Glossary: Key Global Insurance Terms and Definitions
Researching and choosing the right global health insurance plan and the provider is difficult enough. Understanding the terms and language used in the policy descriptions can make things even more confusing. This glossary of terms provides definitions for some of the more frequently used words and phrases you will find throughout the site.
Deductible: This is the amount that you must pay before the insurance will begin to pay. Many plans will allow you to choose your own deductible, if this is the case keep in mind that the higher the deductible, the lower the premium will be. However, the higher the deductible, the more you will have to pay when you use the plan.
Read: Deductibles Explained
Co-Insurance: After the deductible, there might also be a co-insurance. This means that you and the insurance company will share the cost of your remaining fees. The co-insurance is typically broken down by percentage like 80/20 or 70/30. If you choose a plan that has an 80/20 co-insurance, typically you will be in charge of paying 20% and the insurance will be in charge of the other 80%.
Co-Pay: If you have a co-pay on your plan, this is the set fee that you must pay when you use the plan. If you visit the emergency room, there may be an additional co-pay as well.
Policy Maximum: Each plan will list the policy maximum, even if it is simply listed as unlimited. The policy maximum is the total limit as to what the insurance will pay towards your medical expenses.
Out of Pocket Expense: This is the amount of money that you will pay towards your medical expenses. Your out-of-pocket expense is usually in the form of a deductible, co-insurance, copay, or some combination of the three.
Pre-existing Condition: Any medical condition that the insured has prior to contracting for insurance coverage.
Two types of PreExisting Conditions according to Lisa Smith of Investopedia,
Most insurance companies use one of two definitions to identify such conditions. Under the “objective standard” definition, a pre-existing condition is any condition for which the patient has already received medical advice or treatment prior to enrollment in a new medical insurance plan. Under the broader, “prudent person” definition, a pre-existing condition is anything for which symptoms were present and a prudent person would have sought treatment.
Additional International Insurance Terms and Definitions
Accident: An unexpected event that causes injury, that was not intentionally caused by the insured, and arises from causes outside of their control.
Acute Medical Condition: A medical condition that is sudden, severe, and often unexpected. Acute medical conditions can include anything from an asthma attack to a broken arm.
Act of Terrorism Coverage: International medical insurance coverage for injuries or illnesses that are the result of an act of terrorism. While conditions will vary from country to country, the following 4 conditions must be met for the act of terrorism coverage to take effect for U.S citizens:
- The injury or illness does not result from chemical, nuclear or biological weapons or events.
- You have no direct or indirect involvement in the act of terrorism.
- The act of terrorism is not in a country or location where the United States government has issued a travel advisory that has been in effect within the 6 months prior to your date of arrival.
- You have not unreasonably failed or refused to depart a country or location following the date an advisory to leave that country or location is issued by the United States government.
AD&D – Accidental Death and Dismemberment: Insurance that pays the insured or beneficiary in case of bodily injury or death due to an accident, that is not natural causes. This may or may not be included and can be offered as an Add-On to your plan. (Accidental Death and Dismemberment Travel Insurance)
Alternative Therapies (Complementary Therapies): Therapy and treatment that falls outside of traditional Western medicine or treatments. Examples include acupuncture, meditation, and homeopathy.
Benefit Period: The period of time during which the insured receives compensation from their insurance company for medical purposes, and can vary from policy to policy. For example, one policy may state that your benefit period begins the day you are hospitalized for a serious illness and ends 30 days after you stop receiving treatment.
Certificate of Creditable Coverage (CCC): A statement or certificate issued by an insurance company that provides documentation of the existence of insurance, dates of coverage, and this is proof that a person has or has had valid medical insurance.
Claims: An amount of money requested by an insured person from an insurance company to pay for an incurred medical expense. Usually, a claim is made in the form of a written notification to the insurance company requesting payment for medical care received, care that is covered under the terms of the insurance policy.
