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Non-contributory Plan A non-contributory plan is a type of benefit plan, such as a pension or retirement plan, in which the employer pays all of the contributions. Employees are not required to contribute financially to the plan. In these types of plans, the employer assumes the full cost of the employees' benefits. Non-contributory plans can be attractive to employees, as they receive these benefits at no direct cost to them. Employers might offer non-contributory plans to attract and retain talented employees Noncontributory plans are most beneficial for low-income employees, who might not otherwise be able to afford the associated benefits. Especially in group coverage plan. A non contributory Plan is applicable in; raditional pension plans, health insurance, disability insurance, life insurance. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

Cost of Living Adjustment (COLA) cost of living adjustment (COLA) is an increase in the amount of money that someone receives in order to keep up with the rising cost of living. COLAs are typically given to people who receive fixed incomes, such as Social Security benefits, pensions, and annuities The COLA rider is an optional benefit designed to help your disability insurance benefit keep pace with inflation. These riders generally adjust your policy's monthly benefit on an annual basis, based on a fixed percentage or tied to the consumer price index after you have been disabled for 12 months. The amount of a COLA is typically based on the percentage increase in the CPI from one year to the next. For example, if the CPI increases by 2% from one year to the next, then Social Security benefits will increase by 2%. To see how this COLA design might work for any client, let's consider an example. Suppose that our client purchased a disability income insurance policy with a

Group Coverage Group insurance is an insurance that covers a group of people, for example the members of a society or professional association, or the employees of a particular employer for the purpose of taking insurance. You may be responsible for no cost, a percentage of the cost or a set premium. Example: group life, group health, group disability. Such a plan provides the same level of insurance coverage to all members of a group irrespective of their age, gender, occupation or socio-economic status. Usually employers offer this coverage to all full-time employees. The employer has the option to offer coverage to part-time employees (defined as those working fewer than 30 hours per week). The difference between group coverage vs individual coverage is take case of health insurance: Health insurance provided to employees by an employer or by an association to its members is called group coverage. Health insurance you buy on your own not through an employer or association is

Carry-Over Account A carry-over account in insurance is a type of account that allows policyholders to roll over unused benefits from one plan year to the next. This can be beneficial for policyholders who do not use all of their benefits in a given year, as it allows them to save those benefits for future use. This is used in Business Overhead Expense policies, this account accumulates unused benefits so they carry-over and can be used by the insured later. Carry-over accounts are most commonly found in health insurance plans, but they can also be found in other types of insurance, such as dental insurance and vision insurance. The specific rules for carry-over accounts vary depending on the insurance company and the type of insurance plan. For example, some health insurance plans may allow policyholders to roll over unused deductible and out-of-pocket maximum amounts to the next plan year. Other plans may allow policyholders to roll over unused prescription drug coverage benef

Policy (also, Contract) An insurance policy is a contract between an insurance company and a policyholder. The policy outlines the terms and conditions of the insurance coverage, including the types of risks that are covered, the amount of coverage that is provided, and the costs of coverage. When you purchase an insurance policy, you are agreeing to pay the insurance company a premium in exchange for financial protection against certain covered events. If a covered event occurs, you can file a claim with your insurance company and receive benefits to help you cover your losses. Every insurance policy has five parts: declarations, insuring agreements, definitions, exclusions and conditions. It is good to see these sections as guideposts in reviewing the policies. Examine each part to identify its key provisions and requirements. For an insurance policy to remain in force, the policyholder must pay a single premium up front or pay regular premiums over time, as stated in the pol

Benefit Period benefit period is a period of time during which an insurance policyholder or their dependents may file and receive payment for a covered event. The length of a benefit period will vary depending on the type of insurance such as healthcare, disability, long-term care, homeowners, and auto insurance and whether it's an individual or group plan. All insurance plans will include a benefit period, which can vary based on policy type, insurance provider, and policy premium. The length of an insurance policy's benefit period will affect the price of the premium because the longer the benefit period, the greater is the insurer's risk. Benefit periods are important because they affect how much you will pay for covered expenses. For example, if you have a health insurance plan with a 60-day benefit period for inpatient hospital care, you will be responsible for paying your deductible and coinsurance for the first 60 days of your hospital stay. After 60 days, you

