Your glossary guide to understanding health insurance policies

A Health Insurance Glossary

This glossary provides general descriptions of commonly used terms in health, life, disability and special risk insurance. It should be noted that there are differences between plans and that they all do not function in the same way. Please refer to individual insurance policy brochures and/or policy/certificates of insurance for complete details about each insurance plan.
AD&D / Accidental Death & Dismemberment:

A type of life insurance policy that does not require medical underwriting as the plan generally covers claims related to accidental death only — ie; this plan will not cover death related to illness or natural causes. Dismemberment is coverage related to loss of limb, sight or hearing and thus is a “living benefit” paying a certain percentage if these losses occur due to accident. War / Terrorism riders can be added to such AD&D policies, covering the insured worldwide in all countries.

Beneficiary:
Person(s) designated by the insured(s) that would receive the proceeds of an insurance policy upon death of the insured. You would typically assign a beneficiary at the time of completing the policy application. Many of the “travel medical insurance” plans offered not only provide medical insurance but also AD&D / Life coverage and thus may ask for a beneficiary on the application.

Benefit:
Amount an insurance company pays to a claimant, assignee or beneficiary when the insured suffers a covered loss, injury, accident etc.

Benefit Period:
Benefit Period is the maximum time period up to which the plan will pay benefits for any one eligible condition. Some policies have a 12 month while others have a 6 month benefit period; usually this period can extend beyond the date of policy expiration.

Carrier (a.k.a. Insurer):
Insurance company that actually underwrites and issues the insurance policy. The term refers to the fact that the company carries (or assumes) certain risks for the policyholder. Examples are Lloyds of London, ACE, AIG, Virginia Surety Co, etc

Certificate of Coverage:
A statement of coverage, also known as a Certificate of Insurance, that an individual receives when insured under a group contract. The certificate serves as proof of insurance, and outlines benefits and provisions. It is important to review this rather large document once received from the carrier. We recommend reviewing the Exclusions section as a starting point to understanding what the insurance contract is NOT “promising”.

Claim:
Request by the insured(or his/her provider) to an insurance company to pay for services obtained from a health care provider. The claim is usually submitted in a pre-determined format or a claim form. Each carrier / company has differing

Co-Insurance:
After paying the deductible, Co-insurance is the percentage or amount of covered expenses that the insured pays.
For example, an insurance policy brochure may mention that the policy will pay 80% of the first $5,000 and 100% thereafter of the usual and customary charges; In some health insurance plans, it is also called “co-payment”. Co-insurance, with international short and long term medical policies, is generally NOT present with overseas expenses (outside the USA or Canada).

e.g., Suppose you buy an insurance policy with $50,000 policy maximum, $250 deductible per policy period and 80/20 co-insurance for the first $5000 and 100% coverage thereafter. Suppose you incur covered expense of $10,250. You pay FIRST the $250 deductible; then out of the remaining $10,000 covered expenses, you pay 20% of the first $5000 (i.e., $1000); the insurance policy pays for the remaining expenses (i.e. $9,000). That means, you pay $250 + $1000 = $1250 total; and insurance company pays $9000.

Common carrier:
A vehicle or service licensed to carry passengers for hire on a regularly scheduled basis. Good examples are airplanes, trains etc. This term is used with AD&D life insurance policies.

Common carrier AD&D beneficiary:
If the insured person gets into an accident (while in plane for example), either loses hand, foot, eye etc. or dies, the insurance company will pay the benefit amt as outlined in the policy. You should specify the name of the relative to whom that money should go to (in case of death) as ‘Common Carrier AD&D Beneficiary’. That is usually a close relative like son, daugther, son-in-law etc. You do NOT want to place the insured’s name (policy holder) as the beneficiary as the idea is that the life insurance is to be paid to someone other than the deceased person.

Copay:
A predetermined flat fee that the insured pays for healthcare services, in addition to what the insurance covers. Copay is usually not specified in percentage of the total healthcare cost. e.g., you pay $10 for a visit to the doctor’s office, no matter how much the doctor’s office visit charge is.

Coverage period:
In most plans, insurance coverage can be purchased in the combination of monthly and/or 15 days increments to suit your needs. e.g., for a trip of 3.5 months, you can choose 3 monthly increments and one 15 days increment. Effective date for insurance coverage can be the date of departure from home country, or it can be any other later date specified by insured. It is wise to have the insurance effective date same as the date when you depart from home country for the destination and end date same as the date you arrive back in the home country so that you will be covered for any medical emergencies(for covered expenses) even during your journey.

Deductible:
Amount to be paid by the insured person before the insurance company begins to pay for the covered expenses. Deductible may be either per sickness/injury or once per policy period or once per year depending upon the insurance policy you purchase. You will not get receive any reimbursement later from insurance company for the deductible you pay.

e.g., Let us consider that you have purchased an insurance policy with a $50,000 policy maximum, $250 deductible per policy period and 80/20 co-insurance. Suppose you incur a covered expense of $10,250; then the insurance company will pay the covered expenses according to policy terms after you make a a payment of the deductible (i.e. $250).

