Life Insurance Glossary

Life Insurance Glossary

Finding Term Life Insurance can be stressful. If you’re not an insurance pro, there may be some terms and lingo thrown around that you may be unfamiliar with. SkyBlue Insurance is here to help. Below we’ve created a Life Insurance Glossary defining some of the terms you may encounter when looking for Term Life Insurance.

Accelerated Death Benefit: This benefit is sometimes part of the policy and at times is added as a rider. It will pay the benefit (sometimes a lesser amount than the death benefit) under certain specified conditions, such as a terminal disease (check your policy for exact conditions and the maximum amount paid). Take note that if this benefit is exercised, it will reduce the actual death benefit by the amount of Accelerated Death Benefit paid.

Accidental Death Benefit: A payment for loss of life due to an accident which was the direct cause of death. A provision added to a life insurance policy for payment of an additional benefit, above and beyond the death benefit, when death occurs by accidental means, as defined in the policy.

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Annual Renewable Term (ART) Life Insurance: Term life insurance that renews on an annual basis. The premiums typically increase every year on the policy anniversary date of the policy.

Annuity: A contract that provides a periodic income at regular intervals, usually for life.

Annuity Certain: A contract that provides an income for a specified number of years, regardless of life or death.

Assets: Anything of value that is owned. An insurance company will sometimes request you list your total assets and liabilities on the application to help them evaluate, in conjunction with your income, your need for the amount of death benefit applied for.

Assignment: The signed transfer of the benefits of a policy to another party by a policy owner. If the insurance company is given due notice of the assignment, the policy benefits will accrue to the person named as assignee. The company does not guarantee the validity of an assignment.

Attending Physician’s Statement (APS): A report the insurance company requests from an applicant’s personal physician when additional information is needed to support medical information disclosed in the application or in the medical examiner’s report. If there is no significant medical history, at the discretion of the underwriter, an APS might not be required. Due to physicians’ busy schedules, it sometimes takes quite a while to receive the APS from a physician and, therefore can increase the time it takes to underwrite your policy.

Backdating: Some insurance companies allow policies to be dated earlier than the actual date issued in order to save age. By underwriting at a younger age, the premiums will typically be lower than if the policy is dated at the actual date. However, take note that premiums will be due from the date on the policy, not the actual date.

Beneficiary: The person named in the policy to receive the insurance proceeds at the death of the insured. Anyone can be named as a beneficiary.

Binding receipt: The receipt for payment of the first premium, which assures the applicant that, if he or she dies before receiving the policy, the company will pay the full claims if the policy is issued (or would have been issued) as applied for.

Bonus Rate Annuity: An extra percent of interest credited to an annuity during the first year that it is in force. The extra amount is above the interest rate to be credited beginning the second year and the remaining years that the annuity is in force. The extra rate is paid in the first year in an effort to attract new policyholders.

Burial insurance: A general term usually referring to a small policy of life insurance ($5,000 to $25,000) intended only to meet the final expense needs of the insured.

Business continuation insurance: Generally refers to a life insurance policy used to fund a business continuation plan (also see buy-sell insurance).

Business Insurance: Life insurance coverage concerned primarily with the protection of an insured’s business or vocation. Business insurance protects a business against the loss of its valuable lives or key executives; stabilizes the business through the establishment of better credit relations; and provides a practical plan for the retirement of business interests in the event of the death of one of the owners.

Buy-Sell agreement: An agreement between the owners of a business, which provides that the interest of any one of them who dies shall be sold to and will be purchased by the surviving co-owners or by the business at a value agreed upon by the parties and stipulated in the agreement. Also applies to buyout arrangements between owners and key employees.

Cash Surrender Value: The amount available in cash upon voluntary termination of a policy by its owner before it becomes payable by death or maturity. The amount is the cash value stated in the policy minus a surrender charge and any outstanding loans and any interest thereon.

Charitable trust: A trust designed for the benefit of a class or the public generally. Is essentially different from a private trust in that the beneficiaries are not designated individually.

Child rider: A rider is an attachment to a policy that adds something to the policy (as opposed to being established in the body of the policy). A child rider allows parents to purchase life insurance for their children (all in one rider), without having to purchase a separate policy for each child.

