Commercial Policy
Same as term Commercial Health Insurance: coverage that provides two types of benefits, disability income (DI) and medical expenses. Sold by insurance companies whose business objective is the profit motive (as distinct from Blue Cross/Blue Shield) it can be classified by its renewal provision, and types of benefits provided.
- Renewal Provisions: (a) Optionally renewable. The insurance company has the option to renew the policy at the end of the termperiod (one year, six months, three months, or one month). If the company renews the policy, it has the option to adjust the premiumup or down; limit the types of perils insured against; and limit some or all of the benefits, (b) Nonrenewable for stated reasons only.When the insured reaches a certain age or when all similar policies are not renewed, the policy is said to be nonrenewable for the reasons stated, (c) Noncancellable. The insurance company must renew the policy and cannot change any of the provisions of thepolicy nor raise the premium while the policy is in force, (d) Guaranteed renewable. The company must renew the policy but thecompany has the option to adopt a new rate structure for the future renewal premiums.
- Benefits Provided: (a) Disability income for total and partial disability subject to a maximum dollar amount and maximum lengthof time. Limitations include: pre-existing injury or condition; elimination period beginning with the first day of disability during which no benefits are paid; probationary period during which no benefits are paid for a sickness contracted or beginning during the first 15, 20, 25, or 30 days that the policy is in force; a recurrent disability such that before the current disability will be deemed to be a new disability, the insured must have returned to full time continuous employment for at least six months, (b) medical expense benefits for hospital charges for room, board, nursing, use of theoperating room, physicians and surgeons fees; and miscellaneous medical expenses for laboratory tests, drugs, medicines, X-rays, anesthetics, artificial limbs, therapeutics, and ambulance service to and from the hospital.
Popular Insurance Terms
Enacted on April 1, 1997; provides protection against creditors for irrevocable trusts provided that the trust has a grantor who is a discretionary beneficiary. In order for the statute of ...
Requirement of the Internal Revenue Service that any dividend payments received are subject to a 20% withholding if the investor fails to furnish the dividend payer with the investor's ...
Concealment of the actual fact. For example, an insurance agent tells a prospective insured that a policy provides a particular benefit when in actual fact this benefit is not in the ...
Early type of no-fault automobile insurance developed by two law professors, Robert Keeton and Jeffrey O'Connell. Its basic premise is that for many accidents it is impossible to place the ...
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums ...
Ruling that, under current tax law, an insurance company that has incurred a net income loss in a given year may charge that loss against its taxable income in a subsequent year. This ...
Form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk ...
End of a defined time period that dividends become payable to the policyholder. ...
Financial technique for providing term death coverage for an entity. With this procedure: (1) an individual purchases an ordinary life insurance policy and completes an agreement with the ...
Have a question or comment?
We're here to help.