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PACKAGE POLICY
A single insurance policy that combines several coverages previously sold separately. Examples include homeowners insurance and commercial multiple peril insurance.

PAID CLAIMS
The total claims payment made by the plan or insurance company. It does not include any employee cost sharing or provider discounts.

PAID-UP ADDITIONAL INSURANCE OPTION
An option, available to the owners of participating life insurance policies, that allows the policy owner to use policy dividends to purchase additional insurance on the insured’s life; the paid-up additional insurance is issued on the same plan as the basic policy and in whatever face amount the dividend can provide at the insured’s attained age. (See Dividend, Participating policy, Policy dividend options )

PAID-UP POLICY
An insurance policy that requires no further premium payments but continues to provide coverage.

PARTIAL CAPITATION RISK CONTRACTS
State Medicaid contracts with HMOs or similar managed care organizations that accept risk for a defined set of services (for example, physician services and laboratory, x-ray, or clinic services). Other services are reimbursed on a fee-for-services basis.

PARTIAL DISABILITY
See Residual disability

PARTICIPATING POLICY
A type of insurance policy that allows policy owners to receive policy dividends. Also known as par policy. (See Dividend )

PARTICIPATING PROVIDER
A provider who has agreed to contract with a managed care program to provide eligible services to covered persons.

PAY-AT-THE-PUMP
A system proposed in the 1990s in which auto insurance premiums would be paid to state governments through a per-gallon surcharge on gasoline.

PAYOUT OPTIONS
The methods available to an annuity contract owner for the distribution of the annuity’s accumulated value. (1) The lump sum distribution method allows the contract owner to receive the balance of his account in a single payment. (2) The fixed period option provides that the annuity’s accumulated value will be paid out over a specified period of time. (3) The fixedamount option provides that the annuity’s accumulated value will be paid out in a pre-selected payment amount until the accumulated value is exhausted. (4) A life annuity option provides that periodic income payments will be tied in some manner to the life expectancy of a named individual. (See Life annuity )

PENSION BENEFIT GUARANTY CORPORATION
An independent federal government agency that administers the Pension Plan Termination Insurance program to ensure that vested benefits of employees whose pension plans are being terminated are paid when they come due. Only defined benefit plans are covered. Benefits are paid up to certain limits.

PENSIONS
Programs to provide employees with retirement income after they meet minimum age and service requirements. Life insurers hold some of these funds. Since the 1970s responsibility for funding retirement has increasingly shifted from employers (defined benefit plans that promise workers a specific retirement income) to employees (defined contribution plans financed by employees that may or may not be matched by employer contributions). (See Defined benefit plan, Defined contribution plan )

PER CAPITA BENEFICIARY DESIGNATION
A type of life insurance policy beneficiary designation in which the life insurance benefits are divided equally among the designated beneficiaries who survive the insured. For example, if the policy specifies two beneficiaries, but only one is surviving at the time of the insured’s death, then the remaining beneficiary receives the entire policy benefit. Contrast with per stirpes beneficiary designation.

PER DIEM
Literally, per day. Term that is applied to determining costs for one day of care. It is an average cost and does not reflect true cost for each patient.

PER MEMBER PER MONTH (PMPM)
Computational designation for each enrollee in a managed care program.

PER REVIEW
Traditional quality assurance program to monitor standard processes of care or adverse outcomes of provider practice by other professional peers. The goal of peer review is to find and correct medical practices that do not conform to the standard processes of care.

PER STIRPES BENEFICIARY DESIGNATION
A type of life insurance policy beneficiary designation in which the life insurance benefits are divided among a class of beneficiaries; for example, children of the insured. The living members of the class and the descendants of any deceased members of the class share in the benefits equally. Contrast with per capita beneficiary designation.

PERIL
A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded.

PERIOD CERTAIN
The stated period over which an insurer makes periodic benefit payments under an annuity certain. (See Annuity certain )

PERSONAL ARTICLES FLOATER
A policy or an addition to a policy used to cover personal valuables, like jewelry or furs.

PERSONAL CARE ADVOCATE
A representative of the nursing facility resident who reviews care, address concerns, and provides advocacy support for a patient and his or her family.

PERSONAL INJURY PROTECTION COVERAGE / PIP
Portion of an auto insurance policy that covers the treatment of injuries to the driver and passengers of the policyholder’s car.

