Agent: a licensed representative of an insurance company who solicits, negotiates, or effects contracts of insurance and provides service to the policyholder for the insurer.

Application: a signed statement of facts requested by the insurance company on the basis of which the company decides whether or not to issue the coverage. The application becomes part of the health insurance contract when it is attached to and made a part of the contract.

Assignment: the signed authorization by the policyholder for the insurance company to pay benefits directly to the hospital, doctor, or other provider.

Beneficiary: the person designated or provided for by the policy terms to receive the proceeds upon the death of the insured.

Benefits: the dollar amount payable by the insurance company to the claimant, assignee, or beneficiary under each coverage.

Claim: a demand to the insurance company for payment of benefits under the insurance contract.

COBRA: If you lose your job and you worked for an employer who has more than 20 employees, you may be able to continue your group coverage for up to 18 or 36 months under COBRA, a federal law. For information on eligibility and the length of time you can continue your coverage, call the U.S. Department of Labor at (202) 219-8776.

Co-insurance or co-payment amount: is your share of the bill that must be paid after you have met the deductible amount. This is usually 20% or 30% of the costs up to a specific out-of-pocket amount, after which the insurer will pay 100% of covered expenses.

Conversion: Some insurance companies offer their policyholders conversion privileges that allow you to convert group coverage to individual coverage without showing proof of insurability. This offer to convert from group to individual coverage is made if you are no longer eligible for group coverage. Ask your insurer or agent if your policy contains this provision.

Coordination of Benefits: If both you and your spouse have health insurance, or if your dependent children are covered under other health insurance, your insurance company will probably coordinate the payment of benefits with the other insurance company. This is done so that payments from both companies are not more than the actual costs of your medical care. If your outline of coverage or benefits handbook has a section on Coordination of Benefits, read it to see how expenses will be paid when two insurance companies insure you and your family.

Covered Expenses: hospital, medical and miscellaneous health care costs incurred by the insured that entitle him or her to payment of benefits under a health insurance policy. Found most often in major medical plans, the term defines the type and amount of expense which will be considered in the calculation of benefits.

Deductible: the dollar amount you pay before the insurance company begins to make payments. If you policy covers you and other family members, check to see if the deductible is a flat amount for the whole family or does each family member have to meet his/her own deductible. Usually, a higher deductible means lower premiums. But be careful that you don't buy a policy whose deductible is so high that you can't pay the bill if you get sick and need medical care.

Effective Date: the date on which the health insurance coverage begins.

Evidence of Insurability: any statement or proof of a person's physical condition and/or other factual information affecting his or her acceptance for insurance.

Exclusions and Limitations: medical services or benefits which will not be paid for or may be paid on a limited basis. Some examples are: experimental medical treatments, self-inflicted injuries, on-the-job injuries covered by Worker's Compensation, cosmetic surgery, eye or dental care, and services that are not medically necessary. Most policies have reduced or no benefits for mental illness or substance abuse treatment. Read your outline of coverage or benefits handbook to see what benefits your insurer will NOT pay for.

Grace Period: a specified period after which a premium payment is due, during which the policyholder may make the premium payment and the health insurance continues.

Health Maintenance Organization (HMO): an organization system for health care that provides comprehensive services directly to enrolled members for a fixed, periodic fee.

Hospice: a health care facility providing medical care and support services, such as counseling, to terminally ill people and their families.

Lapse: termination of a policy upon the policyholder's failure to pay the premium when due.

Limited Policy: a contract which covers only certain specified diseases or accidents.

Medicaid: a joint state and federal program of public assistance to eligible people, regardless of age, whose income and resources are insufficient to pay for health care.

Medically Necessary: many insurance policies will only pay for treatment that is deemed "medically necessary." For instance, many policies will not cover plastic surgery for cosmetic purposes. Ask your agent whether the company or physician determines medical necessity under the policy, and ask for examples of what is and is not considered medically necessary treatment.

Medicare: a federal program that provides health insurance benefits for people age 65 or older, or to those receiving Social Security benefits for disability, and those with end stage renal disease.

Miscellaneous Expenses also referred to as Ancillary Services or Special Services: expenses in connection with hospital insurance, hospital charges other than room and board, such as x-rays, drugs, laboratory fees and other ancillary charges (sometimes referred to as Ancillary Charges).

Open Enrollment Period: the stipulated time during which enrollees in a group contract must select a health plan alternative. Under federal HMO regulations, HMOs must allow at least 30 days.

Policy: the legal document issued by the company to the policyholder which outlines the conditions and terms of the insurance. Also called the policy contract or contract.

Policy Term: that period for which an insurance policy provides coverage.

Pre-existing Condition: is an illness or other health problem that was diagnosed or treated before the policy was issued to you. Many policies will not pay immediate benefits for claims due to pre-existing conditions; some will never pay. The rules are changing, though. Ask your insurance company or agent to tell you if your policy has any pre-existing exclusions.

Preferred Provider Organization (PPO): is an arrangement where an insurance company or other carrier contracts with a group of health care providers who furnish services at lower than usual fees in return for prompt payment and a greater number of patients. Under these arrangements you may have to pay less in out-of-pocket expenses if you use the preferred provider.

Premium: the periodic dollar amount required to keep a policy in force.

Reasonable and Customary Charge: a charge for health care which is consistent with the ongoing rate or charge in a certain geographical area for identical or similar services.

Renewal and Premium Increase Provisions: explain the conditions under which your policy may be renewed or the premium may increase. The following terms are used to describe renewal provisions:

An optionally renewable policy is one that the insurance company may renew, or not renew, at its option at the end of the policy period. Premiums may also be increased by the company on any renewal date.

A conditionally renewable policy is one that the insurance company may renew if certain conditions are met. Some examples are your continued employment, or membership in a group sponsoring your health insurance, or your continuing residence in an HMO's provider network. Premiums for a conditionally renewable policy may be increased on any renewal date.

A guaranteed renewable policy is one that will stay in force and continue to be renewed until you reach a specific age as long as you make the premium payments. Premiums for these policies may increase only if they are raised for all people within the same classification. They may not increase on an individual basis.

Supplemental Insurance: a policy which provides benefits in addition to those payable under basic and major medical policies. Some examples are Medicare supplement insurance, hospital indemnity insurance and specified disease insurance.

Waiting or Elimination Periods: are the length of time that you must wait before benefits under your policy begin.