Health Insurance Flashcards
Types of Limited Health Policies
Accident-only Specified (Dread) Disease/Critical Illness Hospital Income (Indemnity) Insurance - pays flat dollar amount Prescription Drugs Vision Care Hearing Insurance Short-term Medical Expense Plans Dental
Health Insurance Common Exclusions
Intentional War Elective Cosmetic Surgery Workers compensation Felony
Uniform Health Insurance Policy Provision
12 standard provisions
Mandatory
Entire Contract and Changes
Application
Insurance Policy
Riders
Time Limit on Certain Defenses (Incontestability Clause)
2 years after application
Fraud can be contest indefinitely
Grace Period
Following due date of premium 7 days if premium paid weekly 10 days if premium paid monthly 31 days semi-annually or quarterly Insurance in force during grace period Unpaid premium deducted from claim
Reinstatement
May require reinstatement application and conditional receipt
Must be denied within 45 days after app or policy is in force
Accident claims covered immediately
10 day waiting period for sickness claims
Disability and Long-term Care reinstatement can be denied
Notice of Claim
Written notice of claim must be submitted 20 days after loss
If continuing disability, must provide proof ever 6 months
Claim Forms
Must be furnished to insured within 15 days of notice of loss
Proof of Loss
Written proof of loss must be submitted within 90 days
Time of Payment of Claims
Immediately
Made monthly if a periodic claim such as long term disability
Payment of Claims
Paid in name of insured
Direct payment instructions for example direct payment to doctor
Death benefits will be paid to any named beneficiary or insured’s estate
Optional benefit of $1000 to family member
Physical Examination and Autopsy
At the expense of insurance company
If company requires and state law allows
Legal Actions
Earliest can happen is 60 days after proof of loss
Must be within 3 years after proof of loss
Change of Beneficiary
Any time by owner if revocable
Permission of beneficiary needed if irrevocable
Optional Policy Provisions
Change of occupancy - more hazardous = reduction of benefits; less hazardous = refund of excess premium.
Misstatement of age - younger = benefits increase; older = benefits reduced.
Illegal Occupation - no benefits if committing felony or engaged in illegal occupation.
Free Look
10 days from receipt
30 days for senior products - Medicare Supplemental, Long Term Care
Begins date received by policy holder
Complete refund of money if policy returned
Insurance Clause
First provision
Promise to pay
Conditional of payment - type of loss covered
Consideration Clause
Company promises to pay
Applicant to provide information and pays premiums
Renewability Provision
5 types
Cancelable - insurer can cancel at any time with 5 days notice
Optionally - insurer has option to renew or not on premium due date or anniversary date, usually 30 days
Conditionally - can terminate only for reasons not based on insured’s health such as reaching certain age, premiums can increase on policy anniversary for a class of insured
Guaranteed renewable - cannot be cancelled except for non-payment, premium can increase only if increases for all insureds in that coverage classification
Non-cancelable - cannot cancel coverage (except for non-payment) or raise premiums
Own Occupation
Inability to perform any or all of the duties of insured’s normal occupation
Any Occupation
Any occupation for which the insured is qualified by training eduction and experience.
More difficult to qualify.
Split Definition
Start with using own occupation.
After a period of time, switch to using any occupation.
Income Replacement Contract
Payment is triggered if illness or accident reduces income.
Presumptive Disability
Automatically qualifies insureds for disability benefits whether or not they can work.
Loss of or loss of use of any two limbs.
Total and permanent blindness in both eyes.
Loss of speech.
Total and permanent loss of hearing in both ears.
Basic Total Disability Plans
Indemnity benefit.
Elimination Period - must be disabled for this length of time before benefits begin; 30, 60, 90, 120, 180, 1 year.
Benefit Period - length of time benefits will be paid; 1, 2, 3, 5, 10 years until 65.
Waiver of Premium
Waives further premium payments after initial waiting period.
Refunds any premiums paid during the waiting period usually 90 days.
Partial Disability
Returns to work in a reduced capacity.
Usually pays 50% of total benefit.
Usually no longer than 3-6 months.
Recurrent Disability
Conditional recurs after returning to work.
No wait to start receiving benefits.
Conditions must recur within a certain time frame after returning to work.
Cost of Living Rider (COLA)
Optional.
Increases benefit while receiving disability.
Based on Consumer Price Index.
Adjustments usually made every 12 months.
Future Increase Option (FIO)
Allows insured to increase policy benefits.
No evidence of insurability required.
The insured’s income must have increased.
Accidental Death & Dismemberment (AD&D)
Principal sum = 100% if death or loss of both limbs or sight in both eyes.
Capital sum= 50% if dismembered (loss of 1 limb or sight in 1 eye).
Paid if accidental death and is a multiple of the monthly disability benefit.
Exclusions for Disability Income Policies
War or military service Suicide and other self-inflicted injury Non-commercial aviation Commission of a felony Living overseas
Group Disability
Usually a percentage of pay instead of a stated benefit.
Short Term Disability
6-24 months.
Short elimination period if any
Coordinated with other benefits such as sick days.
Always uses own occupation.
Long Term Disability
2-65 years.
Elimination period is STD period.
Offset by other benefits such as social security disability.
Uses split definition of disability.
Business Use of Disability Insurance
Key person.
Business overhead expense - cover necessary business expenses that continue when business owner is disabled.
Disability buy sell.
Social Security Disability
Person must have at least 6 credits in last 13 quarters.
Number of credits required increases with age up to age 62.
Fully insured is 40 credits.
5 month waiting period for benefits.
Disability must last 12 months.
Benefit based upon person’s Primary Insurance Amount - not designed to replace worker’s total earnings.
Spouse and children may receive benefits.
Stops when reaches full retirement age.
PPO
Fee for service
Provider is paid as services are provided
Customer = insured
HMO
Prepaid
Provider is paid a set fee in advance
Customers = subscribers or participants
