Appendix 7.

01M

Key Terms: Health and Life Insurance
Term General Insurance Terms risk insurance policy policyholder coverage premium deductible Health Insurance health insurance basic medical major medical HMO HAS Provides compensation for losses due to injury, illness, or disability Pay a large part of hospital and medical care, may also pay part of some other expenses (e.g. doctor’s visits) Pays for long-term illness expenses after basic medical benefits limits have been reached (e.g. cancer). Health management organizaiton---a health care group that provides health care services to members for a set fee and a small co-pay. Health savings account---you contribute pre-tax dollars to the account for expected medical expenses for the coming year-often set up through your employer-submit claims and receipts for reimbursement up to amount deposited. Preferred providers organization---an agreement between health providers with empoloyers or insurers to provide services at a reduced rate to employees. Point of service---members use a primary physician who refers them as needed to participating specialists or members can see non-participating specialist members. But, members pay more to use non-participating health providers. A plan in which an insured can select his/her own doctors and hospitals, pay costs at time of visit, and file form with insurance company for reimbursement of covered expenses Childrens Health Insurance Program - health insurance for children under 18 whose parents earn too much to qualify for Medicaid, but not enough to afford private insurance. Federal funds are distributed by Uncertain, unpredictable factors that can lead to losses or damages An arrangement in which an insured pays money to an insurer to gain protection against risks and compensation for losses A written contract stating the arrangement between insured and insurer A consumer who has purchased an insurance policy Potential risks and losses against which an insured is protected by a policy A fee paid to an insurance company on a regular basis for coverage An initial amount paid by insured for a loss before insurance compensations begin Explanation

PPO

POS

fee-for-services plan

CHIP

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Appendix 7.01M, continued

Key Terms: Health and Life Insurance
Health Insurance, continued disability long term care An illness or injury that leaves a person unable to work Pays for care when a person with a serious illness or injury cannot care for themselves for an extended period of time Employers are required to have in every state in some form. Covers medical care, treatment, rehabilitation, and a portion of wages from injuries that occur in the workplace. May be purchased by Medicare recipients to cover part/all expenses not covered by Medicare. A federal law that someone who leaves employment may be eligible to keep insurance coverage at his/her own expense up to six months. An illness or injury that a person has at the time he/she enrolls in a health care plan A patient’s right to restart coverage annually A limit on the number of days one’s care will be covered, or the highest amount that can be paid in benefits for a specific procedure A time period during which a person can enroll in a health care plan A medical service that is not covered Requirement to obtain approval from the plan before having certain treatments or procedures done A doctor who provides general medical care and coordinates other health care.

worker’s compensation

Medigap insurance COBRA pre-existing condition renewability maximum benefit open enrollment period exclusion preauthorization primary care physician Life Insurance beneficiary insurance benefits face value maturity Cash value

A group or individual selected to receive the assets of a person when he/she dies Assets or gain received by having an insurance policy The amount of money payable to a beneficiary as a death benefit when an insured dies The length of time it takes an insurance policy to reach it full value The amount of money a whole life policyholder would receive if the policy were surrendered before death or maturity.

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Unit D: Managing and Protecting Resources

Summer 2010 Page 303

Appendix 7.01M, continued

Key Terms: Health and Life Insurance

term insurance level term decreasing term renewable term convertible term permanent life whole life insurance limited payment life universal life variable life

A type of insurance that provides coverage for a specific period of time with no investment benefits premiums and death benefits stay the same for the life of the policy premiums stay the same but the benefits decrease over the life of the policy e.g. for home mortgage the insured person can renew the policy without taking a physical the insured person can change the policy from convertible to permanent without taking a physical, tends to be more expensive (also called cash value life insurance) provides coverage the person’s entire life and includes an investment component a type of insurance that provides coverage for a whole lifetime and grows in face value as premiums and cash accumulate. coverage for entire life but premiums are higher than whole life because premiums are paid for a set number of years or until a set age allows adjustments of premium, face value, and level of protection premiums are fixed, but face amount varies with investment results

7086 Personal Finance

Unit D: Managing and Protecting Resources

Summer 2010 Page 304

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