Voluntary Benefits (or employee-paid) Voluntary benefits are services and/or goods that an employer offers at a discounted group rate but are paid for (either fully or partially) by an employee through a payroll deduction. Voluntary benefits may also be called employee-paid benefits or supplemental insurance. Voluntary insurance is important in that it closes the gaps between typical insurance coverage and additional needs. Voluntary benefits can be a valuable way for employees to customize their benefits package to meet their individual needs and preferences. They can also be a way for employers to attract and retain top talent. The most common voluntary insurance plans complement are: Additional health and insurance benefits, such as dental insurance, life insurance, disability insurance, vision insurance. Financial planning and retirement savings benefits, such as student loan repayment assistance and tuition reimbursement. Lifestyle and wellness benefits, such as gym membe

Deductible A provision in a disability insurance policy that an initial amount of expenses shall be paid by the policyholder before the l insurance coverage begins, i.e insurer will step in and pay the remaining balance of a claim with definition of claim (up to the limit in your policy). For example, if you have a deductible of $1,000 and you have an auto accident that costs $4,000 to repair your car. You will have to pay $1,000 out of pocket as your deductible, and then your insurance would cover the additional $3,000 (or up to your coverage limit). Your insurance company would then likely send you a check for the amount of the claim minus your deductible. The general rule is that policies with higher premiums come with lower deductibles while those with lower premiums tend to have higher deductibles. Insurance companies use deductibles to ensure policyholders have skin in the game and will share the cost of any claims. When you file a claim with your insurance company, you w

Contributory Plan contributory plan in insurance is a type of insurance plan in which both the employer and the employee contribute to the cost of the premiums. Contributory plans are most common in health insurance, pension insurance but they can also be used for other types of insurance, such as life insurance and disability insurance. In a contributory plan, the employer typically pays a portion of the premium, and the employee pays the rest. The amount that each party pays can vary depending on the plan and the employer. For example, an employer may pay 50% of the premium and the employee may pay the other 50%. Or, an employer may pay 100% of the premium for the employee and the employee may pay 100% of the premium for their dependents. Here are some of the benefits of contributory plans: Affordability: Contributory plans can make health insurance more affordable for employees. This is because the employer typically pays a portion of the premium. Choice: Employees typicall

Policyholder (Contract Holder) A policyholder is the person who purchases and owns an insurance policy. The policyholder is responsible for paying the premiums and is entitled to the benefits of the policy. The policyholder may also be the insured person, but this is not always the case. For example, a parent may purchase a life insurance policy for their child, or a business owner may purchase a health insurance policy for their employees. For life insurance it's a little bit different. You may be the policyholder, but someone else may be the insured party. In addition, you will need to name one or several beneficiaries of the policy. In life insurance, the policyholder owns and controls the policy but is not always the insured. A wife can purchase a term life insurance policy with her husband as the insured and name her adult son and herself as the beneficiaries. As policyholder, she controls the life insurance policy. If her husband dies during the coverage period, the wif

Mental Health Limitation In insurance mental health limitation in insurance is a clause in an insurance policy that restricts coverage for mental health conditions. In general mental health limitation is a condition that affects a person's ability to think, feel, or behave in a healthy way. Mental health limitations can be caused by a variety of factors, including genetics, brain chemistry, life experiences, and trauma. There are a number of reasons why insurance companies impose mental health limitations. One reason is that mental health conditions are often more expensive to treat than physical health conditions. Another reason is that insurance companies are concerned about moral hazard, which is the idea that people will consume more healthcare services if they are not required to pay for them. Most policies have a 24-month mental health limitation. In other words, benefits for mental health conditions such as depression, anxiety or bipolar disorder will only be paid for

Insurance Portability Insurance portability is the ability to switch insurance providers while keeping your existing coverage and benefits. This is important because it allows you to choose the insurance company that best meets your needs and budget, without having to worry about losing your coverage. Insurance portability is available for a variety of different types of insurance, including health insurance, life insurance, and auto insurance. However, the specific rules and requirements for portability vary depending on the type of insurance and the jurisdiction in which you live. Portable benefits are connected to an individual, rather than a particular employer, and so they can be taken from job to job without interruption in coverage or loss of funding. Here are some tips for switching insurance providers using portability: *Start planning early: It's important to start planning your switch at least 45 days before your current policy expires. This will give you enough

