Core - Buy-up
The Core/Buy-up is a policy in which the employer pays for a base or "core" plan and allows the employee to "buy-up" at his or her own expense. For example, an employer might pay the premium for a disability policy that covers employees for two years of disability income. With a Core/Buy-up, employees can choose to extend the duration of the benefit and pay the extra premium.
Glossary of Insurance TermsAccelerated BenefitAccelerated Benefit is a life insurance contract feature that provides for the accelerated payment of the death benefit if the insured has a terminal condition, as defined in the policy. Different plans specify different life expectancy and terms for eligibility.
Accidental Death and Dismemberment BenefitAccidental Death and Dismemberment Benefit (ADD) provides an additional death benefit if the insured dies or suffers dismemberment as a result of an accidental injury.AmendmentAn Amendment is a document changing the provisions of an insurance contract signed jointly by the insurer and the policyholder.And DefinitionThe "And" Definition is part of how "disability" can be defined. It requires that a claimant have both functional loss and financial loss due to disability.
Any OccupationAny Occupation is part of how disability can be defined. In this instance, the claimant will be considered disabled if he/she is unable to work in any gainful occupation for which he/she is qualified by education, training, or experience.
BeneficiaryThe Beneficiary is the person named to receive the benefit in the event of the policyholder’s death.BenefitThe Benefit is the amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss.BrokerA Broker is a sales and service representative who handles insurance for clients, generally selling insurance of various kinds and for several companies. Brokers resemble agents but, in a legal sense, represent the party seeking insurance rather than the insurance company.Cash ValueCash Value is the amount of money that is available on the life insurance policy for loans or withdrawls. Term life insurance has no cash value.
CertificateA Certificate is a statement issued to individuals insured under a group policy. It sets forth the essential provisions relating to the insurance coverageClaimA Claim is a notification to an insurance company that payment of an amount is due under the terms of the policy. A claim is a demand by a person who is seeking to recover for a loss.COBRACOBRA (Consolidate Omnibus Budget Reconciliation Act) requires employers with more than 20 employees to make group health care coverage available for 18 months, at the employee's expense, to employees who leave employment due to certain specific events. Click on the term for more information. CoinsuranceCoinsurance is the amount you are required to pay for your care. When it shows a coinsurance amount, also check to see if it says "No deductible" or "After deductible." If it says, "After deductible" you will have to pay the amount of your deductible before the coverage will kick in. If it says, "No deductible" then you do not need to pay the deductible before the coinsurance amount kicks in to cover the cost. The coinsurance rate is usually expressed as a percentage. For example, if the coContributory PlanA Contributory Plan is a group plan under which the employee shares in the cost of the plan. The employee makes a contribution, often by payroll deduction, toward the premium.ConversionConversion is the right to change insurance to an individual policy without proof of good health if coverage terminates under the group contract. For example, a Conversion would allow you to convert the group coverage to an individual policy, pay the premium and maintain uninterrupted coverage.
Copayment or CopayCopayment or Copay is similar to the amount you need to pay to use a service. With a copayment, you pay a flat fee when you visit the doctor's office. For example, if it says $20 copayment for an office visit, you will need to pay $20 when you go in for your appointment and the health plan will pay for the rest of your visit.
Core - Buy-upThe Core/Buy-up is a policy in which the employer pays for a base or "core" plan and allows the employee to "buy-up" at his or her own expense. For example, an employer might pay the premium for a disability policy that covers employees for two years of disability income. With a Core/Buy-up, employees can choose to extend the duration of the benefit and pay the extra premium.
DeductibleThis is the amount of money you must pay before your insurance plan will start covering your claims. Once you pay this amount, your insurance plan will start paying for part of your claims. Until you reach this amount, you must pay for all of your claims out of your pocket.
Definition of DisabilityThe Definition of Disability is the criteria used to determine whether a claimant is disabled and therefore eligible for disability payments. It is a key component of any disability policy contract. Some common definitions include the "And" definition and the "Or" definition.
Disability InsuranceDisability Insurance is a form of insurance that insures the beneficiary's earned income against the risk that disability will make working (and therefore earning) impossible. In other words, it answers the question, "How would I pay for my living expenses if I became unable to work?"DividendsDividends are the return of dollars to the policyholder based on the earnings of the insurance companyEarnings TestThe Earnings Test is part of the definition of disability. It specifies how much a disabled claimant can earn performing limited work and still qualify for disability benefits.
