Glossary

This glossary provides general descriptions of commonly used terms in international health 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.

Accident: An unexpected and unfortunate event occurring during the Insured period.

Accidental Death & Dismemberment: An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies, loses his/her sight, or loses two limbs due to an accident.

Agent: An authorized representative of an insurance company who has license to market insurance products.

AM Best Rating: The A.M. Best Company, is considered the most authoritative source of Insurance company information. The company provides comprehensive data to insurance professionals. Founded in 1899 by Alfred M. Best, A.M. Best is the world's oldest source of insurance company ratings and information. Its Best's Ratings are the industry's standard measure of insurer financial performance.
Please note these ratings are assigned to usually the insurance underwriters of the policies you purchase and not to the policy or the policy administrator or the insurance agent.

Following are various AM Best ratings:
A++:  Superior
A+  :  Superior
A    :  Excellent
A-   :  Excellent
B++: Very Good
B+  :  Very Good
B    :  Fair
B-   :  Fair
C++:  Marginal
C+  :  Marginal
C    :  Weak
C-   :  Weak
D    :  Poor
E    :  Under Regulatory Supervision
F    :  In Liquidation
S    :  Rating Suspended

Assignee: The assignee is the beneficiary for the policy and is entitled to receive the benefits of the policy.

Assignment: The legal transfer of the rights and benefits of an insurance policy from one person to another.

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.

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.

Cap: The maximum amount an insured will pay for covered medical bills in any one year. A cap is reached when out-of-pocket expenses, including the annual deductible and coinsurance payments, total a specific amount stated in the insurance policy.

Carrier: 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.

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.

Certificate of Insurance: A written document issued to individuals insured mentioning the essential provisions covered under the policy.

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.

COBRA (Consolidated Omnibus Budget Reconciliation): Regulations requiring an employer who employs more than 20 people to offer continued group insurance coverage to former employees for up to 18 months. If the employee dies, the employer must offer continued group health insurance coverage to widowed spouses and dependent children for up to 36 months.

Co-Insurance: After paying the deductible, 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".

e.g., Suppose you buy 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 $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 $4000 + $5000 = $9000.

Coinsurance Clause: A provision which states that the insured and the insurance company will share the losses covered by the policy in a proportion as agreed upon in advance.

Common carrier: A vehicle or service licensed to carry passengers for hire on a regularly scheduled basis. Good examples are airplanes, trains etc.

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 money. You should specify enter 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 close relative like son, daugther, son-in-law etc. If you are buying insurance for your mother and father both, please do not put any of their names in the beneficiary. This question is for who should that money go to in case both die.

Comprehensive Policy: A policy plan that provides the insured a package of health care services, including preventive care, routine physicals, immunization, outpatient services and hospitalization.

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.

Covered Expenses:
The Expenses that an insurance company agrees to pay the insured as per the terms and conditions mentioned in the policy.

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 a request by an insured (or his/her healthcare provider) to pay for healthcare services. This would usually be due to pre-existing conditions.

Disability: Physical or mental condition that prevents a person from performing his/her occupational duties temporarily or permanentely resulting from an injury or sickness..

Dismemberment: Accidental loss of hands, legs, ears and eyes.

Effective date: It is the Date when insurance coverage begins.

Emergency evacuation: Coverage for emergency medical evacuation to the nearest qualified medical facility or the country of residence, as determined by the insurance compnay; expenses for reasonable travel and accommodations resulting from the evacuation; and the cost of returning to either the countgry of residence or the country where the evacuation occured, up to resonable maximum limit.

Emergency reunion: Emergency reunion coverage for certain maximum amount, and for certain maximum duration such as 15 days, for the resonable 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.

Endorsement: It is a written document attached to an insurance policy which alters the either the policy coverage or the terms and conditions of the policy. Also called as rider.

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.

Expiration: The date specified in the policy as the date of termination.

Face Amount: Face Amount is the amount that an insurer agrees to pay in case of death or at maturity. It does not include additional amounts payable under accidental death or other special provisions.

Fee-for-Service: A payment system for healthcare in which the caregiver is paid for each service provided rather than a pre-negotiated amount for each insured patient.

Foreign Insurer: An insurance company that is incorporated in another state.

Formulary: The list of preferred pharmaceutical products that is to be used by physicians in a managed-care plan when they prescribe medication.

Fraud: Dishonest act or concealment by the policy holders to claim an insurance policy that would otherwise not be paid or misrepresentation by the officials of an insurance company.

Generic Drug: A drug which is the same as a brand name drug and which is allowed to be produced after the brand name drug's patent has expired.

Grace period: It is the Period of time after the premium due date in which premiums may still be paid, with the insurance policy still remains in force.

Group Disability Insurance:A type of insurance policy plan that covers a group of individuals insured against the loss of pay due to accident or sickness.

Group Health Insurance:A type of insurance policy plan which covers health insurance to the members of the insured group.

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, 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.

Health Insurance: Coverage that provides Protection against loss due to sickness or bodily injury.

Health Maintenance Organization (HMO): It is an Organization that provides a wide range of prepaid comprehensive health care services for a specified group for a fixed period of time. The focus of the HMO is preventive medicine.

Hospital Medical Insurance: A type of health care policy plan that provides coverage benefits for the cost of any or all hospital services.

Indemnity Plan: Traditional health insurance that usually covers a percentage of the cost of care after the insured pays an annual deductible.

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.

Insurance: A contract whereby one party (insurer) agrees to indemnify or gurantee many individuals and business entities against a financial loss in return for payment of a premium.

Insured: Person that purchases 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 thereffrom.

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 medical 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 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.

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 the area of principal residence. Many plans usually pay for one way air or ground transporation ticket of the same class as the unused travel ticket, less the value of the unused return ticket.

UC&R (or Usual, Customary & Reasonable):
UC&R (or Usual, Customary & Reasonable) Charges represent the average or most common amount charged by providers for a particular service, treatment, or supply in the same geographic area. Typically information on rates for procedures is compiled into a data bank and updated periodically. So when a claim is submitted for a plan with UC&R benefits, the insurance company before making the claim payment reviews the UC&R rate and double checks that hospitals and doctors are not billing excessively for the particular service or procedure. Most well respected plans from Blue Cross, Aetna, Lloyds, Unicare etc. follow the UC&R schedule.