Unit 28: Common Provisions and Features Flashcards
Page 388
What is an “insuring clause?”
The foundation of a health policy in terms of the insurer’s general agreement to provide coverage
(the insurer’s promise to pay under the conditions stipulated in the policy)
What is a “consideration clause” in healthcare?
The insur co exchanges the promises in the policy for a two-part “consideration” (an exchange of something of value on which a contract is based) from the insured. For a health insur contract to be valid, the insured, in return
provides consideration in the form of:
- full minimum premium required
- statements made in application
(Buddu, seem to me, a very complicated way to say that the insur co and the insured form a contract based on “considerations” that each party make. Insur co. promises X, in exchange, the insured promises Y
Handwritten notes near Consideration Clause section
Look at page 388
“Different from Life Insurance”
“The difference”
Page 389
What is a “free-look provision?”
In many states, provosion that allows individuals to look over the policy for a specified period with the right to refuse it.
Typically, they have 10 days from receipt of policy. Can return policy by end of the trial period for a full refund of prepaid premium.
Page 390
What is an “assignment?”
policyowners may transfer all/part of their rights, title or interest in an insurance contract to another party.
What are the two types of “assignments?”
- Absolute assignments – transfer ALL ownership rights to another party
- Collateral assignments – transfer only PART of the rights, usually to secure a debt
What are “accummulations?”
To encourage insureds to renew their policies successively, insur co. may pay additional amounts called “accumulations.” i.e. They may pay more in accidental benefit for someone who has been a loyal customer of the insur co for 5 successive years
(an insur co incurs less expense to renew a policy rather than drop and reinstate someone – Like a loyalty reward)
Page 391
When an insurer has the option to refuse to renew, the policy may be one of two types. What are they?
- Optionally renewable
- Conditionally renewable
What is an optionally renewable policy?
insurer may not renew for any reason or for no reason. It can only exercise this right on the premium due date/anniversary date
What is a conditionally renewable policy?
insurer may elect not to renew only under conditions specified in the policy
Page 392
What is a “cancelable policy?” and what is the difference between that and an optionally renewable policy?
Insur co can cancel coverage AT ANY TIME, provided it returns any unearned premiums to the insured.
Must pay out any existing valid claims and cancellation is effective no loess than 5 days from the date of notice
What are “guaranteed renewable policies?”
policies that the Insurer relinquishes its right to cancel at any time and to refuse renewal at a premium due date
so cant cancel at anytme and can’t refuse renewal
What are 3 important features of a guaranteed renewable policy?
(there are 5, only 3 highlighted)
- Renewal is guaranteed (must renew) as long as insured pays premiums
- Premiums may be increased on the basis of an entire classification, i.e. occupation. typer in court is less dangerous than a construction worker
- Guarantee to renew ends at a specified age
Page 393
What are the two ways to describe a “noncancelable policy?”
- noncancelable
- noncancelable and guaranteed renewable
two words/phrases are used interchangeably
With a noncancelable policy, how are the premiums treated?
- Insurer may never increase the premiums
- initial premiums remains the same through life of policy.
What is the difference between guaranteed renewable policies and non-cancelable and non-cancelable and guaranteed renewable policies?
It is in regard to premium. The guaranteed renewable policy, the insurer may increase the premiums by classifications. With a non-cancelable policy however, the insurer, may never increase the premiums. That is the initial premium is the premium the insured will pay throughout the life of the policy.
Page 394 (subhead highlighted, but no text)
What are nonoccupational vs full coverage policies?
Nonoccupational policies: Policies with a provision that does not cover occupational hazards.
Explanation: If someone’s occupation is very hazardous, insur co won’t assume risk of covering someone while involved in this kind of hazard. They’ll cover general accident and sickness/disability, etc. but will issue a policy that contains a provision EXCLUDING job-related injuries for that person
Page 395 – 396 Dependents’ rights in family policies – 4 things to know (handwritten)
What is conversion an individual policy?
READ PAGE 395-396
- When coverage under a family policy ends, a dependent can “convert” to an individual policy
What causes a dependent spouse or child to lose coverage under a family plan?
- Child has aged out (obtained age)
death
divorce
Can an dependent convert to an individual policy without giving evidence of insurability
- Yes, no evidence of insurability required
Within what time frame must the conversion to an individual plan take place?
- within 31 days
How does coverage for a newborn child work?
In most states, baby is covered automatically from moment of birth. Parents must notify insur co. within 31 days of new baby and pay any additional coverage required to continue coverage
Page 396 (bottom)
What is an insurance rider vs. an endorsement?
Think riders can be extend provision riding the policy
Handwritten: “Rider is a separate attachment”
Rider – typed/printed and physically attached to the standard policy contract; it “rides” with policy
Endorsement – incorporated into the body of the policy, typed, printed or stamped onto the standard policy form
Page 397
What does waiver of premium mean (in terms of a disability policy)?
Insur co agrees to waive or forego further premium payments, including poliy in force, if the insured is total disabled.
Page 398
What is an impairment rider?
excludes coverage for a specific ailment or condition (existing medical prob or chronic condition) that would otherwise be covered
This refers to a condition that currently already exists that normally they wouldn’t classify for but if they’re able to exclude this, they can get coverage for other healthcare needs and stuff like that and it also benefits the insurance company because they don’t take on any undue risk
How are impairment riders written?
On an individual basis, individually specific
only applies to person with the impairment and not any other insureds (family members covered under same policy, etc.)
aka future increase rider
This chapter has riders and provisions that protect the company, next chapter, chapter 29 protects insured
This chapter has riders and provisions that protect the company, next chapter, chapter 29 protects insured
Page 399
What is a guaranteed insurability rider?
guarantees that an insured may purchase additional disability income coverage at specific future dates without evidence of insurability
Page 400
What does the social security rider to a disability income policy do?
(handwritten note says have to know this)
Provides for a monthly amount that approximates the amount the insured might receive from social security for a total disability.
