Insurance Glossary
Insurance can feel overwhelming when the terminology is unfamiliar. This glossary breaks down the most common terms related to health insurance, Medicare, life insurance, and more so you can understand your coverage with confidence.
Coinsurance
Your share of the costs of a covered health care service, calculated as a percentage. For example, if coinsurance is 20%, you pay 20% and your plan pays 80%.
Copay
A fixed amount you pay for a covered health care service after you have paid your deductible. For example, a $20 copay for a doctor visit.
Deductible
The amount you pay for covered health care services before your insurance plan starts to pay. For example, with a $1,000 deductible, you pay the first $1,000 of covered services.
EPO
Exclusive Provider Organization. A type of health plan where services are covered only if you use doctors, specialists, or hospitals in the plan's network, except in an emergency.
Final Expense Insurance
A type of whole life insurance with smaller coverage amounts, designed to cover funeral costs, burial expenses, and other end-of-life costs.
HMO
Health Maintenance Organization. A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. Requires a primary care physician and referrals.
Medicare Advantage
Also known as Part C. A Medicare plan offered by a private company that contracts with Medicare. It includes Part A and Part B benefits and often includes Part D and extra coverage.
Medicare Supplement
Also called Medigap. Insurance sold by private companies to fill gaps in Original Medicare coverage, such as copayments, coinsurance, and deductibles.
Out-of-Pocket Maximum
The most you have to pay for covered services in a plan year. After you reach this amount, your plan pays 100% of covered services.
PPO
Preferred Provider Organization. A type of health plan where you pay less if you use providers in the plan's network but can see out-of-network providers at a higher cost.
Pre-existing Condition
A health condition that existed before the start date of your new health coverage. Under the ACA, health insurance companies cannot refuse to cover you or charge you more because of a pre-existing condition.
Premium
The amount you pay each month for your health insurance coverage, regardless of whether you use medical services.
Special Enrollment Period
A time outside the annual open enrollment period when you can sign up for health insurance. You qualify if you have experienced certain life events, such as losing coverage, getting married, or having a baby.
Term Life Insurance
A type of life insurance that provides coverage for a specific period of time, such as 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit.
Whole Life Insurance
A type of permanent life insurance that provides coverage for your entire life. It includes a cash value component that grows over time.
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