Insurance Gobbledygook Made Simple
Plain english explanations of insurance terms used by agents, companies and lawyers and found in your insurance policies.
SSecond surgical opinionIf surgery is recommended, the insurance company may require, or in some cases the insured may request, a review of the case by a second surgeon. If a second opinion is deemed warranted the insurer would pay a second surgeon to review the case and concur with the first doctor or suggest an alternative treatment.Secondary planapplies only when you have more than one health insurance plan. The second plan pays only after the primary plan has processed the claim.Self-insured planan organization that pays health care costs out of the organization’s own pocketSettlement option the several ways the insurance company can pay a policyholder or beneficiary.Short rate cancellation cancellation by the insured of an insurance policy for which the returned, unearned premium is diminished by administration costs incurred when the insurance company places the policy on its books.Single premium whole lifetype of whole life insurance where the policy owner pays one premium.Specific disease policya plan that covers expenses only for a specific disease identified in the policy. Also called Dread Disease policy.Spell of illness provisionspell of illness usually refers to a period of time during which a patient is being treated for a particular incidence of an illness. Some companies use the terminology “per cause” rather than “spell of illness.” The exact definition can also vary from plan to plan. Here is one example of how it might work: If a patient is confined in a hospital for 5 days for a specific condition, the spell of illness is 5 days. If the confinement continues for an additional 7 days because of another non-related condition, that might be considered to be another 7 day spell of illness. On the other hand, if the total confinement of 12 days (5 days plus 7 days) results from the initial condition or a related condition -- hospital plans usually have lists of conditions that are considered closely related and so constitute a single spell of illness -- the entire confinement might be considered to be one spell of illness lasting 12 days.Stop-loss clausethe clause in the contract between the insurer and the insured that specifies the maximum payment that will be made for particular types of coverages – for example the total payments for psychiatric coverage or surgery may be limited to some maximum dollar amount. Sometimes the term stop-loss is also used to refer to an arrangement of risk management where the risk is shared among several insurance companies.Surrenderterminating or canceling a policy before its maturity date and cashing in its cash surrender value.Surrender chargesfees that are deducted if your life insurance policy is cashed in prematurely.