HMO? Deductible? Co-insurance? When dealing with insurance coverage and health coverage specifically, you may become confused and frustrated with the different terms used in the industry. Sometimes it seems that you are learning a new language!
Health coverage is best purchased when working with an experienced agent who can explain the different terms and conditions that go along with it. Before you go to meet with your local expert, learn these terms and you'll be able to understand all of the components of your policy like a pro.
Benefit: The term describing the amount payable to the claimant by the company providing your coverage when a claimant has suffered a loss, made a claim and won their claim. In other words, this is what you stand to be paid in the case of a claim.
Claim: The actual request made by a claimant or beneficiary for the insurance company to cover losses incurred by paying for services from a health care provider. When you see a doctor, the doctor often files the claim for you, but it is something that you may need to do yourself.
Co-Payment: A flat rate, predetermined fee that an individual pays out of pocket to their service provider after the deductible is paid. Often known as co-payment, this could be a percentage or a flat rate fee. This fee is determined by the company providing your coverage.
Deductible: A yearly amount that the individual must pay for health care services before insurance will cover the remaining costs. There are often multiple deductible levels to choose from. The higher the deductible (and thus, the more you will have to pay upfront each year) the lower the cost typically is.
Group Insurance: The name for coverage which is purchased and provided by an employer or other large group that covers everyone within the group. Group discounts often apply.
Lifetime Maximum Benefit: The maximum amount that the company can pay out for medical services within the term of an individual's lifetime. In other words, once you've reached this limit, you will no longer be covered.
Out of Pocket Maximum: The predetermined amount of money that an individual can pay out of pocket before the company must pay for 100 percent of medical costs incurred. Usually determined yearly.
Pre-Existing Condition: A condition that existed before the a policy is set in place, that the company may or may not have to cover. In some cases, a company is legally obligated to cover pre-existing conditions if certain circumstances are met.
Short Term Disability: The term which describes the scenario if an individual is injured or detained by illness from working, coverage that will pay out for certain living expenses in the place of a salary or wages.
Underwriter: The party who is responsible for carrying the insurance, assumes the risk and receives premiums for its services.
