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Glossary of Insurance Terms - M

Glossary of terms used in insurance - M

  1. Managed Care: A medical system that manages the quality and cost of services you receive. Most plans encourage PPO and HMO usage to their members. Some plans try to improve on health care facilities by encouraging prevention.
  2. Maximum Dollar Limit: This the maximum dollar amount your insurance company will pay as claims within a set period. Limits vary greatly. Limits might be set according to services or illnesses. They also vary according to time periods or lifetime.
  3. Medigap Insurance Policies: Insurance offered by private companies, not the governments. They are designed to pay for services not covered by Medicare or Medicaid.
  4. Multiple Employer Trust (MET): An association of small employers in the same industry who buy a group plan. They may also buy plans by self funding. These plans are usually cheaper than individual plans.
  5. Major Medical Insurance: An insurance plan that provides cover for a wide range of services, inpatient and outpatient. These are often plans which carry a high deductible.
  6. Medicaid: It is a health care programme which is provided by the state to people with very low incomes or people who have been disabled.
  7. Medicare: It is a federal provision for people over 65 years of age. It provides health insurance covering hospitalization, medical care and other facilities to people over 65.
  8. Medicare Advantage: The beneficiaries of Medicare were provided with this advantage in 1997. Through this provision, they could access their benefits through private health insurance providers.
  9. Medicare Part D: This was made available in 2006. People who are eligible under plans A or B are also eligible for plan d. A person must have a stand -alone prescription drug plan or Medicare Advantage Plan.
  10. Medicare Supplemental Insurance: This is the coverage provided to a Medicaid beneficiary to help him fill in the gaps in the insurance cover provided by Medicare.
  11. Maternity Care: The care provided to women before and after childbirth. It also includes the care of newborn babies.
  12. Medically Necessary: This term refers to the different equipment, procedures etc. required to treat or diagnose a medical condition. These should be necessary for the patient and not only convenient for him. It also refers to the services which are appropriate for the illness.
  13. Member: An individual who is covered by a plan. He may also be called a beneficiary or enrollee.
  14. Mental Health or Behavioral Health: The factors that affect the ability of a person to perceive things in a rational manner. Disorders can be recognized by changes in mood, agitated behavior and depression.
  15. Mental Health Parity Act: A federal health benefits law. It was passed in1996. It restricts companies from imposing lower lifetime benefits to patients with mental illness. The law is applicable to all group health plans.
  16. Master Policy: A health insurance policy given to an employer which establishes a group insurance plan for eligible members of a group.
  17. Maximum Out Of Pocket Costs: The maximum amount a member will pay per year as co payments, deductibles and co insurance.
  18. Medical Expense Insurance: Health insurance that covers costs incurred for medical care. This includes costs of physicians, nursing, hospital etc. It may also include services for diagnostics and preventions.
  19. Medical Insurance Bureau (MIB): A service that stores information on the health histories of applicants.
  20. Medical Savings Account (MSA): A personal savings account used together with a high deductible insurance plan to provide tax benefits. Individuals may put in the deductibles into the savings account and defer taxes. The amount is set aside for medical expenses.
  21. Minimum Group: The minimum number of members required to form a group for group insurance purposes.
  22. Miscellaneous Expenses: The expenses related to hospital insurance, other hospital charges like X rays and drugs. It also includes ancillary charges.
  23. Medical Loss Ratio: This is calculated by dividing total health benefits by total premium.
  24. Member Month: This refers to the total number of participants in a health plan in a particular month.
  25. Mortality and Expense Risk Fees: This is a charge covering annuity contract guarantees like death benefits etc.
  26. Mortgage Insurance Policy: This is a part of life and health insurance. It provides a guarantee to the holder of a mortgage that in the event of his death, his dues will be paid off.
  27. Mutual Insurance Companies: These are companies which have no capital stock. They are owned by the policy holders. The residual income of the company, after losses have been paid for and expenses accounted, belongs to the policy holders. There are two such types of companies-1) a non assessable mutual and (2) the assessable ones. The former charges a prefixed premium from the policy holders. The policy holders may be assessed further also. The companies maintain surplus and a legal reserve in order to meet claims when they arise. Assessable mutual funds initially charge a fixed premium. If the costs do not meet with the expectations, they assess policy holders to review premiums so as to fill in the gaps.
  28. Malpractice Insurance: This refers to liability coverage for lawyers, physicians and other specialists. The policy covers losses due to negligence or mistakes on the part of the professionals.
