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Learning about insurance can be intimidating. Besides each plan having its exceptions, the industry is full of key terms and acronyms. We’ve compiled this glossary to give you an insider’s advantage when choosing your insurance plan.

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Click on a letter to locate a specific term.

AD&D: Accidental death and dismemberment

Loss of limb, eyesight, or life as a direct result of injuries to the body caused by violent, external, and unexpected factors.

Additional living expense coverage

ALE coverage is reimbursement for common expenses of the insured to help him or her maintain a standard of living experienced before a loss covered under a policy.

ADB: accelerated death benefit

Fixed life insurance benefits paid in advance, while the insured is still living, that decrease the benefit amount paid after his or her death.


The process insurance companies use to determine how much they’ll pay to healthcare providers after they receive a medical claim.

ADLs: activities of daily living

Basic movements people make every day without help to take care of personal needs, including getting in and out of bed, bathing, dressing, eating, controlling their bladder and bowels, and getting on and off the toilet.

Advance funeral planning

Planning one’s own funeral in advance, and sometimes paying for it, to relieve his or her loved ones from the emotional and financial burden.

Advance health care directive

Also referred to as a living will, this legal document lets others know one’s preferences for medical care and takes effect when someone is no longer able to speak for himself or herself.

AI: additional insured

A person or organization not originally included in an insurance policy but added by the insured.

Allowed amount

Also known as a recognized charge, negotiated rate, payment allowance, or eligible expense, this amount is the maximum payment an insurance plan will contribute for a covered health care service.

Ancillary services

Diagnostic, therapeutic, or custodial care that supplements the primary care of doctors, dentists, and nurses to help meet specific medical needs, such as pharmaceutical medicine, kidney dialysis, physical therapy, and nutrition education.


Funeral services provided by a funeral home at the time a person dies. The term is often used when differentiating it from preneed funeral service plans, which are prepared in advance.

Benefit duration

The window of time in which benefits will be paid by the insurance provider to an insured.

Benefit maximum

This is the most an insurance provider will provide the insured for health care benefits in a year or over a lifetime.

Benefit period

A consecutive number of days covered by an insurance policy during which a plan member can receive benefits for medical services.

Bereavement guilt

The remorseful reaction after losing a loved one that one has failed to live up to expectations to the deceased or the death.

Burial insurance

A Term Life or Whole Life insurance policy that pays benefits directly to the beneficiary to cover the cost of the insured’s funeral or cremation expenses upon his or her death.


A rectangular coffer that the deceased is placed in and then buried in the ground. Also referred to as a coffin.

Celebration of life

An informal gathering of friends and family where they can share stories and pay respect to the life of the deceased in a positive manner. 

Centers for Medicare & Medicaid Services (CMS)

A federal agency of the U.S. Department of Health and Human Services that provides affordable and accessible programs, information, and resources on patient-centered medical care.


This is the dollar amount, often shown as a percentage of the total medical service, that you are responsible for paying the health care provider after you’ve paid the plan’s deductible.

Conservation burial

A natural burial that goes a step further by also committing fees to pay for land acquisition, protection, restoration, and management.

Coordination of benefits (COB)

Insurance providers who cover the same person working together as primary and secondary payers to ensure benefits don’t exceed the amount of the claim.


An amount the insured pays each time he or she uses a medical service, such as a doctor’s office visit.

Coverage gap (Medicare)

Also known as a donut hole, this is a phase in Medicare Part D that temporarily limits coverage for prescription drugs after a fixed amount has been spent by the insured and Medicare.

Creditable coverage (Medicare)

Insurance coverage that pays on average as much as the standard prescription drug coverage of a Medicare Part D plan.


A deceased person’s cremated remains, also known as ashes.


The disposal of a deceased person’s body through burning it to ashes, oftentimes after a funeral ceremony has taken place.

Cremation funeral

A funeral service that can include any of the elements used in a traditional burial. This service can take place before or after cremation, and oftentimes, incorporates the burial of the cremated remains.

Custodial care

Temporary help with activities of daily living provided through ancillary services, ranging from bi-weekly in-home care to 24-hour nursing home care.

Death benefit

Also known as face amount, this is the payment a life insurance provider makes to a beneficiary when the insured policyholder passes away.

Deductible (Medicare)

The required amount, which can vary each year, paid by the insured for health care services or prescription drugs before Medicare payments begin.

Direct cremation

The process of cremating a deceased body within the days immediately following death and before a funeral service.

Dual eligibles (Medicare)

People who qualify for some level of help from both Medicare and Medicaid and are legally protected from cost-sharing and double charges.

Durable medical equipment (DME) (Medicare)

Assistive items, such as wheelchairs, walkers, and oxygen tanks, which are expected to last at least three years while being used regularly and repeatedly for activities of daily living in the home.

