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170 Cards in this Set
- Front
- Back
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Agent/Producer |
a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer |
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Applicant or proposed insured |
A person applying for insurance |
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Consent |
Permision to do something |
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Insurable Interest |
The policy owner facing the possibility of losing something of value in th event of loss; proven by love and affectionm economic or financial loss |
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Insurance Policy |
A contract b/w a pplicy owner (and/or insured) and an insurance company whihc agrees to pay the insured or the beneficiart for loss caused by specific events |
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Insured |
person covered by the insureance policy; may or may not be policy owner |
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Insurer (Principal) |
the company who issues an insurance policy |
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Policyowner |
the person entitled to exercise the rights and priveledges in the policy |
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Premium |
the money paid to the insurance company for the insurance policy |
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Elements of a Contract |
1. Agreement 2. Consideration 3. Competent Parties 4. Legal Purpose |
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Acceptance |
Takes place when an insurer's underwrited approces teh application and issies a policy |
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Offer |
Made when submitting the application |
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Consideration |
Binding force in any contract; something of value that each party gives to the other |
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Parties of a Contract |
Requires both parties be of legal age, mentally competent,, and not under the influence of drugs/alcohol |
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Warrenty |
absolutely true statemnt upon which the validity of the insurance policy depends |
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Breach of Warrenties |
considered grounds for voiding the policy or a return of premium |
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Representations |
Statements believed true to the best of one's knowledge but they are not guaranteed to be true; the answers the insured gives to questions on the insurance applicatiov |
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Misrepresentations |
Untrue statements on the application; could void the contact |
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Material Misrepresentations |
A statement that would alter the underwriting decison of the insurance company; if intentional considered fraud |
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Conditional Contract |
Certain conditions must be met by the policyowner and the company in order for the contract to be executed EX: insured must pay the premium and provide proof of loss in order for the insurer to cover a claim |
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Unilateral Contract |
Only one of the parties to the contract is legally bound to do anything; the insured makes no legally binding promises - however an insurer is legally bound to pay losses covered by a policy in force |
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Adhesion |
Prepared by one of the parties (insurer) and accepted or rejected by the other party; insurance contracts are offered on a take-it-or-leave-it basis |
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Aleatory |
There is an exchange of unequal amounts or values EX: premium paid by the insured is small in relation to the amount that will be paid by the insurer in the event of loss |
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Notice to the Applicant |
Informs the applicant that a credit report will be ordered concerning his or her past history and any other insurance for which they previously applied |
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Completing the Application and Necessary Signatures (Steps) |
1. Completeness and Accuracy 2. Signatures 3. Changes in the Application 4. Premiums in Application 5. Submitting Application to Company for Underwriting |
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Attending Physicians Report |
Best for accurate info on the applicant's medical history |
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Medical Exam Report |
Conducted by the insurance company's expense; usually not required with health but more common with life |
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Medical Information and Consumer Reports |
For policies with higher amounts of coverage or if the prospective insured's health |
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Medical Information Bureau (MIB) Report |
Nonprofit trade organization which receives adverse medical info from insurance companies and maintains confidential medical impairment info on individuals; an applicant cannot be refused simply b/c of some adverse info discovered through the MIB Helps companies share adverse medical info on insureds |
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Fair Credit Reporting Act |
Established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used; also protect customers against the circulation of inaccurate or obsolete personal or financial info |
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Consumer Reports |
Include written/oral info regarding consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports and other public sources |
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Investigative Consumer Reports |
Primary difference b/w consumer reports us that info is obtained through an investigation and interviews w/ associates, friends and neighbors; can only be done if consumer is advised within 3 days of the date the report was requested |
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HIPAA Privacy |
Under Privacy Rule includes all individually identifiable health information held or transmitted by a covered entity or its business associate; also called Protected Health Information (PHI) |
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Pre-Existing Conditions |
Medical condition for which the insured sought medical advice or treatment within a specified period of time prior to the policy issue |
