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What is term life insurance?

What is whole life insurance?

What is an annuity?


How do you stay up to date with the latest changes and new plans in the ever changing insurance marketplace?
Our brokers are licensed and regulated by the Virginia Department of Insurance.  Continuing Education classes are only part of their efforts to stay on top of the latest developments in insurance law and application.  They also take part in seminars, educational workshops and up to the minute briefings by professional organizations, such as the National Association of Health Underwriters (NAHU), as well as training provided by the companies with which we do business.  Furthermore, they consult professional magazines and newsletters to stay apprised of marketplace developments and trends.

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What is a deductible?
A health insurance deductible is the amount of the loss, which the insured person must pay out of pocket for a covered expense before the insurance company will pay any compensation.  Such deductibles, for instance $500, must be sustained and paid by you each plan year before the insurance carrier is responsible for any covered medical expenses. Keep in mind that expenses that are not covered by your health insurance policy do not count toward your deductible.

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What is a copayment?
A copayment is a partial payment the insured is required to pay for certain medical services, for instance a physician office visit or a prescription drug.  Co-pay fees are usually listed on the insured’s participant ID card. 

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What is reasonable and customary?
Insurance companies often pay claims based on the “usual & customary“ fee charged by medical providers in a geographic area for a particular service.  The fee is based on what most other hospitals, labs or physicians in a pre-determined geographic area are charging for similar services/procedures.

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What is the difference between Fee for Service and Managed Care Plans?

Fee for Service plans also known as Indemnity Plans and Managed Care plans differ in their basic approach. Put broadly, the major differences concern choice of providers, out-of-pocket costs for covered services, and how bills are paid. Usually, indemnity plans offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans. Indemnity plans pay their share of the costs of a service only after they receive a bill.
Managed Care plans have agreements with certain doctors, hospitals, and health care providers to give a range of services to plan members at reduced cost. In general, you will have less paperwork and lower out-of-pocket costs if you select a managed care type plan and a broader choice of health care providers if you select an indemnity-type plan.

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Besides indemnity plans, there are basically three types of managed care plans: PPOs, HMOs, and POS plans:

Fee For Service (Indemnity Plan):
With an indemnity plan (sometimes called fee-for-service), you can use any medical provider (such as a doctor and hospital). You or they send the bill to the insurance company, which pays part of it. Usually, you have a deductible—such as $200—to pay each year before the insurer starts paying.
Once you meet the deductible, most indemnity plans pay a percentage of what they consider the "Usual and Customary" charge for covered services. The insurer generally pays 80 percent of the Usual and Customary costs and you pay the other 20 percent, which is known as coinsurance. If the provider charges more than the Usual and Customary rates, you will have to pay both the coinsurance and the difference.
The plan will pay for charges for medical tests and prescriptions as well as from doctors and hospitals. It may not pay for some preventive care, like checkups.

Managed Care:
Preferred Provider Organization (PPO)
A PPO is a form of managed care closest to an indemnity plan. A PPO has arrangements with doctors, hospitals, and other providers of care who have agreed to accept lower fees from the insurer for their services. As a result, your cost sharing should be lower than if you go outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan.
If you go to a doctor within the PPO network, you will pay a copayment.  Your coinsurance will be based on lower charges for PPO members.
If you choose to go outside the network, you will have to meet the deductible and pay coinsurance based on higher charges. In addition, you may have to pay the difference between what the provider charges and what the plan will pay.

Health Maintenance Organization (HMO)
HMOs are the oldest form of managed care plans. HMOs offer members a range of health benefits, including preventive care, for a set monthly fee. There are many kinds of HMOs. If doctors are employees of the health plan and you visit them at central medical offices or clinics, it is a staff or group model HMO. Other HMOs contract with physician groups or individual doctors who have private offices. These are called individual practice associations (IPAs) or networks.
HMOs will give you a list of doctors from which to choose a primary care doctor. This doctor coordinates your care, which means that generally you must contact him or her to be referred to a specialist.

With some HMOs, you will pay nothing when you visit doctors. With other HMOs there may be a copayment, like $5 or $10, for various services.

If you belong to an HMO, the plan only covers the cost of charges for doctors in that HMO. If you go outside the HMO, you will pay the bill. This is not the case with point-of-service plans.