Eco-friendly caskets

Coffins made from a variety of materials that are not harmful to the environment and oftentimes are even biodegradable. Also known as biodegradable caskets.


Involves injecting a deceased body with fluids that are used to temporarily slow the body’s decomposition. This process is typically used to preserve the body for a public or open casket funeral.

Endowment care

Funds that cemeteries use to cover the costs of grounds and facilities maintenance.


The act of placing a deceased body or cremated remains into a burial chamber.

EOB: Explanation of Benefits

Provided by the insurance company, a detailed account of costs that are eligible for coverage after medical services have been completed.

EOI: Evidence of insurability

Medical and personal information that an insurance provider uses when deciding on coverage for an individual or group applying for health or life insurance. Also known as medical underwriting.

Estate planning

A plan made in advance that instructs who is entitled to an individual’s possessions after he or she dies.


A speech or piece of writing that positively reflects about someone who has died.

Final Expense insurance

An insurance plan that is used to cover funeral costs and additional expenses of the insured after they die.

Formulary (open, closed, preferred)

A list of generic and brand-name prescription drugs that are covered by a health plan and often include various cost-sharing tiers or levels. An open formulary has no limitations on medication access. A closed formulary is a limited list of drugs. A preferred formulary is a network of retail pharmacies that offer discounted prices for covered medications.

Funeral care

All of the services that a funeral home provides, such as planning the funeral service and preparing and transporting the body.

Funeral insurance

A life insurance policy that is used to cover the insured’s funeral, burial, and any final expenses they may leave behind.

Funeral procession

A motorcade or march of people after a funeral from the funeral home to the cemetery.

Funeral recession

A hymn sung at a funeral that represents the mourners saying goodbye to the deceased. It is also seen as a processional from the funeral service to the deceased’s final resting place.

Funeral service

A service that is held when the body of the deceased is present in a coffin with a burial immediately following.

Graveside service

A funeral service held at the deceased’s gravesite that can be a stand-alone event or follow a traditional funeral service.

Green burial

A burial in a green cemetery, where the body is not cremated or prepared with any embalming chemicals, but it is placed in a biodegradable casket and buried with the goal of complete decomposition of the body and the casket.

Green cemetery

A cemetery that does not use pesticides to maintain the property and none of the bodies have been embalmed or buried in a traditional casket.

Green cremation

An eco-friendly alternative to flame-based cremation that involves the use of water and potassium hydroxide to break down the body into bone ash.

Green funeral

A funeral service that incorporates environment-friendly alternatives to a typical U.S. funeral, such as not embalming or embalming with formaldehyde-free products, using recycled paper for programs, selecting locally grown organic flowers, or choosing a natural or green burial.

Guaranteed funeral plans

A guaranteed price contract where the cost of specific funeral services and products can never increase, regardless of inflation or price changes that may occur by the time the insured dies.

Guaranteed issue

The amount or size of a plan that someone automatically qualifies for without having to prove good health during the life insurance application process. Also known as guaranteed issue maximum.


An acronym for Health Insurance Portability and Accountability Act, a federal law passed by Congress in 1996 and administered by the U.S. Department of Health and Human Services that sets and regulates health information privacy and security standards.

Home care/home health care

Services, such as assistance with activities of daily living, that help people live independently without long-term care. Home care focuses on household chores and cleaning. Home health care focuses on medical services, such as skilled nursing, speech therapy, and occupational and physical therapy to help someone recover from an illness or injury.

IADLs: instrumental activities of daily living

Advanced skills in self-care, such as transportation, grocery shopping, meal preparation, home maintenance, housecleaning, taking medications, and financial management.

ID card

A source of information and proof of insurance for plan members, as well as service providers and insurance companies, with contact information and details of the insured’s plan coverage, benefits, and costs.

Indemnity plan

Traditional or fee-for-service plans offered by health insurance companies that pay fixed fees for specific medical services and procedures.

Initial coverage limit

A set amount covered by an insurance plan for prescription drugs after factoring in the copayment or coinsurance and the insured has paid the deductible.


The burial of a deceased person in a grave.

Lapse or lapse in coverage

The end of an insurance policy after the premium payment is no longer being made — intentionally or accidentally.

Lifetime maximum

The most money an insurance provider will pay for non-essential health care services while the insured is living.

Long-term care

Help with personal needs and activities of daily living at home, in the community, or in residential facilities, such as nursing homes, provided over an extended length of time and typically in the form of custodial care.


A health care assistance program administered by state governments according to federal requirements overseen by the Centers for Medicare & Medicaid Services that offers coverage to eligible low-income children, pregnant women, adults, the elderly, and people with disabilities.