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Underwriting |
Evaluate risk and decide whether or not a person is eligible for coverage |
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Accidental Bodily Injury |
an unforeseen and in intended injury that resulted from a accident rather than a sickness |
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Cafeteria Plan |
type of employee benefit plan that allows insureds to choose between different types of benefits |
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Cancellation |
termination of an in-force insurance policy by either the insured or the insurer, prior to the expiration date shown in the policy |
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Comprehensive coverage |
health insurance that provides coverage for most types of medical expenses |
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Deductible |
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits |
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Lump sum |
a payout method that pays the beneficiary the entire benefit in one payment |
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Nonrenewel |
termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy |
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Riders |
added to the basic insurance policy to add, modify or delete policy provisions |
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Sickness |
an illness, that first manifests itself while the policy is still in force |
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Tax Exempt |
not subject to taxation |
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Taxable |
Subject to taxation |
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Medical Expense Insurance |
Basic hospital, surgical and medical policies and the major medical policies |
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Basic Hospital Expense Coverage |
Room and board, misc hospital expenses, medicines, operation room and supplies |
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Misc Hospital Expenses |
Norm have separate limit - may not pay for the full amount needed by the insured in the event of a lengthy hospital stay |
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Basic Medical Expense Coverage |
"Basic Physicians Nonsurgical Expense Coverage" - no deductible with benefits, but coverage is usually limited to number of visits per day, limit per visit, or limit per hospital stay |
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Basic Surgical Expense Coverage |
Pay for the costs of surgeons services/fees, anesthesiologist and the operating room |
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Surgical Schedule |
-Lists the types of operations covered and their assigned dollar amounts - if the surgery is not listed the contract may pay for a comparable operation |
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Relative Value |
Each Surgical procedure will be assigned a number of points relative to the number of points assigned to the max benefit EX: Max points assigned to major surgical procedure (open heart surgerY0 |
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Conversion Factor |
Total amount payable per point |
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Major Medical Policies |
Broad range of coverage under one policy -Comprehensive coverage for hospital expenses -Catastrophic medical expense protection -Benefits fro prolonged injury and illnesses Usually carry deductibles, coinsurance requirements and large benefit maximums |
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Two major types of Major Medical Policies |
Supplemental Major Medical Policies and Comprehensive Major Medical Polices |
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Supplemental Major Medical Policies
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Supplement the coverage payable under a basic medical expense policy (after the basic policy pays the supplemental major medical will provide coverage for expenses that were not covered by the basic policy) |
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Corridor Deductible |
Applied between basic coverage and the major medical coverage |
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Health Maintenance Act of 1973 |
Act enforced employers with more than 25 employees to offer Health Maintenance Organizations (HMO) as an alternative to their regular health plans -Main goal was to reduce the cost of health care by utilizing preventive care |
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HMO |
-free annual check-ups for family and immunizations to members -preventive care mainly -provides both financing and patient care -need to live within boundaries |
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Copayments |
Specific part of the cost of care or a flat dollar amount |
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Capitated Basis |
HMO receives a flat amount each month attributed to each member, whether they see a physician or not "prepaid medical plan" |
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Primary Care Physician (PCP) |
also gatekeeper best interest to keep member healthy to prevent future time for treatment of disease |
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Referral (Specialty) Physician |
PCP must refer first |
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Preferred Provider Organizations (PPO) |
-Physicians are paid feed for their services rather than salary -Provides 90% of the cost of a physician on their approved list while possibly only 70% of the cost off the list -Group of physicians and hospitals that contract w/ employers, insurers or 3rd parties to provide medical care with a reduced fee |
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Point of Service Plans (POS) |
Combination of HMO and PPO - a different choice can be decided every time a need arises -also called "open-ended HMOs" |
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PCP Referral (Gatekeeper PPO) |
Does not have to select a primary care physician -all network providers are considered preferred |
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Flexible Spending Accounts (FSAs) |
form of cafeteria plan benefit funded by salary reduction and employer contributions -two types -- Health Care Account for out-of-pocket expenses and Dependent Care Account to help pay for dependents care expenses -exempt from federal income taxes |
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Qualified Life Event Changes |