Denial of claim:
Refusal by an insurance company to honor a request by an insured (or his/her healthcare provider) to pay for healthcare services. This would usually be due to pre-existing conditions.

Emergency evacuation:
Coverage for emergency medical evacuation to the nearest qualified medical facility or the country of residence, as determined by the insurance company; expenses for reasonable travel and accommodations resulting from the evacuation; and the cost of returning to either the country of residence or the country where the evacuation occurred, up to reasonable maximum limit. Depending on the provider, the evacuation definition can be to destination of choice (ie; MedjetAssist membership programs, etc)

Emergency reunion:
Emergency reunion coverage for certain maximum amount, and for certain maximum duration such as 15 days, for the reasonable travel and lodging expenses of a relative or friend during an emergency medical evacuation: generally either the cost of accompanying the insured during the evacuation or traveling from the country of residence to be reunited with the insured.

Exclusions:
Healthcare services not covered by an insured’s health insurance policy. This would usually be due to pre-existing conditions or due to the limitation of the insurance plan. We highly recommend you review the Exclusions section of the certificate wording for full details of exclusions so you know what to expect of the policy.

Hazardous sports coverage:
Coverage for injuries incurred during amateur athletic activities which are non-contract and engaged in by an insured person solely for leisure, recreation, entertainment or fitness purposes.However, activities not covered include amateur or professional sports or other athletic activity which is organized and/or sanctioned, or which involves regular or scheduled practices, games or competition. Usually, the following hazardous activities can be included by optional sports rider at additional premium cost: scuba diving, mountain climbing(up to 4500 meters or where ropes or guides are normally used), jet, snow and water skiing and snowboarding, sky diving, amateur racing, piloting an aircraft, bungee jumping and spelunking. Note that each companies sports rider wordings can be vastly different from one plan to the next. We recommend contacting us for questions.

Individual policy:
An insurance policy (life, health, or disability) that provides coverage for an individual person (and, in some cases, his/her immediate family members), as opposed to a group policy that provides coverage for a group of individuals such as coverage through an employer. Benefits, exclusions and pricing can vary widely between group and individual policies. Certain pre-existing health conditions are difficult to get covered under individual plans.

Insured:
Person that is named as the “covered” individual on the insurance policy or enrolls into the insurance plan.

Lost luggage:
This benefit will be paid in the event that the common carrier permanently looses an insured person’s checked luggage.This coverage is secondary to any other available coverage, including the carrier’s.

Out of pocket maximum:
Maximum amount of money that the insured must pay on his own before the insurance company will pay 100% for insured’s healthcare expenses.

Pre-existing conditions:
A pre-existing condition is defined as any injury, illness, sickness, disease, or other physical, medical, mental or nervous condition, disorder or ailment that existed at the time of application or during the past duration(specified by each insurance plan) prior to the effective date of the insurance, including any subsequent, chronic or recurring complications or consequences related to thereto or arising therefrom. We recommend viewing more details on pre-existing conditions and how domestic vs. foreign policies define existing conditions. Note that pre-existing conditions coverage for short term plans is difficult to insure unless you are a US citizen or US resident. HTH Worldwide programs are considered the best in the industry for covering pre-ex conditions.

Policy maximum:
Maximum amount of money that the insurance company will pay for covered expenses. Policy maximum can be either per policy period, per year, life time or per injury/sickness depending upon the insurance policy you purchase.

Premium:
Amount you pay to purchase any insurance plan. Premium may be paid monthly, quarterly, semi-annually, annually or for entire duration of the coverage depending upon the insurance policy you purchase.

Repatriation of remains:
If a covered illness/injury results in a death, expenses are paid for repatriation of bodily remains or ashes to the country of residence.

Return of minor children:
If an insured person is hospitalized due to a covered illness/injury and is traveling alone with child(ren) of age 19 or under that otherwise would be left unattended, the cost of one way economy fare to their home country, usually up to some reasonable maximum amount. Be sure to review the particular policy wording as they can differ slightly.

Trip interruption:
If, during a covered trip, there is a death of an immediate family member(spouse, child, parent or sibling) or the substantial destruction of the insured’s principal residence, many plans would pay the insured to return to the area of principal residence. Many plans usually pay for one way air or ground transportation ticket of the same class as the unused travel ticket, less the value of the unused return ticket. TripCancellation is a benefit paying usually 100% of non-refundable trip costs PRIOR to departing on your covered trip.

Usual, Reasonable & Customary charge (URC)
A “Usual and Customary” charge is the amount normally charged by medical service providers for similar services and supplies in your area of living.