Common Carrier: Any land, sea, or air conveyance operating under a valid license for the transportation of passengers for hire.
Continuous Coverage: Health insurance coverage that is not interrupted by a lapse of a predetermined number of days.
Coverage Area: The geographical region where an insurance policy is in effect.
Coverage Maximums (Aggregate limits, or policy maximums): Most international insurance plans have a lifetime maximum, condition maximum, or annual maximum that will be listed under your policy benefits. Here is a breakdown of how each maximum works:
- Annual Maximum – Some policies have maximum coverage that resets every year at renewal. To give you an example, let’s say you have a medical emergency that costs $2 million but your plan has a $1.5 million annual maximum. The plan will only cover $1.5 million for that certificate period year. If the $2 million is incurred in the same policy year, then you will pay the remaining $500,000. At the renewal of your plan at the end of the year, the plan will again offer $1.5 million in coverage.
- Condition Maximum (Per Injury, or Per Illness Maximum) – The total amount that an insurance plan will pay per condition. As an example, let’s say you have a $100,000 coverage maximum per injury or illness on your plan. If you have an injury that requires hospitalization, physical therapy, and regular doctor follow-ups, the maximum amount the plan will cover for all of these related expenses is $100,000. If you have a new unrelated illness or injury, you would be entitled to coverage up to $100,000 for that condition.
- Lifetime Maximum – The maximum amount a plan will cover for each insured over the lifetime of the policy. Once the lifetime maximum has been paid, there are no more benefits covered under the policy. So, to give you an example, let’s say your plan has a $5 million lifetime maximum. In the first year, if you have $1 million in paid claims. In this case, the policy will only pay $4 million for eligible expenses for the remaining life of the policy. Once you meet the lifetime maximum, no further expenses are covered and you may need to seek a new insurance plan.
Covered Expenses: Expenses that the insurance company agrees to cover based on the insurance policy purchased. A summary of “covered expenses” will be listed in the Schedule of Benefits.
Covered Reasons: The specific situations and events that are covered by a specific coverage or policy.
Death Benefit (Survivor Benefit): The total compensation that is paid to the beneficiary of the life insurance plan when the insured passes away.
Deductible and Copays: Typically the amount you pay out of pocket either before the coverage starts (deductible) or as a percentage of what the insurance plan covers (co-pay or co-insurance). More: Deductible, Co-Insurance, and Co-Pays.
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.
Earned Premium: the amount of total premium collected by an insurance company that has been “earned” based on the elapsed time of the policy. For example, if your annual insurance premiums were $1,200, and you were 6 months through your policy, the insurance company’s earned premium would be $600, even if you paid the $1,200 upfront.
Effective Date: The date when the insurance coverage becomes effective.
Elimination Period (Waiting Period): the period of time between the insured’s accident and the arrival of benefit payments. For example, if you broke your leg in January and received your first benefit payment in February, the elimination period would be one month.
Epidemic: An outbreak of a contagious disease that spreads rapidly and widely and that is identified as an epidemic by The Centers for Disease Control and Prevention (CDC).
Evacuation: Emergency Evacuation Categories
- Emergency medical evacuation (to the nearest qualified medical facility that can handle the medical condition)
- Medical due to outbreaks, epidemics
- The threat of natural disaster
- Political evacuation due to civil unrest (treated separately)
Includes expenses for reasonable transportation (either public transport or private as reasonable based on the condition) resulting from the evacuation; and the cost of returning to either the home country or the country where the evacuation occurred. Sometimes includes remote transportation in the event of a diagnosis of a critical medical condition that is not necessarily immediately life-threatening, but severe enough that it could result in death or a permanent disability if not treated right away. Any medical treatment (after any deductibles) is usually paid from your medical insurance benefit. May also include an Emergency Reunion Benefit, or Return of Minor Children.
Exclusions: Cases under which an insurance provider does not provide coverage to the insured. For example, an insurance company may include an exclusion for car accidents if the insured is driving under the influence.
