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Glossary of Insurance Terms

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Radiation Therapy: The use of ionizing radiation in the treatment of disease, usually cancer. These services are provided by a radiation therapies or a physician qualified in therapeutic radiology.

Rating Class: The appropriate price category to which an applicant qualifies according to an insurance company's underwriting guidelines. Common rate classes are Preferred Plus, Preferred, Standard Plus, Standard and Substandard.

Rate Banding: The process of grouping term life insurance death benefit amounts. The rate per thousand typically changes at certain death benefit levels or band breaks.

Rate Per Thousand: The price per unit (or US$ 1,000) of death benefit. Term life insurance premiums are calculated by multiplying the rates per thousand of death benefit, then adding the policy fee.

Rated Policy: A policy issued at a substandard rating class based on underwriting guidelines.

Reasonable and Customary Fee: The average fee charged by a particular type of health care practitioner within a geographic area.

Rebating: The act of gloving something of value to an applicant by the agent/broker in return for purchasing a life insurance policy (e.g. sharing commissions). Rebating is illegal in most states.

Re-Entry: A policy provision that allows an insured to renew their term life insurance policy at the end of the term based on their attained age and health status. Evidence of insurability is required for re-entry.

Referral: A recommendation by a physician and/or managed care plan for a covered person to be evaluated and/or treated by a different physician.

Reinstatement: A policy provision that allows a policy to be restored from a lapsed status. This is usually allowed during the 31 days following the expiration of an insurance policy's grace period.

Renewable Term Insurance: Term life insurance that may be renewed for another term without evidence of insurability.

Renewal: The process of continuing a policy by paying the premium due.

Replacement: The act of terminating a policy with an insurance company and replacing it with a new insurance policy. An internal replacement involves both policies from the same company while and external replacement involves two separate policies, each from a different insurance company. Replacement transactions are highly regulated for the benefit of consumer protection.

Replacement Form: A required form that must be completed if the applicant is replacing existing coverage. The replacement form notifies the existing insurer that the applicant is replacing their policy with a policy from another company.

Reserve: The amount of money an insurance company holds which, with future premiums and an assumed rate of interest, will pay all contractual obligations as they become due. Insurance company reserves are an important factor used to establish a company's industry ratings.

Respiratory Therapy: Treatment to preserve or improve lung function.

Revocable Beneficiary: A type of beneficiary designation that can be changed without the beneficiary's consent.

Rider: A special provision attached to a policy that either expands or restricts the benefits of the policy. Exclusion riders typically exclude certain conditions from coverage.

Ridered: A ridered insurance policy is one in which a specific condition is excluded from coverage.

Risk: The probability of injury, illness or death associated with an insured.

Risk Classification: The process by which underwriting determines the risk associated with an applicant and assigns an appropriate rating class to the policy.

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