Unit 30: Optional Uniform Policy Provisions Flashcards
Page 415
Overall concept, what do Optional Uniform Policy Provisions do?
Handwritten note:
Protects the insurance companies
Page 416
Optional Provision 1: Change of Occupation
What does this provision do?
Nothing highlighted, just a chart from woman who wrote in the book. LOOK AT HER CHART
Book: Relieves the insurer from paying benefits not anticipated when the premium was established
Circular Chart: More hazardous, adjust premium
less hazardous adjust benefit
Page 417
Optional Provision 2: Missatement of Age
What happens when the insured’s age has been misstated?
Insur company may adjust benefits to the amount that the premiums paid would have bought had the insured’s correct age been known.
If an insured overstated their age, when applying for coverage, the insured has been paying a premium that is too high. If an insured understated their age, the company would pay them a smaller benefit. to make up for the little payments they been pay
THIS APPLIES WETHER INTENTIAL OR NOT
Optional Provision 3: Other Insurance in This (same) Insurer
Nothing highlighted, just a handwritten that says Optional Provisions 3-6 deal with “other insurance”
Provision deals with insurance of the same type with the SAME INSURER.
An individual with so much insurance they may be tempted to see a doc, go to hospital or stay home from work may be tempted to do so instead of recover. Person is OVER insured
This provision allows an insurer to control overinsurance through its own policies
Page. 418/419
Optional Provisions 4 and 5: Insurance with OTHER Insurers
What is the essence of these two provisions?
If an insured has two or more policies from diff companies that cover the same expenses, and if the insurers were not notified that the other coverage existed, the each insurer will pay a proportionate share of any claims. This will prevent the insured from receiving benefits greater than the loss
Page 420
Optional Provision 6 is also designed to prevent “overinsurance malingering.” What is that?
remaining disabled in order to collect insurance
(FYI, to help you remember: “mal” is french for “pain,” lingering - english “prolong.” That’s where they get this term I think)
Page 419
Optional Provision 6: Relation of Earnings to Insurance – Average Earnings Clause
What does this provision specifically concern?
Loss of time, or disability income coverage
Page 421
Optional Provision 7: Unpaid Premium
What does this provision provide?
Upon payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.
Page 423 (Not sure if this is part of optional provision 7 or if it’s Provision 8; there is no page 422 for me to reference. I have no Provision 8 text)
What happens if the insur co cancels policy?
Handwritten note:
They (insur co) have to refund all of the unearned premium
What is a pro rata return?
When the INSUR CO CANCELS, the portion of the premium dollar the insurer as already earned is kept by the insur co. The entire unearned portion is returned to the insured. This is a pro rata return
What is a short rate return?
When the INSURED CANCELS, the insur co is allowed to reatin a portion of premium over and above that which it has earned. The insurer keeps earned premium AND A PORTION OF UNEARNED PREMIUM, returning the balance of unearned premium to the insured. This is a short rate return.
Page 424
Optional Provision 9: Conformity with State Statutes
What does this provision apply to?
The laws of the insured’s state of residence
Basically, state laws trump provisions in the policy. Policy is amended to conform to minimum requirements of such [state] statutes
Provisions 10: Illegal Occupation
Nothing highlighted
What does this provision declare?
Insurer will not be liable for any loss to which a contributing cause was the insured’s commision of or an attempt to commit a felony
Optional Provision 11: Narcotics
Nothing highlighted, just “unless” circled
What does this provision declare?
Insurer will not be liable for any loss sustained while insured is under the influence of narcotics UNLESS administered on the advice of a doc
