Ch.6 health

Question 1

The Entire Contract provision

Answer 1

the insurance policy itself, any riders and endorsements/amendments, and the application comprise the entire contract between all parties

Question 2

The time limit on certain defense provision

Answer 2

the policy is incontestable after it has been in force a certain period of time, usually two years

Question 3

The notice of claim policy provision

Answer 3

describes the policy owner’s obligation to provide notification of a claim to the insurer within a reasonable period of time. Typically, the period is 20 days after the occurrence or commencement of the loss, or as soon thereafter as is reasonably possible

Question 4

Claim forms provision

Answer 4

the formal request to an insurance company asking for a payment based on the terms of the insurance policy. It is the company’s responsibility to supply a claim form to an insured within 15 days after receiving notice of claim

Question 5

Proof of loss provision

Answer 5

a mandatory health insurance provision stating that the insured must provide a completed claim form to the insurer within days of the date of loss

Question 6

Time of payment claims provision

Answer 6

a provision that requires claims be paid immediately or within a stated number of days. If the claim involves disability income payments, they must be paid at least monthly if not at more frequent intervals specified in the policy

Question 7

Payment of claims provision

Answer 7

states that the insured and insurance company will share the cost of covered losses

Question 8

The physical exam and autopsy provision

Answer 8

a standard health insurance policy provision allowing the insurer to examine the insured when a claim is pending, and in the event of death perform an autopsy where not prohibited by law

Question 9

Legal actions provison

Answer 9

states the insured cannot take legal action against the company in a claim dispute until after 60 days from the time the insured submits proof of loss. At least give us 2 months before you take us to court

Question 9

The change of beneficiary provision

Answer 9

permits the insured to change the beneficiary as often as he or she wishes, except in policies where the beneficiary is irrevocable

Question 10

The change of occupation provision

Answer 10

allows the insurer to reduce the maximum benefit payable under the policy if the insured switches to a more hazardous occupation or to reduce the premium rate charged if the insured changes to a less hazardous occupation

Question 11

The misstatement of age or sex provision

Answer 11

allows the insurer to adjust the policy benefits if the insured’s age or sex is misstated on the policy application

Question 12

The other insurance in this insurer provision

Answer 12

states that the total amount of coverage to be underwritten by a company for one person is restricted to a specified maximum amount, regardless of the number of policies issued

Question 13

The insurance with other insurer provision

Answer 13

The “insurance with other insurer” provision in an insurance policy outlines how claims are handled when multiple policies cover the same loss. It determines how insurers will share the payment for the claim, which can be based on primary and secondary coverage, pro-rata distribution, or equal sharing among insurers. This provision ensures fair distribution of payment and avoids duplication

Question 14

The relation of earnings provision

Answer 14

states that the insurer is liable only for that proportionate amount of benefits as the insured’s earnings bear to the total benefits under all such coverage

Question 15

The unpaid premiums provision

Answer 15

a provision that permits unpaid premiums to be taken from claim payments. If there is an unpaid premium at the time a claim becomes payable, the amount of the premium is to be deducted from the sum payable to the insured or beneficiary

Question 16

The conformity with state statutes provision

Answer 16

designed to ensure that the policy complies with state laws and regulations

Question 17

The illegal occupation clause

Answer 17

states the insured is not covered for losses that arise if he or she tries to commit a felony. Coverage is also voided if the insured is working at an illegal occupation

Question 18

The intoxicants and narcotics provision

Answer 18

states the policy is not liable for losses that occur as a result of the policyholder being intoxicated or taking a narcotic without a physician’s supervision and recommendation

Question 19

Cancellable Policies

Answer 19

insurance contracts that may be terminated by the company or that is renewable at its option

Question 20

Policy loan or cash value provisions

Answer 20

found in whole life policies and some long-term care policies. These policies must begin to build cash value after a certain number of years. In most states, this is 3 years. These loans, with interest, cannot exceed the guaranteed cash value or the policy is no longer in force. The policyowner has the right to the policy’s cash value. Policy loans are not taxable. Any loans with interest due at the time of death will be deducted from the insured’s policy proceeds

Question 21

Automatic premium loans

Answer 21

allow the insurer to automatically use the policy cash value to pay an overdue premium

Question 22

The Social Security rider

Answer 22

provides for the payment of additional income when the insured is eligible for social insurance benefits but those benefits have not yet begun, have been denied, or have begun in an amount less than the benefit amount of the rider

Question 23

The right of assignment

Answer 23

built into most commercial health policies lets policyowners assign benefit payments from the insurer directly to the health care provider, thus relieving the policyowner of first having to pay the medical care provider

Question 24

The assignment clause

Answer 24

The right to transfer policy rights to another person or entity

Question 25

Absolute assignment

Answer 25

When the assignee receives full control of the policy and rights to the policy benefits from the current policyowner

Question 26

Collateral assignment

Answer 26

The partial and temporary transfer of rights to another person or entity. Collateral assignments are usually intended for securing a loan with a creditor

Question 27

What are the 12 mandatory policy provisions in health insurance contracts?

Answer 27

Entire contract
Time limit on certain defenses
Grace period
Reinstatement
Notice of claim
Claim forms
Proof of loss
Time of payment claims
Payment of claims
Physical exam and autopsy
Legal actions
Change of beneficiary

Question 28

The uniform individual accident and sickness policy provisions law

Answer 28

Established standard provisions that are to be included in all individual health insurance policies

Question 29

What are the 11 optional provisions in a health insurance contract

Answer 29

Change of occupation
misstatement of age
conformity with state statutes
Other insurance in this insurer
Insure with other insurer
insurance with other insurers
relation of earnings to insurance
unpaid premiums
Cancellation
Illegal occupation
Intoxicants and narcotics

Question 30

What are the three common health insurance exclusions or restrictions?

Answer 30

War or act of war injuries
Intentionally self-inflicted injuries
Maternity benefits

Question 31

What are the five renewability provisions?

Answer 31

Cancellable policies
Optionally renewable policies
Conditionally renewable policies
Guaranteed renewable policies
Non-cancellable policies

Question 32

Optionally renewable policies

Answer 32

gives the insurer the right to renew or not renew the policy at the end of each term, typically on an annual basis

Question 33

Conditionally renewable policies

Answer 33

offers the option to renew under specific conditions outlined in the policy

Question 34

Guaranteed renewable policies

Answer 34

ensure that the policyholder can renew the policy as long as they meet their obligations, with the possibility of premium adjustments but no loss of coverage due to individual risk factors

Question 35

Non-cancellable policies

Answer 35

non-cancellable policies ensure that the insurer cannot cancel or alter the terms of the policy or increase premiums, offering stable and secure coverage for the policyholder

Question 36

What does the insuring clause do?

Answer 36

States the scope and limits of the coverage

Question 37

An insurer must provide an insured with claims forms within _____ days after receiving notice of a loss

Answer 37

15

Question 38

Mandatory uniform policy provision

Answer 38

ensures that insurance policies have standardized terms and conditions to provide consistent protection and transparency for policyholders

31 days is the max time after missing a premium that the policy will remain in force