Glossary

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Cancellation

Termination of an insurance contract by voluntary act of the insurance company or the insured, executed in accordance with provisions in the contract or by mutual agreement.

Capitation

A fixed amount of money per patient per year that medical providers receive to provide for all of their patients’ medical needs.

Carrier

An insurance company that "carries" the insurance; i.e., another name for an insurance company. (The terms "insurance company" and "insurer" are preferred because of the possible confusion of "carrier" with transportation terminology.)

Cash Value

The amount of cash that is due an insured who surrenders a life or (extremely rarely) a health policy. Such surrender with termination of all insurance benefits is often called "cashing out."

Claim

The demand for benefits as provided by an insurance policy.

Clause

A term used to identify a particular part of a policy or endorsement.

Co-Insurance

An arrangement under which two or more insurance companies (or reinsurers) are each liable for a proportion of losses. In health insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. In this context, the preferred term is "percentage participation."

Co-Payment

The patient's share of a healthcare bill. It usually is a small amount ($5 or $10 per office visit).

Collision Coverage

Insurance coverage, part of most automobile insurance policies, protecting an insured’s automobile(s) from damage resulting from collision with another object or automobile.

Commission

The portion of an insurance premium retained by the agent or broker as compensation for sales, service and distribution of insurance policies.

Community Rating

A method for establishing the level of healthcare insurance premiums for a given geographic area, such as an entire state. It is based on the average of actual or anticipated services used by all subscribers in that area. The intent of community rating, which is not always pure in its application, is to spread costs evenly among an entire population rather than set premiums according to individual or small group circumstances.

Comprehensive Health Insurance

A type of health insurance that combines the coverage of Major Medical and Basic Medical Expense contracts into one broad contract that provides coverage for almost all types of medical expense. The coverage is usually subject to a small deductible for some or all expenses and to a percentage participation clause (sometimes called co-insurance) applicable to all or some of the covered expenses.

Comprehensive Personal Liability Policy (CPL)

A personal liability contract providing liability protection for numerous personal activities and situations.

Cost-Sharing

A provision in health insurance plans that requires the insured to pay a portion of his or her medical expenses, including co-payments, deductibles, etc.

Coverage

Scope of the protection provided under a contract of insurance.

Credit Insurance

Insurance on a debtor in favor of a lender intended to pay off a loan or the balance thereon if the insured dies or is disabled (usually called a "credit life" policy).
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