A&H Policy
A policy that pays benefits for losses resulting from either an accident or a sickness. The three major classifications of A&H benefits are medical expense benefits, disability income benefits, and dismemberment benefits. A&H policies are also referred to as Health Policies

Accident
In health insurance, an unintended and unforeseen (not predictable, unexpected) event which results in bodily injury. Accidents are one of two perils (cause of loss) that can be covered by health policies; the other peril is sickness.

Accident & Health Insurance
Another common name for health insurance. The abbreviation is A&H insurance.

Accidental Death Benefit
In health insurance, a provision for payment if death results from an accident. Accidental Death insurance is often combined with Dismemberment insurance to create a policy called Accidental Death & Dismemberment. In life insurance, a payment for loss of life due to an accident. Also, a rider added to a life insurance policy for payment of an additional benefit, related to the face amount of the basic policy, when death occurs as the result of an accident as defined in the policy. This is often called “double indemnity” when the rider doubles the death benefit of the policy.

Accidental Death & Dismemberment Benefit
Pays a stated amount in case of accidental death or in case of the loss of limbs or sight as a result of an accident.

Annuity
A contract guaranteeing an income for life to the annuitant.

Assignment
The legal transfer by a policyowner of the policy ownership or policy benefits to another party. When the company is given written notice of the assignment, the policy benefits will then accrue to the person named as assignee.

Beneficiary
The person to whom the proceeds of a life or health insurance policy are paid when the insured dies. There are three types of beneficiaries: The primary beneficiaries are those who are first entitled to the proceeds; the secondary beneficiaries are those who are entitled to proceeds if no primary beneficiary is living when the insured dies; the tertiary beneficiaries are those entitled to the proceeds if no primary or secondary beneficiaries are alive when the insured dies. Secondary and tertiary beneficiaries are also referred to as alternate or contingent beneficiaries since their claims are contingent on the deaths of primary beneficiaries occurring before the insured dies.

Blue Cross/Blue Shield – (1) Blue Cross
An independent membership association operating on a service basis and providing protection against the costs of hospital care. Benefit payments are made directly to the hospital. Benefits vary among Blue Cross Associations. Blue Cross plans are usually established on a Group basis. However, individual enrollment is sometimes permitted, and plans of community enrollment are undertaken in some locations. Blue Cross plans are usually (but not always) organized under special enabling state legislation. The benefits are focused on hospital related services. (2) Blue Shield – The familiar title for the Associated Medical Care plans, an independent membership association cooperating with Blue Cross and providing protection against the costs of surgery, doctors, and other items of medical care. Benefit payments are made directly to the doctor, not to the policy owner.

Business Health Insurance
Health insurance coverage issued primarily to indemnify a small business for the loss of services due to the disability of a key employee or partner of the business, or, in a partnership or close corporation, provide the money necessary to buy out the interest of a partner or stockholder who becomes permanently disabled.

Buy & Sell Agreement
An agreement between the owners of a business which provides that the shares of the business owned by any one of them who dies shall be sold to and will be purchased by the surviving co-owners at a value agreed upon by the parties in advance and stipulated in the agreement. Also applies to buy out arrangements between owners and key employees.

Cash Accumulation
There are two primary types of life policies that build equity (develop significant cash values). They are Whole Life policies and Endowment policies. Health policies do not build cash values.

Cash Surrender Option
In life insurance, the equity (cash value) amount legally available to the policy-owner when a policy is surrendered to the company. The cash surrender option is one of the nonforfeiture options and is the basis for the remaining two alternative options.

Cash Value
In a life insurance policy, the cash value is the equity amount legally available to the policy-owner when the policy is surrendered.

Coinsurance
The set percentage of costs you pay for healthcare after your deductivel is met. For example, after your deductible is met, you might pay 20% of your healthcare expenses while your plan pays the remaining 80%.

Coinsurance Maximum
The maximum amount of coinsurance that you could be required to pay each each benefit period. For example, if your plan has a 20% coinsurance with a maximum of $1,000, you would keep paying 20% of all healthcare expenses until your 20%'s add up to $1,000.

Conditional Receipt
In life and health insurance, a type of receipt, the agent gives to an applicant who pays the initial premium at the time of application. This receipts binds the insurance company to the risk as of either the date of the application, or the date of the medical exam, whichever is last- IF, and only if, the proposed insured is an acceptable risk on that key date. It is one type of interim insuring agreement.

