Insurance terms

A lapse is when certain privileges cease to be in effect. In the context of insurance, it usually refers to a cessation of coverage. A lapse of coverage can occur if a policyholder fails to pay the premiums that they owe to the insurer.

Qualifying event refers to a change in a person’s life that affects their insurance coverage. A proof of this change can make that person enroll for coverage suited to their new life in the government-sponsored insurance department in the United States.

A cap on the total lifetime benefits you may get from your insurance company.

This is a cap on the total dollar amount your medical insurance contributes over the entire enrollment span. It could hit limits for pricey care like transplants or gene therapy.

A limit of liability is the most an insurance company would pay a policyholder who loses a lawsuit. The policy terms explain exactly how much. In case the policyholder is sued and owes more than the limit of liability provided in the coverage, they would need to pay the rest for the damages out-of-pocket.

Limitations are the maximum amount of money that an insurance company will pay out for a claim in a policy period. These amounts are typically specified on the insurance policy.

These are extra policies that reimburse people for things like nursing home care, assisted living, or home health care, typically for aging or disabilities requiring custodial help/supervision.

The loss ratio method is a way to calculate how much money an insurance company makes relative to the benefits that it has to pay out. It is used to determine an insurance company’s financial health. The loss ratio equation is as follows: Loss ratio = (Benefits paid out + Adjustment expenses) / Premiums collected