Plain-English definitions of the insurance terms you’ll encounter when shopping for coverage. Organized by product line so you can quickly find what you need. Click any linked term to learn more on the relevant product page.
General Insurance Terms
Foundational terms that apply across most lines of coverage.
Premium
The amount you pay (monthly, quarterly, or annually) to keep an insurance policy active.
Underwriting
The insurance company’s process of evaluating your health, lifestyle, and financial situation to determine whether to offer coverage and at what price. See high-risk life insurance underwriting for impaired-risk applicants.
Rider
An optional add-on to a base policy that provides extra benefits or coverage, usually for an additional premium.
Beneficiary
The person or entity you designate to receive the benefit payment from your policy.
Policyholder
The person who owns the insurance policy and is responsible for paying premiums.
Grace Period
A window of time (typically 30 days) after a missed premium payment during which your policy remains active.
Exclusion
A specific condition, event, or situation that an insurance policy does not cover.
Claim
A formal request to the insurance company for payment of benefits under your policy.
Agent vs. Broker
An agent represents one insurance company; a broker (like Term Insurance Brokers) represents multiple carriers and shops the market on your behalf.
Captive vs. Independent
A captive agent sells products from only one company. An independent agent or broker can compare offers from many carriers.
Lapse
When a policy terminates due to non-payment of premium after the grace period ends.
Reinstatement
The process of restoring a lapsed policy, sometimes requiring updated health information and back premiums.
Declination (or Decline)
When an insurance company refuses to offer coverage based on its underwriting evaluation. If you’ve been declined, see our high-risk life insurance options.
Postponement
A temporary delay in underwriting, usually pending additional medical records, test results, or a waiting period after a recent diagnosis.
Life Insurance Terms
Terms specific to term life, whole life, universal life, and underwriting for high-risk applicants. Get a life insurance quote →
Term Life Insurance
Coverage for a fixed period (typically 10, 15, 20, or 30 years) that pays a death benefit if you die during the term. Compare carriers and get rates on our term life quote page.
Whole Life Insurance
Permanent coverage that lasts your entire life, builds cash value, and has level premiums.
Universal Life (UL)
Permanent coverage with flexible premiums and an adjustable death benefit, often with a cash value component tied to interest rates.
Indexed Universal Life (IUL)
A type of universal life policy where cash value growth is tied to a market index (like the S&P 500), with caps and floors limiting both gains and losses.
Face Amount (Death Benefit)
The dollar amount paid to your beneficiary when you die.
Table Rating
A health-based premium increase applied when an applicant doesn’t qualify for standard rates. Each table (A through P, or 1 through 16) adds roughly 25% to the standard premium. See our complete table rating guide with examples for Tables A through J.
Flat Extra
An additional charge per $1,000 of coverage assessed for specific risks (often hazardous occupations or activities), separate from a table rating.
Accelerated Underwriting
A faster application process that may waive medical exams for healthy applicants under certain ages and coverage amounts, using data sources instead.
Paramedical Exam
A short medical exam (height, weight, blood, urine, sometimes EKG) performed by a contracted professional at no cost to you.
MIB Report
A record from the Medical Information Bureau that insurers share to track prior application activity and disclosed health conditions.
Attending Physician Statement (APS)
A report requested from your doctor that gives the insurer details on your medical history, treatments, and test results.
Contestability Period
The first two years of a policy during which the insurer can investigate and deny claims based on material misrepresentations.
Conversion Privilege
The right to convert a term policy into a permanent policy without new underwriting, usually before a specified age or date.
Convertibility
The feature in a term policy that allows conversion to permanent coverage. Carriers and conversion windows vary significantly.
Laddering
A strategy of buying multiple term policies of different lengths (e.g., a 10-year and a 20-year) to match declining coverage needs over time.
Medicare Terms
Terms you’ll see when comparing Medicare Supplement (Medigap), Medicare Advantage, and Part D plans. See all Medigap plan options →
Part A
Medicare hospital insurance that covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care.
Part B
Medicare medical insurance that covers doctor visits, outpatient care, preventive services, and durable medical equipment.
Part C (Medicare Advantage)
An alternative to Original Medicare offered by private insurers that bundles Parts A and B (and usually Part D) into a single plan.
Part D
Medicare prescription drug coverage offered through standalone plans (PDP) or bundled into Medicare Advantage plans.
