Coverage

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Coverage

Coverage

1. The specific insured events for which an insurance company will pay a benefit. For example, a life insurance policy provides coverage in the event of death. Likewise, a health insurance policy provides money in the event of illness. Generally speaking, an insurance policy outlines what it covers and the benefits it provides under different circumstances.

2. A measure of a company's ability to pay its fixed liabilities. It is calculated by determining by subtracting its fixed payments from its operating income. High coverage indicates that the company can easily make its payments and indeed is able to set funds aside to do so in the event its income declines. Low coverage means that the company can make its payments but that it has less flexibility in doing so. A negative number indicates that the company cannot pay its fixed liabilities. The payments included in this calculation are lease payments, dividends on preferred stock, and debt service. It is also called fixed-charge coverage.
References in periodicals archive ?
QHP issuers that offer coverage during the 2014 coverage year will be required to participate in the beta test of the Quality Rating System in 2015.
Insurance coverage year guarantee for 10 years and guarantees insurance coverage Roofing and facades for 3 years.
Often employees fail to take steps to evaluate their personal life insurance needs and simply maintain the same amount of life insurance coverage year to year - receiving only basic employer-paid coverage," said Todd Katz, vice president of MetLife's Institutional Business.
Other new contracts are likely before the new coverage year begins January 1, 2005.
Most people give very little thought to their group life insurance benefits - simply maintaining the same level of life insurance coverage year after year.
The policy also provides "No Cost Loans" after the tenth coverage year, 50 basis points of additional interest in years 11 through 20 and one percent of additional interest each year after the 20th year.