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Glossary of Insurance Terms - D

Glossary of terms used in insurance - D

  1. Deductible: This is the amount an enrolling member has to pay before the insurance kicks in. the amounts are usually calculated on a yearly basis.
  2. Denial of Claim: This is a refusal by an insurance company to pay for services availed of from a health care provider.
  3. Dependant Worker: A person living in a family where at least one member has a higher income.
  4. Dependants: A legal spouse or unmarried children (natural, adopted or step children) of an insured person.
  5. Day Treatment Centre: This is an outpatient psychiatric centre. It provides outpatient care and treatment to patients with mental diseases or nervous disorders. It also provides service to patients with substance abuse problems.
  6. Dental Care: When undertaken as part of a medical plan, it refers to dental treatment undertaken in a hospital setting.
  7. Diagnosis Code: A classification describing illnesses, diseases and factors of death. International morbidity code and AMA standard nomenclature of disease are different diagnosis codes.
  8. Diagnosis Related Groups: A method of combining related diagnosis and treatment. It is a coding system that helps in outlining the Medicare reimbursements for inpatient services.
  9. Diagnostic Tests: Procedures and tests asked for by a doctor to determine the cause behind certain symptoms demonstrated by a patient. It includes laboratory, pathology and other tests.
  10. Discharge Planning: Assessing the treatment of a person to fix a discharge plan for him. The attending physician has the most important role in this. The plan just promotes and monitors the providers.
  11. Disease Management Programme: Educational and motivational programmes undertaken to prevent recurrence of certain symptoms in patients. This may include pharmaceutical care, practice guidelines etc.
  12. Disability: A physical or mental condition preventing a person from leading a normal life. The condition may be partial or total.
  13. Drug Formulary: A list of drugs which are covered by the insurance policy.
  14. Durable Medical Instrument (DME): Medical equipment used for treatment or homecare. These may include wheel chairs, hospital beds, hospital beds etc.
  15. Discount Dental Plan: This is not really an insurance plan. It just provides discounts on certain items of dental services. The discounts are between 40-60%.
  16. Death Benefit: This is a certain amount of money that will be paid as benefit on the expiry of the covered person. For an annuity contract, it refers to the payments made to the contract owner if he dies before the start of payments.
  17. Developed To Net Premiums Earned: This is the ratio of premiums developed to the net earned premiums. It basically measures whether premium growths are in line with the company’s loss reserves.
  18. Direct Writer: This refers to an insurer whose mechanism of distribution is either the exclusive agency or the direct selling system.
  19. Declaration: This is a part of a liability or property insurance stating the name and address of the policy holder. It may also contain the details of the property insured, its description and its location. It is also known as “dec page”.
  20. Deferred Annuity: These are types of annuity contracts that are also called investment annuities .They are bought either with periodic tax deferred premiums over a period of time or as a one time tax deferred premium. The payments starts at a predetermined time foe e.g. at retirement. It is mainly intended to let the money grow for future convenience.
  21. Declined Risk Class: In the language of insurance, it is a class whose health or mortality risks are so high that the company cannot offer them insurance at an affordable cost. They are also known as the class of uninsurable. Therefore, they are the opposite of preferred risk classes and standard risk classes.
  22. Decreasing Term Life Insurance: This is a term life insurance whose benefits go down with the policy term. This is the opposite of an increasing term life insurance.
  23. Defined Benefit Plan: This is basically a retirement plan with a predetermined rate of pension. The pension is usually calculated according to the years of service to the company and a percentage of the wages earned.
  24. Defined Contribution Plan: In this system, the employer sets up a benefits account. Both the employer and the employee contribute to the account. Their contributions are usually similar in amount.
  25. Demand Deposit: These refer to the customer assets held in a checking account. This is so called because funds can be withdrawn on demand.
  26. Demutualization: The transformation of an insurance company from a mutual company to a publicly traded stock company. In the previous case, the owners would by the policy holders and in the latter case, they are owned by people owning the stocks.
  27. Depository Institution: These are financial institutions which mainly get their funding through deposits by the public. They include savings and loan associations, credit institutions and commercial banks.
  28. Deregulation: The reduction of regulatory control over insurance rates and forms is called deregulation.
  29. Difference in Conditions: These are policies which are taken up to fill in gaps in the coverage of a business’ property insurance.
  30. Diminution of Value: This refers to the concept that a vehicle’s value diminishes after it has been damaged.
  31. Direct Premium: These are the casualty or property premiums that are collected from policy holders before the deduction of reinsurance premiums.
  32. Direct Response / Direct Sales: This is the method by which insurance is sold directly to the people through the employees of the company, by telephone, through the internet or through mail. The method excludes the usage of exclusive agents.
  33. Directors’ And Officers’ Liability Insurance (D&O): This policy covers the directors and officers of a company. The cover is provided against negligent acts and misleading statements resulting in legal cases against the company. Many coverage plans are available. There are side A coverages and entity coverages. The policies may be widened to include employment practices liabilities also.
  34. Disability Income Insurance: This is a type of insurance which is designed to provide a person with a portion of his income lost due to a disability or physical injury. Payments are made either on a monthly or weekly basis.
  35. Dividend: This refers to the money given to the policy holders of an insurance company from the earnings of the company. Dividends are paid by both insurance companies and property/ casualty policies. The latter pays it to the owners. The life insurance companies which pay dividends are referred to as participating policies.
  36. Domestic Insurance Company: This refers to a company that is incorporated in the state.
  37. Double Indemnity Benefit: This is actually a accidental death benefit. The amount is equal to the face value of a life insurance policy’s death benefit. It is paid when the death is due to an accident.


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