Glossary: Definitions of common insurance terms

Insurance uses a lot of words you probably don't hear every day. Here are definitions of some common insurance terms. Don't see the one you're looking for? Call 1-877-268-3763 (Monday through Friday, 8 a.m. to 8 p.m. Eastern Time) or email us. Our frequently asked questions can also help provide answers.

These definitions are general in nature. If you have a question about a term in your insurance policy, please consult the policy itself.

Accident

A sudden, unforeseeable event that causes bodily injuries.

Add-ons

Available only with a core plan, add-ons enable you to customize your protection to your individual needs by increasing your coverage in certain areas.

Anniversary year

The 12 consecutive months following the Effective Date of the Policy and each 12-month period thereafter.

Assistive Devices Program (ADP)

The objective of the Assistive Devices Program (ADP) is to provide consumer centered support and funding to residents who have long-term physical disabilities and to provide access to personalized assistive devices appropriate for the individual’s basic needs. Items include Wheelchairs, Walkers and CPAP Machines.

Benefits

The amounts paid to a claimant or beneficiary under the coverage of a policy.

Benefit year

The 12-month period following the date a claim for a specific benefit is first incurred, and each 12-month period thereafter.

Calendar year

The 12-consecutive-month period that begins on January 1 and ends on December 31.

Claim

A request for benefit payment under the terms of an insurance policy.

Claimant

The person(s) or beneficary making a request for payment of benefits under the terms of an insurance plan.

Co-ordination of benefits

A process designed to eliminate duplicate payments and determine the order for payment of benefits when there is coverage provided under another plan.

Coverage

Another term for the protection offered under an insurance policy. Coverage is used interchangeably with the terms insurance or protection.

Declaration

A statement, signed by the insured, warranting that the information given by him/her is true.

Deductible

Out-of-pocket expense you are required to pay before your insurance coverage will pay a benefit.

Dental fee guide

Dental fee guides may vary by province/terriority, as each provincal/territorial dental association assigns a specific fee for a given procedure. Fees vary by dentist within a jurisdiction and across jurisdictions.

Dispensing fee

The charge for the professional services provided by a pharmacist when dispensing a prescription(Not applicable in Quebec).

Effective date

The date when insurance coverage begins.

Eligible expenses

Expenses that are eligible for payment of benefits, under the terms of the Schedule of Benefits of an insurance policy.

Emergency

An acute, unexpected or unforeseen illness or accidental injury that results in a sickness or accidental bodily injury of the insured.

Evidence of insurability

Evidence of Insurability (EOI), also known as the proof of good health, is the documentation of the good health condition of the beneficiary and his/her dependent’s health in order to be approved for coverage. While applying for an individual health insurance plan, an applicant must confirm his or her health status through a questionnaire or a medical examination.

Exclusions

Specific causes of death, circumstances and health-related conditions or any other losses for which an insurance policy does not provide benefits.

Generic

A drug sold under its generic name, usually legal only after the patent has expired or if no patent was issued for the drug. Generic drugs sare usually less expensive than brand name drugs.

Government health insurance plan

Canada's health care program is made up of federal, provincial and territorial government health insurance plans, all of which share certain common features and standards under the Canada Health Act design to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers.

Group benefits

Insurance issued on a group of people under a master contract. Group benefits are usually issued to an employer or association for the benefit of employees, spouse, dependents, and retirees.

Insured

The person (or persons) whose risk of financial loss from an insured peril is protected by the policy.

Lifetime maximum

The maximum amount of benefits that will be paid for all covered services during the entire time you are insured.

Name brand or brand-name

A medication sold by a pharmaceutical company under a trademark-protected name. Name brands are typically more expensive than generic drugs.

Non-smoker

An insured person who has not used any form of tobacco, including tobacco cessation products, in the 12 consecutive months preceding the date of application for insurance or non-smoker premiums, and who meets Manulife's Underwriting guidelines.

Policy

The legal document issued by an insurance company to a policyholder, which outlines the conditions and terms of the insurance. Also called the contract.

Policyowner or policyholder

The person who owns the insurance policy.

Pre-existing health condition

An injury, sickness or condition that existed before the date that an insurance policy takes effect.

Premium

The cost of insurance coverage. A premium can be paid monthly, semi-annually or annually.

Reasonable and customary

The maximum amount a plan or insurance contract will consider eligible for reimbursement, based on prevailing fees in a geographic area.

Standalone

Flexcare standalone options allow you to build a plan that will give you hospital coverage, catastrophic coverage or both – without the need to purchase a more comprehensive core plan.

Underwriting

The process by which an insurer determines whether or not, and on what basis, it will accept an application for insurance.

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