PERSONAL LINES
Property/casualty insurance products that are designed for and bought by individuals, including homeowners and automobile policies. (See Commercial lines )

PHYSICIAN-HOSPTIAL ORGANIZATION (PHO)
Group practice arrangement that occurs when hospitals and physicians organize for purposes of contracting with managed care organizations. These relationships are formally organized, contractual, or corporate in character and include physicians outside the boundaries of a hospital's medical staff.

PLAN OF CARE
Also known as Home Care Plan. It is the result of an assessment; a program for providing home care services. In most policies, a physician and the multi-disciplinary team will prepare such a program. It will be appropriate for the level of care needed for the physician's diagnosis. All long term care policies qualifying under California Senate Bill 1943 require plans of care.

PLAY OR PAY
A concept that would require employers to provide health insurance to their employees and dependents (play) or pay a tax or premium toward a publicly provided system that covers people without private insurance (pay).

POINT OF SERVICE PLANS (POS)
Combination of HMO and PPO features. They provide a comprehensive set of health benefits and offer a full range of health services much the same as the HMO. However, the member does not have to choose how to receive services until they need them. The member can then opt to use the defined managed care program, or can go out-of-plan for services but pay the difference for non-plan benefits (e.g. 100 percent coverage for managed care Vs. 80 percent coverage out-of-plan).

POLICY
A written contract for insurance between an insurance company and policyholder stating details of coverage.

POLICY DIVIDEND OPTIONS
Ways in which the owner of a participating insurance policy may receive policy dividends. (See Additional term insurance option, Cash dividend option, Dividend accumulations option, Paid-up additional insurance option, Premium reduction option )

POLICYHOLDERS' SURPLUS
The amount of money remaining after an insurer’s liabilities are subtracted from its assets. It acts as a financial cushion above and beyond reserves, protecting policyholders against an unexpected or catastrophic situation.

POLITICAL RISK INSURANCE
Coverage for businesses operating abroad against loss due to political upheaval such as war, revolution, or confiscation of property.

POLLUTION INSURANCE
Policies that cover property loss and liability arising from pollution-related damages, for sites that have been inspected and found uncontaminated. It is usually written on a claims-made basis so policies pay only claims presented during the term of the policy or within a specified time frame after the policy expires. (See Claims-made policy)

POOL (ING)
Used by insurance companies to combine all premiums, claims and expenses in order to spread the risk of insurance coverage. This process ensures that small employers will not be singled out and unfairly assessed with a large rate increase due to unanticipated medical catastrophic claims of insured employee(s).

PORTABILITY
Provides access to continuous health insurance coverage so the insured does not lose coverage due to any change in health or personal status (such as employment, marriage, or divorce).

PRACTICE GUIDELINES
Specific, professionally agreed upon recommendation for medical practice used within health care organizations to standardize the practice to achieve consistent quality outcomes. Practice guidelines may be instituted when triggered by specific clinical indicators.

PRE-AUTHORIZATION
Previous approval required for referral to a specialist or non-emergency health care services.

PRE-CERTIFICATION
Utilization management program that requires the individual or provider to notify the insurer before hospitalization or surgical procedure. Notification allows the insurer to authorize payment and to recommend alternate courses of action.

PRE-EXISTING CONDITION
A condition or diagnosis which existed (or for which treatment was received) before coverage began under a current plan or insurance contract, and for which benefits are not available or are limited.

PRE-EXISTING CONDITION CLAUSE
A clause in an insurance contract or plan that specifies if benefits will or will not be paid for a pre-existing condition. (Example: "the insured must be covered by the plan for a certain period of time or have gone a certain amount of time without any treatment.") Additionally, the clause may limit the benefit payable for treatment of pre existing conditions until a certain time period of coverage has elapsed, usually six months to a year.

PREFERRED PROVIDER ORGANIZATION
Network of medical providers which charge on a fee-for-service basis, but are paid on a negotiated, discounted fee schedule.

PREFERRED RISK CLASS
In insurance underwriting, the group of proposed insureds who represent a significantly lower than average likelihood of loss within the context of the insurer’s underwriting practices. Contrast with declined risk class, standard risk class and substandard risk class.

PREMISES
The particular location of the property or a portion of it as designated in an insurance policy.

PREMIUM
The price of an insurance policy, typically charged annually or semiannually. (See Direct premiums, Earned premium, Unearned premium )

PREMIUM REDUCTION OPTION
An option, available to the owners of participating insurance policies, that allows the insurer to apply policy dividends toward the payment of renewal premiums. (See Dividend, Policy dividend options )

PREMIUM TAX
A state tax on premiums paid by its residents and businesses and collected by insurers.

