System for rating substandard insurance risks that is used when the extra risk is constant. Usually it is a specific extra premium for each $1,000 of insurance coverage.

Payment of one fee to a provider to cover all services related to a patient’s treatment based on diagnosis (episode of care) or presenting problems. Also called bundled rate or case rate .

Mathematical method used to determine the retirement benefit for participants in a defined benefit pension plan (DBPP). This type of formula gives each participant a specific percentage of preretirement compensation (e.g., 65%). The amount that is paid using this formula is dependent on how compensation is defined.

Managed care plan offered by an employer to his or her employees that allows them to select the type and amount of benefits from among options the employer offers. It also allows employees to make contributions required for their choice of benefits with before-tax dollars. Also called cafeteria plan, flexible benefit option, flex plan , or flexible compensation .

Type of deferred annuity investment contract that gives the buyer the ability to vary the amount of each premium payment to the insurance company during the accumulation period.