Glossary
Insurance has a vocabulary problem. Here’s every term we use on this site, each defined in a sentence or two, no circular definitions allowed.
Deductible
What you pay for covered care each year before the plan starts paying its share.
Copay
A flat fee for a specific service — $30 for an office visit, say — regardless of the full price.
Coinsurance
Your percentage of a bill after the deductible — on an 80/20 plan, the 20 is yours.
Out-of-pocket maximum
The most you can pay for covered care in a year — after this, the plan pays 100%. The single most important number on an ACA plan.
Allowance
A set dollar amount a plan contributes toward something — like frames on a vision plan. You cover anything above it.
Benefit schedule
A published list of fixed cash amounts a policy pays per event — the backbone of accident and fixed indemnity plans.
Annual maximum
The most a plan will pay in a year — common on dental plans. The mirror image of an out-of-pocket maximum.
Claim
The formal request for a plan to pay a benefit — filed by your provider on medical plans, usually by you on supplemental ones.
Major medical (ACA plan)
Full health insurance under the Affordable Care Act: covers pre-existing conditions and the ten essential health benefits, with no annual dollar caps.
Read the guideShort-term medical
A temporary, underwritten plan for coverage gaps — fast to start, cheap, and excludes pre-existing conditions.
Read the guideExtended short-term
Short-term coverage written as back-to-back terms on one application — protection that can run up to about 36 months.
Read the guideFixed indemnity
A plan that pays set cash amounts per service — so much per doctor visit, per hospital day — instead of a percentage of bills.
Read the guideSupplemental insurance
Coverage that pays on top of your main plan — accident, critical illness, hospital indemnity. It adds cash; it doesn’t replace health insurance.
Essential health benefits (EHB)
The ten categories every ACA plan must cover — including maternity, mental health, prescriptions, and preventive care.
Minimum essential coverage (MEC)
The legal bar a plan must clear to count as “real” coverage under the ACA. Short-term and supplemental plans don’t clear it.
Network
The set of doctors and facilities a plan has negotiated prices with. In network costs you less; out of network costs more or isn’t covered.
Read the guideHMO
A closed-network plan with a primary-care gatekeeper: the lowest costs, referrals required, and no routine coverage outside the network.
Read the guidePPO
A broad-network plan with no gatekeeper — see specialists directly and keep out-of-network coverage, at a higher premium.
Read the guideEPO
A hybrid that keeps PPO-style referral-free access but covers in-network care only — nothing outside the network except emergencies.
Read the guidePOS plan
The mirror hybrid: an HMO-style primary doctor and referrals in network, with PPO-style (pricier) coverage when you step outside.
Read the guideHDHP
Not a network type — a cost structure. A high deductible in exchange for lower premiums and HSA eligibility, layered on any network model.
Read the guidePre-existing condition
A health issue you had before the coverage started. ACA plans must cover them; short-term and most supplemental plans exclude them.
Exclusion
Anything a policy states it will not cover. The exclusions page is the most honest page in any policy — read it first.
Waiting period
Time that must pass after enrolling before a benefit works — common for major dental work and some critical illness benefits.
Rider
An optional add-on that extends a policy — orthodontic coverage on dental, a child benefit on critical illness — for extra premium.
Open enrollment
The annual window (typically November–January) when anyone can buy or switch ACA plans.
Special enrollment period (SEP)
A window outside open enrollment, unlocked by a qualifying life event, during which you can enroll in an ACA plan.
Qualifying life event (QLE)
A change that unlocks an SEP — losing other coverage, moving, marriage, a new baby, and similar.
Underwriting
The carrier’s review of your health before issuing a policy. It’s why short-term plans can be declined — and why ACA plans, which have none, can’t.
Guaranteed issue
Coverage that can’t turn you down for health reasons — ACA plans always; final expense life insurance sometimes, at a price.
Look-back period
How far back an underwritten plan checks your medical history when deciding what counts as pre-existing.
Effective date
The day coverage actually starts. Care received before it — even the day before — isn’t covered.
Broker
A licensed professional who compares plans from multiple carriers on your behalf — paid by carriers, not by you. That’s us.
Term life
Life insurance for a set period — 10, 20, 30 years — with a level premium. The most coverage per dollar.
Read the guideDeath benefit
The amount paid to your beneficiaries when you die — generally income-tax-free.
Beneficiary
The person (or people, or trust) you name to receive the death benefit. Keep it current — it overrides your will.
Cash value
A savings component inside permanent policies (like IUL) that grows over time and can be borrowed against. Term life has none — that’s why it’s cheap.
Indexed universal life (IUL)
Permanent life insurance whose cash value growth is tied to a market index, with floors and caps.
Read the guideFinal expense
A small permanent policy — typically $5,000–$50,000 — designed to cover funeral costs and last bills, with easy qualification.
Read the guideLiving benefits
Riders that let you access part of the death benefit early after a qualifying serious illness — increasingly standard on modern policies.
Missing a term? Call a licensed agent at +1 (888) 885-6520 and we’ll define it, and tell you whether it matters for your situation.