Collateral assignment: In insurance, the assignment of a policy to a creditor as security for a debt. Under a collateral assignment, the creditor is entitled to be reimbursed out of policy proceeds for the amount owing to him or her; the beneficiary is entitled to any excess of policy proceeds over the amount due the creditor in the event of the insured’s death.

Conditional receipt: A receipt given to a life insurance applicant if all or part of the premium is paid at the time of application. This receipt does not provide absolute interim insurance (during underwriting) until the company acts on the application, but stipulates that the company will assume the risk of the death of the insured after the date of the application if it later approves the application or, more frequently, if the insured meets with the company’s rules of insurability for the plan applied for as of the date of the application.

Contestable clause: That section of an insurance contract which states conditions under which the policy may be contested or voided. Also see incontestable clause.

Contestable period: The period of time during which an insurer may contest a claim on a policy because of misleading or incomplete information furnished with the application.

Decreasing term life insurance: Term life insurance on which the face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level.

Disability rider: A rider in a life insurance policy that, in the event of an insured’s total disability, the insurer will waive payment of premiums falling due during the period of disability. Also known as waiver of premium.

Endowment: In life insurance, a contract which provides for the payment of the face amount at the end of a fixed period, or at a specified age of the insured, or at the death of the insured before the end of the stated period.

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Endowment policy: A life insurance policy in which the cash value and face value are equal to each other at the policy’s maturity date; a policy under which the face amount is payable on a specified future date (maturity date) if the insured is then living, or at the insured’s death, if that should occur sooner.

Estate planning: The total process of planning an estate, including: (a) estate creation and conservation during the owner’s life; (b) the minimization of state shrinkage at death; (c) the creation of adequate liquidity for estate settlement costs; and (d) a plan for proper estate distribution to the owner’s heirs.

Estate tax: A tax levied upon the right to transfer property at death, imposed upon and measured by the estate that the deceased leaves.

Evidence of Insurability : A statement or proof of your health, finances or job, which helps the insurer decide if you are an acceptable risk for life insurance.

Face Amount: The amount stated on the face of the policy that will be paid in case of death or at the maturity of the policy. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.

Flat extra premium:
Premium added on top of the regular premium of a life insurance policy to cover added risk, typically that of high risk occupations or activities (e.g. flying an aircraft). The insurance company adds a flat extra fee per thousand dollars of death benefit. An example of this would be a pilot paying and extra $2 – $3 per thousand dollars of benefit. In this example, a pilot taking out a $1 million policy would pay an extra $2,000 – $3,000, over and above the normal premium.

Free Look Provision: A certain amount of time provided (usually between 10-30 days) to an insured in order to examine the insurance policy and if not satisfied, to return it to the company for a full refund.

Group life insurance: A form of life insurance covering a group of persons generally having some common interest, such as employees of the same company or members of the same union or association, etc.

Health Class: Life insurance companies factor in health and lifestyle information to determine the risk insuring you would present to them. In order to determine premiums based on different degrees of risk, the insurance companies have established health (or risk) classes. There are no industry standards, but the health classes are typically Preferred Plus, Preferred, Standard Plus and Standard for non-tobacco users. Below these classes are sub-standard (or rated) categories. There are also separate classes for tobacco users.

In-Force: In life insurance, a term denoting that a policy has been issued, premiums are current and coverage is in place.

Intestate: One who dies leaving no will. Also, the condition of dying without a will.

Irrevocable beneficiary: A beneficiary that cannot be removed from an insurance policy without his or her formal (written) consent.

Irrevocable Life Insurance Trust (ILIT): An irrevocable trust is a trust which cannot be terminated by the donor (grantor). The ILIT is used to own an insurance policy for the purpose of keeping the life insurance proceeds free of federal estate tax upon the death of the insured. Once the trust is established, it is irrevocable, which means it can never be changed, except by the courts and then only under very special circumstances.

Lapse Rate: The rate at which life insurance policies terminate because of failure to pay the premiums. When policies are lapsed before enough premium payments are made to cover early policy expenses, the company must make up this loss from remaining policyholders. Therefore, the lapse rate will affect the cost of the policy.

Life Expectancy: The probability of an individual living to a certain age according to a particular mortality table. This is the beginning point in calculating the pure cost of life insurance and annuities and is reflected in the basic premium.

