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Contract

A contract in insurance is the legally binding agreement between the policyholder and the insurance company that outlines the terms, conditions, and obligations of both parties. It specifies what coverage is provided, what benefits are payable, how premiums are calculated, and what exclusions or limitations apply. The insurance contract serves as the foundation for determining how claims are handled and what rights and responsibilities exist under the policy.

In health, dental, life, or disability insurance, the contract is typically made up of several key components: the application for insurance, the policy document, the schedule of benefits, and any riders or amendments. Together, these form the complete legal agreement. Once the insurer accepts the application and the first premium is paid, the contract takes effect and remains valid as long as premiums are paid and terms are met.

Example:

If you apply for a personal health insurance plan and the insurer issues a policy outlining your coverage for prescription drugs, dental care, and vision, that policy - along with your signed application - forms the insurance contract between you and the insurer.

What to Watch For:

Always read your contract carefully before signing or renewing coverage. It is a legal document, so terms such as exclusions, termination clauses, and renewal conditions are enforceable. Keep both the policy and any updates or endorsements together, as they collectively represent the full contract.

Related Terms

Calendar Year

The calendar year defines a benefit period that runs from January 1 to December 31. Many annual maximums, deductibles, and claim resets follow this schedule. It provides a consistent framework across most insurers and simplifies tax reporting for medical expenses.

Certificate of Insurance

A certificate of insurance is an official document issued by an insurance company that summarizes the key details of your coverage. It serves as proof that you are insured and outlines the essential terms of your policy, including the type of coverage, effective dates, benefit limits, exclusions, and any dependents or beneficiaries listed under the plan.

Claim

A claim is a formal request you or your healthcare provider submit to your insurance company to receive reimbursement or direct payment for eligible medical or dental expenses covered under your plan. Submitting a claim provides the insurer with the necessary information - such as receipts, treatment details, and provider information - to verify the service and determine the amount payable according to your policy’s terms.

Claim Submission Deadline

The claim submission deadline is the final date by which an insured person must submit a claim to their insurance company for reimbursement of eligible expenses. After this date, the insurer is not obligated to pay the claim, even if the expense itself would have been covered. This deadline ensures timely processing, accurate recordkeeping, and proper financial reporting for both the insurer and the policyholder.

Claimant

A claimant is the person who submits a request for reimbursement or payment under an insurance policy. In health and dental insurance, the claimant is usually the insured individual who received the service, such as a medical treatment, prescription, or dental procedure. However, a claimant can also be a parent, spouse, or legal guardian submitting a claim on behalf of a covered dependent.

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