The office will be closed Friday, March 29th, in observance of Good Friday.

Please be advised, the Wilmington Office of the Delaware Department of Insurance has moved to a new location effective June 30th, 2023. The new address for the Wilmington office is: 503 Carr Road, Suite 303, Wilmington, Delaware 19809. (All payments should be mailed to 1351 West North Street, Suite 101, Dover, Delaware 19904.)

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Insurance Words & Terms


InfoListed below are many of the most commonly used health insurance terms. Please feel free to call the Insurance Commissioner’s Office at (800) 282-8611 with any questions you may have about these or other terms.

For more definitions related to health insurance and the Affordable Care Act please view the HealthCare.gov glossary.

Adjuster: An individual employed by a property/casualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyholders, and receive a portion of a claims settlement. Independent adjusters are independent contractors who adjust claims for different insurance companies.

Advanced Premium Tax Credit (related to the ACA): The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through the Health Insurance Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return. Also called “premium tax credit”.

Affordable Care Act (ACA or Obamacare): the most common formal name for the health care reform law passed by Congress in 2010. Its full title is the Patient Protection and Affordable Care Act, or PPACA. The most widely used unofficial name for the healthcare reform law is Obamacare.

Agent/Producer: a licensed representative of an insurance company who solicits, negotiates, or effects contracts of insurance and provides service to the policyholder for the insurer.

Application: a signed statement of facts requested by the insurance company on the basis of which the company decides whether or not to issue the coverage. The application becomes part of the health insurance contract when it is attached to and made a part of the contract.

Assignment: the signed authorization by the policyholder for the insurance company to pay benefits directly to the hospital, doctor, or other provider.

Beneficiary: the person or party designated by the policy terms to receive the proceeds upon the death of the insured.

Benefits: the dollar amount payable by the insurance company to the claimant, assignee, or beneficiary under each coverage.

Claim: a formal request to the insurance company for payment of benefits under the insurance contract.

COBRA: If you lose your job and you worked for an employer who has more than 20 employees, you may be able to continue your group coverage for up to 18 or 36 months under COBRA, a federal law. For information on eligibility and the length of time you can continue your coverage, call the U.S. Department of Labor at (202) 219-8776 or visit http://www.dol.gov/ebsa/cobra.html.

Co-insurance: The percentage of costs of a covered health care service you pay (20%, for example) after you’ve paid your deductible.

Let’s say your health insurance plan’s allowed amount for an office visit is $100 and your coinsurance is 20%.

  • If you’ve paid your deductible: You pay 20% of $100, or $20. The insurance company pays the rest.
  • If you haven’t met your deductible: You pay the full allowed amount, $100.

Co-payment: A fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible.

Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.

  • If you’ve paid your deductible: You pay $20, usually at the time of the visit.
  • If you haven’t met your deductible: You pay $100, the full allowable amount for the visit.

Copayments (sometimes called “copays”) can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.

Generally plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.

Comprehensive Coverage: Portion of an auto insurance policy that covers damage to the policyholder’s car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods and riots), and theft.

Conversion: Some insurance companies offer their policyholders conversion privileges that allow you to convert group coverage to individual coverage without showing proof of insurability. This offer to convert from group to individual coverage is made if you are no longer eligible for group coverage. Ask your insurer or agent if your policy contains this provision.

Coordination of Benefits: If both you and your spouse have health insurance, or if your dependent children are covered under other health insurance, your insurance company will probably coordinate the payment of benefits with the other insurance company. This is done so that payments from both companies are not more than the actual costs of your medical care. If your outline of coverage or benefits handbook has a section on Coordination of Benefits, read it to see how expenses will be paid when two insurance companies insure you and your family.

Covered Expenses: hospital, medical and miscellaneous health care costs incurred by the insured that entitle him or her to payment of benefits under a health insurance policy. Found most often in major medical plans, the term defines the type and amount of expense which will be considered in the calculation of benefits.

Deductible: the dollar amount you pay before the insurance company begins to make payments. If your policy covers you and other family members, check to see if the deductible is a flat amount for the whole family or if each family member has to meet his/her own deductible. Usually, a higher deductible means lower premiums. But be careful that you don’t buy a policy whose deductible is so high that you can’t pay the bill if you get sick and need medical care.

Effective Date: the date on which the health insurance coverage begins.

Essential Health Benefits: A set of health care service categories that must be covered by certain plans, starting in 2014. The Affordable Care Act ensures health plans offered in the individual and small group markets, both inside and outside of the Health Insurance Marketplace, offer a comprehensive package of items and services, known as essential health benefits. Essential health benefits must include items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. Insurance policies must cover these benefits in order to be certified and offered in the Health Insurance Marketplace. States expanding their Medicaid programs must provide these benefits to people newly eligible for Medicaid.

Evidence of Insurability: any statement or proof of a person’s physical condition and/or other factual information affecting his or her acceptance for insurance.