Life insurance trust: A trust for the purpose of distributing life insurance proceeds. Life insurance companies usually cannot act as trustees or guardians, nor exercise discretion in making payments to beneficiaries. In some cases, it is advisable to have the policy proceeds paid into a trust and distributed under the terms of a trust agreement, thereby permitting greater flexibility in the distribution of the proceeds.

Living trust: A trust created to take effect during the lifetime of the grantor.

Lump sum: Payment of the entire proceeds of a life insurance policy in one sum. The method of settlement provided by most policies unless an alternate settlement is elected by the policy owner before the insured’s death or thereafter by the beneficiary before receiving the payment.

Medical Information Bureau (MIB): A data pool service that stores coded information on the health histories of people who have applied for life or health insurance with subscribing companies in the past. Most life insurance companies have subscriptions with the MIB.

Modal Premium: The frequency with which premiums are paid (monthly, annually, quarterly, semi-annually)

Mortality: The incidence of death at each attained age; frequency of death.

No-lapse guarantee rider: A rider sometimes offered with a universal life insurance policy that guarantees that the policy will never lapse, and the death benefit and premiums will never rise, even if the cash value of the policy falls to zero, provided that premiums are paid when due. Also known as lapse protection.

Non-Forfeiture: One of the choices available if the policy owner discontinues premium payments on a policy with a cash value. Options available are to take the cash value in cash or to use it to purchase extended term insurance or reduced paid-up insurance.

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Non-Participating: A life insurance policy in which the company does not distribute to policy owners any part of its surplus.

Occupational hazard: A danger inherent in the insured’s line of work. This often results in higher premiums.

Paid-up Policy: Insurance on which the policy owner has completed payments, but which has not matured. This may be either (1) reduced paid-up insurance provided under the non-forfeiture provision; (2) a limited payment policy under which all premiums have been paid; or (3) a policy on which accumulated dividend are applied to pay the net single premium required to pay up the difference between the policy’s reduced paid-up insurance and its face amount.

Participating Policy: A life insurance policy under which the company agrees to distribute to policy owners the part of its surplus that its Board of Directors determines is not needed at the end of the business year. The distribution serves to reduce the premium the policy owners had paid.

Permanent life insurance: A term loosely applied to cash value life insurance. This type of policy is meant to last a whole life, as opposed to term, which is in force for a specified period of time or term.

Policy Proceeds: The amount actually paid on a life insurance policy at death or when the policy owner receives payment at surrender or maturity.

Premium: The payment, or one of the periodic payments, a policy owner agrees to make for an insurance policy. Depending on the terms of the policy, the premium may be paid in one payment or a series of regular payments, e.g., annually, semi-annually, quarterly or monthly. The premium charged reflects the expectation of loss, expenses and profit contingencies.

Primary Beneficiary: The beneficiary specifically designated by the insured as the first in priority to receive policy proceeds.

Rating: The basis for an additional charge to the standard premium because the person insured is classified as a greater than normal risk usually resulting from impaired health or a hazardous occupation.

Reduced Paid-up Insurance: A form of insurance available as a non-forfeiture option. It provides for continuation of the original insurance plan, but for a reduced amount, without further premiums.

Reinstatement: Restoring a lapsed policy to its original premium paying status, upon payment by the policy owner, with interest, of all unpaid premiums and policy loans, and presentation of satisfactory evidence of insurability by the insured.

Renewable Term: Term life insurance under which the insured has the right, at the end of the term, to elect to continue the insurance for another term (at the premium for his or her then attained age) without submitting evidence of insurability.

Return of Premium (ROP) term life insurance: A term life insurance policy in which all the premiums paid to the insurance company are returned to the policy owner at the end of the term, if he or she has outlived the term.

Rider: An endorsement to an insurance policy that modifies clauses and provisions of the policy, including or excluding coverage.

Risk Classification: The process by which a company decides how its premium rates for life insurance should differ according to the risk characteristics of individuals insured (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications.

Saving Age: The act of backdating a policy to a date closer to the applicant’s last birthday in order to lower the premium. In backdating, premiums are payable as of the policy date.

Second-to-die life insurance: A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured. Also known as survivorship life insurance or joint survivor life insurance, this type of policy is typically used to pay estate taxes upon the death of the second insured. It is also often used by parents of special needs children to ensure the child will be provided for after the death of both parents.