Medigap (Medicare Supplement)
Private insurance that pays for costs Original Medicare doesn’t cover, such as deductibles, copayments, and coinsurance. See our complete Medigap plan comparison.
MAPD
A Medicare Advantage plan that includes Part D prescription drug coverage.
Initial Enrollment Period (IEP)
The 7-month window around your 65th birthday (3 months before, the month of, and 3 months after) when you can first enroll in Medicare.
Annual Enrollment Period (AEP)
October 15 through December 7 each year, when current Medicare beneficiaries can change Medicare Advantage or Part D plans.
Special Enrollment Period (SEP)
A limited window outside standard enrollment periods when you can sign up or change plans due to qualifying life events.
Medigap Open Enrollment
The 6-month window starting when you’re 65+ and enrolled in Part B, during which insurers cannot deny you a Medigap policy or charge more based on health.
Formulary
The list of prescription drugs covered by a Part D or MAPD plan, organized into tiers that determine your cost.
Coverage Gap (Donut Hole)
A historical phase of Part D where you paid more out of pocket. Eliminated in 2025 by a new $2,000 annual out-of-pocket cap.
Low Income Subsidy (LIS / Extra Help)
A federal program that helps people with limited income and resources pay Part D premiums, deductibles, and copays.
Guaranteed Issue Rights
Situations (like losing employer coverage) where Medigap insurers must sell you a policy regardless of your health status.
Special Needs Plan (SNP)
A type of Medicare Advantage plan designed for people with specific chronic conditions, dual Medicare/Medicaid eligibility, or institutional care needs.
A definition of disability that pays benefits if you cannot perform the duties of your specific occupation, even if you could work in another field. Learn more about own-occupation disability policies at TIB.
Any Occupation
A stricter definition that only pays if you cannot perform the duties of any occupation for which you’re reasonably suited by training or experience.
Elimination Period
The waiting period (commonly 30, 60, 90, 180, or 365 days) between when you become disabled and when benefits begin.
Benefit Period
The maximum length of time benefits will be paid for a single disability (commonly 2 years, 5 years, to age 65, or to age 67).
Monthly Benefit
The amount of income the policy pays each month while you are disabled. Usually 60-70% of your pre-disability income.
Residual (Partial) Disability
A benefit that pays a portion of your monthly benefit if you can work part-time or in a reduced capacity due to disability.
Cost of Living Adjustment (COLA)
A rider that increases your monthly benefit each year you’re on claim to keep pace with inflation.
Future Increase Option (FIO / FPO)
A rider that lets you increase coverage as your income grows without new medical underwriting.
Non-Cancelable
A policy feature where the insurer cannot cancel coverage, raise premiums, or reduce benefits as long as you pay premiums.
Guaranteed Renewable
A policy feature where the insurer cannot cancel coverage but can raise premiums for an entire class of policyholders.
Catastrophic Disability Rider
Additional monthly benefit paid if you become unable to perform two or more activities of daily living or are cognitively impaired.
Presumptive Disability
Automatic full benefits (no elimination period) for severe losses like total blindness, deafness, loss of speech, or loss of two limbs.
Taxable vs. Tax-Free Benefits
If you paid premiums with after-tax dollars (individual policy), benefits are typically tax-free. If your employer paid premiums, benefits are typically taxable.
SSDI Offset
A policy provision that reduces your monthly benefit by the amount you receive from Social Security Disability Insurance.
Six basic functions—bathing, dressing, eating, transferring, toileting, and continence—used to determine eligibility for LTC benefits.
Benefit Trigger
The criteria you must meet to begin receiving LTC benefits, typically being unable to perform 2 of 6 ADLs or having severe cognitive impairment.
Daily / Monthly Benefit
The maximum dollar amount the policy will pay for covered care each day or each month.
Benefit Pool
The total lifetime amount available under the policy, calculated by multiplying the daily/monthly benefit by the benefit period.
Elimination Period (LTC)
The number of days you must pay for your own care before policy benefits begin, similar to a deductible measured in days (commonly 30, 60, 90, or 180 days).
Inflation Protection
A feature that increases your benefit amount each year (typically 3% or 5%, simple or compound) to keep pace with rising care costs.
Partnership Plan
An LTC policy meeting state Partnership Program standards that allows you to protect personal assets from Medicaid spend-down equal to the benefits paid. Ask about Partnership-qualified LTC plans for asset protection.
Hybrid LTC / Asset-Based LTC
A life insurance or annuity policy with LTC benefits attached, so if you never need care, your heirs receive a death benefit.
