Individual health insurance policy provisions Flashcards
The NAIC developed how many provisions that MUST appear in all health insurance policies?
12
These mandatory provisions exist primarily for the protection of whom?
The policyowner
Name of the provision that states, if any guarantees, promises, exclusions, or anything else are not included in the policy…then they are not apart of the contract.
Entire contract provision
Provision that limits the time an insurer can void a policy or deny a claim for material misrepresentations on the application.
Time limit on certain defenses provision
Most states limit the time limit on a contestability period to how long?
two years
Provision that gives the policy owner some time after the due date to pay the premium
Grace Period provision
The grace period provision usually depends on how often the premium is due. 3 most common ?
7,10, or 31 day depending on the type of policy
Provision that lets a policyowner reinstate a lapsed policy within a certain time period?
Reinstatement provision
How long is the normal reinstatement period? What are the conditions?
policyowner has 3 years to reinstate. They must pay past premiums with interest and provide proof of insurability.
How long does the insurer have to reject the application for reinstatement of a lapsed policy?
45 days
If the insurer doesn’t respond to a reinstatement application within their given time period, what happens?
The reinstatement is automatic.
Provision that allows the insurer to require a physical exam (for a disability claim), or an autopsy (for a death claim) at the insurers expense?
Physical examination and autopsy provision
Provision that sets a period for the policyowner to take legal action against the insurer to dispute a decision on a claim?
Legal action provision
What is the time period given, after proof off loss is provided,for the legal action provision?
the policyowner must wait at least 60 days and cannot exceed 3 years after proof off loss.
Provision that gives the policyowner the right to change the beneficiary?
Change of beneficiary provision
In this provision the policyowner can only exercise the right to change beneficiary if the designation is what?
revocable.
What is it called when the beneficiary designation can only be changed with the written consent of current beneficiary?
Irrevocable
Provision that explains how claims are paid.
Payment of claims provision
If the insured dies, the insurer pays the beneficiary. If the insured did not specify a beneficiary, the insurer pays who?
The insurer will pay the insured’s estate.
Provision that is step 1 in the claims process, and requires the insured to notify the insurer within how many days of a covered loss?
Notice of claim provision. must notify within 20 days after loss
Provision that is step 2 in claims process, and requires the insurer to provide the claim forms to the insured within how many days from the notice of a claim?
Claim forms provision. Insurer has 15 days to provide the forms.
Provison that is step 3 in the claims process, and requires the insured to provide written proof of loss to the insurer within how many days of the loss?
Proof of loss provision. The insured has 90 days to provide written proof of loss.
Provision that compels the insurer to pay the claims ‘immediately’ after receiving the written proof of loss?
Time of payment of claims provision
States differ on how they define ‘immediate’ payment after proof of loss. Most sates require ____days and some other states ___ days?
most states 60 days and some others 45 days.
Insurers must include 12 standard provisions in policies, but they may also include optional provisions.
How many optional provisions are there, and who do they protect?
There are 11 optional provisions, and they are to protect the insurers.
True or False: Insurer’s can use none, some, or all of the 11 optional provisions, but they must conform to the minimum of NAIC standards.
True
This optional provision covers two situations. 1) When insured changes to a more hazardous job, the insurer can reduce insured’s benefits. 2) When insured changes to a less hazardous job, insurer is required to reduce the insured’s premium.
Change of occupation provision
Optional Provision that applies when an insured misstates his/her age or sex on the insurance application. The benefits are then adjusted to reflect the insured’s correct age or sex.
Misstatement of age or sex provision
What is true about the misstatement of age or sex provision, in some states?
In some states this is a required provision and not optional.
Optional Provision that limits the total coverage the insurer will provide to the insured. (multiple policies with same company)
Other insurance in this insurer provision.
Optional Provision that allows the insurer to reduce (pro rate) coverage, if another insurer covers losses from the same event. It keeps the insured from receiving a benefit that is more than the loss. (Different company/or has not notified the primary insurer of other existing coverage)
Insurance with other insurer provision.
Optional Provision that applies to coverage with multiple insurers when the primary company knows of them. This provision pro rates each of the insurer’s share of the total benefit due. Usually in the case of Workers comp.
Other insurance with other insurers
Optional Provision that applies to disability income insurance. Limits the disability insurance coverage if the insured’s income decreases. Prevents the insured from receiving more income from the insurer than from working.
Relation of earnings to insurance provision
Optional Provision that addresses any premiums the insured owes before the claim is to be paid. This allows the insurer to deduct the amount of unpaid premiums from the benefit to be paid to the insured.
Unpaid premium provision
Optional Provision that allows the insurer to cancel a policy any time with how many days notice?
Cancellation provision with a 45 days notice.
Under this optional provision: If the insurer is cancelling a policy because the insured did not pay the premium, the insurer must give the insured how many days notice?
10 days.
Optional Provision that addresses any other provisions that differ from the state’s law. Any policy provisions that are not compliant with the state’s law are automatically changed to meet the state’s minimum requirements.
Conformity with state statutes provision
Optional Provision that lets an insurer deny a claim if the cause of loss was from the insured participating in illegal activity.
Illegal occupation provision
Optional provision that lets the insurer deny a claim that arises from the insured’s use of illegal narcotics or intoxication.
Intoxicants and narcotics provision