Gainful Employment In general, a "gainful" occupation is one that is able to provide you with at least 60% of your pre-disability wages. What this means is that, before an insurance company denies a disability claim (or terminates disability benefits) under an "any occupation" plan, the insurer must demonstrate that the insured, considering his educational and vocational history, can reasonably perform some job that would pay him 60% of his prior earnings. To determine whether an insured person is gainfully employed, the insurance company will consider a number of factors, including: -The amount of income that the insured person is earning -The type of work that the insured person is doing -The hours that the insured person is working -The skills and experience that the insured person is using This means the claimant could reasonably be expected to earn at least as much as the benefit amount (or some other defined percentage). The gainful occupation definiti

Any Occupation Insurance Policy any occupation insurance policy is a type of disability insurance policy that provides benefits to the insured if they are unable to work in any occupation that is suitable for them based on their education, training, and experience. This is in contrast to an own occupation policy, which pays benefits only if the insured is unable to work in their own occupational duties that they have been trained to perform. Any occupation policies are typically less expensive than own occupation policies, but they can be more difficult to qualify for. To qualify for an any occupation policy, the insured must typically be unable to perform the material duties of any occupation that they are suited for based on their education, training, and experience. Any occupation policies can be a good option for people who are concerned about becoming disabled and unable to work in any occupation. However, it is important to carefully consider the terms of the policy before

Offset An offset in insurance is a reduction in the amount of benefits that an insured person is entitled to receive because they are also receiving benefits from another source they receive. Offsets are most common in disability insurance and workers' compensation, but they can also be found in other types of insurance, such as life insurance and health insurance. Insurance companies are not prohibited from applying offsets this because if you were allowed to keep the full amount of all of the various disability benefits to which you might be entitled, it would be possible for you to earn more money on disability than you would by working. There are two main types of offsets: Income offsets: Income offsets reduce the amount of benefits that an insured person is entitled to receive by the amount of other income that they are receiving, such as Social Security Disability Insurance (SSDI) or workers' compensation. Expense offsets: Expense offsets reduce the amount of ben

Disability Appeal A disability appeal in insurance is a process that allows a policyholder to challenge the denial of their disability insurance claim. If a policyholder's disability claim is denied, they will typically receive a denial letter from the insurance company. The denial letter will explain the reason for the denial and the policyholder's right to appeal. Here are some common reasons why disability insurance claims are denied: -The claim is not covered by the policy. -The policyholder has not met the definition of disability under the policy. -The policyholder has failed to provide sufficient evidence of their disability. -The policyholder has violated the terms of the policy. The insurance company will then review the appeal and make a decision. If the insurance company upholds the denial, the policyholder may have the option to file a lawsuit against the insurance company. Remember during an appeal you must show the court, through substantive evidence and w

Denial Letter A denial letter in insurance is a letter from an insurance company to a policyholder or beneficiary informing them that their claim has been denied. The letter will typically explain the reason for the denial and the policyholder's right to appeal. The difference between a rejected claim and a denied claim is that; a claim rejection occurs before the claim is processed and most often results from incorrect data. Conversely, a claim denial applies to a claim that has been processed and found to be unpayable. This may be due to terms of the contract or for other reasons that emerge during processing. After the claim is filed, if the claim is denied, the claimant will receive a “denial letter.” This letter is very important because it will list what evidence the insurance company reviewed when making its decision, and who reviewed the evidence. Some common reasons include: -The claim is not covered by the policy. -The claim is not medically necessary. -The claim i

Vocational Review (by the Insurance Company) A vocational review is an assessment conducted by an insurance company to determine a claimant's ability to work, given their medical condition and limitations. Vocational reviews are typically used in disability insurance cases, but they may also be used in other types of insurance cases, such as life insurance and workers' compensation If the insurance company finds a claimant “not disabled,” they will often perform a cursory “vocational review.” The vocational analyst will take the restrictions the insurance company decides the claimant has and the skills the vocational analyst derives from a claimant’s past work history and come up with a list of jobs that the claimant can perform. The vocational analyst will state that these jobs are available in the claimant’s home region and that the job will pay usually, at least 80 percent of the claimant’s pre-disability earnings. This is done using Residual Functional Capacity (RFC)