Commercial Policy
Definition of "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
Conditions found in employee benefit plans such as pensions, under which minimum requirements, such as 20 years of service, must be met by an employee to qualify for benefits. ...
Ruling that, under current tax law, if an insurance company is to use a loss carryforward accounting adjustment, the company must first offset a net income loss in a specified time period ...
State laws based on a model law of the National Association of Insurance Commissioners (NAIC) that allow insurers to set rates independently; or adopt those rates developed by a rating ...
Index that traces the construction of new single-family homes, townhouses, and multifamily apartment buildings. These statistics are published monthly by the United States Department of ...
INSURANCE health insurance policy providing coverage for an insured's medical expenses except those that are specifically excluded. This may be the most advantageous medical expense policy ...
Same as term Automobile Assigned Risk Insurance Plan: coverage in which individuals who cannot obtain conventional automobile liability insurance, usually because of adverse driving ...
Person who transfers rights under an insurance or mortgage contract. ...
Reserve at the beginning of the policy year that is equal to the terminal reserve for the preceding year plus the net level premium for the current year. ...
Type of major medical deductible amount that acts as a corridor between benefits under a basic health insurance plan and benefits under a major medical insurance plan. After benefits are ...
Have a question or comment?
We're here to help.