Glossary of Terms

Benefit – the amount the insurance company pays to the insured when the insured meets the policy requirements.

Beneficiary – the person(s) and/or business who receives the proceeds (benefit) as stated in the policy.

Business Loan Insurance – insurance to cover your loan obligation(s). It’s a secure and cost-effective way of ensuring that a business loan will never become a financial burden for your family or your firm.

Buy/Sell Agreement Insurance – insurance that provides the funds to ensure execution of the legal agreement between shareholders or business owners that allows for the smooth transfer of ownership upon the disability and/or death of a co-owner.

Certificate Holder – in group insurance, the sponsoring employer is the policy owner and the employees are certificate holders under the policy.

Critical Illness Insurance – a lump sum payment made to you after the diagnosis of a covered illness, such as heart attack, cancer, stroke, coronary bypass, multiple sclerosis, Alzheimer’s, Parkinson’s, organ transplant, paralysis, kidney failure, coma, blindness, severe burns, etc.

Disability Insurance – insurance that protects your biggest asset – your ability to earn an income. It provides a benefit if you can’t work due to illness and/or injury.

Employee Benefits – see Group Insurance

Extended Health Care (EHC) – provides coverage for health care expenses not covered by your provincial health care plan, such as prescription medications; paramedical services (chiropractor; physiotherapist; etc.); eye exams; ambulance services, etc.

Group Insurance – a compilation of benefits provided by an employer to their permanent full-time employees.

Income Replacement – see Disability Insurance

Insured – the individual covered by the policy.

Insurer – the insurance company.

Key Person Insurance – the insurance placed on a key employee (anyone associated with your business whose unique talents make a significant contribution to your bottom line) that will provide the necessary funds to hire and train his/her replacement, upon the death and/or disability of the insured employee.

Late Entrant – an employee who decides to participate in a group insurance plan after the mandatory waiting period has passed. These employees are subject to medical questionnaires for themselves and any dependents and may or may not be approved by the insurer. If approved, some benefits will be limited for the first 12 months.

Life Insurance – a lump sum benefit payable to your beneficiary upon your death.

Long-Term Care Insurance – insurance that provides you with coverage should you require long-term care in either a private facility or professional attention in the comfort of your own home.

Mortgage Insurance – see Life Insurance.

Non-Evidence Maximum (NEM) – the amount of benefit that the insurer guarantees without an employee completing any medical questionnaires. These limits are determined by the number of people in the group and the types of benefits taken and vary from insurer to insurer.

Office/Business Overhead Insurance – insurance that pays for eligible business expenses (rent, telephone, legal, accounting, vehicle, hydro, heat, taxes, etc.) during the period of an owner’s disability.

Plan Administrator – the individual responsible for making plan changes and who takes care of the day-to-day running of the plan for the insured company.

Policy Owner – the individual or company that owns the policy, not necessarily the insured.

Premium – the cost of insurance, often quoted as a monthly amount.

Salary Continuation Plan – see Disability Insurance.

Travel Insurance – insurance that is available for individuals or families for single or multi-trip annual plans that can be purchased as a stand-alone product or as a top-up to your employee group benefit plan’s coverage.

Waiting Period – the period of time before a permanent full-time employee is eligible for enrollment in the group insurance plan (ie: 3 months). This period varies dependent upon the policy set by the insured company.

Waiver/Waiving Coverage – is opting not to participate in the Extended Health Care and/or Dental coverage of the group benefit plan offered by your employer. This can only be done if you have coverage for the benefit(s) elsewhere (ie: through your spouse’s plan).

 

We’re always happy to answer any questions you may have. Contact us to talk with us about your specific requirements.