Accident/Health Policy Clauses Flashcards
Renewable at Insurer’s Option
Insurer is not obligated to renew the policyholder or keep premiums the same if person becomes ill
Renewable at insurer’s option cannot be cancelled for…
Bad health during the policy period
Conditionally Renewable
Insurer can’t non-renew due to health but might non-renew for other changes in the person’s level of risk
Guaranteed Renewable
Policyholder can renew and can’t be charged more at renewal due to personal health
Where is guaranteed renewable most common?
Medical insurance
Can increases happen in guaranteed renewable?
Yes, non-discriminatory
Non-cancelable
Policyholder can renew and can’t be charged more for any reason unless increases were specifically scheduled in the policy language
Where is non-cancelable possible?
Disability insurance and valued policies
Some products might only be guaranteed renewable or non-cancelable until when?
Certain age, typically 65
Probationary Period: Individual
Might delay coverage for illness (not accidents) for 15 or 30 days after policy issued
Probationary Period: Group
Might delay the ability to enroll in a group plan for one or several months
Mandatory Provisions
Must appear in all accident/health policies sold to individuals
Mandatory Provisions protect…
Consumers
Optional Provisions
Don’t need to be included but, when used, can’t be less consumer-friendly than set by law
Optional provisions protect…
Insurers
Entire Contract is what kind of provision?
Mandatory
Contract between consumer and insurer consists only of…
Policy, application, and other documents literally attached to the policy (riders)
Changes to the entire contract must be…
In writing and require insurance company’s official sign off (not just agent)
Incontestable Clause is what kind of provision?
Mandatory
Incontestable Clause: Insurer has how many years to rescind coverage based on inaccurate application info?
2 years
Incontestable Clause: Insurer can still rescind, deny, or cancel coverage based on…
Lies related to claims
What kind of provision is a grace period?
Mandatory
Grace Period
Keeps insurance from lapsing is premiums aren’t paid
Grace Period: Insurer may need to pay if losses occur during grace period but…
Can deduct unpaid premiums from settlement
Grace Period: weekly payments
7 days
Grace Period: monthly payments
10 days
Grace Period: annual or other payments
31 days
What type of provision is a reinstatement?
Mandatory
Reinstatement
Insured may be allowed to regain individual health insurance by paying 60 days over overdue premium and completing new application
Reinstatement: Insurer often has how many days to reject applicant?
45 days
Reinstatement: If no action is taken in 45 days, what does that mean?
Person is covered
What kind of provision is a claims provision?
Mandatory
Notice of claims must be provided to the insurer within how many days?
20 days
Insurer must provided “proof-of-loss” forms within how many days?
15 days
Insured must return proof-of-loss forms within how many days of loss?
90 days
Upon receiving proof of loss, insurer must…
Pay within a reasonable time
Benefits due at regular intervals MUST be…
Monthly
What kind of provision is legal action?
Mandatory
Suits against the insurer can’t be initiated until…
60 days after providing proof of loss and must be within 3 years
What kind of provision is a physical exam or autopsy?
Mandatory
Insurer has the right to conduct medical exams to determine…
Benefit eligibility at own expense
Insurer has the right to an autopsy in cases of…
Alleged accidental death from injury, not illness
What kind of provision is unpaid premiums?
Optional
If consumer hasn’t paid all premiums, unpaid amounts can be deducted from…
Insurance Settlement
What kind of provision is conformity of state statutes?
Optional
Conformity of State Statutes
Coverage will adjust automatically if required by state law
What kind of provision is misstatement of age or gender?
Optional
If incorrect age or gender…
Benefits will be adjusted accordingly
Adjustments can still occur even if…
2 year contestability period has expired
What kind of provision is change of occupation?
Optional
Change of Occupation
Applies to disability insurance when insured is doing different job than at a time of application
If a more hazardous job…
Benefits can be reduced
If a less hazardous job…
Benefits will be unchanged but some premium can be refunded
What type of provision is earnings to insurance?
Optional
Earnings to Insurance: Clarifies that disability can never be…
Greater than income immediately prior to disability OR average income over 2 years prior to disability, whichever is greater
Earnings to Insurance: Applies even if insured has…
Multiple policies
What kind of provision is illegal occupation?
Optional
Illegal Occupation
No coverage while hurt during illegal activity
