Types of Insurance Policies

Types of Policies

• Disability Income: Covers income loss due to disability
  • Individual disability income
  • Business overhead expense policy
  • Business disability buyout policy
  • Group disability income policy
  • Key employee policy
• Accidental Death and Dismemberment: Insurance for death or injury from accidents
• Medical Expense Insurance: Covers medical costs
  • Basic hospital, medical, and surgical
  • Major medical policies
  • Health Maintenance Organizations (HMOs)
  • Preferred Provider Organizations (PPOs)
  • Point of Service (POS) plans
  • Flexible Spending Accounts (FSAs)
  • High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs)
  • Health Reimbursement Accounts (HRAs)
• Medicare Supplement Policies: Add-on coverage for Medicare
• Group Insurance: Offered to groups of people (e.g., employees)
  • Differences between individual and group contracts
  • General characteristics
  • COBRA (Consolidated Omnibus Budget Reconciliation Act)
• Long Term Care (LTC): Covers assisted living or nursing home care
  • Eligibility criteria
  • Levels of care
• Other Policies: Various types of insurance
  • Dental
  • Vision
  • Cancer
  • Critical illness
  • Worksite (employer-sponsored)
  • Hospital indemnity
  • Short-term medical
  • Accident

Policy Provisions, Clauses, and Riders

• Mandatory and Optional Provisions: Key components of insurance policies
  • Entire contract (all terms and conditions)
  • Time limit on certain defenses (incontestable)
  • Grace period (time for payment before late penalties)
  • Reinstatement (returning to policy after lapse)
  • Notice of claim (procedure for filing claims)
  • Claim forms
  • Proof of loss (evidence required to justify claim)
  • Time of payment (when benefits will be distributed)
  • Payment of claims
  • Physical examination (in some cases)
  • Legal actions (how disputes can be resolved)
  • Change of beneficiary
  • Misstatement of age or gender (policy implications)
  • Change of occupation
  • Illegal occupation
  • Relation of earning to insurance (in some policies)
• Other Provisions and Clauses:
  • Insuring clause (basic coverage description)
  • Free look (period to review the policy)
  • Consideration clause
  • Probationary period
  • Elimination period (waiting time before coverage starts)
  • Waiver of premium
  • Exclusions and limitations (activities or conditions not covered)
  • Preexisting conditions (coverage restrictions)
  • Coinsurance (shared cost of care)
  • Deductibles (amount to pay before insurance covers)
  • Eligible expenses
  • Copayments (fixed amount per visit)
  • Pre-authorizations/prior approval
  • Usual, reasonable, and customary (URC) charges (average costs)
  • Lifetime, annual, or per cause maximum benefit limits (policy limits)
• Riders: Adds on or modifies some policies
  • Impairment/exclusions
  • Guaranteed insurability
  • Future increase option
• Rights of Renewability: Potential policy conditions
  • Noncancelable
  • Cancelable
  • Guaranteed renewable

Social Insurance

• Medicare (Parts A, B, C, D): Federal health insurance program for seniors and disabled.
• Medicaid: Federal and state program that helps with medical costs
• Social Security benefits: Benefits for retirement, disability or survivors

Other Insurance Concepts

• Disability: Total, partial, recurrent, residual
• Owner's rights: Legal rights
• Dependent children benefits: Insurance for minors
• Primary and contingent beneficiaries: Person who benefits
• Modes of premium payments: How payments are made
• Nonduplication and coordination of benefits: Avoiding double payment
• Occupational vs. non-occupational: Relation to ones work
• Tax treatment: Tax implications on premiums and proceeds
• Managed care: Types of care delivery
• Workers Compensation: Insurance to compensate employees injured at work