Expatriate Insurance: Expat insurance policies designed to cover financial losses that expatriates face while living and working in a country other than their own.
Flexible Spending Account (FSA): A benefits program offered by most organizations that allows you to set aside pre-tax income every month to be used for certain out-of-pocket medical expenses (also see HSA – add anchor link)
Fulfillment Kit: Materials sent to the client after they have been approved for insurance coverage. The kit usually contains the Medical ID card, a Certificate of Coverage, a detailed explanation of the insurance plan, information concerning filing claims, and contact information for the insurance company.
Grace Period: A period of time after an insurance premium payment is due during which the insured can fully enjoy the insurance coverage without incurring an additional fee. Grace periods can range from 24 hours to 30 days, and after their expiration, the insured will be required to pay an additional fee.
HIPAA: The Health Insurance Portability and Accountability Act. This is also known as the Kassebaum-Kennedy Act enacted by the US Congress in 1996. It includes basic requirements for health insurance privacy and portability of health insurance, thus avoiding the exclusion of coverage for pre-existing medical conditions.
Hospital Indemnity: Hospital indemnity will provide $$ for each night you spend in the hospital as an inpatient when receiving treatment for a covered illness or injury. Hospital indemnity benefits are typically not subject to a deductible or coinsurance and are in addition to the payments for other covered expenses.
Inflation Protection: A feature of certain insurance policies whereby the value of benefits increases by a certain, pre-defined percentage during specific time periods to assure that insurance coverage grows at the same pace as inflation.
Insurance Provider Network: The grouping of hospitals, doctors, and other health care providers that the insured will receive the maximum insurance coverage from working with.
- Health Maintenance Organization (HMO) – an insurance provider plan that typically limits customers to receiving insurance coverage only when working with one specific network provider.
- Preferred Provider Organization (PPO, or Participating Provider Organization) – an organization of hospitals, doctors, and other health care providers who have agreed to provide health care at reduced rates to clients of a particular insurance provider. Healthcare providers who fall into your provider’s PPO are often referred to as “In-Network” providers, while healthcare providers outside of your insurance provider’s PPO are referred to as “Out of Network” providers, and will typically cost you much more than in-network providers.
In-Network, Out-of-Network: Medical facilities and practitioners that have contracted with the insurance companies to provide discounted rates, direct billing, and other services are considered In-Network (See more about Doctor Networks). Those facilities that have not contracted are considered “Out-of-Network.” The insured will typically save money by using “In-Network” providers and facilities.
In-patient: A patient admitted for at least a 24-hour residence (or at least overnight) in a medical facility where he is being treated.
Insurance Broker: An agency or individual who works as an intermediary between a person wanting insurance and one or more insurance companies to guide them in the purchase of insurance. (See Why Work with an International InsuranceBroker)
IPMI: International Private Medical Insurance or Global Health insurance.
Life Insurance: An insurance plan that pays the insured’s family in the event that the insured dies. Life insurance plans are found in two forms:
- Term Life Insurance – an insurance plan that covers a person for a specified period of time (days, weeks, years), but not for their whole life. It only pays benefits if the person dies during the time that the individual is covered for.
- Whole Life Insurance – an insurance plan that covers a person for their entire life. Whole life insurance plans pay benefits regardless of when the insured dies.
Lifetime Maximum: The maximum amount an insurance company will pay for all benefits received. The usual limits are $1,000,000; $3,000,000 or $5,000,000 but may be greater or, in some cases, unlimited.
Loss: Injury or damage sustained by you in consequence of the happening of one or more of the occurrences against which the company has undertaken to indemnify you.
Lost Luggage: Aka Loss/Theft, if there is damage to, or loss of, or theft of your checked or stored baggage or personal items (Defined as suitcases, clothing, toiletries, books, photo equipment, mobile phones, and laptops) by a common carrier, or while stored with your hotel. It will also usually include coverage for the replacement costs of travel documents, and sometimes bag tracking. May, or may not, include delayed baggage.