Exclusions and Limitations: medical services or benefits which will not be paid for or may be paid on a limited basis. Some examples are: experimental medical treatments, self-inflicted injuries, on-the-job injuries covered by Worker’s Compensation, cosmetic surgery, eye or dental care, and services that are not medically necessary. Most policies have reduced or no benefits for mental illness or substance abuse treatment. Read your outline of coverage or benefits handbook to see what benefits your insurer will NOT pay for.

Grace Period: a specified period after which a premium payment is due, during which the policyholder may make the premium payment and the health insurance continues.

Floater: Attached to a homeowners policy, a floater insures movable property, covering losses wherever they may occur. Among the items often insured with a floater are expensive jewelry, musical instruments and furs. It provides broader coverage than a regular homeowners policy for these items.

Gap Insurance: An automobile insurance option, available in some states, that covers the difference between a car’s actual cash value when it is stolen or wrecked and the amount the consumer owes the leasing or finance company. Mainly used for leased cars.

Health Insurance Marketplace: A resource where individuals, families, and small businesses can learn about their health coverage options; compare health insurance plans based on costs, benefits, and other important features; choose a plan; and enroll in coverage. The Marketplace also provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children’s Health Insurance Program (CHIP). The Marketplace encourages competition among private health plans, and is accessible through websites, call centers, and in-person assistance. The Health Insurance Marketplace is sometimes referred to as an exchange.

Health Maintenance Organization (HMO): an organization system for health care that provides comprehensive services directly to enrolled members for a fixed, periodic fee.

Hospice: a health care facility providing medical care and support services, such as counseling, to terminally ill people and their families.

Lapse: termination of a policy upon the policyholder’s failure to pay the premium when due.

Limited Policy: a contract which covers only certain specified diseases or accidents.

Medicaid: a joint state and federal program of public assistance to eligible people, regardless of age, whose income and resources are insufficient to pay for health care.

Medically Necessary: many insurance policies will only pay for treatment that is deemed “medically necessary.” For instance, many policies will not cover plastic surgery for cosmetic purposes. Ask your agent whether the company or physician determines medical necessity under the policy, and ask for examples of what is and is not considered medically necessary treatment.

Medicare: a federal program that provides health insurance benefits for people age 65 or older, or to those receiving Social Security benefits for disability, and those with end stage renal disease.

Miscellaneous Expenses also referred to as Ancillary Services or Special Services: 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).

Open Enrollment Period: Open enrollment refers to the period of time during which individual consumers and businesses have the opportunity to enroll in health insurance benefit programs. Open enrollment is generally only held once a year. If you miss the annual open enrollment, you likely will not be able to enroll in, or make changes to, a policy until the following year. Certain exceptions apply for new employees or employees with life changing events such as marriage/divorce or the birth/adoption of a child.

Policy: the legal document issued by the company to the policyholder which outlines the conditions and terms of the insurance. Also called the policy contract or contract.

Policy Term: that period for which an insurance policy provides coverage.

Pre-existing Condition: an ongoing or past health problem. A health insurance company can’t turn you down or charge you more because of your condition. Once you have insurance, the plan can’t refuse to cover treatment for pre-existing conditions. Coverage for your pre-existing conditions begins immediately. This is true even if you have been turned down or refused coverage due to a pre-existing condition in the past.

Preferred Provider Organization (PPO): is an arrangement where an insurance company or other carrier contracts with a group of health care providers who furnish services at lower than usual fees in return for prompt payment and a greater number of patients. Under these arrangements you may have to pay less in out-of-pocket expenses if you use the preferred provider.

Premium: the periodic dollar amount required to keep a policy in force.

Reasonable and Customary Charge: a charge for health care which is consistent with the ongoing rate or charge in a certain geographical area for identical or similar services.

Renewal and Premium Increase Provisions: explain the conditions under which your policy may be renewed or the premium may increase. The following terms are used to describe renewal provisions:

An optionally renewable policy is one that the insurance company may renew, or not renew, at its option at the end of the policy period. Premiums may also be increased by the company on any renewal date.

A conditionally renewable policy is one that the insurance company may renew if certain conditions are met. Some examples are your continued employment, or membership in a group sponsoring your health insurance, or your continuing residence in an HMO’s provider network. Premiums for a conditionally renewable policy may be increased on any renewal date.

A guaranteed renewable policy is one that will stay in force and continue to be renewed until you reach a specific age as long as you make the premium payments. Premiums for these policies may increase only if they are raised for all people within the same classification. They may not increase on an individual basis.

Rider: An attachment to an insurance policy that alters the policy’s coverage or terms.

Supplemental Insurance: a policy which provides benefits in addition to those payable under basic and major medical policies. Some examples are Medicare supplement insurance, hospital indemnity insurance and specified disease insurance.

Tax Penalty (related to the ACA): the fine levied on individuals who disregard the individual responsibility provision of the ACA (also known as the Individual Mandate). Learn more about the individual responsibility provision from the Internal Revenue Service.

Uninsured Motorist Coverage: Portion of an auto insurance policy that protects a policyholder from uninsured and hit-and-run drivers.

Waiting or Elimination Periods: the length of time that you must wait before coverage begins under your policy.


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