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Definition Terms

What is …

Critical Illness Insurance-Critical illness insurance covers you should you be diagnosed with a covered critical illness. The carrier typically pays a lump sum benefit to the insured in the form of a check instead of to the doctors. Coverage is meant to fill the gaps of what traditional or conventional health insurance does not cover. Monies can be used for anything without limitation rules restrictions or guidelines. Typical premiums are affordable and one of the most important coverages you can have.

Cancer Insurance- This is a Cancer only policy as it has been also known. There are two basic kinds of policies. An “expense benefit” plan covers a certain amount per month for a treatment or procedure, as well as a certain amount for hospital stay or confinement, as well as possible transportation. There is a limit monthly on most plans and a cap overall. It does pay over an existing health insurance policy as a supplement and can be a stand alone which can be gotten though work or perhaps a lower rate on an individual policy where it can also be portable due to job loss. A “cash cancer” or “lump sum benefit policy” (variation in word) pays a fixed amount upfront upon the diagnosis of a cancer. In most cases it must be a malignant or the “availability of spreading” this is mostly all cancers internally, but may not be covered outside of the body such as under a simply removal of basal cell or skin cancer.

Critical Illness Terms/Conditions -CII,-critical care insurance,  Critical illness cover, critical health insurance, also under the supplemental or supplemental health insurance umbrella. Often confused with cancer insurance while nearly all carriers plans follow the same general coverage, critical illness covers more than cancer (heart attack, stroke etc).  Some other carriers will provide more coverage and also depending upon the state in which you reside. Coverage additional that may be included could be blindness or deafness, loss of limbs, major burns (usually 20% of body) coma, Advanced Alzheimer’s disease, Paralysis to name a few.

Critical illness-A critical illness usually represents the big three Heart attack, Stroke and Cancer. This makes for nearly three million cases a year and is one of the highest causes of personal bankruptcies. Other conditions may include Coma, major organ transplant and others. (See critical illness insurance)

Supplemental Health Insurance-May refer to a host of about 10 different types such as Cancer insurance or its parent critical illness insurance. It may also refer to other ancillary or secondary products like Long term Care (LTC), Medicare or Medigap, Accident or accidental health insurance. Supplemental is a secondary policy often needed to take over the financial burden of what their primary insurance will not cover. Example: $10,000 deductible and 80/20 co-insurance = at least $10,000 supplemental insurance.

Insurance-Is a purchase of protection and transferring the risk onto  another party will ing to accept or assume that financial risk. This is insurance known as an event that may or may not happen opposed to assurance.

Assurance-While often inter-changeable with the term insurance it is not in the technical sense that assurance is something that is going to happen rather than a risk of some event that may occur. It is within a time line which is why life insurance albeit death insurance and certain to occur, may not occur in the time of policy.

Deductible-The amount you need to pay or satisfy, usually yearly on health insurance, before the insurance company pays out any benefit. There is no deductible(s) to satisfy with supplemental critical illness insurance policies. In this case if you have a high deductible insurance a person would look to get critical illness coverage to offset the cost if some critical condition was to occur under its’ covered conditions.

Policy- Plan -Coverage-Benefits– Inter-changeable words in context of insurance. Policy is the contract in which you are covered under by the insurance carrier. It is your benefits under the policy and it explains your benefits (EOB-explanation of benefits) and coverage amount. One might say critical illness policy the same as critical illness coverage or critical illness plan.

Return of Premium( ROP)-Some options for a return of premium may actually different from one carrier to the next. Surprisingly some Critical illness companies will provide you your paid in premiums if pass away at a certain time frame such as less than a year after the policy began and considered a return of premium such as a graded life policy may have. Most will pay minus any benefits paid and again if you are deceased goes to beneficiary or estate. Most often in critical illness insurance or cancer insurance, it refers to the amount of money(ies) in premium you have paid in as an option. The option or return of premium would be granted all back due to the client or insured if he or she maintained the policy in good standing and not having a claim for a period certain such as 20 years. Most that choose this option can not maintain consistently for said period and lose the option. ROP option does cost you more, and if can maintain the plan would be worth it making it a no premium risk policy. The risk is do not maintain. Check the definition with you carrier.

Pre-screening– Is a call to the underwriting department of  carriers to efficiently save time filling out applications. This is good also so that when filling out another application to a carrier more willing to accept your condition(s) when asked on the application have you ever been turned down or rated up for insurance you wont need to answer negatively. Everyone can have a pre-screen if it is warranted.

Underwriter– The person(s) that reviews your application for coverage. It is the underwriters that way your application risks to determine whether or not you get your policy issued. Risks they may look at could be your height way ratio with BMI (body mass index) or what medications you take and if have a condition is it considered under control by physician. There are many behind the scenes agents themselves do not see but answering the application honestly with full information will help the underwriter. Speculators who omit information might not get underwritten simply because they have not given information enough to ascertain they are in fact healthy by addressing it and being under control. Ask an agent or Critical Illness Resource Department for further questions to see if a pre-screening is necessary to save time.