Section 1035 exchange: Under IRS Section 1035, a policy owner can exchange one life insurance policy with another and transfer the accumulate cash value from the old policy to the new one without incurring any taxes on the cash accumulation. The transfer must occur between two like policies and must be transferred directly from the old insurance company to the new one.

Single premium: The lump-sum premium payment required to cover the entire cost of a life insurance policy.

Split dollar insurance: An arrangement between two people (often an employer and an employee) where life insurance is written on the life of one who also names the beneficiary of the net death benefits (death benefits less cash value), and the other is assigned the cash value (or equivalent amount of death benefits), with both sharing the premium payments (usually the noninsured paying a portion equal to the increase in cash value each year and the insured paying the balance of the annual premium). Upon termination of the plan while the insured is living, the cash value generally would go to the noninsured to compensate for the portion of premiums paid. Upon death of the insured, the amount of proceeds equal to the cah value generally would go to the non-insured, and the balance of proceeds would go to the insured’s beneficiary. This method permits a financially able person (say, a favored employee) to obtain substantial amounts of needed life insurance with a very low premium outlay on his or her part.

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Standard Risk: The classification of a person applying for a life insurance policy who fits the physical, occupational and other standards on which the normal premium rates are based.

Substandard Risk: The classification of a person applying for a life insurance policy who does not meet the requirements set for the standard risk. An additional premium is charged on substandard risks to provide for the probability that such a person will have a shorter life span than a standard risk.

Suicide clause: Most policies provide that if the insured commits suicide within a specified period, usually two years after the date of issue, the company’s liability will be limited to a return of premiums paid.

Supplementary Contract: An agreement between a life insurance company and a policy owner or beneficiary in which the company retains at least part of the cash sum payable under an insurance policy and makes payment in accordance with the settlement option chosen.

Surrender: The return for cancellation of a policy to the insurer by the policy owner in exchange for the policy’s full cash value or other equivalent non-forfeiture values.

Survivorship life insurance: A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured. Also known as joint survivor life insurance or second to die life insurance, this type of policy is typically used to pay estate taxes upon the death of the second insured. It is also often used by parents of special needs children to ensure the child will be provided for after the death of both parents.

Term life insurance: Life insurance issued for a term of years, normally building up no cash value and expiring without value. Typical term periods are 10, 15, 20, 25 and 30 years

Tertiary beneficiary: A beneficiary designated as third in line to receive proceeds or benefits if the primary and secondary beneficiaries do not survive to receive them.

Underwriter: The person who reviews the application for insurance and decides if the applicant is acceptable and at what premium rate.

Waiver of premium: A rider available with most life insurance policies which exempts the insured from the payment of premiums after he or she has been disabled for a specified period of time.

Whole life insurance: A plan of insurance offering protection for the whole of life, proceeds being payable at death. Premiums may be paid under a continuous premium arrangement or on a limited payment basis for virtually any desired period of years.

Learn the terms on this Life Insurance Glossary so you can be prepared when you shop for insurance. SkyBlue Insurance is an authorized dealer for some of the leading providers of Term life Insurance. We can help you find multiple quotes to compare and narrow down your Term Life Insurance options. Contact us now and request a free Term life Insurance quote and get your results instantly!

 

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When to Buy Term Life Insurance

When to Buy Term Life Insurance

We get it: people don’t like talking about Life Insurance because they don’t want to think about death. Unfortunately there will come a time when you’ll need to consider a life insurance policy. There are two types of life insurance: Permanent Life Insurance and Term Life Insurance. You may not know which type of policy is right for you. For the sake of this article, we will focus on Term Life Insurance. Read on to learn when to buy term life insurance.

Term Life Insurance

As the name suggests, Term Life Insurance provides coverage for a specified amount of time. This type of insurance is to provide a financial cushion for those you leave behind. It’s a great option for people who have dependents or individuals who rely on your income. If you don’t pass within the specified term limits, the policy expires. At this point you will either have to set up a new policy or renew your old one.

The two main parts of a Term Life Insurance are the Death Benefit and the Beneficiary. The death benefit is the amount that will be paid out in a lump sum in the event of your death. The beneficiary is the person, people, or organization that will receive the lump sum. The death benefit and beneficiary are determined when the policy is created.