Maximum Limit, Maximum Coverage: Same as Lifetime Maximum listed above
Medical Evacuation (MedEvac, medivac): Timely and efficient evacuation and in-route care of ill or injured persons, usually by air transportation, to a place where they can receive adequate medical care.
Medically Necessary: Treatment that’s appropriate for your illness or injury, consistent with your symptoms, and that can safely be provided to you. It meets the standards of good medical practice and isn’t for your convenience or the provider’s convenience.
Natural disaster: A large-scale extreme weather or environmental event that damages property, disrupts transportation, or endangers people. Examples include earthquakes, fires, floods, hurricanes, or volcanic eruptions. (Natural Disaster and Travel Insurance)
Online Fulfillment: Electronic communication of Medical ID card, certificate or indication of coverage, information on the policy purchased, how to file a claim, and the insurance company’s contact information.
Outpatient: A patient who receives medical treatment at a clinic or hospital, but is not admitted for an overnight stay.
Out-of-Pocket Expense: The total amount that you will pay towards your medical expenses. These expenses typically come in the form of a copay, co-insurance, deductible, or some combination of the three.
- Co-Insurance – the shared cost of medical treatment between the insured and the insurance company. This shared cost is typically broken down by a certain percentage, like 80/20. In the instance of an 80/20 co-insurance, the insurance company will pay 80 percent of any medical bill, and the insured is responsible for the other 20 percent. It’s important to check out what percentage you will be expected to pay along with whether there is a maximum amount at which the insurance company will pay the remainder. For example, perhaps you find a plan that has an 80/20 co-insurance up to $5,000. This means that you are responsible for 20 percent of your expenses until you reach the $5,000 cap. Then, typically the insurance will pay 100 percent up to the benefit or policy maximum. Keep in mind that not all co-insurance will have a cap. While this is fine for smaller items such as a doctor visit for a cold, it can quickly add up when it comes to larger emergency situations.
- Copay – the set fee that you are required to pay when you use the plan. For example, if you have a $50 copay on doctors’ visits, you would be required to pay the first $50, and the insurance company would pay the rest. Keep in mind that, on top of a copay, many insurance providers also use coinsurance, which would increase your costs for that same doctor’s visit.
- Deductible – the annual amount that you are required to pay out of pocket before your insurance company will pay any eligible expenses. For example, if you have a deductible of $1,000, your insurance company will not cover any medical expenses until you have spent $1,000 on medical expenses for the year.
Policy Year: The amount of time from the effective date of the policy that comprises one full year. For example, if the effective date begins April 14, 2009, the policy year will end at midnight, April 13, 2010.
Political Evacuation: Often lumped together with non-medical or security evacuation, political evacuation is for situations where one is either trapped, or expelled, or at risk due to civil uprisings, riots, military coups, political unrest, or being identified as a “persona non grata” in the country you are visiting. Security evacuations (necessary for impending natural disasters, etc.) are different from political evacuations. Political evacuations are for situations of political instability, civil unrest, or military action. Coverage is sometimes dependent on the United States Department of State, Bureau of Consular Affairs, or similar government organization of the insured person’s home country, ordering the evacuation of all non-emergency government personnel from the host country.
Pre-certification: The need to check with the insurance company before receiving medical care, generally for major medical procedures, to confirm if the medical care received will be covered by the insurance company.
Pre-Existing Conditions: Any injury or illness which, prior to the start of the insurance plan, manifested itself, exhibited symptoms, required medical treatment or medication, or for which a physician was consulted. The exact definition will vary from plan to plan, but the key idea remains the same. Pre-existing conditions will often not be covered under your insurance policy.
Premium: Payment for insurance, the amount paid by the insured to the insurance company for health insurance coverage.