-Marital Status -Number of dependents -One of the dependents becomes eligible or no longer satisfies the coverage requirements under the Medical Reimbursement plan for unmarried dependents due to age, student statues, or etc -Employment status -Change in dependent care provider -Family medical leave |
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High-deductible health plans (HDHPs) |
-Higher annual deductibles and out of pocket limits than traditional health plans -Lower premiums -The annual deductible must be met before the plan will pay benefits -Preventive care is usually first dollar coverage or paid after copayment |
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Health Savings Accounts (HSAs) |
-help individuals save for qualified health expenses that they, their spouse, or their dependents incur -must be covered by HDHP, must not be covered by other health insurance, not eligible for medicare, and cant be claimed as a dependent |
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Disability income |
Replace lost income in the event of disability --- may be purchased individually or through an employer group basis |
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Elimination Period |
From the onset of disability until benefit payments commence. Deductible measured in days. -purpose is to eliminate coverage for short-term disabilities in which the insured will be able to return to work in a relatively short period (typically from 30 to 180 days) |
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Probationary Period |
Waiting period (often 10 to 30 days) and applies to only sickness not accidents or injury -purpose is to reduce the chances of adverse selection against the insurer |
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Benefit Period |
Length of time over which the monthly disability benefit payments will last for each disability after the elimination period has been satisfied (most periods of 1 year, 2 years, 5 years and to age 65) |
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Presumptive Disabilty |
-provision that automatically qualifies the insured for full disability benefits Provides a benefit for dismemberment, total and permanent blindness or loss of speech or hearing |
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Social Insurance Supplements |
Used to supplement or replace the benefits that might be payable under Social Security Disability |
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Business Overhead Expense Policy |
Reimburses the business owner for the actual overhead expenses that are incurred while the business owner is totally disabled |
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Business Disability Buyout Policy |
Specifies who will purchase a disabled partners interest and legally obligates that person or party to purchase such interest upon disability |
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Respite Care |
designed to provide relief to the family care giver |
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Accidental Death |
The principal sum is paid; usually equal the amount of coverage under the insurance contract or face amount -must occur within 90 days |
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Accidental dismemberment/loss of sight |
A percentage of that principal sum will be paid by the policy; called capital sum -Policy will pay full principal for loss of sight in both eyes/two or more limbs |
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Limited Risk Policy |
specific risk in which accidental death or dismemberment benefits will be paid EX: Travel Accident Policy |
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Special Risk Policy |
Cover unusual types of risks that are not normally covered under AD&D policies - covers only the specific risk/hazard identified in the policy EX: Racecar driver test-driving a new car |
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Long-Term Care Policies |
Coverage for individuals who are no longer able to live an independent lifestyle and require living assistance at home/in a nursing home -Guaranteed renewable |
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3 levels of care for LTC |
-Skilled - typically institutional; daily nursing and rehabilitative care -Intermediate - require daily medical assistance on a less frequent basis than skilled nursing care -Custodial - can be provided by non medical care - help eating, bathing, dressing |
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Individual LTC Contracts |
-most common -state regulations, guaranteed renewability, and the ability to customize the plan |
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Group/Voluntary LTC Contracts |
-Offers lower rates and less underwriting, not all regulated, the individual decides whether or not to enroll in the plan |
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Group Insurance |
Coverage must be incidental to the group - 2 kinds of groups -Employer-sponsored and association-sponsored |
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Master Contract |
Policy in group health insurance that is issued to the group sponsor |
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Certificates of Insurance |
Proof of coverage in group health insurance for individual insureds |
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Short term medical |
provide temporary coverage for people in transition-between jobs/retirees (from 1 to 11 months) |
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Accident only policies |
limited policies that provide coverage for death, dismemberment, disability or hospital care from an accident |
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Guaranteed renewable |
policy that is written on a noncancellable basis that the right to renew guaranteed |
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Irrevocable beneficiary |
a beneficiary who has a vested interest in the policy and therefore, the policy owner may not exercise certain right without the consent of the beneficiary |
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NAIC |
National Association of Insurance Commissioners; and organization composed of insurance commissioners to resolve insurance regulatory issues |
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Total Disability |
inability of the insured to perform any occupation for which he or she is reasonably suited by reason of education, training or experience |
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Waiver |
relinquishment of a right or interest |
