Employees Glossary
A
Accelerated Death Benefit
A benefit that allows for the early payment of some portion of the policy’s face amount should you suffer from a terminal illness or injury.
Accident Insurance
Pays cash directly to you for the unexpected costs of an accidental injury.
Accidental Death & Dismemberment Insurance
Pays additional benefits if a death or injuries occur as the result of an accident.
Ancillary
Refers to benefits that are used to supplement group health insurance.
B
Basic Life Insurance
Basic life insurance is the simplest form of life insurance, and it is typically provided by your employer.
Beneficiary
The person named in the policy to receive the insurance proceeds when you pass away. Anyone can be named as a beneficiary.
Benefit
Total expenditures for insurance services paid to you or on your behalf.
C
Claim
A request made by you for insurer remittance of payment due to loss incurred and covered under the policy agreement.
Claimant
The person who files a claim.
Contingent Beneficiary
Person or persons named to receive proceeds in case the primary beneficiary is not alive. Also referred to as a secondary or tertiary beneficiary.
Conversion
Allows you to convert your insurance coverage when it is being reduced or terminated for any reason other than non-payment of premiums.
Critical Illness Insurance
Provides cash directly to you for the unplanned expenses of a critical illness.
D
Deductible
A specified amount of money that you must pay before an insurance company will pay a claim.
E
Effective Date
The date when an insurance policy goes into force or becomes active.
Employer-Paid
Insurance coverage paid for by your employer.
Evidence of Insurability (EOI)
Statements or proof of your physical condition affecting the acceptance for insurance.
F
FMLA
The Family and Medical Leave Act of 1993 (FMLA) is a U.S. federal law requiring covered employers to provide employees with job-protected and unpaid leave for qualified medical and family reasons.
G
Group Insurance
Covers a defined group of people or the employees of an employer.
Guarantee Issue
The right to purchase insurance without physical examination; the present and past physical condition of the applicant are not considered.
H
Health Savings Account (HSA)
A tax-advantaged medical savings account available to taxpayers in the U.S. who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit.
High-Deductible Health Plan (HDHP)
A health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is a requirement for having a health savings account (HSA).
I
Individual Insurance
Insurance you buy on your own—not through an employer or association.
Insured
A person or organization covered by insurance.
Insurer
A person or company that underwrites an insurance risk; the party in an insurance contract undertaking to pay compensation.
L
Life Insurance
Pays out a sum of money to a designated beneficiary when you pass away.
Long-Term Disability (LTD) Insurance
Provides a steady income to help cover expenses during an extended illness or after a disabling accident.
O
Open Enrollment
Period of time each year when you can sign up for insurance.
P
Partial Disability
Any type of disability in which you are unable to perform at full physical capacity. This is usually due to an on-the-job injury or due to illness.
Portability
Allows you to continue (“port”) your insurance coverage when your employment is being voluntarily or involuntarily terminated.
Pre-existing Condition
A health or physical condition that existed prior to the effective date of an insurance policy.
Premium
The annual payment from you to the insurance company to keep the policy active.
Primary Beneficiary
A beneficiary that is first in line to receive the named benefits.
S
Short-Term Disability (STD) Insurance
Provides a steady income to help cover expenses during a short-term illness or after a disabling accident.
Supplemental Life Insurance
Additional life insurance coverage on top of your basic life insurance.
T
Total Disability
Because of a sickness or injury, you are unable to work in your own or any occupation for which you are suited by training, education or experience.
V
Vision Insurance
Health and wellness plans designed to reduce your costs for routine preventive eye care (eye exams) and prescription eyewear (eyeglasses and contact lenses).
Voluntary Life Insurance
Voluntary life insurance is an optional benefit offered by employers where an employee pays a monthly premium in return for cash paid to beneficiaries upon death.
W
Waiver of Premium
A clause that waives the policyholder’s obligation to pay any further premiums should he or she become seriously ill or disabled. It allows people to benefit from an insurance policy, even when they cannot work.