Health Insurance Policy Provisions Flashcards
The Entire Contract
states the insurance policy itself, any riders and endorsements/amendments, and the application comprise the entire contract between all parties. Insurance producers cannot make changes to a policy. The entire contract provision is found at the beginning of every insurance policy issued. Only an authorized officer of the insurer is permitted to make changes to the contract. We can’t send you additional paperwork later. THE ENTIRE POLICY AND APPLICATION is sent to you and that makes up your ENTIRE CONTRACT.
The Time Limit on Certain Defenses states
the policy is incontestable after it has been in force a certain period of time, usually two years. This is similar to the incontestable clause. Unlike life policies, a fraudulent statement on a health insurance application is grounds for contest at any time, unless the policy is guaranteed renewable. There is a TIME LIMIT for which you must DEFEND yourself. This applies to the contestable period, preexisting conditions, and new claims. If you file a claim that you broke your leg yesterday, and the insurance company sees you moving a grand piano up 5 flights of stairs, you will probably have to DEFEND your claim. However, at some point, it is expected your leg will heal.
The Grace Period
is a period after the due date of a premium during which the policy remains in force without penalty. If an insured dies during the Grace Period of a life insurance policy before paying the required annual premium, the beneficiary will receive the face amount of the policy minus any required premiums. For health insurance, remember Aunt Grace’s Birthday 7(makes payments more than once a month)-10(makes premium payments once a month)-31(makes Premium payments less than monthly (quarterly, semiannually, etc.).
A Reinstatement
is putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required. It Permits the policyowner to reinstate a policy that has lapsed- as long as the policyowner can provide proof of insurability and pays all back premiums, outstanding loans, and interest. Most states allow reinstatement up to 3 years after a policy has lapsed. However, some states are 5- 7 years. To reinstate any policy, you need: A reinstatement application, statement of good health, all back premiums.
The Notice of Claim
is a policy provision that 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 a commencement of the loss, or as soon thereafter as is reasonably possible
The Claim Forms Provision
specifies 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. If it fails to do so within the time limit, the claimant may submit proof of loss in any form, explaining the occurrence, the character, and the extent of the loss for which the claim is submitted. Policyowner can submit the claim using a napkin and crayons as long as it has the required information.
Proof of loss
is 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.
The Time of Payment of Claims
is 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. You did your part (Paid your bill and got injured/sick/etc) now we have to immediately do our part (Pay you) and it can’t be less often than monthly, or you wouldn’t be able to pay your bills. If the claim involves disability income payments, they must be paid at least monthly if not at more frequent intervals specified in the policy. You did your part (Paid your bill and got injured/sick/etc) now we have to immediately do our part (Pay you) and it can’t be less often than monthly, or you wouldn’t be able to pay your bills.
The Payment of Claims provision
in an insurance contract specifies how and to whom claim payments are to be made. Payments for loss of life are to be made to the designated beneficiary If no beneficiary has been named, death proceeds are to be paid to the deceased insured’s estate. Claims other than death benefits are to be paid to the insured or ANY OTHER NAMED PARTY (medical professional, hospital, etc.).
The Physical Exam and Autopsy Provisions
is 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. This entitles a company, at its own expense, to make physical examinations of the insured at reasonable intervals during the period of a claim, unless it’s forbidden by state law.
The Legal Actions Provisions
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.
Change of Beneficiary
is a provision that permits the insured to change the beneficiary as often as he or she wishes, except in policies where the beneficiary is irrevocable.
Change of Occupation provision
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
The Misstatement of Age or Sex Provision
allows the insurer to adjust the policy benefits if the insured’s age or sex is misstated on the policy application. The misstatement of age provision allows the insurer to adjust the benefit payable if the age of the insured was misstated when application for the policy was made. If the insured was older at the time of application than is shown in the policy, benefits would be reduced accordingly. The reverse would be true if the insured were younger than listed in the application.
The Other Insurance in This Insurer Provision
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
The Insurance with Other Insurer Provision
states that benefits payable for expenses incurred will be prorated in cases where the company accepted the risk without being notified of other existing coverage for the same risk. This is done in attempt to deal with the potential problem of over insurance.
The Insurance with Other Insurers Provision
calls for the prorating of benefits that are payable on any basis other than expenses incurred
The Relation of Earnings Provision
outlines that if disability income benefits from all disability income policies for the same loss exceed the insured’s monthly earnings at the time of disability, the relation of earnings provision 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.
Unpaid Premiums Provision
states 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.is a provision that permits unpaid premiums to be taken from claim payments.
Conformity with State Statutes Provision
simply states that any provision of this policy that is in conflict with state statutes in the state where the insured lives at the time the policy is issued is automatically amended to conform with the minimum statutory requirements.
Illegal Occupation
is a clause that 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.
