"Other common policy provisions" Flashcards
Provision that lets policyowners return the policy to the insurer within a certain time and receive a full refund of all premiums and fees paid. What is the standard time period given, and when does it begin?
Free look provision (right to examine) time period is 10 days (up to 30 days in some cases)
Begins upon policy delivery
What is the name of the Insurer’s promise to pay a benefit upon proof of loss, describes the type of insurance, and states conditions under which the policy will pay a benefit?
Insuring clause
The clause that states the consideration that both parties exchange. (applicant & insurer) Applicants consideration is the application and first premium. Insurer’s consideration is the promise to pay the benefit for a covered loss.
Consideration clause
The time that must pass between the policy’s effective date and the time when losses are covered. It helps the insurer avoid adverse selection. Losses due to illness are not covered during this period.
Probationary period
The time period after a loss and before benefits begin. Common with disability insurance and Long term care insurance.
Elimination period
Difference between probationary period and elimination period?
Elimination period begins every time a covered loss occurs.
Probation period is after a policy is issued during which losses due to illness are not covered.
Provision that states the insurer will waive the premium if the insured becomes totally disabled. The insurance remains in force.
Waiver of premium provision
Conditions that are not covered.The insurer denies claims related to these conditons.
-Must be identified in the policy, otherwise the loss will be covered.
Common Policy exclusions
What are a few common policy exclusions?
Self inflicted injuries, illness or injury from war and military actions, cosmetic surgery, infertility treatments, noncommercial airline travel, treatment in government hospital, losses occurred while committing a felony.
Preexisting condition exclusions are no longer used because of ACA except they still appear in which policies?
Long term care and disability income insurance policies.
Provision that defines the terms under which a policy may be renewed or canceled. How many are there?
Renewability provision -there are 5
Provision in which the insurer can neither cancel the policy nor raise the premium. Most common with disability income polices.
Noncancellable
Provision that the insurer cannot cancel the policy, but may increase the premium. If the insurer increases premiums, it must raise them for all policies in that class issued in the state.
Guaranteed renewable
Policy that is guaranteed renewable as long as certain conditions are met.
Conditionally renewable
The insurer can refuse to renew the policy or increase the premium at the policy anniversary date.
Optionally renewable