Carrier/Company– usually representing the marketing organization or the underwriters that are providing the insurance policy that covers you should there be any rise (Assurity Assurant CBL etc full list)

Full Underwriting– As with any insurance underwriting is almost inevitable but full underwriting is just that, full research prior to issuing. It is not often that this pertains to critical illness insurance in the US however it typically can occur when you are getting above the policy face amount norm for your age. (61 year old wishing $80,000, or a 35 year old wanting $200,000 coverage could be full underwriting by most carriers)

Simplified Underwriting– Is a shorter question application and faster underwriting process. If you pass the first basic questions often about 6 or so, then you can qualify. This is not guaranteed, as guaranteed issue has no underwriting, simplified may decline you. If healthy as high as 90% will be accepted others may have extenuating conditions that may be considered too much a risk. These conditions may be, but not limited to Insulin Diabetics or Heart disease or obesity since these factors are one of the highest causes for a critical illness.

Guaranteed Issue– This is a(n) insurance policy that accepts all individuals regardless of medical condition(s). The insured may be accepted in a group insurance if offered at work which may be accepting, but not always since supplemental insurance does not fall under the same applicable rules as group major medical health insurance. Some companies that offer coverage with more than 1000 members are usually guaranteed issue.

Uninsurable / Decline– Those individuals that are considered uninsurable or normally declined by carriers based on that typically may be considered a risk or severe or have chronic medical conditions are deemed “uninsurable”. Health care reform is to be in effect by 2014 and must accept all individuals regardless of conditions. These individuals can get a guaranteed issue critical illness insurance policy. There is generally a one (1) year exclusionary period.

Quote Engine– Is a software platform in which to run multiple quotes, with many different companies or carriers, and many different plans and plan options offered, without having to run each carrier separately. More popular quote engines used by consumers are travel such as Orbitz or Priceline (ref. only/not endorsement) but are also used for other industries such as insurance quoting.

State Coverage Areas– All states in the USA (United States of America) Has a Critical illness insurance policy for individual coverage. More difficult, or less option states would be CT New York and Florida) Plans however are available.

Accelerated Benefit Rider– Critical illness policy may be attached to another policy such as a life insurance policy. If the benefits of that policy can be paid out earlier than death, rather upon diagnosis of a critical illness, this would be an example of accelerated benefit as a rider to life coverage.

Guaranteed renew-ability/Renewable- At end of term or length of policy the insured has availability to option renew at new policy face amount but can not be turned down. Some policies continue for life and have no term length as long as premiums are met. Other CI policies can go to age 70 or 75 and not be renewed past that point due to age others still willing to accept new apps at age 80. Check with insurance Resource Center for defining carriers.

Covered Conditions:  Medical diagnosis by physican that is paid out upon claim at amount stipulated on Explanation of Benefits or policy.

Benefit amount- The amount payable in the face amount of the policy or portion of that amount in the case of a covered condition which is payable to the insured directly.

Assignable- Means that the benefit paid amount for critical illness insurance policy can be paid to another party such as a doctor, hospital or other provided if designated by the insured. This is known as an assignable benefit.

Agent- is a lose term generally referred to by one who acts in a broker capacity, a go-between, or an intermediary to act on someones behalf typically for purchase of items or negotiating a deal or contract, agreement or terms. In this term agent is interchangeable with broker. One who is an agent or broker in insurance must be licensed first having taken the appropriate courses and certification or passing of exam and recognized by the state department of insurance.

Agency-is a filed for and run by insurance agents or a field for name of a company whereby other agents may also be appointed to work either captive or non captive.

Captive/non-captive-Meaning whether or not an agent is either captive or non-captive, is merely if the producer or agent is allowed by the agency they work for to provide only the agency products or allowed to sell others carriers and agencies products which is known as non-captive. An example of captive may be if a person works at Humana and can not sell an aetna policy due to their captive status.

Waiver of premium, is a rider to the policy typically for health or ancillary insurance such as a supplemental health insurance or critical illness insurance, whereby the client would choose to pay extra if offered. In such an event should befall them and are out of work and can not make the premium payment the policy would still remain in force where a waiver of premium rider kicks in and takes care of the premium. Purpose for a WOP, is meant to protect the client and keep in force the policy do to unforeseen events that a client is unable to make payment. WOP riders definitions or policies vary from carrier to carrier and should be researched first before relying on one generic definition as to the lengths of time or events can vary.

Pathologist/pathology Specialized field of study and research on a specific and diagnosis of a disease. The medical doctor performing is known as a pathologist which will typically make the determination and diagnosis from a surgical removal of a lesion or biopsy from pollup or tumor. The result will be an outcome of benign or malignant and refers to cancer.

Oncology/Oncologist is a specialized doctor that handles patients that have been diagnosed as having cancer versus a pathologist which only diagnoses the patient. It is a skill of study that has increased its need and importance over time.