Chapter 9: Health Insurance Mandatory Provisions

Question 1

The NAIC model provisions provide standardization for all individual health insurance policy provisions and identify the rights of the _____ and ______

Answer 1

insurer
policyowner

Question 2

TF: If insurers word the provisions differently, the wording must be at least as favorable as the law provides.

Answer 2

TRUE

Question 3

There are ____ mandatory provisions and ___ optional provisions.

Answer 3

12
11

Question 4

Required Provision #1: Entire Contract = _____ + _____ + ______

Answer 4

Policy
Endorsements
Application

Question 5

Required Provision #2: The policy becomes incontestable and cannot be voided or claims denied after ______ years (_____ years in some states), except in the case of fraud.

Answer 5

2
3

Question 6

Required Provision #3: Premium Grace Period - ____ days for weekly, _____ days for Monthly, and ______ days for all other policies

Answer 6

7
10
31

Question 7

Required Provision #4: reinstatement

Answer 7

if the insurer requires an application to reinstate the policy, a person must submit an application, which the insurer may approve or deny. The insurer may also require the person to pay up to a maximum of 60 days of back due premiums and provide proof of insurability.

The insurer must issue a conditional receipt to the applicant. The insurer will reinstate the policy upon the 45th day after the date of the conditional receipt, unless the application is denied. The reinstated policy will cover accidents immediately upon reinstatement, but will not cover sickness until 10 days have passed from the date of reinstatement.

Question 8

Required Provision #5 Notice of Claim - Written notice of claim must be given to the insurer within _____ days of the loss, or as soon as reasonably possible.

Answer 8

20

Question 9

Required Provision #6: Claims Forms - must be provided by the insurer within ____ days

Answer 9

15

Question 10

TF: Pre-existing conditions cannot be excluded after two years from the date the policy is in force.

Answer 10

True

Question 11

Required Provision #7: Proof of Loss must be submitted to the insurer within ____ days of the loss

Answer 11

90

Question 12

TF: In no event, except in the absence of legal capacity, may proof of loss be submitted later than six months from the date proof of loss was initially required.

Answer 12

false - one year

Question 13

Required Provision #8: time of payment of claims - Claims other than those providing periodic payment are payable ______ upon receipt of written proof of loss

Answer 13

immediately
(disability claims must be paid no less frequently than monthly)

Question 14

Required Provision #9: Payment of Claims

Answer 14

Claims are to be paid to the policyowner, who is usually the insured. If a death benefit is provided, (as in an AD&D policy) the death benefit is payable to the designated beneficiary according to the policy provisions.The facility of payment clause may be included in the payment of claims provision. The provision states that benefits are payable to an individual who is related to the deceased insured by blood or marriage.

Question 15

Required Provision #10: Physical Exam and Autopsy - The ______, has the right and opportunity to examine the person or autopsy of the insured when reasonably required while a claim is pending. The ____ (same) has the right to have an autopsy performed on the insured if not prohibited by law.

Answer 15

Insurer

Question 16

Required Provision #11: Legal Actions - No legal action may be brought to recover on the policy until _____ ______ after written proof of loss is provided to the insurer

Answer 16

60 days

Question 17

TF: No legal action may be brought after the expiration of three years (in some states, two years) after the time written proof of loss is required to be provided to the insurer.

Answer 17

True

Question 18

Required Provision #12: Change of Beneficiary - The right to change the beneficiary is reserved to the ______ and does not require the consent of the beneficiary

Answer 18

Policyowner (unless the beneficiary designates an irrevocable beneficiary)

Question 19

According to the Physical Examination and Autopsy provision, who is responsible for paying the cost of examining the insured?

Select one:
a. The insured
b. The insurer
c. The policyowner
d. The medical provider

Answer 19

B

Question 20

All of the following are provisions that relate to the filing of claims and payment of benefits in health insurance, EXCEPT:

Select one:
a. Claims form
b. Notice of claim
c. Grace period
d. Proof of Loss

Answer 20

C

Question 21

If a company decides to reinstate a policy, when does coverage begin for losses caused by sickness?
Select one:
a. Immediately
b. 10 days
c. 14 days
d. 30 days

Answer 21

B

Question 22

For individual health insurance policies, how soon must the insured submit proof of loss to the insurer?

Select one:
a. 15 days
b. 20 days
c. 90 days
d. 120 days

Answer 22

C

Question 23

While investigating a current claim, an insurance company learns the insured claimant had not included their full medical history on the application and that the current claim results from a condition that was probably pre-existing 4 years ago, when the application was approved. The company will:
Select one:
a. Reduce the percentage of payment for the current claim
b. Pay the current claim, but void the policy, based on misrepresentation
c. Deny payment of the claim and cancel the policy, based on misrepresentation
d. Pay the claim

Answer 23

D

Question 24

Of the following health insurance provisions, which states that an insurance agent may not waive any provision or make any change in an insurance contract?
Select one:
a. Entire contract
b. Grace period
c. Legal actions
d. Illegal occupation

Answer 24

A

Question 25

The facility of payment clause:

Select one:
a. States benefits are payable to an individual who is related to the deceased insured by blood or marriage
b. States claims must be paid immediately upon receipt of proof of loss
c. States benefits are paid to the insured’s estate
d. Is a required uniform provision

Answer 25

A

Question 26

How long is the grace period for health insurance policies with monthly-due premiums?
Select one:
a. 7 days
b. 10 days
c. 31 days
d. 60 days

Answer 26

B

Question 27

Which of the following best describes the claims forms provision?

Select one:
a. The insured must submit notice of claim to the insurer within 20 days of the date of loss.
b. The insurer must supply claim forms to the insured within 15 days.
c. The insured must only submit the proof of loss on specific forms supplied by the insurer.
d. The insurer may require the insured to submit claims electronically.

Answer 27

B

Question 28

For individual health insurance policies, how soon must the insured/claimant provide the insurance company with notice of claim?
Select one:
a. Within 5 days of the date of loss
b. Within 10 days of the date of loss
c. Within 20 days of the date of loss
d. Within 31 days of the date of loss

Answer 28

C

Question 29

For individual health insurance policies, legal action may be taken against the insurer for up to ____ years from the date proof of loss is provided to the insurer.

Select one:
a. 1
b. 3
c. 5
d. 7

Answer 29

B

Question 30

What happens to Jacob’s policy if he does not pay the premium by the end of the grace period?
Select one:
a. Jacob must pay an additional premium to keep his policy in force.
b. Jacob may, at the option of the insurer, renew his policy.
c. Jacob’s policy continues in force without penalty.
d. Jacob’s policy will lapse.

Answer 30

D

Question 31

To which type of health insurance policies does the NAIC Uniform Provisions Law apply?
Select one:
a. Group disability income policies
b. Individual health insurance policies
c. Annuities
d. Life and health policies

Answer 31

B

Question 32

Adam fails to pay his premium for his health insurance policy before the end of the grace period. A couple months later, Adam decides he wants to reinstate his policy. He submits a policy application to the insurance company. Adam does not receive a reply from the insurer. If his application is accepted, when will the policy be reinstated?
Select one:
a. 20 days after the reinstatement application is submitted to the insurer
b. 45 days after the reinstatement application is submitted to the insurer
c. 60 days after the reinstatement application is submitted to the insurer
d. 90 days after the reinstatement application is submitted to the insurer

Answer 32

B

Question 33

Upon receipt of a notice of claim, the insurer must provide the potential claimant the proper claims form within how many days?

Select one:
a. 10 days
b. 15 days
c. 20 days
d. 30 days

Answer 33

B