Key Concepts
Basic Medical Expense Policies - Health insurance policy that provides "first dollar" benefits for specified (and limited) health care, such as hospitalization, surgery or physician services. Characterized by limited benefit periods and relatively low coverage limits.
Coinsurance - Principle under which the company insures only part of the potential loss, the policyowners paying the other part. For instance, in a major medical policy, the company may agree to pay 75% of the insured expenses, with the insured to pay the other 25%.
Comprehensive Major Medical Insurance - Designed to give the protection offered by both a basic medical expense and major medical policy. It is characterized by a low deductible amount, coinsurance clause, and high maximum benefits.
Deductible - Amount of expense or loss to be paid by the insured before a health insurance policy starts paying benefits.
Hospital Expense Insurance - Health insurance benefits subject to a specified daily maximum for a specified period of time while the injured is confined to a hospital, plus a limited allowance up to a specified amount for miscellaneous hospital expenses, such as operating room, anesthesia, laboratory fees, etc. Also called hospitalization insurance.
Hospital Indemnity Insurance - Form of health insurance providing a stipulated daily, weekly, or monthly indemnity during hospital confinement; payable on an unallocated basis without regard to actual hospital expense.
Limited Risk Policy - Provides coverage for specific kinds of accidents or illnesses, such as injuries received as a result of travel accidents or medical expenses stemming from a specified disease.
Preexisting Condition - An illness or medical condition that existed before a policy's effective date; usually excluded from coverage, through the policy's standard provisions or by waiver.
Stop-Loss Feature - Designed to stop the company's loss at a given point, as an aggregate payable under a policy, a maximum payable for any one disability or the like; also applies to individuals, placing a limit on the maximum out-of-pocket expenses an insured must pay for health care, after which the health policy covers all expenses.
Supplementary Major Medical Policy - A medical expense health plan that covers expenses not included under a basic policy and expenses that exceed the limits of a basic policy.
Surgical Expense Insurance - Provides benefits to pay for the cost of surgical operations.
Familiarize yourself with the Key Concepts in the Florida study manual, Unit 17.
