Key Terms & Definitions

AD&D – Accidental Death and Dismemberment: Accident insurance that pays the insured or beneficiary in case of bodily injury or death due to an accident as opposed to natural causes.

Affordable Care Act (ACA): The comprehensive health care reform law enacted in March 2010 (sometimes known as “Obamacare”). The law has three primary goals:

  • Make affordable health insurance available to more people.
  • Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level.
  • Support innovative medical care delivery methods designed to lower the costs of health care.

Annual limits: The total benefits an insurance company will pay in a year while an individual is enrolled in a particular health insurance plan. Annual limits may be placed on the dollar amount of covered services or on the number of visits that will be covered for a particular service. After an annual limit is reached, you must pay all associated health care costs for the rest of the year.

Annuity: A form of insurance or investment entitling the investor to a fixed sum of money paid out each year, typically for the rest of his or her life. Annuities work like life insurance policies in reverse – you pay the provider a lump sum up front, then the provider pays you regularly until your death. There are certain risks associated with annuities that you should fully understand before purchasing. Contact the experts at Jefferson Insurance Group for information.

Beneficiary: Someone who receives money or other benefits as determined by the execution of a will, life insurance policy, retirement plan, annuity, trust or another contract.

Copayment (“copay”): A fixed amount that an insured patient pays a health care provider for a particular health-related service.

Coinsurance: The percentage of costs of a covered health care service paid after an insured reaches her or her deductible.

Covered Expenses: Medical expenses that an insurance company will cover based on the insurance policy purchased.

Deductible: The amount an insured pays out-of-pocket for covered health care services before the insurer begins paying for any expenses.

Dependent: Usually a spouse and/or children who are legally dependent on the insured. Depending on the insurance plan, dependents may qualify for insurance coverage on the insured’s policy.

Group Health Insurance: A health insurance plan that provides benefits for employees of a business or members of an organization, as opposed to individual and family health insurance.

Individual Life Insurance: An insurance policy paid by one person and covering a single person, as opposed to group life insurance, which covers employees of a company or members of an organization. Individual life insurance policies are used to meet the financial needs of a surviving spouse or family members in the event of the insured’s death.

Insurance Broker: An insurance broker works for the insured rather than an insurance company. Brokers use their professional knowledge and experience to help clients properly assess their insurance needs, shop for the best value in insurance coverage and help them in the event of a claim.

Lifetime Maximum: The maximum amount an insurance company will provide for all medical care received.

Long-Term Care Policy: A policy that provides care on a continuing basis for those who can no longer care for themselves; this includes the chronically ill or disabled. Long-term care may be provided on an inpatient basis (at a long-term care facility) or in the home setting.

Marketplace/Health Insurance Marketplace: A resource for individuals, small businesses and families to compare health insurance plans for coverage and affordability, as well as to purchase plans directly. The Health Insurance Marketplace was created by the Affordable Care Act in 2010. In most states, the federal government runs the Marketplace (sometimes known as the "exchange") for individuals and families. (Note: Some states run their own Marketplaces at different websites.) Contact your Jefferson Insurance Group agent with questions.

Medicare: A national health insurance program in the United States for Americans aged 65 and older and younger people with certain disabilities and diseases. 

A type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits. Medicare Advantage Plans include:

  • Health Maintenance Organizations
  • Preferred Provider Organizations
  • Private Fee-for-Service Plans
  • Special Needs Plans
  • Medicare Medical Savings Account Plans

If you’re enrolled in a Medicare Advantage Plan:

  • Most Medicare services are covered through the plan
  • Medicare services aren’t paid for by Original Medicare

Most Medicare Advantage Plans offer prescription drug coverage.

Medicare Advantage Plans: Commonly known as “Part C” or “MA Plans,” Medicare Advantage Plans are bundled with Medicare Part A (hospital insurance), Part B (medical insurance) and often, Part D (prescription drug plans). The health plans are offered by private companies contracting with Medicare.

Medicare Prescription Drug Plans: The “Part D” of Medicare plans, prescription drug plans cover a variety of prescription (formulary) drugs, along with generic drugs, at various tiers.

Medicare Supplement (“Medigap”): Insurance coverage sold on an individual or group basis to help fill the "gaps" in the protections granted by the federal Medicare program. It is structured to pay part or all of Medicare's deductibles and co-payments. It may also cover some services and expenses not covered by Medicare.

Out-of-pocket: Cash/payments that will not be reimbursed by the insurance company, including deductibles and coinsurance limits.

Policy: A written contract ratifying the legality of an insurance agreement.

Premium (health care): As related to health insurance, a premium is the amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments and coinsurance.

Premium (insurance): The amount of money an individual or business pays for an insurance policy.

Rider (Waiver): A formal written statement by an insurance company to the insured amending and modifying coverage, e.g., adding or excluding coverage.

Term Life Insurance: An insurance plan that covers a person for a specified period of time – but not for the person’s whole life – that only pays benefits if the person dies.

Universal Life Insurance: Adjustable life insurance under which premiums and coverage are adjustable.

Variable Life Insurance: Life insurance with a face value and/or duration that varies depending upon the value of underlying securities.

Variable Universal Life: Combines the flexible premium features of a universal life insurance policy with the component of a variable life insurance policy, in which excess credited to the cash value of the account depends on investment results of separate accounts.

Whole Life Insurance: Life insurance that may be kept in force for the duration of a person's life and pays a benefit upon the person's death.