Indemnity vs. Reimbursement
Indemnity policies pay the full daily benefit once you qualify, regardless of actual costs. Reimbursement policies only pay actual expenses up to the daily benefit.
Cognitive Impairment
Loss of intellectual capacity (memory, reasoning, judgment) that triggers benefits even when ADLs can still be performed independently.
Home Health Care Benefit
Coverage for care delivered in your home by a licensed professional, often paid at a percentage of the facility benefit.
Assisted Living Facility Benefit
Coverage for care in a residential facility that provides housing, meals, and personal care assistance.
Nursing Home Benefit
Coverage for skilled nursing facility care, the most expensive level of long-term care.
Waiver of Premium
A provision that stops your premium payments while you’re receiving LTC benefits.
Shared Care Rider
A spousal feature allowing each partner to use the other’s unused benefits if they exhaust their own pool.
Health Insurance Terms
Terms for individual and family health insurance plans, ACA marketplace plans, and short-term medical coverage. Get a health insurance quote →
Deductible
The amount you pay out of pocket for covered services before the insurance plan starts paying.
Copay (Copayment)
A fixed dollar amount you pay for a covered service (like $30 for a doctor visit), usually due at the time of service.
Coinsurance
The percentage of costs you pay for a covered service after meeting your deductible (e.g., 20%, with the insurer paying 80%).
Out-of-Pocket Maximum (MOOP)
The annual cap on what you’ll pay for covered services. Once you hit this number, the plan pays 100% for the rest of the year.
HMO (Health Maintenance Organization)
A plan that requires you to use in-network providers and typically requires a primary care physician referral for specialists.
PPO (Preferred Provider Organization)
A plan offering more flexibility to see out-of-network providers (at higher cost) without referrals.
EPO (Exclusive Provider Organization)
A hybrid plan with no out-of-network coverage (except emergencies) but typically no referral requirement for specialists.
HSA (Health Savings Account)
A tax-advantaged savings account paired with a high-deductible health plan, allowing pre-tax contributions for medical expenses.
HDHP (High Deductible Health Plan)
A plan with a higher deductible and lower premiums, eligible to be paired with an HSA.
ACA Subsidy / Premium Tax Credit
Federal financial assistance that lowers your monthly premium for marketplace health plans, based on household income and family size.
Metal Tiers (Bronze, Silver, Gold, Platinum)
ACA plan categories that indicate how costs are split between you and the insurer (Bronze = lower premium, higher costs; Platinum = higher premium, lower costs).
Network
The group of doctors, hospitals, and providers contracted with your insurance plan to provide services at negotiated rates.
Prior Authorization
Approval from your insurance plan required before certain services, medications, or procedures will be covered.
Explanation of Benefits (EOB)
A statement from your insurer showing what services were billed, what the plan paid, and what you owe. Not a bill.
Short-Term Medical (STM)
Temporary health coverage (typically 30 days to 12 months) that bridges gaps between major medical plans. Not ACA-compliant.
Insurance offered through an employer or association to a group of people, typically with lower per-person costs than individual plans. Get a quote for your business on our group insurance page.
Employer Contribution
The portion of the premium an employer pays on behalf of employees, often expressed as a percentage of the total premium.
Employee Contribution
The portion of the premium an employee pays, usually deducted from their paycheck pre-tax.
Open Enrollment
The annual period when employees can enroll in, change, or cancel group benefits without a qualifying life event.
Qualifying Life Event (QLE)
A major life change (marriage, divorce, birth, job loss) that allows you to enroll or change group coverage outside open enrollment.
COBRA
A federal law that lets former employees continue group health coverage for a limited time (usually 18 months) by paying the full premium themselves.
Summary of Benefits and Coverage (SBC)
A standardized document summarizing plan benefits, costs, and coverage examples to help employees compare plans.
Plan Year
The 12-month period your group plan operates. May or may not align with the calendar year.
Effective Date
The date your group coverage begins.
Waiting Period
The time a new employee must wait before becoming eligible for group benefits (often 30, 60, or 90 days).
Ancillary Benefits
Supplemental group coverage beyond major medical—dental, vision, life, disability, accident, critical illness.
Composite Rating
A pricing structure where all employees pay the same rate regardless of age (typically tiered by single, family, etc.).
Age-Banded (Age-Rated)
A pricing structure where individual employee premiums vary based on age.
