Adverse Selection - When those with below average health conditions make application for or continue health coverage to a greater extent than those with average or better health Allocated Benefits - A listing of the maximum dollar amounts payable for specific services (generally found in indemnity plans). Broker - A licensed representative who sells and services insurance products to clients. A broker usually offers multiple plans through various insurance carriers. Coinsurance - The portion of the bill that you are responsible for, once your deductible has been met. This is typically 20 to 30 percent and most policies have a cap on how much you must pay. Conversion Privileges - The right to convert from one health plan to another without having to provide evidence of insurability. For instance, this may be an option if coverage under a group plan is being terminated. Copayment - A predetermined amount of money an insured must pay for certain services and for prescription drugs. Amounts often range from $5 to $25. Most managed care plans require copayments. Deductible - This is the amount an insured must pay for medical services before benefits are paid by the insurance company. A rule of thumb is, the higher the deductible the lower the premiums. Make sure the deductible you select is an amount that you can comfortably afford to pay should you become ill. Remember that you will still have premiums to pay as well. Effective Date - Simply the date your coverage begins. Most medical plans do not start the day you complete the application unless/until you are approved by the company's underwriters.
Exclusions / Limitations - A listing of medical services that may not be covered or may be limited. These might include dental and/or vision, hearing aids, attempted suicide, an act of war, cosmetic surgery, self inflicted injuries, injuries while on the job that would normally be covered under workers compensation. Limitations can also be put on organ transplant, mental health services, etc. Fee-For-Service - An insurance carrier reimburses a medical care provider for each service. Grace Period - A period of time specified in the policy, during which a late premium can be made before the policy is canceled. This is usually (but not always) 31 days. Indemnity - A coverage type that pays maximum benefits according to a schedule. This is almost always a less favorable plan that a major medical which pays based on reasonable and customary. Lifetime Limit - The most an insurer promises to pay over the life of a policy. $1 Million is a common lifetime maximum. Out-of-pocket Maximum - The maximum amount of money you are required to pay in a year, in deductibles and coinsurance. Pre-authorization - If a feature of your policy, an inpatient or outpatient surgery or procedure may need to be authorized by the insurance company in advance. Preexisting Condition - An illness or injury where symptoms were evident or treatment was received before the affective date of the policy. Some Plans will not cover a preexisting condition for a period of time or indefinitely. Preexisting clauses will vary from policy to policy. Premium - The amount the insurer charges in exchange for coverage. Premium / Renewal Increase Provisions - Determine what the conditions are for the policy to be renewed and/or premiums increased. Qualified Impairment Insurance - This is a special class or substandard form of medical insurance, that excludes or restricts coverage for a particular health condition(s). Rider - An additional document that either adds to or takes away benefits stated in the original policy. For example, a rider could exclude coverage of a preexisting condition. Waiting Period - Some policies will not cover an illness and/or accident for a specified period of time from the effective date. | 
