ACTUAL CASH VALUE
The fair market value of stolen or damaged property immediately preceding the loss, usually approximately equal to the cost
of replacing the property with comparable new property, minus any depreciation and obsolescence in the property prior to the
loss. See also Depreciation, Fair Market Value.
AFFILIATION PERIOD
The time an HMO may require you to wait after you enroll and before your coverage begins. Iowa law allows for the use of HMO
affiliation periods in small group health plans. HMOs that require an affiliation period cannot exclude coverage of preexisting
conditions, and cannot charge premium during the affiliation period.
AGENT
A licensed person authorized to sell insurance by or on behalf of an insurance company. Also called an insurance producer.
AGENCY
The business organization of an agent or a group of agents.
ANNUITY
A contract sold by insurance companies that pays for a periodic income benefit for the life of a person (the "annuitant") or for a specified period of time. An annuity differs from a life insurance policy in that the purpose of a life insurance policy is to provide an income for a beneficiary when the insured dies, while the purpose of an annuity is to provide an income to the annuitant while the annuitant is alive.
BINDER
Temporary insurance that provides coverage until a permanent policy can be issued.
CANCELLATION
The termination of insurance coverage during the policy period.
CAPTIVE AGENT
An insurance producer who sells insurance for only one company or group of companies.
CASUALTY INSURANCE
Coverage for legal liability that results from negligent acts and omissions which cause bodily injury and/or property damage to
a third party. The term is used broadly to apply to many kinds of insurance, such as aviation insurance, boiler and machinery
insurance, glass insurance and crime insurance.
CLAIM
Notice to an insurer that under the terms of a policy, a loss maybe covered.
COBRA
The abbreviation and common term for the "Consolidated Omnibus Budget Reconciliation Act", a 1986 federal law. COBRA allows continuation
of employer group health plan coverage under certain situations after it otherwise would cease. If you are eligible for COBRA
continuation coverage, you may continue coverage in the group health plan for 18 or 36 months, depending on your circumstances,
by paying the full premium (including the share the employer used to pay) plus a 2% administrative fee. For example, if your
employer has 20 or more employees, you may be eligible for COBRA continuation coverage when you retire, quit, are fired, or work
reduced hours. If you are a surviving, divorced or separated spouse or a dependent child of a previously covered employee, you also may
be eligible.
CREDIT INSURANCE
Insurance issued to a creditor to cover the health or life of a debtor for an outstanding loan. Credit disability insurance is
payable if the debtor becomes disabled, credit life insurance is payable if the debtor dies. If the debtor becomes disabled or
dies prior to repayment of the debt, the policy will pay the balance of the amount of debt outstanding. The face value of credit life
insurance policy decreases in proportion to the reduction in the loan amount until both equal zero.
DECLINE
When an insurance company chooses not to accept the request for insurance coverage.
DEDUCTIBLE
The amount of the loss, under the policy terms, which the insured is responsible to pay before benefits from the insurance company
are payable.
DEPRECIATION
A decrease in value due to age, wear and tear, etc.
DIRECT WRITER
An insurance company that sells insurance directly to consumers through the mail or the Internet, without the use of insurance
agents.
DISABILITY INCOME INSURANCE
Health insurance that provides income payments to the insured when income is interrupted or terminated because of illness,
sickness or accident.
ENDORSEMENT
An amendment to a policy to add or delete specific items or terms or coverage. Also called a "rider."
ENROLLMENT PERIOD
The period during which all employees and their dependents can sign up for coverage without underwriting under an employer group health plan.
Many employers and group health insurers allow employees to elect health benefits when first hired, and some also have an annual enrollment period, during which all employees can enroll in or change their health coverage. See also Group Health Plan, Special Enrollment Period.
EXCLUSION
A policy term which describes a certain cause or condition, not covered.
FACE AMOUNT
Under a life insurance policy, the dollar amount to be paid to the beneficiary when the insured dies. It does not include other
amounts that may be paid from insurance purchased with dividends or any policy riders.
FAIR MARKET VALUE
The price that a reasonable and willing buyer would pay a reasonable and willing seller, if neither is under any compulsion to
sell or buy. See also Actual Cash Value.
GENETIC INFORMATION
Includes information about family history or genetic test results indicating a person's risk of developing a health condition.
Under Iowa law, an insurer cannot exclude coverage for a condition about which you have genetic information, unless that health
condition has been diagnosed.
GRACE PERIOD
A period defined in the policy during which an overdue premium may be paid after the premium due date without penalty. The
policy remains in force throughout this period.
GROUP HEALTH PLAN
A health benefits plan (usually sponsored by an employer, union or professional association) that covers at least 2 persons.
There are fully-insured plans and self-insured plans.