Term Life Insurance policies are also much more affordable than Permanent Life Insurance policies. This is due to the payout process. With a Permanent Life Insurance policy, the insurer must pay out the cash value of the policy whether you pass away or not. With a Term Life Insurance policy, there is no pay out. So if you don’t die, you don’t get the lump sum.

Most people purchase a Term Life Insurance policy once they have children. They want to ensure that their children are financially taken care of if they pass away. Term Life Insurance is also a great option for people who have other assets that accumulate wealth. A permanent Life Insurance policy acts as an investment. A Term Life Insurance gives you protection for a certain time while other assets and investments accumulate wealth to pass on. Once these investments gain enough revenue, people tend to end their Term Life Insurance policies because they are now set with the value of their investments.

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Term Life Insurance is a great safety net to protect your loved ones and dependents. Be sure you know when to buy Term Life Insurance. If you feel like a Term Life Insurance policy would be great for you, you should give us a call at 1-800-771-7758. SkyBlue Insurance is an authorized rep for some of the leading Term Life Insurance providers in the nation. We can help you find an affordable policy that’s specific to your needs. Find out how much you can get covered for instantly by requesting a Term Life Insurance quote for free!

 

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Disadvantages of Health Savings Accounts

Disadvantages of Health Savings Accounts

A Health Savings Account can be a great tax-free investment for those who want to save for future medical expenses. There are many advantages that come with a Health Savings Account. That being said, an HSA may not be the best option for everyone. Some insurance professionals believe that Health Savings Account may actually be harmful for some citizens in the long run. Below we list some disadvantages of health savings accounts so you can decide if opening one is the right choice for you.

It Takes Time

The contributions made to one’s Health Savings Account are funded by their income. Most people pay into their HSA with every paycheck. This means that those who don’t have high income may have to wait some time before they see a hefty balance. This may not be the best option for those who may be expecting to pay medical expenses soon.

Complicated

Opening and maintaining a Health Savings Account may be complicated. There are a lot of regulations, terms, and specifics that may not thoroughly understood by some clients. Some people may be confused when it comes to understanding payouts and investing.

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No Prescription Drug Copays

With a Health Savings Account, owners are required to pay the full amount for prescription drugs (minus their health plan discount) until the deductible is reached. This can become extremely expensive since many prescriptions are pricey.

High Deductibles

An HSA comes with much higher deductibles than standard PPO health plans. The IRS requires that qualified Health Savings Account plans come with a minimum family deductible of $2,400, but could be as high as $6,500 with a maximum out of pocket of $12,100. This can cause some lower income people to put off minor but important care treatments because they’re so expensive.

Limits

Health Savings Account regulations also limit the amount of money a person can contribute to their account per year. Owners with individual plans can only invest $3350 year and those with family plans are limited to $6650 per year.

Now that you know the disadvantages of health savings accounts, you can decide if opening one is right for you. If you think that you could benefit from investing in a Health Savings Account, contact us today and we’ll help you get the protection you need. SkyBlue Insurance is an authorized rep for leading providers of Health Savings Accounts. Give us a call or visit the site and request a Health Savings Account quote for free!

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Benefits of Health Savings Accounts

Benefits of Health Savings Accounts

In the changing world of Health Insurance, all eyes are on Health Savings Accounts. A Health Savings Account (or HSA) is a tax-exempt savings account that can be used to fund certain qualified medical expenses. They are great for health people who want to invest and save for suture potential health problems. Health Savings Accounts come with a lot of advantages. Below we explain some of the benefits of health savings accounts to help you decide if one is right for you.

Tax Deductible

Any contributions you make to your Health Savings Account are tax-deductible. This will decrease your taxable income, helping you save even more money.

It’s an Investment

Another one of the benefits of health savings accounts is that they act as an alternative form of savings. Just like a 401k or an IRA, a Health Savings Account will generate interest over time which means you may end up with more money than you invested. An HSA can also be combined with your retirement fund. Once an individual turns 65, they can withdraw their full account balance, tax-free!

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Balance Roll Over

Every contribution you make to your HSA will remain until you use them. Your remaining balance at the end of the year will automatically roll over to the next year.

