Health Insurance - Individual Policy Provisions

Question 1

Twelve Required Insurance Contract Provisions

Answer 1

1. ) Entire Contract Provision;
2. ) Time Limit on Certain Defenses (Incontestability) Provision;
3. ) Grace Period Provision;
4. ) Reinstatement Provision;
5. ) Physical Exam. & Autopsy Provision;
6. ) Legal Actions Provision;
7. ) Change of Beneficiary Provision;
8. ) Payment of Claims Provision;
9. ) Notice of Claim Provision;
10. ) Claim Forms Provision;
11. ) Proof of Loss Provision;
12. ) Time Payment of Claim Provision

Question 2

Entire Contract Provision

Answer 2

Health insurance policy provision that state the policy makes up the entire contract.

Question 3

Time Limit on Certain Defenses Provision

Answer 3

Health insurance policy provision that limits the time an insurer can void a contract or deny a claim for material misrepresentation on an application. Typically, this time frame equals two or three years.

Question 4

Grace Period Provision

Answer 4

Health insurance policy provision that allows the policy holder limited time beyond the due date to pay a premium. 7-day grace period for premiums paid weekly. 10-day grace period for premiums paid monthly. 31-day grace period for all other payment modes.

Question 5

Modes of Premium Payment

Answer 5

The frequency of premium payment (e.g., weekly, monthly, quarterly, semiannually, annually, or some other frequency).

Question 6

Reinstatement Provisions

Answer 6

Health insurance provision that lets the policy owner place a lapsed policy back in force within a certain period (typically three years).

Question 7

Physical Examination & Autopsy Provision

Answer 7

Health insurance provision that allows the insurer to require the insured to take a physical exam or be subject to an autopsy during the claims investigation process. Paid for by the insurer.

Question 8

Legal Action Provision

Answer 8

Health insurance provision that defines the periods during which the insured can take legal action against the insurer because it didn’t pay a claim. Normally, there is a waiting period of 60 days after proof of a claim is submitted to an insurer before legal action can be taken for non-payment of a claim.

Question 9

Change of Beneficiary Provision

Answer 9

Health insurance provision that applies to policies that provide a death benefit and a beneficiary has been designated.

Question 10

Payment of Claim Provision

Answer 10

Health insurance provision that details how claims are paid out.

Question 11

Notice of Claim Provision

Answer 11

Health insurance provision that requires the insured to notify the insurer within 20 days after he or she has a covered loss.

Question 12

Claim Forms Provision

Answer 12

Health insurance provision that an insurer must provide claims forms to the insured within 15 days of receiving a notice of claim.

Question 13

Proof of Loss Provision

Answer 13

Health insurance provision that requires the insured to provide written proof of loss within 90 days of the loss.

Question 14

Time Payment of Claim Provision

Answer 14

Health insurance provision that requires insurers to pay claims immediately after receiving proof of loss. The meaning of the term “immediately” ranges from 45 days to 60 days.

Question 15

Change of Occupation Provision

Answer 15

Optional health insurance provision that allows for premium change if an insured individual changes to a more or less hazardous occupation.

Question 16

Misstatement of Age Provision

Answer 16

Optional health insurance provision that highlights how the misstatement of one’s age on an application impacts benefits received. Some states have made this provision mandatory.

Question 17

Other Insurance in this Insurer Provision

Answer 17

Optional health insurance provision that limits the total coverage the the insurance company assumes with one insured.

Question 18

Insurance with Other Insurer Provision

Answer 18

Optional health insurance provision that addresses situations where an insured has coverage for the same risk and expenses with multiple insurance companies and has not notified the other insurance companies.

Question 19

Other Insurance with Other Insurers Provision

Answer 19

Optional health insurance provision that extends the ability for insurers to prorate the benefit they pay when the primary insurer had prior knowledge of other insurers.

Question 20

Relation-of-Earnings to Insurance Provision

Answer 20

Optional disability insurance provision that reduces the policy’s income benefit if the insured has more insurance benefit income than actual income at the time of disability.

Question 21

Unpaid Premium Provision

Answer 21

Optional health insurance provision that addresses any premiums the insured may not have paid at the time of the claim, usually allowing the insurer ti credit the benefits it pays toward premiums due.

Question 22

Cancellation Provision

Answer 22

Optional health insurance provision that provides an insurer the ability to cancel, not renew or change the premium for a policy by giving the insured a 45-day notice. If the cancellation is the result of the insured not paying the premium, the notification period drops to 10 days.

Question 23

Conformity with State Statutes Provision

Answer 23

Optional health insurance provision that addresses policy provisions that differ from state law and therefore are automatically changed to meet the minimum requirements of the law.

Question 24

Illegal Occupation Provision

Answer 24

Optional health insurance provision that allows the insurer to deny liability when the insured’s claim arises from the insured’s participation in an illegal activity.

Question 25

Intoxicants and Narcotics Provision

Answer 25

Optional health insurance provision that allows the insurer to deny liability when the insured’s claim arises from the insured’s intoxication or use of narcotic drugs.

Question 26

Expense-Covered Loss

Answer 26

Component of the Insurance with Other Insurer health insurance provision that allows an insurer to prorate the amount of benefit it will pay if another insurer is covering losses from the same event.

Question 27

Free-Look Provision

Answer 27

Allows a policy owner to return he policy to the insurer within a limited time and receive a full refund of premiums and fees paid.

Question 28

Insuring Clause

Answer 28

States the insurer’s promise to pay a specified amount of benefit if a certain event occurs.

Question 29

Consideration Clause

Answer 29

States the consideration terms. The applicant’s consideration in the health insurance contract is the application and the first premium payment. The insurance company’s consideration is the promise to pay a benefit when a stated future event occurs.

Question 30

Probationary Period

Answer 30

The period that must pass between the policy’s effective date and the time when illness-related losses will be covered.

Question 31

Elimination Period

Answer 31

The waiting period after a loss occurs before benefits begin.

Question 32

Waiver of Premium Provision

Answer 32

Provides that the policy’s premium will be waived if the insured is disabled.

Question 33

Renewability Provision

Answer 33

Defines the rights of the insurer to increase premiums or cancel a policy, as well ass the rights of the policy owner’s right to renew the policy’s coverage beyond the current coverage period.

Question 34

Noncancellable

Answer 34

A renewability provision in a health insurance policy under which the insurer guarantees that during the noncancellable period, it will not end the policy, nor will it increase the premium.

Question 35

Guaranteed Renewable

Answer 35

A renewability provision in a health insurance policy under which the insurer guarantees that, during the guaranteed renewal period, it will not cancel the policy, and it will increase premiums only on a class basis.

Question 36

Optional Renewable

Answer 36

A renewability provision in a health insurance policy under which the insurer guarantees that the policy owner can renew the coverage, if the conditions of the policy are met.

Question 37

Cancellable

Answer 37

A renewability provision in a health insurance policy under which the insurer can cancel or end the policy at any time simply by providing written notification.