Insurance4 Flashcards
■ Entire contract (remember “AIR”)
– Application of insurance
– Insurance Policy
– Riders
■ Time limit on contesting application information
– Two years after application
– Fraud in the application can void the policy when discovered
■ Grace period following due date of premium
– Insurance still in force during grace period
– 7 days if premium paid weekly
– 10 days if premium paid monthly
– 31 days if premium paid annual, semi-annual or quarterly
– Unpaid premiums deducted from a claim
■ Reinstatement
– Application and receipt
– Must deny within 45 days after application or policy is in effect
– Accident claims covers immediately
– Sickness claims covered 10 days after reinstatement, a probationary period will apply
Notice of claim
20 days after loss
– If continuing disability can only be required to provide proof every 6 months
Claim forms
Must be furnished to insured within 15 days of notice of loss
Proof of loss
Within 90 days
Time payment of claims
Immediately
At least monthly if disability or long term care insurance
Payment of claims
Any death benefits
■■ Beneficiary
■■ Insured’s estate
Facility of payment
– $1,000 to a family member
Medical exams and autopsy
If company requires and state law allows
– Company pays all costs
Legal action against insurer
Earliest 60 days after proof of loss
– Maximum three years after proof of loss
Change of beneficiary
Any time by owner if revocable
– Permission of beneficiary needed if irrevocable
Optional provisions
Change of occupation
– More hazardous
■■ Reduction of benefits
– Less hazardous
■■ Refund of excess premiums
■ Misstatement of age
– Younger than stated in application
■■ Benefits increased
– Older than stated in application
■■ Benefits reduced
Other insurance with this insurer
Total of all polices exceeds maximum
■■ Benefits reduced
■■ Excess premiums refunded
Insurance with other insurer
Each company pays a proportionate share
– Excess premiums are refunded
Relation of earnings to insurance
Disability benefit exceeds earnings
– Benefit reduced
– Excess premiums refunded
Unpaid premium
Can be deducted from the claim
Cancellation
Company must give at least a five day notice
– Unearned premium must be refunded pro rata
– Insured cancels short rate penalty will apply
Conformity with state statutes
makes policy comply with laws of the insured’s state of residence
Illegal occupation
No benefits
■■ If committing a felony
■■ Engaged in an illegal occupation
Alcohol and narcotics
No benefits
■■ Loss caused by alcohol and narcotics unless doctor’s orders
Other Provisions
Free look
– 10 days from receipt (30 days for senior products-Medicare Supplements, Long Term Care
Insurance)
– Begins date received by policy holder
– If policy returned—complete refund of money
Insuring clause
Promise to pay
– Conditions of payment
Consideration clause
Company promises to pay
– Applicant provides information and pays premium
Renewability (extension of policy
Cancelable
■■ Any time
Optionally renewable
Company may not renew
■ Anniversary or premium due date
Conditionally renewable
Nonrenewal can occur only under certain conditions
– Such as reaching age 65
Guaranteed renewability
Insurer must renew
– Premiums can be raised by classes
Noncancelable
Insurer must renew
– Premiums cannot be raised
Military suspense
Temporary suspension while in military
– Reactivated after leaving military