Portable

A Health Savings Account belongs to the individual. That means it will follow you wherever you go. If someone decides to change job or health insurance plans, their HSA can be attached to their new policy and remain unchanged.

Tax-Free Withdrawals

Any withdrawal you make to cover a qualified medical expense for you, your spouse, or your dependents will not be taxed or penalized.

If you want to take advantage of the benefits of health savings accounts, then don’t hesitate to open one today. SkyBlue Insurance is an authorized rep for some of the leading providers of Health Savings Account. We can find you the best option so you can start investing in your health today. Contact us for a free Health Savings Account quote and your results instantly.

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Health Insurance Terms

Health Insurance Terms

The process of finding Health Insurance can be very confusing and tiring. There are a lot of terms that get thrown around that you may be unfamiliar with. This may make the process more mind boggling. Well SkyBlue Insurance is here to help. Below, we list some of the common terms you’ll encounter when looking for Health Insurance.

Health InsuranceHealth Insurance

Allowable- This is the dollar amount considered by a health insurance company to be a reasonable charge for medical services or supplies based on your local rates.

ASO (Administrative Services Only)- An arrangement in which an employer hires a third party to deliver administrative services to the employer such as claims processing and billing; the employer bears the risk for claims.

Benefit­- The amount payable by the insurance company to a plan member for medical costs.

Benefit level- The maximum amount that a health insurance company has agreed to pay for a covered benefit.

Benefit year- The 12-month period for which health insurance benefits are calculated.

Claim- A request by a plan member, or a plan member's health care provider, for the insurance company to pay for medical services.

Coinsurance- The amount you pay to share the cost of covered services after your deductible has been paid. The coinsurance rate is usually a percentage.

Conventional Indemnity Plan- An indemnity that allows the participant the choice of any provider without effect on reimbursement.

Coordination of benefits- A system used in group health plans to eliminate duplication of benefits when you are covered under more than one group plan.

Copayment- One of the ways you share in your medical costs. You pay a flat fee for certain medical expenses, while your insurance company pays the rest.

Deductible- The amount of money you must pay each year to cover eligible medical expenses before your insurance policy starts paying.

Dependent- Any individual, either spouse or child, that is covered by the primary insured member’s pan.

Drug Formulary- A list of prescription medications covered by your plan.

Effective Date- The date on which a policyholder's coverage begins.

Exclusion or Limitation- Any specific situation, condition, or treatment that a health insurance plan does not cover.

Exclusive Provider Organization (EPO) Plan - A more restrictive type of preferred provider organization plan under which employees must use providers from the specified network of physicians and hospitals to receive coverage.

Explanation of Benefits- The health insurance company's written explanation of how a medical claim was paid.

Flexible Spending Accounts or Arrangements (FSA)- Accounts offered and administered by employers that provide a way for employees to set aside, out of their paycheck, pretax dollars to pay for the employee’s share of insurance premiums or medical expenses not covered by the employer’s health plan. The employer may also make contributions to a FSA.

Fully Insured Plan- A plan where the employer contracts with another organization to  assume financial responsibility for the enrollees’ medical claims and for all incurred administrative costs.

Gatekeeper- Under some health insurance arrangements, a gatekeeper is responsible for the administration of the patient’s treatment; the gatekeeper coordinates and authorizes all medical services, laboratory studies, specialty referrals and hospitalizations.

Group Purchasing Arrangement- Any of a wide array of arrangements in which two or more small employers purchase health insurance collectively, often through a common intermediary who acts on their collective behalf.

Group Health Insurance- A coverage plan offered by an employer or other organization that covers the individuals in that group and their dependents under a single policy.

Health Maintenance Organization (HMO)- A health care financing and delivery system that provides comprehensive health care services for enrollees in a particular geographic area. HMOs require the use of specific, in-network plan providers.

Health Savings Account (HSA)- A personal savings account that allows participants to pay for medical expenses with pre-tax dollars. HSAs are designed to complement a special type of health insurance called an HSA-qualified high-deductible health plan (HDHP). HDHPs typically offer lower monthly premiums than traditional health plans.

Indemnity Plan - A type of medical plan that reimburses the patient and/or provider as expenses are incurred.

In-network Provider- A health care professional, hospital, or pharmacy that is part of a health plan’s network of preferred providers.

Individual Health Insurance- Health insurance plans purchased by individuals to cover themselves and their families.

