Insurance Terms
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Understanding insurance can feel overwhelming. Our glossary breaks down common terms in clear, easy-to-understand language.
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All Terms
Actuary
A professional who evaluates insurance risks using mathematics and statistics.
Adjuster
An insurance representative who investigates and settles claims.
Application
The form used to apply for insurance coverage.
Beneficiary
The person or entity receiving benefits from a policy.
Binder
Temporary proof of insurance coverage until the policy is issued.
Broker
An independent insurance professional representing consumers.
Carrier
Another term for an insurance company.
Claim
A request for payment under an insurance policy.
Coinsurance
The percentage of costs shared by the insured after the deductible.
Copayment
A fixed amount paid for healthcare services.
Coverage
The protection provided by an insurance policy.
Deductible
The amount paid before insurance benefits begin.
Effective Date
The date coverage starts.
Endorsement
A policy amendment that changes coverage.
Exclusion
A condition or service not covered by a policy.
Grace Period
Additional time allowed for premium payment before cancellation.
Insured
The individual covered under a policy.
Insurer
The insurance company providing coverage.
Liability
Legal responsibility for damages or injuries.
Policy
The contract between insurer and insured.
Policyholder
The owner of the insurance policy.
Premium
The amount paid for insurance coverage.
Rider
Optional additional coverage added to a policy.
Risk
The possibility of loss or financial harm.
Underwriting
The process of evaluating insurance risk.
Affordable Care Act (ACA)
Federal healthcare reform law expanding insurance access.
Coinsurance Maximum
The highest amount a member pays in coinsurance annually.
Emergency Room Copay
The amount paid for emergency room services.
Essential Health Benefits
Mandatory benefits required under ACA-compliant plans.
Explanation of Benefits (EOB)
A statement showing claim processing details.
Family Deductible
Combined deductible for family members under one plan.
Formulary
List of covered prescription medications.
Health Savings Account (HSA)
Tax-advantaged savings account paired with HDHPs.
HMO
Health Maintenance Organization plan requiring network providers.
In-Network
Providers contracted with the insurance plan.
Marketplace Plan
Health plan sold through the ACA Marketplace.
Maximum Out-of-Pocket
Most a member pays annually for covered services.
Open Enrollment
Annual period to enroll in or change health plans.
Out-of-Network
Providers not contracted with the insurer.
POS Plan
Point of Service plan combining HMO and PPO features.
PPO
Preferred Provider Organization allowing greater provider flexibility.
Preauthorization
Advance approval required for certain services.
Preventive Care
Healthcare intended to prevent illness.
Primary Care Physician
Doctor providing routine healthcare.
Special Enrollment Period
Enrollment opportunity due to qualifying life events.
Urgent Care
Treatment for non-emergency medical issues.
Waiting Period
Time before certain benefits become active.
Annual Enrollment Period (AEP)
Medicare enrollment period from October 15 to December 7.
CMS
Centers for Medicare & Medicaid Services.
Dual Eligible
Someone qualifying for both Medicare and Medicaid.
Extra Help
Program assisting with Medicare prescription drug costs.
Initial Enrollment Period (IEP)
First opportunity to enroll in Medicare.
Late Enrollment Penalty
Penalty for delayed Medicare enrollment.
Medicaid
Government healthcare program for eligible low-income individuals.
Medicare
Federal health insurance program primarily for those age 65+.
Medicare Advantage
Private Medicare plans replacing Original Medicare.
Medicare Part A
Hospital insurance portion of Medicare.
Medicare Part B
Medical insurance portion of Medicare.
Medicare Part C
Another name for Medicare Advantage.
Medicare Part D
Prescription drug coverage under Medicare.
Medicare Supplement
Coverage helping pay Medicare cost-sharing expenses.
Original Medicare
Traditional Medicare provided by the federal government.
PDP
Prescription Drug Plan under Medicare Part D.
Scope of Appointment
CMS-required document identifying products discussed.
Special Needs Plan (SNP)
Medicare Advantage plan for specific populations.
Star Ratings
CMS quality ratings for Medicare plans.
Trial Right
Right to switch from Medicare Advantage to Medigap in certain cases.
Accelerated Death Benefit
Allows early access to death benefits under qualifying conditions.
Annuity
Financial product providing retirement income.
Cash Value
Savings component of permanent life insurance.
Death Benefit
Amount paid to beneficiaries upon death.
Final Expense Insurance
Life insurance intended for funeral expenses.
Fixed Annuity
Annuity offering guaranteed interest rates.
Indexed Universal Life
Life insurance linked to market indexes.
Irrevocable Beneficiary
Beneficiary whose rights cannot easily be changed.
Living Benefits
Benefits accessible while still living under certain conditions.
Mortgage Protection Insurance
Life insurance intended to cover mortgage obligations.
Permanent Life Insurance
Coverage lasting the insured’s lifetime.
Premium Financing
Borrowing funds to pay life insurance premiums.
Surrender Charge
Fee for canceling certain insurance products early.
Term Life Insurance
Coverage lasting for a specified term.
Universal Life Insurance
Flexible permanent life insurance.
Variable Annuity
Annuity with investment-based returns.
Whole Life Insurance
Permanent life insurance with fixed premiums and cash value.
Cancer Insurance
Supplemental coverage for cancer-related expenses.
Critical Illness Insurance
Coverage paying lump-sum benefits for major illnesses.
Dental Insurance
Coverage helping pay dental expenses.
Disability Insurance
Coverage replacing income after disability.
Hospital Indemnity Insurance
Supplemental cash benefits for hospital stays.
Long-Term Care Insurance
Coverage for extended custodial care.
Short-Term Disability
Temporary income replacement coverage.
Vision Insurance
Coverage for eye care and corrective lenses.
Wellness Benefit
Benefit encouraging preventive healthcare services.
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