Eligible EmployeeAn Eligible Employee meets the eligibility requirements for insurance as stated in the policy. The eligibility requirements may be determined by the employer, in the case of a group insurance policy, as well as the insurance company. Elimination PeriodThe Elimination Period is the length of time during a period of disability for which the claimant must be disabled before benefits are payable. Also referred to as "qualifying period" by some carriers. Common choices are three or six months.
Endowment PoliciesEndowment Policies will actually pay a sum or income to the policyholder at a certain age. If you die prior to that age, the death benefit would go to the beneficiary. Premiums are higher than for the same amount of whole life insurance.Evidence of InsurabilityEvidence of Insurability (EOI) is the proof that an insurance underwriter requires during the underwriting process. Click the term for more information.Face ValueFace Value is the amount of the death benefit that will be paid, not including additional amounts that may be payable in the case of accidental death.
Family DeductibleThis is the maximum amount of money your family must pay towards the deductible. Once your family reached this amount, your insurance plan will start paying for part of your claims for the whole family.
Family Out-of-Pocket MaximumFamily Out-of-Pocket Maximum is the most your family will have to pay out of pocket for you deductibles, copayments, and/or coinsurance. Once your family's out of pocket expenses for covered services reach this amount, the insurance plan will pay 100% of covered charges for the remainder of the plan year.
Financial StrengthFinancial Strength is an insurer's financial security as determined by a number of independent ratings companies. The ratings organizations evaluate the insurer's ability to pay claims under the terms of its insurance contracts. Formulary or Preferred Drug ListFormulary (or Preferred Drug List) is a list of prescription drugs that are approved and covered by the health plan.
Full Family DirectFull Family Direct (FFD) is the most common method of reducing the amount of LTD insurance benefits by the amount the claimant receives in Social Security disability benefits. This provision considers both primary (employee) and dependent Social Security disability benefits as direct offsets to the benefit amount paid by the group disability policy.
Gainful EmploymentGainful Employment means the claimant could reasonably be expected to earn at least as much as the benefit amount (or some other defined percentage). This concept is typically found in the "any occupation" portion of the definition of disability.
Guarantee IssueGuarantee Issue is an amount of insurance an individual can obtain without any health questions. Typically this applies to group life policies.Health QuestionnaireThe Health Questionnaire is a form used by underwriters to assist in evaluating groups or indiviudals to determine whether they are acceptable risks. Also see Evidence of Insurability.IndexingIndexing is a provision associated with the earnings test. Indexing uses a formula that recalculates the claimant's pre-disability earnings each year, thus increasing the amount a claimant can earn and still be eligible for benefits, as defined by the earnings test.
InsurabilityInsurability is the circumstance under which an insurance company is willing to insure the applicant; the acceptability to the company of an applicant for insurance.InsuranceInsurance is a form of risk management which provides protection against loss. It is a coverage by a contract in which one party agrees to guarantee another party against a specified loss.
InsuredThe Insured is the person or property the insurance contract protects. It is also the person purchasing the the insurance protection.InsurerThe Insurer is the person or company providing the insurance protection. They are accepting the risk and are obligated to provide a benefit as specified in the contract in case of loss.
Level Term Life InsuranceLevel Term Life Insurance is a version of term life insurance where the premium is guaranteed to remain the same for a certain period of time - often 10, 15, 20, or 30 years. The longer the level term, the more expensive the premiums for the policy.
Long Term Care InsuranceLong Term Care Insurance is an insurance plan designed to cover the costs of extended personal care required when a person needs help with basic activities. Click on the term for more information.Master PolicyA Master Policy is issued to an employer, establishing a group insurance plan for designated members of an eligible group. Material DutyMaterial Duty (or duties) is the set of tasks or skills required in a specific occupation. These are duties that cannot be reasonably omitted or modified without impairing an employee's ability to perform his or her occupation. Material duties are used to help determine whether the employee is disabled under the contract. Small differences, such as "a," "the," "some," and "all" material duties (or duty), can greatly impact whether a claimant qualifies for disability benefits.
Maximum Monthly BenefitThe Maximum Monthly Benefit is the highest dollar amount a policyholder can receive on a monthly basis from the insurance policy. Minimum BenefitThe Minimum Benefit is the minimum monthly amount payable to the claimant after offsets; ensures that the claimant will receive at least a minimum benefit from the carrier. Typically $100 a month, although amounts may vary.
Non-Contributory PlanA Non-Contributory Plan is a group insurance plan under which premiums are paid by the employer. The employees are not required to share in the cost.OffsetThe Offset is specified payments of benefits due or received by the claimant from another source that reduces the amount of LTD benefit payable. Click on term to read more.Or DefinitionThe "Or" Definition is part of how "disability" can be defined. It requires that a claimant have either functional loss or financial loss due to disability.