PREMIUMS IN FORCE
The sum of the face amounts, plus dividend additions, of life insurance policies outstanding at a given time.

PREMIUMS WRITTEN
The total premiums on all policies written by an insurer during a specified period of time, regardless of what portions have been earned. Net premiums written are premiums written after reinsurance transactions.

PREPAID GROUP PRACTICE
A type of HMO plan where participating providers render specific services to the insured in exchange for an advance fixed patient.

PREVAILING CHARGES
Amounts charged by health care providers that are consistent with charges from similar providers for identical or similar services in a given locale.

PREVENTIVE MEDICINE
Wellness and health promotion services that are part of the basic benefits package of a managed health care plan.

PRIMARY BENEFICIARY
The party designated to receive the proceeds of a life insurance policy following the death of the insured. Also known as first beneficiary. (See Contingent beneficiary)

PRIMARY CARE
Non-specialist, basic routine medical care provided by family physician

PRIMARY CARE CASE MANAGEMENT
Single provider is responsible for coordinating, arranging, and monitoring all patient care, even for those patients with no serious medical conditions.

PRIMARY CARE PHYSICIAN (PCP)
Primary deliverers and managers of health care, central to controlling costs and utilization. The PCP provides basic care to the enrollee, initiates referrals to a specialist, and provides follow-up care. Refers exclusively to other contracted providers and admits patients only to contracted hospitals. Usually defined as a physician practicing in such areas as internal medicine, family practice, and pediatrics.

PRIMARY COMPANY
In a reinsurance transaction, the insurance company that is reinsured.

PRIMARY MARKET
Market for new issue securities where the proceeds go directly to the issuer.

PRIME RATE
Interest rate that banks charge to their most creditworthy customers. Banks set this rate according to their cost of funds and market forces.

PRIOR APPROVAL STATES
States where insurance companies must file proposed rate changes with state regulators, and gain approval before they can go into effect.

PRIVATE MORTGAGE INSURANCE
See Mortgage guarantee insurance

PRIVATE PLACEMENT
Securities that are not registered with the Securities and Exchange Commission and are sold directly to investors.

PRODUCT LIABILITY
A section of tort law that determines who may sue and who may be sued for damages when a defective product injures someone. No uniform federal laws guide manufacturer’s liability, but under strict liability, the injured party can hold the manufacturer responsible for damages without the need to prove negligence or fault.

PRODUCT LIABILITY INSURANCE
Protects manufacturers’ and distributors’ exposure to lawsuits by people who have sustained bodily injury or property damage through the use of the product.

PROFESSIONAL LIABILITY INSURANCE
Covers professionals for negligence and errors or omissions that injure their clients.

PROFILING
Systematic method of collecting, collating, and analyzing patient data to develop provider-specific information about medical practice.

PROOF OF LOSS
Documents showing the insurance company that a loss occurred.

PROPERTY/CASUALTY INSURANCE
Covers damage to or loss of policyholders’ property and legal liability for damages caused to other people or their property. Property/casualty insurance, which includes auto, homeowners and commercial insurance, is one segment of the insurance industry. The other sector is life/health. Outside the United States, property/casualty insurance is referred to as nonlife or general insurance.

PROPERTY/CASUALTY INSURANCE CYCLE
Industry business cycle with recurrent periods of hard and soft market conditions. In the 1950s and 1960s, cycles were regular with three year periods each of hard and soft market conditions in almost all lines of property/casualty insurance. Since then they have been less regular and less frequent.

PROPOSITION 103
A November 1988 California ballot initiative that called for a statewide auto insurance rate rollback and for rates to be based more on driving records and less on geographical location. The initiative changed many aspects of the state’s insurance system and was the subject of lawsuits for more than a decade.

PROSPECTIVE REVIEW
Data-gathering technique that uses projected figures or current data to determine future costs or services.

PROTOCOL
Tool for enhancing quality in a health care organization by developing customary methods for medical interventions. Treatment protocols are developed for clinical areas of medicine where diagnostic or therapeutic approaches are defined. Technology assessment and quality studies are used to establish decision protocols for particular diseases or treatments.

PROVIDERS
Term used to describe medical professionals and services organizations that provide health care services.

PURCHASING GROUP
An entity that offers insurance to groups of similar businesses with similar exposures to risk.

PURE ENDOWMENT
A life insurance contract that pays a periodic income benefit for the life of the owner of the annuity. The payment can be monthly, quarterly, semiannually or annually.

PURE LIFE ANNUITY
A form of annuity that ends payments when the annuitant dies. Payments may be fixed or variable.