; participants must select doctors who belong to the network; must have pre-approval for surgery

types of managed care plans

HMO
PPO
POS

HMO Health Maintenance Organization

group plan offering medical care to its members; patients must choose doctors on the staff including their primary care physician

primary care physician

main health care provider

examples of preventative care

routine physical exams and vaccinations

preventative care

treatment before a minor ailment becomes a major problem

capitated

per person

PPO Preferred Provider Organization

a group of health care providers who band together to provide health services for set fees; patients can choose doctors from an approved list but can go outside the plan but have to pay a higher fee

POS Point of Service

combination of HMO's and PPO's

Medicare

government-sponsored health insurance for people aged 65 or older; run by social security administration

medicap insurance

a supplemental private insurance policy to pay deductibles and co-payments

Medicaid

government-sponsored health insurance for people with low incomes

high-risk pools

make it possible for people who are otherwise "un-insurable" to obtain some type of coverage

disability insurance

an insurance plan that makes regular payments to replace inocme lost when illness or injury prevents the insured from working

income protection

another name for disability insurance

waiting period

the amount of time one must wait for insurance benefits to begin

duration of benefits

the length of time an insurance company will pay disability insurance

guaranteed renewability

protection against cancellation of an insurance policy

OASDI Old age, survivors, and disability insurance

government-sponsored disability insurance

worker's compensation

a form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment.

life insurance

provides funds to the beneficiaries when the insured dies

mortality tables

statistical tables used to gather life expectancy

group life insurance

insurance plan that insures a large number of people under the terms of a single policy without a medial examination

portability

when you leave your employer, you are able to continue paying the premiums and convert your group into an individual policy

beneficiaries

people named in an insurance policy who will receive the benefits of the policy

incontestable clause

provision of a life insurance policy stating that once the policy has been in effect for a stated period of time, the insurer many no longer question items on the application or deny coverage

life insurance rider

small insurance policy that modifies the coverage of the main policy

waiver of premium

allows one to stop making payments and keep coverage in force if you become disabled

guaranteed insurability

riders that five you the right to renew a policy or buy additional coverage regardless of changes of health

double indemnity

the beneficiary is paid double the face value of the insurance policy

temporary life insurance

a life insurance policy that lasts for a specific period

permanent life insurance

a life insurance policy that lasts for life

term life insurance

life insurance policy that remains in effect for a specific period of time

pure life insurance

another name for term life insurance

decreasing term insurance

the amount of coverage decreases each year while the premium remains the same

level term insurance

the amount of coverage remains constant from beginning to the end

credit life

this insurance can be used only to repay a specific debt should the borrower die before doing so; obtained through a lender

renewable term life insurance

the policy holder has the right to renew each year without passing a physical exam

cash value

the savings accumulated in a permanent life insurance policy that the policy holder receives if their policy is cancelled

whole life

a life insurance policy that you pay fixed premiums throughout your life and the policy pays a stated sum at death

limited-pay life

a life insurance policy that premiums are limited to a specific number of years or until age 65; at that time, you no longer have to pay any more premiums and the insurance company will pay face value of the policy at the time of death

universal life

life insurance which combines the low cost protections of term insurance with a savings component that is invested in a tax deferred account

variable life

life insurance premiums are invested in market securities