Insurance Education

Insurance can get confusing very quickly.  There are so many different kinds of policies and it takes more than a dictionary to understand.  Below find some common insurance words and products.  Some of the definitions include links to information provided by the California Department of Insurance.  For more on each of them, call us or visit the corresponding product page.

Accident Policies can help fill in those coverage gaps as you pay out-of-pocket medical bills.  Regular medical insurance won’t cover all the expenses that result from injury, so accident policies pay your deductible and / or copays.

Annuities are a fixed sum of money paid to someone every year, typically for the rest of their life or for a specific term. More on Annuities.

Brokers are independent parties who work as a liason between insurance companies and individuals or groups to facilitate the best plan for the consumer’s need.  They are licensed by the state, required to take continuing education courses, and are regulated by the Department of Insurance.  It costs you nothing to additional to work with a broker, and it can be immensely helpful having an educated, unbiased conversation about the products available.  More on  Choosing An Insurance Broker.

Coinsurance is the share or percentage of covered expenses you must pay in addition to the deductible. For example, your policy may pay 80 percent of covered charges after you pay the deductible. You would then pay the remaining 20 percent as coinsurance.

Coordination of Benefits Provision: Even if you have more than one group policy, you cannot receive more benefits than your actual hospital and medical expenses.

Copayment is a specified dollar amount you pay, as a subscriber to a managed care plan, for covered health care services. It is paid to the medical provider at the time the services are rendered.

Covered CA is our state exchange.  Individuals and families can purchase health insurance from this plan administrator, and if their income is at a certain level they can qualify for a discount or subsidy.  Small groups can purchase insurance at a discount through the SHOP program in Covered CA.  Covered CA can also assist those who qualify in applying for Medi-Cal.

Critical Illness and Cancer Policies provide coverage for acute illnesses that can be financially catastrophic.

Deductible is the initial dollar amount you must pay before your insurance company begins paying for health services. Usually, the higher the deductible, the lower your premium. However, do not choose a deductible so high that you cannot afford to pay it. The contract will dictate the specific amount you pay per year for your family. You must pay a deductible each year, which will vary depending on the number of people covered by the policy.

Health Insurance is an option for making health care more affordable for you and your family. Purchasing health insurance for you and your dependents will make it easier for you to get proper health care when you need it, because your insurance will help defray the cost.  Health Insurance

Health Savings Account is an account opened at your bank where you can put untaxed money to help pay for medical expenses (but not for your premiums!)  Health Savings Accounts (HSA's)

Hospital Confinement Policies (sometimes called “bridge”) pay a set amount if you’re confined in a hospital. The plan can pay benefits based on per confinement, per day, per week or per month. Some plans can pay for outpatient benefits as well.  These plans are different from the major medical insurance since these plans pay regardless if the hospital is in the network and these plans pay the policy holder directly, NOT the provider.

Individual and Family Health Insurance  Individuals who are in between jobs, work for a place that does not provide health insurance, or are independent contractors can purchase health insurance either direct from the insurance carriers or from their state exchange if they qualify for discounted health insurance.

Large Group Health Insurance  Employers with 50+ employees can purchase large group insurance policies.

Long Term Care is an insurance plan which helps provide for the cost of long-term care beyond a predetermined period.  Remember, health insurance, Medicare, and Medicaid don’t usually pay for long-term care.  Protect your family’s finances by planning for the future.  Long Term Care

Medicaid / Medi-Cal Medi-Cal is California’s version of Medicaid.  Medicaid is a joint federal and state program that helps with medical costs for people with limited income and resources.

Medicare Individuals over 65 have access to Medicare, which is a federally funded program.  Part A pays for hospital, skilled nursing, nursing home, hospice, and home health services.  Part B pays for medically necessary services and preventative services.  But you’ll need to purchase a Part D drug plan and a Medicare supplemental plan to cover what A and B will not!

Premium is the monthly or annual amount you will pay for your insurance policy.

Short Term or Long Term Disability protects your income during short periods of disability. The benefits paid under short-term disability are usually for terms of 3 months up to 1 or 2 years. If you are disabled, short-term disability will provide you with weekly or monthly payments of either a fixed amount or a set percentage of your regular income thus providing income replacement when you are disabled for a limited time.

Small Group Health Insurance Employers with 2-50 employees can purchase small group insurance.  These employees must be W2, 30+ hours per week, all members must be offered insurance, and 51% of the employees must be based in the state where the insurance is being purchased.

Subsidy / APTC If your income is in a certain level, you can qualify for a discount on your health insurance.  It is called a subsidy or Advanced Premium Tax Credit or APTC.

Telemedicine Plans as costs of co-pays increase and technology becomes more accommodating telemedicine is becoming more and more prevalent. Telemedicine is the use of telecommunication and information technologies in order to provide clinical health care at a distance. As we all know many of us will put off seeing a doctor because we don’t want to take the time off work or are unable to fit an appointment in. Telemedicine is a solution that not only saves on the copay, but also saves time and effort of getting to the doctor. Many times even prescriptions can be handled with this alternative.

Term Life Insurance  have premiums that remain the same over the life of the policy, which typically ends when the insured reaches a specific age. There is no cash build-up in a term policy and, accordingly, the death benefit will not increase. Life Insurance

Variable Life Insurance  begins with low premiums during the initial stages of the policy and these premiums increase steadily as the insured grows older. There should be a cash build-up as long as the various mutual funds selected by the insured perform well. Life Insurance

Whole Life Insurance a portion of each premium pays for the insurance and the remainder serves as a tax-free investment. A whole life policy sets a premium at the beginning of the policy and that premium does not change over the life of the policy. This form of insurance allows for a cash build-up during the insured's life. This cash build-up can be used during the course of the policy or it will simply serve to increase the death benefit in the end. Life Insurance

Worker’s Compensation is provided by employers who are injured while performing their job or who are disabled due to an occupationally related illness or disease. Workers Compensation