Contestable Period
The period of time during which an insurance company may contest a claim on a policy because of fraud, or misleading, or incomplete information furnished on the application. This period is usually from one to three years from the policy’s date of issue.

Death Benefit
The policy proceeds to be paid upon the death of the insured. In life or AD&D health policies, the face amount, as stated in the policy, to be paid to the beneficiary upon proof of death of the insured. Under prescribed conditions there may be a partial return of premium from a Life Annuity if the participant dies prematurely.

Deductible
The amount of covered charges an individual or family must incur in a benefit period before the plan begins to pay benefits.

Disability
A physical or mental impairment caused by accident or sickness which partially or totally limits your ability to perform the duties of, say, your own occupation or any occupation for which you are reasonably suited by education, training, or experience. In insurance policies or government benefit programs, the definitions of disability vary greatly.

Face Amount
In life insurance, the amount payable in the event of death, as stated on the front page of the policy. Of course, the actual amount payable by the company may be decreased by outstanding loans or increased by additional benefits under specified conditions (dividend accumulations), or as stated in a rider (such as double indemnity in case of accidental death).

Group Health Insurance
Health insurance covering members of a group of persons, as employees of the same employer, or members of an association or labor union. The term is usually used to distinguish this type of health insurance from individual health insurance. There is only one master contract written to cover the group.

Group Insurance
Insurance protecting a group of persons, usually employees of the same company, or members of the same union or association. As a rule, the group must have been formed for a purpose other than to obtain insurance; its members must either all be insured or, if premiums are paid in part by the individuals, at least 75% must become insured; the amount of insurance for each member of the group must be determined by a formula which precludes any individual selection or choice by the individuals insured.

Health Insurance
The generic name which as been accepted by the insurance industry as the broad term for the branch of insurance that includes all types of disability income, medical expense and accidental death and dismemberment coverages due to accident or sickness. It is also known as accident and health insurance, sickness and accident insurance, etc.

Insurable Interest
The presence of a true, valid and determinable economic interest in the life of another person, such as support from a spouse, help from a business partner, or repayment of debt to a creditor. The love of a blood relationship or spouse also qualifies as an insurable interest; to be in a position to lose something of significant value if the insured person dies; the interest arising when one person has a reasonable expectation of benefiting from the continuance of another person’s life or of suffering a loss at that person’s death. In life insurance, a person generally is considered to have an unlimited insurable interest in himself. However, a person must have an insurable interest in another person at the time of application in order to insure the other’s life. Where no insurable interest exists, policies obtained by one person on the life of another are not enforceable at law since they are considered contrary to the public welfare.

IRA (Individual Retirement Account)
A personal qualified retirement account or annuity through which an individual may accumulate tax deferred dollars up to a certain sum or percent of income each year to use for retirement income.

Life Insurance
The transfer of part of the economic loss due to death of the insured to an insurance company. The risk insured against is the death of a particular person (known as the insured), upon whose death within a stated term, the insurance company agrees to pay a stated sum or income to the beneficiary.

Medicare
Title 18 to the Social Security Act; is primarily a federally financed plan of medical expense health insurance for qualified persons (predominantly those over age 65). Part A, called Medicare Basic Hospital Insurance, is 100% paid by the federal government out of the compulsory payroll taxes for social security; benefits are predominantly hospitalization coverages (daily room and board) plus some home health care visits. Part B, Supplementary Medical Insurance, is financed half by the recipient of the benefits and half by the federal government. Coverages are similar to Basic Medical (doctors) with some surgical coverage, rental of medical equipment and so on. The coverages are rather complex. The plans have deductibles, per diem charges, participation and exclusions.

Medicare Supplement Policy
In health insurance, a medical expense policy sold by private industry to people on Medicare (over age 65). The policy is designed to pay for what Medicare will not pay due to its deductibles, coinsurance requirements and exclusions.

Mortgage Protection Insurance
A type of Decreasing Term insurance designed to correspond directly to the amount of outstanding loan and length of time remaining on a mortgage. If the insured dies during the mortgage period, the outstanding balance is paid by the insurance company to the beneficiary or directly to the mortgage company.

Network
This is a group of hospitals and physicians that contract with the insurance company to provide healthcare services to their policyholders with discounted fees.

Preexisting Conditions Exclusion
In health insurance, a provision which states that any injury or sickness that existed before the policy effective date will be excluded from coverage. Most individual policies will not cover preexisting conditions; most Group policies will cover preexisting conditions because they are written without medical exams being required, and therefore there is really no way to screen them.