Anyone buying or selling insurance for the first time will quickly realize the extensive amount of jargon associated with the industry. It’s not always self-explanatory, either. Do you know what the repatriation of remains is? What is an FSA? Or an HMO? HRA? …HSA? No matter how fluent you might be with the lingo, sometimes it helps to brush up on the really complicated terms. Here are a few of the most common in the first part of our series on insurance terminology.
What is a benefit period?
This is the exact period of time during which a particular plan will cover a particular person. A benefit period that lasts for three months might begin February 5 and run through October 5. That means the coverage is still good on both of those days — and every day in between. For health insurance plans, the coverage is usually good for one year, but keep your eye on the specific dates.
What is coinsurance?
Many people who have never purchased an insurance plan might mistakenly assume this is some type of shared insurance between two people. But it’s not. This is shared payment between you and your insurance provider. Coinsurance is usually provided as a percentage of the amount owed. It usually kicks in after the deductible has been paid.
What is a deductible?
This is probably the most important new term you need to learn! The deductible is the amount you pay for a service (usually healthcare) before an insurer will pay a dime for specific services. Before purchasing a plan, pay close attention. Cheaper plans usually have higher deductibles, which can be terrible if you don’t have much money in your wallet. For example, a $5,000 deductible means that if you are diagnosed with a life-threatening form of cancer, you would have to pay $5,000 before your insurer helps out. And don’t forget — you might still be paying a lot in coinsurance.