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Glossary of Insurance Terms
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- Mail Order Insurer: Type of
insurance company that sells policies through
the mail or other mass media, eliminating need
for agents.
- Major Medical Expense Insurance: A
form of health insurance that provides
benefits for most types of medical expense up
to a high maximum benefit, such as $250,000 or
higher after a substantial deductible, such as
$500 or more. Such contracts may contain
internal limits and are normally subject to
coinsurance.
- Major Medical Insurance: Health
insurance designed to finance the expense of
major illness and injury. Characterized by
large benefit maximums ranging up to $250,000
or higher above an initial deductible, which
reimburses the major part of all charges for
hospital, doctor, private nurses, medical
appliances, prescribed out-of-hospital
treatment, drugs, and medicines. The insured
person pays the remainder.
- Malingering: The practice of
feigning illness or inability to work in order
to collect insurance benefits.
- Malpractice Insurance: Coverage for
a professional practitioner, such as a doctor
or a lawyer, against liability claims
resulting from alleged malpractice in the
performance of professional services.
- Managed Care: Health care systems
that integrate the financing and delivery of
appropriate health care services to covered
individuals by arrangements with selected
providers to furnish a comprehensive set of
health care services.
- Manual Rate: The premium rate
developed for a group's insurance coverage
from the company's standard rate tables
normally referred to as its rate manual or
underwriting manual.
- Manuscript Policy: Policy designed
for a firm's specific needs and requirements.
- Marine Insurance: A form of
insurance primarily concerned with means of
transportation and communication, and with
goods in transit (See Inland Marine Insurance
and Ocean Marine Insurance).
- Marital deduction: A reduction of
an estate for estate tax purposes, which is
available if the deceased is survived by his
or her spouse.
- Market Price (or Market Value): The
price at which a security can be bought or
sold at any particular time.
- Master Policy: A policy that is
issued to an employer or trustee, establishing
a group insurance plan for designated members
of an eligible group.
- Material Damage: Automobile
insurance designed to provide financial
protection against damage to an insured
vehicle. It includes automobile comprehensive,
collision, fire and theft. Material damage and
physical damage are terms that often are used
interchangeably.
- Maximum family benefit: The largest
amount in Social Security benefits that will
be paid to any family unit.
- McCarran-Ferguson Act: Federal law
passed in 1945 stating that continued
regulation of the insurance industry by the
states is in the public interest and that
federal antitrust laws apply to insurance only
to the extent that the industry is not
regulated by state law.
- Medicaid: State programs of public
assistance to persons whose income and
resources are insufficient to pay for health
care. Title XIX of the federal Social Security
Act provides matching federal funds for
financing state Medicaid programs, effective
January 1, 1966.
- Medical Examination: The
examination given by a qualified physician to
determine to the insurability of an applicant.
A medical examination may also be used to
determine whether an insured claiming
disability is actually disabled.
- Medical Expense Insurance: A form
of health insurance that provides benefits for
expenses incurred for medical care. This form
of health insurance provides benefits for
expenses of physicians, hospital, nursing, and
related health services, and supplies. These
benefits may be related to actual expense,
specified sums, or services rendered. Such
insurance sometimes includes benefits for
prevention and diagnosis as well as treatment.
- Medical Expense Liability Insurance:
A general liability coverage in which the
insurer reimburses, without regard to the
insured's liability, the insured and others
(as specifically provided in the policy) for
medical and funeral expenses incurred by such
persons as a result of bodily injury or death
sustained by accident under the conditions
specified in the policy.
- Medical malpractice: Improper care
or treatment by a physician, hospital, or
other provider of health care.
- Medical Payments Insurance: A
coverage, available in various liability
insurance policies, in which their insurer
agrees to reimburse the insured and others,
without regard for the insured's liability,
for medical or funeral expenses incurred as
the result of bodily injury or death by
accident under specified conditions.
- Medicare: A program of Hospital
Insurance (Part A) and Supplementary Medical
Insurance (Part B) protection provided under
the Social Security Act.
- Medigap: A term sometimes applied
to private insurance products that supplement
Medicare insurance benefits.
- Minimum Benefits: A provision that
a minimum amount of annuity will be paid if
the regular benefit formula produces less.
This minimum is usually payable only if
certain service requirements are met at
retirement.
- Minimum Group: The least number of
employees permitted under a state law to
effect a group for insurance purposes; the
purpose is to maintain some sort of proper
division between individual policy insurance
and the group forms.
- Minimum Premium Plan (MPP): An
arrangement under which an insurance carrier
will, for a fee, handle the administration of
claims and insure against large claims for a
self-insured group.
- Miscellaneous Expenses: Expenses in
connection with hospital insurance, hospital
charges other than room and board, such as
X-rays, drugs, laboratory fees, and other
ancillary charges. (Sometimes referred to as
ancillary charges.)
- Miscellaneous Hospital Expense Benefit:
A provision in a hospital expense policy
providing for the payment of a benefit for
expenses for necessary hospital services and
supplies during a period of hospital
confinement. Expenses commonly covered under
this benefit include those for x-ray
examinations, laboratory tests, medicines,
surgical dressings, anesthetics (including
administration thereof), and use of operating
room.
- Misrepresentation: A false,
incorrect, improper, or incomplete statement
of a material fact, made in the application
for an insurance policy.
- Mode of Premium Payment: The
frequency with which premiums are paid
monthly, quarterly, semiannually, or annually.
- Moral Hazard: Hazard arising from
any nonphysical, personal characteristic of a
risk that increases the possibility of loss or
may intensify the severity of loss, for
instance, bad habits, low integrity, poor
financial standing.
- Morbidity: The incidence and
severity of sicknesses and accidents in a
defined class or classes or persons.
- Morbidity Tables: Actuarial
statistics showing the frequency and duration
of disability.
- Mortality Table: A chart showing
how many members of a group, starting at a
certain age, will be alive at each succeeding
age. It is used to calculate the probability
of dying in, or surviving through, any period,
and for determining the value of an annuity.
To be appropriate for a specific group, it
should be based on the experience of
individuals having common characteristics,
including such variables as sex and
occupation.
- Mortality: The rate at which
members of a group die in a specified period
of time. Actual mortality rates are compared
to the mortality table.
- Multi-Employer Plan: A plan
maintained according to a collective
bargaining agreement, to which more than one
employer contributes (eg., multiple school
districts). Under ERISA, at the beginning of
the plan, no single employer may contribute as
much as 50% of the total, and thereafter as
much as 75%. An employee may change employers
within the group without losing retirement
benefits unless a break in service (under the
plan) cancels credits earned before the break.
- Multi-Peril Policy: A package
policy which provides protection against a
number of separate perils. Multi-peril
policies are not necessarily multiple line
policies, since the combined perils may be all
within one insurance line.
- Multiple Employer Trust (MET): A
legal trust established by a plan sponsor that
brings together a number of small, unrelated
employers for the purpose of providing group
medical coverage on an insured or self-funded
basis.
- Mutual Insurance Company: An
insurance company in which ownership and
control is vested in the policyholders and a
portion of surplus earnings may return to
policyholders in the form of dividends. No
capital stock (eg., common stock) exists.
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