Point-of-Service (POS) Plan
Many HMOs offer an indemnity-type option known as a POS plan. The primary care doctors in a POS plan usually make referrals to other providers in the plan. But in a POS plan, members can refer themselves outside the plan and still get some coverage.
If the doctor makes a referral out of the network, the plan pays all or most of the bill. If you refer yourself to a provider outside the network and the service is covered by the plan, you will have to pay coinsurance.

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What is a preexisting condition?
This is normally a physical or mental condition for which medical advice, diagnosis, care or treatment is recommended or received before the effective date of the policy. The definition can vary from policy to policy.

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What is a Certificate of Creditable Coverage?
A document provided by your health plan that lets you prove you had coverage under that plan. Certificates of creditable coverage will usually be provided automatically when you leave a health plan. You can obtain certificates at other times as well.

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What is a Primary Care Physician (PCP)?

Your primary care doctor will serve as your regular doctor, managing your care and working with you to make most of the medical decisions about your care as a patient. In many plans, care by specialists is only paid for if you are referred by your primary care doctor.

An HMO or a POS plan will provide you with a list of doctors from which you will choose your primary care doctor (usually a family physician, internists, obstetrician-gynecologist, or pediatrician). This could mean you might have to choose a new primary care doctor if your current one does not belong to the plan.

PPOs allow members to use primary care doctors outside the PPO network (at a higher cost). Indemnity plans allow any doctor to be used.

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Can my employer change our health insurance carrier and level of benefits during the year?
Yes. It is completely up to the employer whether or not they will offer health insurance to employees at all and they can change carriers and level of benefits at any time.

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Does the Waiting Period required by an employer before an employee becomes eligible for health insurance count toward the preexisting condition exclusion period?
Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous. If your employer requires a waiting period, your preexisting condition exclusion period begins on the first day of the waiting period. See also Preexisting Condition Exclusion Period.

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What happens when my group health coverage ends?
You can apply for individual health coverage under the federal law Health Insurance Portability and Accountability Act (HIPAA). This type of policy is issued on a guaranteed issue basis if you meet the qualifying criteria. However, there is no limit on the maximum premium the company can charge. Preexisting conditions are waived.

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Can health insurance companies deny an application for individual insurance due to a health condition?
Yes, the company has the right to deny coverage for almost any reason on a new application.  However, once you are accepted for coverage, your policy can only be terminated for one of two reasons. The company can cancel your policy if you fail to pay your premiums in a timely manner. If you misrepresent information on the application or fail to disclose known information, the company may rescind the policy for material misrepresentation.

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What is term life insurance?
Term insurance provides protection for a specified period of time; a term of 1, 5, 10 or 20 years or up to age 65 is available. This type of policy only pays a benefit if you die during the policy term. Term insurance does not build cash value. If you stop paying your premium, the insurance expires. This insurance generally is less expensive than other types of life insurance.

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What is whole life insurance?
Whole life insurance is meant to be kept in force throughout your entire life. An important feature of whole life insurance is the accumulation of cash value. The cash value is the cash available to borrow against the policy, or the value of the policy paid to the policy owner when the contract is surrendered before maturity. Any withdrawal of cash value is treated as a policy loan and interest accumulates based on the loan amount. If you do not pay back the loan, the death benefit is reduced by the outstanding loan amount.

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What is an annuity?
An annuity pays a monthly (or quarterly, semi-annual, or annual) income benefit for the life of a person or for a specified period of time. The annuitant (insured) can never outlive the income from the annuity. While the basic purpose of life insurance is to provide an income for a beneficiary at the death of the insured, the annuity is intended to provide an income for the life of the annuitant.
There are two basic types of annuities, fixed annuities, which pay a fixed income backed by fixed dollar investment such as secure bonds and mortgages, and variable annuities, which vary in payment according to the value of stock and bond investments.

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If you need assistance or would like additional info, please use the links to the left. 


* For carrier disclaimers, please visit our "Disclaimers" page

IMPORTANT NOTE:  The information contained in this website is not offered as legal, accounting or other professional advice, but is intended as a general resource.  It does not address your specific circumstances, which you should have evaluated by a qualified insurance professional. Not all coverage types are available in all states.


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