- Premium
- The amount of money the policyowner pays the insurer, on a set schedule, to keep coverage in force. Missing a premium payment can cause the policy to lapse.
- Deductible
- The fixed dollar amount the insured must pay out of pocket for covered services before the insurer begins to pay. It typically resets on a defined period, usually annually.
- Coinsurance
- A cost-sharing arrangement in which the insured and insurer split covered expenses by a set percentage (for example, 80/20) after the deductible is met. The insured's share typically continues until an out-of-pocket maximum is reached.
- Copayment
- A flat, predetermined fee the insured pays for a specific covered service, such as a doctor visit or prescription. It is paid at the time the service is received.
- Elimination Period
- A waiting period at the start of a disability or long-term care claim during which no benefits are paid. It functions like a time-based deductible before benefits begin.
- Insurable Interest
- A legitimate financial or personal stake in the continued health or life of the insured that must exist for a policy to be valid. It prevents insurance from being used as a wager.
- Underwriting
- The process by which an insurer evaluates an applicant's risk to decide whether to issue coverage and at what premium. It relies on health history, applications, and sometimes medical exams.
- Rider
- An optional provision added to a policy that expands, limits, or modifies its coverage. Common examples include a waiver of premium rider or a guaranteed insurability rider.
- Disability Income Insurance
- Coverage that replaces a portion of the insured's income when they cannot work due to sickness or injury. Benefits are typically paid monthly after the elimination period.
- Producer Exam Fee
- The fee California charges to sit for the producer licensing exam. The producer exam fee is $55.
- Passing Score
- The minimum percentage of correct answers needed to pass the licensing exam. In California a candidate must score 60 percent to pass, answering the 75-question exam within a 105-minute time limit.
- Accident and Health Insurance
- A category of coverage that pays benefits for losses resulting from accidental injury, sickness, or disability. It includes products like medical expense, disability income, and long-term care insurance.