Self-Funded vs. Fully-Insured
Self-funded plans have the employer pay claims directly. Fully-insured plans have the employer pay premiums to an insurance company that assumes the claim risk.
ERISA
The federal law governing employer-sponsored benefit plans, including reporting, disclosure, and fiduciary requirements.
Annuity Terms
Terms for fixed annuities, multi-year guaranteed annuities (MYGAs), and income-focused annuity products. See our annuity overview →
Fixed Annuity
A contract with an insurance company that guarantees a specific interest rate for a set period and protects principal from market loss. Learn more about fixed annuities at TIB.
MYGA (Multi-Year Guaranteed Annuity)
A fixed annuity that locks in a specific interest rate for a chosen term (typically 3, 5, 7, or 10 years).
Immediate Annuity (SPIA)
An annuity that converts a lump-sum premium into guaranteed income payments starting within 12 months of purchase.
Deferred Annuity
An annuity where income payments are postponed until a future date, allowing your money to grow tax-deferred in the meantime.
Accumulation Phase
The period during which you contribute to and grow the value of your annuity before taking income.
Payout (Annuitization) Phase
The period during which the annuity pays out income to you, either for a fixed period or for life.
Surrender Period
The window of time (typically 3-10 years) during which withdrawing more than the allowed amount triggers a penalty.
Surrender Charge
A fee charged for withdrawing money from an annuity during the surrender period, usually a percentage that declines over time.
Free Withdrawal Provision
The amount you can withdraw from your annuity each year (commonly 10% of the contract value) without incurring surrender charges.
Rate Lock
A guarantee that the interest rate quoted at application will be honored if the funds arrive within a specified window (typically 30-60 days).
Market Value Adjustment (MVA)
An adjustment to the surrender value of a fixed annuity based on interest rate changes since purchase, applied during the surrender period.
1035 Exchange
A tax-free transfer from one annuity (or life insurance policy) to another, preserving tax-deferred status under IRS Section 1035.
Annuitization
The process of converting an annuity’s accumulated value into a stream of income payments.
Qualified vs. Non-Qualified Annuity
Qualified annuities are funded with pre-tax dollars (IRA, 401k). Non-qualified annuities are funded with after-tax dollars; only earnings are taxed at withdrawal.
Lifetime Income Rider
An optional benefit that guarantees a stream of income for life, even if the annuity’s account value is depleted.
Dental & Vision Insurance Terms
Terms specific to individual and group dental and vision plans.
Annual Maximum
The maximum dollar amount a dental plan will pay for covered services in one plan year (commonly $1,000-$2,000).
Preventive Services
Routine dental care like cleanings, exams, and X-rays, typically covered at 100% with no waiting period.
Basic Services
Procedures like fillings, simple extractions, and root canals, typically covered at 70-80% after deductible.
Major Services
Procedures like crowns, bridges, dentures, and oral surgery, typically covered at 50% after deductible and a waiting period.
Orthodontia
Coverage for braces and aligners, often as a separate lifetime maximum and limited to dependents under a certain age.
Dental Waiting Period
The time you must be enrolled in the plan before certain services (especially basic and major) become covered.
Dental PPO
A dental plan allowing you to see any dentist, with lower out-of-pocket costs when you stay in-network.
Dental HMO (DHMO)
A lower-cost dental plan that requires you to use an assigned in-network dentist with set copays per service.
Dental Indemnity
A dental plan letting you see any dentist with no network restrictions, paid as a percentage of usual and customary charges.
Usual, Customary, and Reasonable (UCR)
The standard fee level for a dental service in a given geographic area, used by indemnity plans to determine reimbursement.
Vision Exam Allowance
The covered amount for a routine eye exam, usually once every 12 months.
Frame Allowance
The dollar amount a vision plan will apply toward eyeglass frames (often every 12 or 24 months).
Lens Benefit
Coverage for prescription lenses, with separate allowances for upgrades (anti-reflective coating, progressives, photochromic).
Contact Lens Allowance
The dollar amount or percentage a vision plan applies toward contact lenses, usually instead of (not in addition to) frame/lens benefits.
Vision Network
The retail providers (LensCrafters, Pearle Vision, independent optometrists) where your vision plan offers the highest level of benefit.
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Insurance Glossary | Term Insurance Brokers | Last reviewed: May 2026
Compiled by Jason Goldenzweig and David Goldenzweig, Licensed Insurance Agents (15+ years).
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