  29. Managed Care: This refers to an arrangement between the employer, or insurer and the providers to provide discounted health care to members of a group. The financing and delivery of the plans are also provided. This system uses medical protocols and usages taken up by medical professionals. The system is expected to be cost effective. They are also known as medical practice guidelines.
  30. Manual: This refers to a book published by a bonding company or an insurance company. It is also taken out by rating associations. They provide rates, differentiations and details on underwriting rules on the various plans offered by companies.
  31. Marine Insurance: This refers to coverage provided for goods in transit. It also covers the commercial vehicles that transport the goods on water or on land. It also applies to inland marine insurance. Covers include damage to a ship’s cargo and hull. Covers also include capsizing, fire, piracy and collision of ships. The covers exclude dampness, war, wear and tear and mould.
  32. Maturity Date: This refers to two aspects. (1) As regards endowments in insurance, it refers to the date on which the company will make payments to the owner of the policy, if he is still living at the time. (2) In the case of bonds, it refers to the date on which the original amount borrowed must be returned to the bond holder. (3) In case of an annuity, it refers to the date from which annuity payments begin. This is also referred to as income date.
  33. Mc Carran Ferguson Act: This is a law enacted in 1945. By this law, it was ensured that the state would continue to regulate the insurance industry. It also grants the insurance companies some exemptions from antitrust legislation.
  34. Mediation: This refers to a procedure which is not binding. In this procedure, a third party tries to solve a conflict between two parties.
  35. Medical Payments in Insurance: This is a coverage that provides reimbursements for certain costs incurred for treatment of injuries due to accidents etc. costs for funeral etc. are also reimbursed. There is a limit up to which the company reimburses the costs. The payments are made regardless of whether the insured was responsible for the injuries or not.
  36. Medical Utilization Review: This is a practice of insurance companies whereby they review claims made for medical treatment.
  37. Mine Subsidence Coverage: This is an endorsement of a homeowner’s policy. This facility is provided in certain states. It provides for coverage to a building where the land sinks into a mineshaft underneath. It is not a part of the standard policy given to homeowners. Other earth movements are also excluded from homeowners’ policies.
  38. Misstatement Of Age Or Sex Provision: This refers to an insurance plan, whether life, health or annuity, where a provision is made as to how benefits from policy will be affected if the age or sex of the insured is found to be misstated. They will usually reflect the payments that would have been made out to the corrected age or sex applicant.
  39. Modified Premium Policies: This refers to a premium policy where the insured pays a lower premium than he would for a comparative policy in the initial stages. He later on pays a higher premium than he would have paid for the same policy. It is the opposite of a level premium policy and single premium policies.
  40. Money Supply: This refers to the sum total of money currently circulating in the market. It includes the total currency in circulation as well as the savings in checking and savings accounts.
  41. Moral Hazard: This refers to the probability of a person acting in a dishonest manner in an insurance transaction.
  42. Morbidity Rate: This refers to the rate at which injuries and sicknesses may occur in a defined group. The insurance companies usually fix a premium rate reflecting the usual morbidity rate in the group.
  43. Mortality and Expense Risk Charge: This refers to a fee that covers annuity contract guarantees like death benefits.
  44. Mortality Rates: This is the percentage at which death occurs in a defined group of particular age and gender. The premiums for he plans are usually based on the prevalent mortality rates in the age group of the person to be insured. This is in contrast to the morbidity rate.
  45. Mortgages Guarantee Insurance: This refers to the coverage provided to a mortgage holder. This covers his payments in case the holder of the mortgage defaults on his payments. It is also referred to as private mortgage insurance.
  46. Mortgage Backed Securities: These are securities which are backed by a pool of mortgages. The interest payments on the bonds are made by using the cash flow from the mortgages.
  47. Multiple Peril Policy: This refers to a homeowners or business owners’ policy which provides coverage against different perils at the same time. It may also indicate the combination of liability and property coverage in a single policy. Previously, the covers for liability and property damage were purchased separately.
  48. Municipal Bond Insurance: These are covers that guarantee bondholders that timely interest payments will be made even if the bond issuer defaults on his payments. These policies are usually offered by companies which have very high credit ratings. This coverage raises the rating of the bond that is being offered. This facility allows the municipalities to raise money at comparatively lower rates. This is a type of financial guarantee insurance.
  49. Municipal Liability Insurance: This is a term covering liabilities for municipalities.
  50. Mutual Holding Company: This is a term for an organizational structure that provides municipal companies the opportunity to raise capital like stock insurers. At the same time, the policy holder ownership of the mutual is also maintained.

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