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Uniform Individual Accident and Sickness Policy Provisions Law |
Established standard provisions that are to be included in all individual health insurance policies |
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Entire Contract |
health insurance together with a copy of a signed application and attached riders and amendments constitutes the entire contract |
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Grace Period |
period of time after the premium due date in which premiums may still be bad before the policy lapses for nonpayment |
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Reinstatement |
what conditions the insured may reinstate coverage if the policy lapsed |
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Change of Beneficiary |
Policy owner may change the beneficiary at any time by providing written request to the insurer - unless the beneficiary is designated as irrevocable |
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Claims Procedures |
the insured's duty to provide the insurer with reasonable notice in the event of loss |
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Physical Examination and Policy |
Gives the insurer the right to examine the insured at its own expense |
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Time limit on certain defenses (incontestable) |
no statement or misstatement made in the application at the time of issue will be used to deny a claim after the policy has been in force for two years |
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Legal actions |
limits the time in which a claimant may seek recovery from an insurer under a policy |
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Misstatement of Age |
if the insured misstated their age or gender the benefits paid under the policy would be be adjusted to what the premium paid would have been purchased at the correct age |
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Insuring Clause
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-located on the first page of the policy
-simply a statement that identifies the basic agreement b.w insurance company and the insured -identifies the insured and the insurance company - states what kind of loss is covered |
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Free-Look |
allows the insured several days to look over the policy - may get a full refund (commonly 10 days) |
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Consideration Clause |
-both parties in the contract must give some valuable consideration |
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Probationary Period |
period of time must lapse before coverage for specified considerations goes into effect |
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Elimination Peiod |
type of deductible that is commonly found in disability income policies |
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Waiver of Premium |
in the vent of permanent or total disability - premiums will be paid for the duration of the disability -the insured must be totally disabled for a specified period of time (usually 3-6 months) |
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Coinsurance |
provides for the sharing of expenses between the insured and the insurance company |
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Stop-Loss limit |
specified dollar amount beyond which the insured no longer participated in the sharing of expenses -insurance com pays 100% if the expenses that are above the specified stop-loss limit |
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Common accident provision |
when more than one family member is injured in a single accident - only one deductible applies for whole family |
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integrated deductible |
amount of the deductible may be satisfied by the amount paid under basic medical expense coverage |
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carry-over provision |
if the insured did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to satisfy the new annual deductible |
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time deductible |
disability income and long-term care policies deductible in the form of elimination period |
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Copayments |
similar to the coinsurance - shares part of the cost for services with the insurer - has a set dollar amount that the insured will pay each time certain medical services are used |
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Exclusions |
specify what the insurer will not pay EX: injury and loss from war, military duty, self injury, cosmetic expense, eye refractions, or care in gov't facilities |
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Reductions |
decrease in benefits because of certain specified conditions |
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Benefit schedule |
very specifically states what is covered in the plan and for how much |
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Usual, reasonable, and customary charges (URC) |
insurance company will pay an amount for a given procedure based upon average charge for that procedure in that specific geographic area |
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Lifetime limit |
specifies a benefit amount that is the most a policy will pay during the lifetime of the insured |
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per-cause limit |
most a policy will pay fro expenses incurred from the same or related causes |
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impairment/exclusions rider |
excludes a specified condition from coverage, therefore, reducing benefits |
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Time of Payment of Claims |
requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments |
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Benefit Period |
a period time during which benefits are paid under the policy |
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Enrollee |
a person enrolled in a health insurance plan, an insured has received diagnosis, advice, care, or treatement |
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Premium |
the money paid to the insurance company for the insurance coverage |
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Social Security Disability Insured Status |
fully insured or currently insured, depending on the number of coverage credits earned |
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Waiting Period |
a period of time that must pass after a loss occurs before the insurer start paying policy benefits |
