View All Blog Posts

Your insurance translation guide

Navigating the insurance world can be a stressful and confusing task. In fact, 1 in 4 employees would rather clean a teenager’s bathroom than perform their open enrollment1; it’s no wonder- deciphering insurance lingo can be a real headache. To help you get a better understanding, we have compiled a list of common, but often misunderstood terms that will give you confidence before, during, and after your enrollment.

1.    Deductible- If you have ever seen an insurance commercial, then you have likely heard the term deductible before.  A deductible is the amount you pay on your bill before your insurance kicks in and pays the remainder of the fee. For example, say you are injured and the total cost of your treatment is $5,000 and your insurance policy deductible is set at $2,000. This simply means that you are responsible for paying the deductible ($2,000) and your insurance takes care of the remaining $3,000. 

2.    Rider- Riders are additional, and optional, benefits that you can tack on to your current insurance policy to gain more customized coverage. Think of your insurance policy as an ice cream cone, comprising the base of what you need. Riders are the extras: sprinkles, nuts, and whipped cream, that make it customizable to you.

3.    Premium- The regularly scheduled payment that you make on your policy to keep it in effect. Your premium on your insurance policy is essentially a bill that you pay on a regular basis just as you would your rent, gas bill, or student loans. Depending on your insurance company and policy, you may pay your premium on a bi-weekly, monthly, quarterly, or annual basis. 

4.    Underwriting- A risk assessment done by a professional underwriter for a given group of people in order to determine policy coverage and pricing. Some factors that an underwriter may take into account when assessing one’s risk are: the number and nature of past claims, age, cigarette usage and payment history. 

5.    Co-payment- Co-payments are supplementary payments made toward your insurer when using a covered health care service, such as a doctor’s visit. Co-payment amounts are fixed and pre-determined, but may vary based on the service being provided- whether it is a specialist visit or lab test, for example. A good way to get a feel for what your co-payments may look like is by looking at your policy’s premiums. Typically, if you have a high premium on your policy then your co-payments are less. Conversely, low premium plans may result in higher co-payments.

These phrases provide a small glimpse into the world of insurance terminology. Throughout the year, we will continue to provide definitions to help you better understand your policy and choose the benefits that are right for you. 

1“Clean a teen’s bathroom or open enrollment? What employees would rather do”. Employee Benefit News. 2015.
 

Posted on March 26, 2019 in Consumer

Tagged as