Term
| Individual medical expense plans are purchased by: |
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Definition
o People who are not employed
o retired workers
o college students |
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Term
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Definition
designed to pay a high proportion of the covered expenses of a catastrophic illness or injury
• Plans are characterized by:
o Broad coverage of reasonable medical expenses
o high maximum limits
o A deductible (typically calendar year) |
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Term
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Definition
| an aggregate deductible that has to be satisfied only once during the calendar year |
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Term
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Definition
requires the insured to pay a certain
percentage (typically 20‐25%) of eligible medical expenses in excess of the deductible
o purpose is to reduce premiums and prevent overutilization of policy benefits |
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Term
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Definition
The insured’s total out‐of‐pocket spending is limited by the ________,
after which the insurer pays 100% of eligible expenses |
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Term
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Definition
is a tax exempt account established exclusively for the purpose of paying qualified medical expenses
o The beneficiary must be covered under a _high-deductible_ health plan to cover catastrophic medical bills
o The account holder can withdraw money from the HSA tax‐free for medical costs
o Contributions and annual out‐of‐pocket expenses are subject to maximum limits
o An HSA Investment account in a qualified plan received favorable tax treatment |
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Term
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Definition
pays a daily or monthly benefit for medical or custodial care received in a nursing facility, in a hospital, or at home
o Plans come in three main forms:
a facility-only policy
a home health care policy
a comprehensive policy
o Daily benefits range from $50 ‐ $300 or more |
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Term
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Definition
must be met to receive benefits
Either,
o The insured is unable to perform a certain number of _activities of daily living_ (ADLs), or
o The insured needs _substantial supervision_ to be protected
against threats to health and safety because of a severe cognitive impairment |
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Term
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Definition
| is a waiting period during which time benefits are not paid |
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Term
| Disability-income insurance |
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Definition
provides income payments
when the insured is unable to work because of sickness or injury
o income payments are typically limited to 60-80% of gross earnings, because they want to give the person the incentive to go back to work |
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Term
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Definition
(ex: 10 yrs, 20 yrs, to age 65)
the longer the benefit period the higher the premium |
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Term
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Definition
(time deductible)
Satisfaction of the elimination period is required before any benefits are
received
typical elimination period is 1-6 months
The _shorter_ the elimination period, the _higher__
the premium |
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Term
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Definition
‐ Insured is considered disabled if he/she is unable to perform every major
duty of own occupation
‐ _most generous and expensive_ definition of disability |
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Term
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Definition
Insured is considered disabled if he/she is unable to perform the duties of
any occupation for which he/she has “education, training, and
experience”
‐ Takes into consideration prior occupation and income |
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Term
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Definition
“Own” occupation for a period of time, then “any” occupation definition
‐ Premium is _between_ “own” and “any” occupation definition |
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Term
| _”waiver of premium”_ clause |
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Definition
premium is waived while receiving disability benefits
Serves as an “extra” disability benefit equal to the cost of the DI premium |
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Term
| Partial/residual disability |
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Definition
| Protection for either the partial inability to work or perhaps the ability to work, but a reduction of income |
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Term
| Cost of living adjustment |
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Definition
After disability benefits begin, the benefit increases each year based on the rise
in the CPI _(Consumer price index)_ or other inflation measure |
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