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Medicaid- A health insurance program created in 1965 that provides health benefits to low-income individuals who cannot afford Medicare or other commercial plans. M

Medicare- The federal health insurance program that provides health benefits to Americans age 65 and older. Medicare has two parts; Part A, which covers hospital services, and Part B, which covers doctor services.

Medicare Supplement Plans- Plans offered by private insurance companies to help fill the "gaps" in Medicare coverage.

Network­- The group of doctors, hospitals, and other health care providers that insurance companies contract with to provide services at discounted rates.

Out-of-Network Provider- A health care professional, hospital, or pharmacy that is not part of a health plan's network of preferred providers.

Out-of-Pocket Maximum- The most money you will pay during a year for coverage. It includes deductibles, copayments, and coinsurance, but is in addition to your regular premiums.

Payer- The health insurance company whose plan pays to help cover the cost of your care. Also known as a carrier.

Pre-Existing Condition- A health problem that has been diagnosed, or for which you have been treated, before buying a health insurance plan.

Preferred Provider Organization (PPO)- A health insurance plan that offers greater freedom of choice than HMO (health maintenance organization) plans. Members of PPOs are free to receive care from both in-network or out-of-network (non-preferred) providers, but will receive the highest level of benefits when they use providers inside the network.

Premium- The amount you or your employer pays each month in exchange for insurance coverage.

Provider- Any person (i.e., doctor, nurse, dentist) or institution (i.e., hospital or clinic) that provides medical care.

Rider- Coverage options that enable you to expand your basic insurance plan for an additional premium.

Underwriting- The process by which health insurance companies determine whether to extend coverage to an applicant and/or set the policy's premium.

Waiting Period- The period of time that an employer makes a new employee wait before he or she becomes eligible for coverage under the company's health plan.

Hopefully, knowing these terms will make it easier to find the Health Insurance you need. If you have any questions, contact one of our reliable SkyBlue Insurance agents at 1-800-771-7758. If you’re ready to start finding good rates, go online now and get a Health Insurance quote for free. Results are instant!

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Featured

Understanding Health Insurance

Understanding Health Insurance

Applying for health insurance can be confusing. There are so many terms and rules, you may get lost in all the jargon. Many people aren’t sure about how their coverage works, how much it costs, or when to use it. So, to help you out, we at Go Medical have put together this guide to help you better understand health insurance.

The Law

The Affordable Care Act requires all United States citizens over the age of 21 to be covered by health insurance or pay a penalty during tax season. Those under the age of 26 can still be covered under their parents’ insurance. After 26 you are required to sign up Health Insurance if their place of employment does not offer coverage.

The Fees

As of 2016, the penalty for not having health insurance is 2.5% of your income or $695 per person, whichever is greater.

Health Insurance

Types of Plans

  • Bronze level: Your plan pays 60% of covered health-care costs; you pay the remaining 40%.
  • Silver level: Your plan pays 70% of covered health-care costs; you pay the remaining 30%.
  • Gold level: Your plan pays 80% of covered health-care costs; you pay the remaining 20%.
  • Platinum level: Your plan pays 90% of covered health-care costs; you pay the remaining 10%.

Coverages

Health Insurance Policies come with these coverage options:

  • Prescription medications
  • Ambulatory services
  • Hospitalization services
  • Emergency or urgent care
  • Maternity and newborn care
  • Rehabilitative services and equipment
  • Mental health and substance abuse services, including counseling
  • Laboratory services
  • Preventive and wellness care, including chronic-condition management
  • Pediatric services (which must include dental and vision care for children)

Exemptions

Certain people are exempt from the tax penalty for not having insurance. They include:

  • Those below the minimum threshold for paying taxes
  • Residents experience financial hardship
  • Consumers who can’t afford coverage
  • Incarcerated Residents
  • Undocumented Immigrants
  • Religious sects and divisions recognized by the IRS who have been opposed to receiving health benefits since 1956
  • American Indian Tribes

Where to Apply

Going through this process can be time consuming and stressful. That’s why Go Medical is here to help. If you don’t feel like searching through tons of information, we can obtain quotes from multiple Health Insurance carriers instantly so you can compare rates. If you need help finding the best insurance, request a rapid Health Insurance quote from us now!

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