Premiums Are Fully Earned: There will be NO REFUNDS if the policy is canceled before the Insurance Certificate expires or if there is a reduction in coverage due to the sale or loss of an item.
Preventive Care (see; Wellness Benefit, Well-care): Medical care given in advance of symptoms to prevent illness or injury. Generally includes emphasis on healthy behavior, regular testing, screening for diseases, routine physical examinations, and immunizations.
Quarantine: Mandatory isolation or restrictions on where you can go, intended to stop a contagious disease from spreading.
Refund: Cash or credit or voucher for future travel that you get from a travel agent, tour operator, airline, cruise line, or other travel suppliers, or any credit, recovery, or reimbursement you get from your employer, another insurance company, a credit card issuer or any other entity.
Remote Transportation: If you experience a medical problem that is not immediately life-threatening, but severe enough to result in death or permanent disability if not treated right away, Remote Transportation will provide for eligible charges arising out of the transportation for you to a qualified facility for further treatment.
Repatriation of Remains: Coverage for the transportation of the covered individual’s bodily remains back to their area of the principal residence, in the event of a covered illness or injury that results in death.
Rider (Waiver): A formal written statement by the insurance company to the insured amending and modifying coverage, e.g., adding or excluding coverage. It could involve waiving coverage for a certain medical condition like cancer, hepatitis or adding coverage for such conditions.
Schedule of Benefits (SOB): A list of the benefits, amount of coverage provided in an insurance policy, usually one or two pages in length.
Scheduled Departure Date: The date on which you are originally scheduled to leave on the trip.
Scheduled Return Date: The date on which you are originally scheduled to return to the point of origin or to a different final destination.
Sickness: An illness or disease which is diagnosed or treated by a physician after the effective date of insurance and while you are covered under the policy.
Subrogation: Steps the travel insurance company takes, after paying a claim, to collect from other available sources such as other insurance plans or travel suppliers.
Term Life Insurance: An international life insurance plan that covers a person for a specified period of time (a day, week, year(s)), but not for his whole life. It only pays benefits if the person dies.
Terrorism: Includes criminal acts, including against civilians, committed with the intent to cause death or serious bodily injury, or taking of hostages, with the purpose to provide a state of terror in the general public or in a group of persons or particular persons, intimidate a population, or compel a government or international organization to do, or to abstain from doing, an act.
Trip Cancellation: Provides reimbursement for non-refundable trip payments and deposits if a trip is canceled for illness, death, or other specific unforeseen circumstances. The “trip cancellation” benefit covers you in the event you have to cancel prior to your trip due to a covered reason listed in your travel insurance policy prior to your departure date.
Trip Interruption: Trip interruption plans typically reimburse you for pre-paid non-refundable travel expenses if an unexpected crisis (e.g., death of a family member, sickness, airline strike, travel supplier bankruptcy, among other crises) occurs during your trip causing it to be canceled, interrupted or delayed.
Underwriter: (1) The company that receives the insurance premium and accepts the responsibility to cover medical costs; (2) The employee in an insurance company who decides whether or not the insurance company should assume the risk of offering the insurance to an individual or group; (3) An insurance agent.
Usual, Reasonable & Customary (UCR): The amount an insurance company will pay for a covered medical expense based on the customary charges of all medical providers in a given geographic area for a similar service.
Waiting Period: A period of time the insured must wait before some or all of the coverages offered in an insurance plan begin and the insured can receive benefits.
Waiver (Rider): A formal written statement by the insurance company to the insured amending and modifying coverage, e.g., adding or excluding coverage. It could involve waiving coverage for a certain medical condition like cancer, hepatitis or adding coverage for such conditions.
Wellness Benefit (Preventive Care, Well-care): Medical care given in advance of symptoms to prevent illness or injury. Generally includes emphasis on healthy behavior, regular testing, screening for diseases, routine physical examinations and immunizations.
Finding the right coverage and understanding all of the fine print can be difficult.
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