Chapter 7 - Health Insurance Policy Provisions, Clauses, and Riders Flashcards
A policy that is written on a noncancellable basis with the right to renew guaranteed
Guaranteed renewable
Inability of the insured to perform any occupation for which the insured is reasonably suited by education, training or experience
Total disability
What provisions must insurers include in individual health insurance policies
All the standard provisions established under the NAIC’s Uniform Individual Accident and Sickness Policy Provision Law
What are the mandatory grace periods for all accident and health insurance policies?
- 7 days for weekly premium policies (industrial policies)
- 10 days for monthly premium policies
- 31 days for all other modes
Whose duties are a notice of claim and proof of loss?
The insured’s
Whose duties are claims forms and the time of payment of claim?
The insurer’s
In Florida, what is the time of payment of claims?
45 days after first received
What happens in response to a misstatement of age on an insurance application?
Benefits are adjusted per the current premium
What two areas does the insuring clause define?
- The scope of coverage
- The rights and duties of each party of the contract
What are the six main mandatory provisions of all health insurance policies?
- Entire contract
- Grace period
- Reinstatement
- Change of beneficiary
- Claims
- Legal action
Coinsurance vs deductible vs copay
Coinsurance is a percentage of cost for the sharing of expenses
Deductible is a specified amount that must be paid first by the insured before benefits kick in
Copay is a set dollar amount paid per visit
What three renewability options apply to individual health insurance?
- Non-cancellable: a type of insurance policy that cannot be canceled, and the insurance company cannot change the policy terms or reduce the benefits
- Cancellable: an insurance policy that can be terminated at any time by either the insurance company or the policyholder
- Guaranteed renewable: an insurance policy that allows the policyholder to renew their coverage as long as they pay their premiums on time
What is the equivalent of the life insurance incontestability clause and how does it work?
Time Limit on Certain Defenses.
Insurers have two years to contest misrepresentations. After two years, liars win.
Age, gender and identity are excluded
How long does the insured have to provide notice of claims?
20 days
How quickly must insurers send out claim forms after receiving notice of claim?
“Promptly”
How quickly must the insured provide proof of loss?
Within 90 days of the loss
What health policy provision states to whom the claim benefits must be paid?
Payment of claims
What health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided?
Legal actions
What health policy provision describes the insured’s right to cancel coverage?
Renewability provision
According to the Time Limit on Certain Defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application?
Any time while the policy is in force
What is the name of the act by the insured to voluntarily give up insurance?
Cancellation
Who decides which optional provisions would be included in a health policy?
The insurance company
What are usual/reasonable and customary charges based on?
Average charge for a given procedure in the specific geographic area
A waiver of premium provision may be included with what type of health insurance policies?
Disability income
What is a probationary period in group health insurance?
The period of time that must lapse before an employee is eligible for group health coverage
Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?
Stop-loss limit
What may insurers change on a guaranteed renewable health insurance policy?
Rates by class
On a guaranteed renewable health insurance policy, the insurer may increase premiums on a class basis only and not on an individual policy
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?
Legal actions
The relation of earnings to insurance provision allows the insurance company to limit the insured’s benefits to the insured’s average income over the last
24 months
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time Payment of Claims
If the insured notifies the agent 12 days after the loss but the agent doesn’t notify the insurer until 60 days after the loss, what happens?
The insurer is considered to be notified since the notification to agent equals notification to the insurer
While a claim is pending, how often may an insurance company require an independent medical examination?
As often as reasonably required
Can the Uniform Individual Accident and Sickness Policy Provisions Law be reworded by the insurer?
Yes, provided that the changes would not be detrimental to the policyholder or beneficiary
An insurer would like to add a provision to its individual health insurance policies. This particular provision would be consistent with uniform provisions. What happens next?
The provision would be allowed, as long as it is approved by the state
Is physical examination and autopsy mandatory for health insurance policies?
Yes
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 days
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
Monthly
Accidental injury vs sickness coverage after the reinstatement of a policy
Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date
