A 403(b) plan is a type of retirement plan authorized under the Internal Revenue Code Section 403(b), allowing employees of qualifying nonprofit organizations, such as The Boys and girls clubs of America and Adapt a Platoon, to contribute pre-tax funds toward their retirement.
A retirement savings plan sponsored by an employer is called a 401(k). In this type of savings plan, employees can contribute a percentage of his or her pre-tax wages into the company’s 401(k) plan, up to a prescribed maximum. Annual contributions made to a 401(k) plan, by the employees, will be excluded from that year’s taxable income. Many employers will match contribution made by the employee’s into the company 401(k), up to a designated percentage, allowing the savings to build even faster.
Paid-up insurance refers to all insurance premiums that have been paid in full. The term itself can be used in reference to the reduced paid-up insurance available as a non-forfeiture option.
A Non-forfeiture clause is a clause in an insurance policy that is designed to allow the insured to receive all or a portion of the benefits, or a partial refund on the premiums that were paid, if the policyholder were to miss any premium payments, in turn causing the policy to lapse. After the policy has been active for a few years, the non-forfeiture clause may become available to the insured, but only for a short period of time.
Managed care is a term used to describe medical plans or techniques created with the intention of reducing the cost of health benefits and improving the quality of care. The most common form of managed care is known as HMO or health maintenance organization. HMO will restrict the doctors available to you to the HMO network of doctors. With an HMO plan the charges for your doctor’s visits are modest and the premiums are generally lower for the traditional fee-for-service health care plans. Some new additions to the HMO network plan are known as the preferred-provider plan and point-of-service plan. The purpose for these types of service plans is to charge the lowest price for each visit to your doctor for treatments that is provided in the plan’s network and to allow out-of-network treatment with 70% of eligible cost reimbursement.
Loss of use refers to a provision included in renters insurance and homeowners insurance that is designed to reimburse the insured for any additional living cost that are due to the policyholder having to live elsewhere during the restoration of your home after a disaster.
Another definition of loss of use is the inability of the insured to use equipment, premises, or a vehicle due to damage caused by neglect or wrongdoing of others.
Fee-for-service refers to the method of billing used by the health industry that allows the physician or other practitioner to charge the health insurance plan or the patient for any services rendered or for each patient encounter. You will find that a major portion of doctors in the U.S. are currently using this billing method. Many health plans will go to great lengths to avoid engaging in what’s known as a fee-for-service payment contract, mainly due to increased expenditures when a doctor’s fee increases, as well as additional units of services that are being provided and the use of more expensive services replacing less expensive ones. This system is designed to compare with salary, per capita, or other prepayment systems, wherein the payment made to the physician does not change with the actual number of services used.
Copayment or copay is a predefined payment amount agreed to in the insurance policy and paid by the insured person each time a medical service is accessed. Copayment is in essence a form of coinsurance, but may be defined differently in health insurance where a coinsurance is a percentage payment after the deductible up to a certain limit. Before any policy benefit is payable by an insurance company, copayment must be paid. Copayments usually do not contribute towards any policy out-of-pocket maximums, where coinsurance payments do.
Contingent beneficiary is a term used to refer to the person or designated party who will receive term, permanent life insurance or annuity death benefits in the case that the primary beneficiary is not alive when the policyholder dies.
Change of beneficiary is an insurance term that allows the policyholder to change the beneficiary listed in the policy at any time prior to the death of the annuitant, unless irrevocable. The change of a beneficiary designation will only become effective when the insurance company receives written notice from the insured of the new beneficiary.