Insurance Glossary
Plain-language definitions for the terms you'll encounter most.
Insurance comes with its own language, and we want to make sure you always know what you're reading and signing. Below is a glossary of commonly used terms across our service areas — organized by category for easy reference
General Insurance Terms
Beneficiary
The person or entity designated to receive the benefit or payout from an insurance policy upon a qualifying event, such as the death of the insured.
Carrier
The insurance company that issues and backs an insurance policy.
Claim
A formal request made to an insurance company to receive a benefit or payment covered under a policy.
Coverage
The specific protections and benefits provided by an insurance policy.
Deductible
The amount you must pay out of pocket for covered expenses before your insurance begins to pay.
Exclusion
A specific condition, event, or circumstance that is not covered by an insurance policy.
Grace Period
A set amount of time after a premium payment due date during which a policyholder can make a late payment without losing coverage.
Insured
The individual or entity covered by an insurance policy.
Policy Holder
The person or entity who owns an insurance policy and is responsible for paying premiums.
Premium
The amount you pay — typically monthly, quarterly, or annually — to maintain your insurance coverage.
Rider
An optional add-on to an insurance policy that provides additional benefits or modifies existing coverage, usually for an additional cost.
Underwriting
The process by which an insurance company evaluates risk to determine whether to issue a policy and at what premium rate.
Life Insurance Terms
Cash Value
The savings component of a permanent life insurance policy that grows over time on a tax-deferred basis and can be borrowed against or withdrawn.
Death Benefit
The amount of money paid to the beneficiary upon the death of the insured.
Face Amount
The dollar amount of coverage stated in a life insurance policy — typically the amount paid as a death benefit.
Guaranteed Issue
A type of life insurance policy that does not require a medical exam or health questions, guaranteeing coverage regardless of health status.
Permanent Life
Life insurance that provides coverage for the insured's entire lifetime, as long as premiums are paid. Includes whole life and universal life policies
Simplified Issue
A life insurance policy that requires answers to a few health questions but no medical exam, making it easier to qualify for than fully underwritten policies.
Term Life Insurance
Life insurance that provides coverage for a specific period of time — such as 10, 20, or 30 years. If the insured outlives the term, the policy expires without a payout.
Universal Life Insurance
A flexible permanent life insurance policy that allows the policyholder to adjust premiums and death benefits within certain limits.
Whole Life
A type of permanent life insurance that provides a guaranteed death benefit, fixed premiums, and a cash value component that grows at a guaranteed rate.
Health Insurance & Medicare Terms
ACA (Affordable Care Act)
Federal legislation that established the Health Insurance Marketplace, expanded Medicaid eligibility, and introduced consumer protections such as coverage for pre-existing conditions
Coinsurance
The percentage of covered medical costs you pay after meeting your deductible. For example, if your coinsurance is 20%, your insurance pays 80% and you pay 20%.
Copayment (Copay)
A fixed amount you pay for a covered health care service, such as $30 for a doctor visit, regardless of the total cost of the service.
Formulary
A list of prescription drugs covered by a health or Medicare plan. Drugs are typically organized into tiers with different cost-sharing levels.
Medicaid
A joint federal and state program that provides health coverage to eligible low-income individuals and families.
Medicare Part A
The part of Medicare that covers inpatient hospital care, skilled nursing facility care, hospice, and some home health services.
Medicare Part B
The part of Medicare that covers outpatient medical services, doctor visits, preventive care, and durable medical equipment.
Medicare Part C (Medicare Advantage)
An alternative to Original Medicare offered by private insurance companies that bundles Parts A and B — and usually Part D — into one plan, often with additional benefits.
Medicare Part D
The part of Medicare that covers prescription drugs, available as a standalone plan or included in a Medicare Advantage plan.
Medicare Supplement (Medigap)
A private insurance policy that helps pay the out-of-pocket costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles.
Network
The group of doctors, hospitals, and other health care providers that have contracted with an insurance plan to provide services at negotiated rates.
Open Enrollment Period (OEP)
A set window of time during which individuals can enroll in or change their health insurance or Medicare coverage.
Out-of-Pocket Maximum
The most you will have to pay for covered services in a plan year. After reaching this amount, your insurance pays 100% of covered costs.
Pre-existing conditon
A health condition that existed before a person's health insurance coverage began. Under the ACA, insurers cannot deny coverage or charge more based on pre-existing conditions.
Premium Tax Credit
A federal subsidy available to eligible individuals and families to help reduce the cost of health insurance purchased through the ACA Marketplace.
Special Enrollment Period (SEP)
A time outside of Open Enrollment when you can sign up for or change insurance coverage due to a qualifying life event such as job loss, marriage, or the birth of a child.
Retirement & Annuity Terms
Annuitization
The process of converting an annuity's accumulated value into a series of regular income payments.
Accumulation Phase
The period during which contributions are made to an annuity and the account value grows on a tax-deferred basis.
Distribution Phase
The period during which an annuity begins making income payments to the annuitant.
Fixed Annuity
An annuity that earns interest at a rate guaranteed by the insurance company, providing predictable, stable growth.
Indexed Annuity
An annuity whose interest credits are linked to the performance of a market index, with a floor that protects against market losses.
Immediate Annuity
An annuity that begins making income payments almost immediately after a lump-sum premium is paid.
Surrender Charge
A fee charged by an insurance company if an annuity owner withdraws funds before a specified period ends.
Tax-Deferred Growth
Investment or savings growth that is not subject to taxes until the money is withdrawn, allowing the account to compound more efficiently over time.
Employee Benefits Terms
Cobra
A federal law that allows employees and their families to continue group health insurance coverage for a limited time after leaving a job or experiencing another qualifying event, typically at the employee's own expense.
Dependent
A spouse, child, or other qualifying individual covered under an employee's health insurance plan.
Disability Insurance
Insurance that replaces a portion of an employee's income if they are unable to work due to illness or injury. Available as short-term (STD) or long-term (LTD) coverage.
Employee Assistance Program (EAP)
A workplace benefit that provides employees with confidential counseling and support services for personal or work-related challenges.
ERISA
The Employee Retirement Income Security Act — a federal law that sets minimum standards for employee benefit plans offered by private employers.
Flexible Spending Account (FSA)
An employer-sponsored benefit account that allows employees to set aside pre-tax dollars for eligible health care or dependent care expenses.
Group Health Insurance
Health insurance coverage offered by an employer to its employees, typically at a lower cost than individual plans due to the group risk pool.
Health Savings Account (HSA)
A tax-advantaged savings account available to individuals enrolled in a high-deductible health plan (HDHP) that can be used to pay for qualified medical expenses.
Open Enrollment (Employer)
The annual period during which employees can enroll in, change, or drop their employer-sponsored benefits.
Supplemental Benefits
Voluntary insurance products offered alongside major medical coverage that help employees cover out-of-pocket costs, such as dental, vision, accident, critical illness, and disability insurance.
Voluntary Benefits
Employer-offered benefits that employees can choose to purchase, typically through payroll deduction at group rates.
Waiting
The amount of time a new employee must wait before becoming eligible to enroll in employer-sponsored benefits.