This glossary provides a general explanation of commonly used insurance terms. If you have insurance coverage through your employer, a professional association, or an affinity group, please refer to the summary plan descriptions they provide for specific information about your plans.
Accident Insurance: A type of supplemental insurance that pays benefits related to accidents you may experience. If you have a claim, it pays money directly to you, to be used however you like. It can help cover out-of-pocket* medical costs such as deductibles, co-pays, or non-covered services; or everyday living expenses, like babysitters and take-out food. It is not the same as Accidental Death & Dismemberment insurance.
Accidental Death and Dismemberment (or AD&D) Insurance: Like life insurance, AD&D insurance pays a benefit to your beneficiaries if you die as result of an accident. It also pays a benefit to you if you have an accidental injury that results in paralysis or the loss of a limb, hand, foot, sight in one eye, speech or hearing, etc. It is not accident insurance.
Benefits: Money that is paid and/or services that are provided by an insurance company under an insurance policy.
Beneficiary/Beneficiaries: The person or people named in a life insurance policy who will receive money (benefit, proceeds) from the plan when the insured dies.
Critical Illness Insurance: A type of insurance that pays you for certain covered illnesses. It can be used to supplement your health/medical insurance, so you can focus more on your health and less on your finances. It pays a lump sum amount directly to you, which you can use however you choose, including paying for out-of-pocket* medical costs such as deductibles, co-pays, or non-covered services; or everyday living expenses, like babysitters, take-out food, and help with household duties.
Co-payment: The amount of money you pay, under certain health or medical insurance plans, for medical services in addition to what the insurance carrier will pay toward the medical services. For example, you may have a $5 co-payment on prescription drugs while your insurance carrier pays additional money toward the prescriptions. Supplemental health insurance coverages can help cover these amounts.
Deductible: The amount of money you pay out of your own pocket before your health or medical insurance carrier begins to pay benefits on claims for services that are subject to deductibles. Supplemental health insurance coverages can help cover these amounts.
Disability Insurance: An insurance plan that can replace a portion of your income in the event you become too sick or injured to work. Types include short-term disability insurance, which typically provides benefits for 3-6 months and long-term disability insurance, which typically provides benefits for 2 to 5 years or up to your normal Social Security retirement age.
Evidence of Insurability (EOI): In order to quality for certain life or disability insurance plans, you may have to provide evidence of your insurability when you apply for or increase your coverage. The insurance company provides a medical questionnaire for you to complete, through either an online or paper form. Depending on your health you may need to provide additional information to qualify for coverage.
Family Medical Leave Act (FMLA): The FMLA is federal legislation which provides certain protections for eligible employees to take up to 12 weeks of unpaid leave during any 12-month period for absences due to: birth of a child and care for a newborn; placement with the employee of a child of adoption or foster care and care for the newly placed child; or the serious health condition of the employee or an immediate family member. FMLA also provides for up to 26 weeks of unpaid leave during any 12-month period for absences due to a call to active military duty and care for injured service members.
Group Insurance: Insurance issued to groups of people, usually through their employer. The employer owns the policy while the employees receive a certificate of insurance. Group insurance costs may be lower than what an employee can find on their own. This insurance may cover death, accidental death, or disability payments.
Group Universal Life (GUL) Insurance: A life insurance plan that differs from term life insurance, as it allows the certificate holder to build cash value by contributing to a cash accumulation fund. The money in the cash accumulation fund earns tax-deferred guaranteed interest at competitive rates, which are determined annually.
Group Variable Universal (GVUL) Life Insurance: A life insurance plan that differs from term life insurance. It is similar to group universal life insurance, except the certificate owner has a choice of variable investment options in addition to the fixed account.
Hospital Indemnity Insurance: A type of insurance that pays for covered hospitalizations. It supplements your medical insurance coverage and can help you stay on track financially and focus on your recovery. It pays the benefit directly to you, which you can use however you’d like, including to help cover out-of-pocket* medical costs such as deductibles, co-pays, or services your health insurance doesn’t cover; or everyday living expenses, like babysitters, take-out food, and extra help around the house while you heal.
Health/Medical Insurance: Insurance for covered medical conditions and related medical services. It can be offered through an employer, association, or affinity group or you can purchase it individually. Plans vary widely, as does the amount of money you pay out of your own pocket for the plan, and some involve deductibles and out-of-pocket maximums that you may also have to pay for.
Insured: The person who is covered by the insurance policy. When this person dies, money (a benefit) will be paid to the policy’s beneficiary or beneficiaries; when this individual is determined to be disabled by Prudential, disability benefits are paid to the insured.
Long Term Disability (or LTD) Insurance: A type of disability insurance that replaces part of your paycheck for longer periods, typically after short-term disability insurance benefits end.
Optional Benefits: See voluntary benefits.
Out-of-pocket Maximums: The maximum amount of money that an insurance policyowner pays out of their own pocket under a health/medical insurance plan. This amount varies from plan to plan. Supplemental health insurance coverages can help cover these amounts.
Paid Family Leave: While not available on a federal level, some states, jurisdictions, and companies may offer paid family leave to bond with a child, care for a family member, etc. You will need to check with your employer to find out what might be available to you.
Policyowner: The person or entity who owns the policy and makes premium payments that keep the policy in force (active). This person can also be the insured.
Premiums: The amount of money paid by the policy owner to purchase an insurance product and keep it in force (active). If you have insurance coverage through an employer, they may deduct money from your paycheck to cover part or all of your premiums, depending on the type of coverage.
Proof of Good Health (POGH): See evidence of insurability.
Short Term Disability (or STD) Insurance: A type of disability insurance that replaces part of your paycheck for typically three to six months.
Statutory Paid Leave (SPL) Programs: There are multiple jurisdictions in the United States that provide paid medical/disability benefits to workers who need to take a leave due to their own medical condition and/or family leave to care for a family member in certain situations. These jurisdictions include: The states of California, Colorado (2024), Connecticut (2022), Hawaii, Massachusetts, New Jersey, New York, Oregon (2023), Rhode Island, and Washington; the District of Columbia (Washington, D.C.); and the territory of Puerto Rico. The laws of each jurisdiction may be different, so please contact your employer’s human resources department for full program details if you work in one of these jurisdictions.
Supplemental Benefits: Insurance products that provide additional money (or services) that supplement another type of insurance coverage, such as health or medical insurance. May also be referred to as voluntary benefits. If offered through an employer, the premiums for these benefits are generally paid for by the employee.
Term Life Insurance: A type of insurance plan that can help you manage the financial risks associated with premature death. It insures your life and pays a lump sum benefit to the policy’s beneficiaries if you die while covered. “Term” refers to the length of time that the policyowner is covered under the plan. If you have term life insurance through your employer, the term is generally through your employment (i.e., if you leave your employer, your term life insurance will end). It may also be referred to as optional life insurance or supplemental life insurance.
Term life insurance is different from group universal life insurance and group variable universal life insurance.
Voluntary Benefits: Benefits that your employer may offer as part of an employee benefits program, but that you pay premiums for out of your own pocket. These may also be referred to as optional benefits.
Workers’ Compensation: Provides money in the event you experience a work-related accident or illness. If your condition qualifies for workers’ compensation, it may override any short-term disability coverage you have, either through your employer or that you purchase on your own.
*Benefits can be used for medical and non-medical purposes.
Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ.
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