The federal health insurance program that provides hospital insurance (Part A), medical insurance (Part B), Medicare Advantage plans (Part C), and prescription drug coverage (Part D) for people 65 years old and older, qualified people with disabilities, and people with end-stage renal disease.

Medicare Advantage

A Medicare Part C health plan contracted with a private company — with options in HMOs, PPOs, private indemnity plans, special needs plans, and Medicare medical savings account plans — to provide the same benefits as Medicare Parts A and B and some prescription drug coverage that’s included in Part D.

Medicare limiting charge

The most money health care providers who don’t accept the Medicare-approved amount as full payment can bill for applicable services, which don’t include supplies or equipment.


Medicare Supplement health insurance policies sold by private companies to help with some costs that aren’t covered by Medicare, such as copayments, coinsurance, deductibles, and even medical care received while traveling internationally.

Memorial service

A service that is held when the deceased is not physically present because the burial has already taken place, or the body has been cremated (with or without an urn present).


A business that provides funeral services for the deceased and their families. Also known as a funeral home or funeral parlor.

Natural burial

The burial of a deceased person directly in the ground in a manner that allows the body to decompose naturally. Embalming fluid, a casket, and a vault are not used.

Order of service

A program that is handed to funeral attendees and lists the elements and order of the funeral.

Out-of-pocket maximum

The most money the insured has to pay in a plan year for covered services, including copayments, coinsurance, and deductibles, but excluding monthly premiums.

Palliative care

Treatment for the relief of discomfort, symptoms, and stress caused by serious illness to help improve someone’s quality of life.

POD (payable on death) account

A bank account an individual deposits money into to cover funeral costs when he or she dies. It accumulates interest and is payable upon the individual’s death to a designated family member or friend to use for his or her funeral.


Under HIPAA, the legal right of an insured person to have the ability to keep certain benefits, such as health savings accounts and pension plans, when moving to a different employer.

PPO: Preferred Provider Organization

A managed-care organization of health care service providers contracted by an insurance company or third-party administrator to provide health insurance coverage and offer significant discounts in services to policyholders.


Also known as authorization, certification, prior authorization, or pre-service utilization review in Texas. This is approval of medical services before they’re received, establishing what the insurance provider is willing to pay for a specific procedure, treatment, or prescription drug without guaranteeing coverage.

Preneed Funeral insurance

Insurance that is purchased in advance at a funeral home. The individual who purchases it chooses the specific arrangements they desire for their funeral and pays the costs in a lump sum or in payments.


The process of planning a funeral in advance to ensure one’s wishes have been made known and to eliminate the need for family to make arrangements while mourning.

Respite care

Short-term relief, from a couple of hours to several weeks, for primary caregivers of people with chronic illness or disabilities.


An amendment to an insurance policy to add benefits or exclude coverage for a health condition, body part, or body system.


Special enrollment periods, also known as special election period, for people with a Medicare plan. Certain times or circumstances that allow a policyholder to amend his or her Medicare Advantage and Medicare prescription drug coverage plans.

Short-term care

Temporary treatment, from several weeks to a few months, after a surgery, injury, or illness to help it improve.

Skilled care

Direct, management, observation, and evaluation services provided by a medical professional, including nursing and rehabilitative care, such as physical, occupational, or speech therapy.

Term Life insurance

A life insurance policy that pays a benefit if the insured dies within a specified term.

Traditional funeral

The most common type of funeral in the United States that often includes a viewing ceremony one or two nights before the funeral service, which is usually held three to six days after the death.


A box made of concrete, plastic, or metal that encases a casket to protect it from the weight of the earth and cemetery maintenance equipment. It is similar to a grave liner, but a vault is sealed and lined, which better protects the casket from weather. Also known as a burial vault.


A designated time when family and friends are able to view the deceased and say their goodbyes before the burial.

Virtual companion care

Also known as attendant care, this is a method of using emerging technologies, such as animated people or animals, to provide non-medical health services — from help with activities of daily living to mental stimulation — for people who spend long periods of time on their own.


A period, typically one or two days before the funeral service, when family, friends, and colleagues come together to express sympathy to the family of the deceased with the body present either in an open or closed casket.


A social gathering usually held before the funeral service at the deceased’s house or a funeral home with the deceased body present.

Water cremation

An alternative to traditional burial or cremation based on alkaline hydrolysis that involves dissolving human remains in a chamber filled with water and lye. The process produces less carbon dioxide and pollutants than cremation. Also known as aquamation.

Explore and learn more

Wellabe offers life and supplemental health insurance plans to help you prepare for good days and bad. We’ll always be here to empower you to be well — well prepared, well protected, and well loved.


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