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Medicare |
Federal medical expense insurance program for people age 65 and older even if the individual continues to work |
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Part A |
financed through a portion of the payroll tax (FICA) - hospital insurance |
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Part B |
financed from monthly premiums paid by insureds and from the general revenues of the of the federal government - medical insurance only |
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Part C (Medicare Advantage) |
allows people to receive all of their healthcare services through available provider organizations |
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Part D |
(prescription Drugs) |
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Original Medicare |
Refers to Part A and B |
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Actual Charge |
Amount a physician or supplier actually bills for a particular service or supply |
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Ambulatory Surgical Services |
Care that is provided at an ambulatory center. These are surgical services performed at a center that do not require a hospital stay unlike in-patient hospital surgery |
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Approved Amount |
The amount medicare determines to be reasonable for a service that is covered under Part B of Medicare |
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Assignment |
The physician or a medical supplier agrees to accept the Medicare-approved amount as full payment for the covered services |
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Carriers |
Organizations that process claims that are submitted by doctors and suppliers under medicare |
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Coinsurance |
The portion of Medicare's approve amount that the beneficiary is responsible for paying |
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Comprehensive Outpatient Rehabilitation Facility Services |
Outpatient services received from a Medicare participating comprehensive outpatient rehabilitation facility |
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Deductible |
the amount of expense a beneficiary must first incur before Medicare begins payment for covered services |
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Durable Medical Equipment |
Medical equipment such as oxygen, wheelchairs and other medically necessary equipment that a dr prescribes for use in the home |
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Excess Charge |
The difference b/w the Medicare-approved amount for a service or supply and the actual charge |
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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 |
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Limiting Charge |
The max amount a physician may charge a medicare beneficiary for a covered service if the physician does not accept assignment |
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Non participating |
Dr/suppliers who may choose whether or not to accept assignment on each individual claim |
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Outpatient Physical and Occupational Therapy and Speech Pathology Services |
Medically necessary outpatient physical and occupational therapy or speech pathology services prsecribed |
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Peer Review Organizations |
Groups of practicing drs and other health care professionals who are paid by the govt to review the care given to medicare patients |
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Qualifies for Medicare Part A |
-citizen -65 years or older -under 65 and disabled -Has end stage renal disease -has ALS - automatically qualifies for Part A the month disability benefits begin |
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Initial Enrollment Period |
when an individual first become eligible for Medicare - starting 3 months before turning 65 and ending 3 months after 65th birthday |
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General Enrollment Period |
between January 1st and march 31st each year |
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Special Enrollment Period |
at any time during the year if the individual or his/her spouse is still employed and covered under a group health palne |
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Medical Advantage |
must cover all of the services covered under the original medicare except hospice care ans some care in qualifying clinical research studies-must be enrolled in medicare parts a & b |
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Medicare Private Fee-For-Service Plan |
Medicare advantage Plan offered by a private insurance company - pays set amount of money every month to the private insurance company to provide health care overage (insurance co decides how much enrollees pay for the services) |
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Special Needs Plan |
Medicare Advantage Part C - provides more focused and specialized health care for specific groups of people - both medicare and medicaid |
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Medicare Prescription Drug, Improvement and Modernization Act of 2003 |
implemented to add Prescription Drug Benefit to the standard of Medicare Coverages -need parts a & b |
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optional coverage |
provided through private prescription drug plans that contract with medicare |
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stand-alone plans |
offer coverage on fee-for-service basis |
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integrated plans |
group coverages together including PPOs and HMOs |
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donut hole |
gap where the beneficiary is responsible for a portion of prescription drug costs |
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catastrophic coverage |
cover 95% of prescription drug costs if spending during the gap reaches the limit |
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Medigap |
Medicare supplement plans - issued by private insurance companies that are designed to fill in some of the gaps in Medicare |
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Omnibus Budget Reconciliation Act of 1990 |
authorized the NAIC to develop a standardized model for Medicare supplement policies - requires Medigap plans to meet certain requirements as to participants |