Out-of-Pocket MaximumOut-of-Pocket Maximum is the most you will have to pay out of your pocket for your deductible, copayments, and/or coinsurance. This is common in health plans and is in addition to regular premiums.
Own OccupationOwn Occupation (own occ) is part of how disability can be defined. In this instance, a claimant will be considered disabled if unable to perform one, some or all of the material duties (varies by carrier) of his or her regular occupation.
Policy OwnerThe Policy Owner, also called the policyholder, is the person to whom the insurance policy is issued.
Pre-existing ConditionA Pre-existing Condition is a condition that exists prior to the effective date of the policy and for which a person has consulted a doctor or received any treatment. Individuals with pre-existing conditions may not qualify for benefits from their group long-term policies for a specified period of time.Pre-existing Condition LimitationA Pre-existing Condition Limitation is a limitation requiring a specified "treatment-free period" or period of time the claimant must be insured in order for known medical conditions to be covered.
PremiumsA payment to an insurance company in exchange for insurance coverage.ProviderIn health and dental plans, provider refers to any person or facility that provides healthcare services. This includes doctors, nurses, dentists, hospitals, clinics, etc. The number of providers reflects the number of people or facilities you can choose from to access with the highest coverage.
Qualifying PeriodThe Qualifying Period is the length of time during a period of disability for which the claimant must be disabled before benefits are payable. Also referred to as "elimination period" by some carriers. Common choices are three or six months.
Rate of BenefitThe Rate of Benefit describes the percent of income the disability plan is intended to replace; ranges from 50% to 80%.
Reasonable AccommodationReasonable Accommodation is any modification(s) to the worksite, the job or employment practices, which would allow the insured to perform the material duties of the occupation and would not create an undue hardship for the employer. For example, a modified workstation or adaptive work environment.
Recurrent DisabilityRecurrent Disability refers to periods of disability from the same cause or causes. If the claimant has satisfied the qualifying period, returns to active work and becomes disabled again, some group LTD policies do not require that a new qualifying period be satisfied and consider the period of disability from the same or a related cause to be continuous unless separated by a recovery of six months or more.
Rehabilitation BenefitsRehabilitation Benefits are vocation or physical services a carrier agrees to provide, arrange or authorize as part of a rehabilitation plan to return the employee to gainful work. These may include education, training, family care expense credit, etc.
Renewable Term Life InsuranceRenewable Term Life Insurance is in force for a stated period, and can be renewed by the policy holder at the end of each term for a limited number of terms without proving insurability of the insured.
Short Term Disability Insurance Short Term Disability Insurance replaces a portion of you pay while you are out of work due to illness, pregnancy or injury. As the name implies, the benefit is payable for a limited period of time.
Supplemental InsuranceSupplemental Insurance is additional insurance protection over the primary insurance coverage. Typically the employee pays the premium for supplemental coverage and may be able to elect insurance for self, spouse and dependent children. Survivor BenefitThe Survivor Benefit is when the disability insurer pays a "bridge" benefit to eligible survivors between the time of the employee's death and the point at which life insurance proceeds may be received or the estate should be settled. The typical benefit amount is based on three months of continued LTD benefits.
Term Life InsuranceTerm Life Insurance provides a death protection for a specific period of time. Click on the term for more information.UnderwritingUnderwriting is the process by which an insurance company determines if an individual is an acceptable risk to insure. Click on the term for more information.Universal Life InsuranceUniversal Life Insurance has similar features to whole life, but adds in investment factors that will affect the premium you pay. Depending on rate of return, premiums may need to be adjusted to retain the same amount of insurance coverage.
Voluntary or Employee PaidVoluntary (or Employee Paid) is when an employee chooses to participate in a group plan and pay 100% of the premium. Voluntary plans make coverage available to employees even when the employer cannot afford to fund benefits.
Waiting PeriodWaiting Period is used to define two separate periods of time. Click on the term for the definitions.Waiver of PremiumWaiver of Premium means the person no longer has to pay the premium for the policy after satisfying the elimination period.
Whole Life InsuranceWhole Life Insurance provides permanent death protection, for as long as you live, as long as premiums are paid. Click on the term for more information.Work Incentive BenefitWork Incentive Benefit is when disabled employees are given the opportunity to earn up to 100% of their pre-disability earnings from all benefit sources and return-to-work earnings.
Zero Day ResidualZero Day Residual is a provision that allows disabled employees to work part time from the onset of a disability without restarting the benefit waiting period.