GUARANTEED INSURABILITY
An option of a life insurance policy that permits the policy holder to buy additional stated amounts of life insurance at stated
times in the future without evidence of insurability.
GUARANTEED ISSUE
A requirement that health plans must permit you to enroll in the plan regardless of your health status, age, gender, or other
factors that might predict your use of health services.
GUARANTEED RENEWABILITY
A feature in health plans that means your coverage cannot be canceled because you get sick.
HEALTH INSURANCE
A policy that will pay specified sums for medical expenses or treatments. Health policies can offer many options and vary in
their approaches to coverage.
HEALTH STATUS
When used in reference to health or life insurance, this term refers to your medical condition (both physical and mental),
claims experience, receipt of health care, medical history, genetic information, and disability.
HIPAA
The abbreviation for the federal Health Insurance Portability and Accountability Act, also known as the Kassebaum-Kennedy act,
after the two senators who spearheaded the bill. Passed in 1996 to help people buy and keep health insurance, even when they
have serious health conditions, the law sets basic requirements that health plans must meet.
HMO
The abbreviation for a health maintenance organization, a kind of health insurance plan. People who join HMO plans agree to use
medical providers who work for or contract with the HMO. HMOs generally do not require the payment of deductible amounts, but
they often do require the payment of a small fee, called a co-payment, for services like doctor visits or prescriptions.
INCONTESTABLE CLAUSE
A policy provision that states that the insurer may not contest the validity of a policy after the policy has been in force for a
period of time (usually two years).
INDIVIDUAL HEALTH PLAN
Policies for people and their families unable or unwilling to obtain coverage through a group health plan
: for example, a self-employed person or a part-time person.
INSURED
In most cases the insured is the policyowner - the person whose risk is covered by the policy. For life insurance, the insured person is the person upon whose death life insurance benefits will be paid.
INSURER
The insurance company.
LIFE INSURANCE
A policy that will pay a specified sum to beneficiaries upon the death of the insured. There are many types of life insurance, including whole life, term life, universal life, etc.
LOAN VALUE
The amount which can be borrowed against a life insurance policy by the policyholder from the insurer, using the value of the
policy as collateral. If the insured dies before the debt is repaid, the amount of the unpaid plus any interest is deducted from
the amount of life insurance benefits payable.
LOOK BACK PERIOD
The maximum length of time, immediately prior to enrolling in a health plan, that can be examined for evidence of preexisting
conditions.
MANAGED CARE
A kind of health insurance plan. Like an HMO, managed care plans can limit coverage to health care provided by doctors and
hospitals that work for or contract with them - also called "network providers." Often managed care plans will require you
to get permission (a "referral") from your family doctor before you get care from a specialist in their network. Some
managed care plans will reduce coverage for your care if you go to a non-network provider or if you get specialist care without
a referral.
PAID-UP INSURANCE
Life insurance policy under which all premiums have been paid, with no further premium payment due.
POLICY
The written contract of insurance.
POLICY LIMIT
The maximum amount a policy will pay, either overall or under coverage for a particular loss or service.
PPO
The abbreviation for a preferred provider organization, a kind of health insurance plan. People who join PPO plans agree to pay
a higher percentage of their medical expenses when they use medical providers who are not a part of the PPO.
PREEXISTING CONDITION
Any condition (either physical or mental) for which medical advice, diagnosis, care, or treatment was recommended or received within
the specified period immediately preceding enrollment in a health plan.
PREEXISTING CONDITION EXCLUSION PERIOD
The time after coverage under a health policy begins during which no benefits will be paid for care relating to a preexisting
condition.
PREMIUM
The amount of money an insurance company charges for insurance coverage.
RIDER
An amendment to a policy to add or delete specific items or terms or coverage. Also called an "endorsement."
SURRENDER
To terminate or cancel a life insurance policy before the maturity date.
TITLE INSURANCE
Coverage for losses if a land title is not free and clear of defects that were unknown when the title insurance was written.
UNDERWRITING
The process by which an insurer determines whether an applicant for insurance meets the company's standards for acceptable risks,
and determines the rate of premium to charge for that risk. of selecting applicants for insurance and classifying them according
to their degrees of insurability so that the appropriate premium rates may be charged. The process includes rejection of
unacceptable risks.
VANISHING PREMIUM
Some life insurance policies charge high initial premiums to allow rapid build-up of cash values. Sometimes, the built-up value
will be great enough that the policyowner can offset future premium payments by borrowing from the cash value, until such time
as the cash value diminishes and premium payments must be made again. This is not the same as a paid-up policy, because premium
payments continue to be due, either by cash from the policyowner, or by borrowing against cash value.
WAITING PERIOD
The time you may be required to work for an employer before you are eligible for health benefits. Not all employers require
waiting periods.
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