Exam FX: Individual Accident & Health Insurance Policy Provisions

Uniform Mandatory Provisions

All individual health insurance policies are required to include certain standard provisions, called ____

adjust benefits if the insured Changes occupations

Bc the occupation of the insured is an important underwriting consideration, particularly for disability income insurance, health insurance policies usually include a provision that allows he insurer to _____. If the insured makes a change to a more hazardous occupation \, upon claim, benefits will be reduced to that which premiums paid would have purchased assuming the more hazardous occupation. If the change is to a less hazardous occupation, the insured is entitled to apply to the insurer for a rate reduction.

other federal, state, or local

Health insurance policies exclude expenses either paid or eligible for payment under Medicare or ___ medical expense program, such as state child health programs.

misstated his/her age or gender benefits amount payable

If the insured ___ at the time f the application,, the benefits aid under the policy would be ____ to what the premium paid would have been purchased at the correct age.

15 days prior

If the premium is not received _ to the end of the grace period, the insurer must mail a notice to the policy holder informing him or her that the policy will lapse at the end of the grace period.

Change of occupation Misstatement of Age or Sex Illegal Occupation Intoxicants and Narcotics

Name the Uniform Optional provisions

Expense-incurred basis

Policy pays health policy benefits as a reimbursement of actual expenses

facility of payment

Some policies allow a provision that gives the insurer the right to expedite payment of urgently needed claim funds and pay up to a specified limit in benefits o a relative or individual who is considered to be equitably entitled to payment, called____

executive officer

The entire contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract. No changes may e made to the policy without the express written agreement of both parties, and any changes must also be made a part of the contract. Only an ___ of the company, not an agent has authority to make any changes to the policy.

Renewability Clause

The face age of the individual health insurance contract must clearly state under what conditions the policy may be renewed. If the insurer reserves the right to refuse renewal, the insurer must deliver or mail to the policyholder's last known address a written notice of its intention not to renew the policy beyond the period for which the premium has been accepted.

noncancellable

The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy (note that the policy may call for an increase in a certain year, such as "age 65, but that must be stated in the original contract.)

60 days 1 year

The insured must wait ___, but no later than ___ after proof of loss, before legal action can be brought against the company.

Intoxicants and Narcotics Provision

The insurer is not liable for any claims that result while the insured is intoxicated or under the influence of drugs (unless administered by a physician). Treatment for substance abuse is usually a covered benefit under health insurance policies. This provision simply excludes any injury or sickness that results from he insured's intoxication.

reistated

The policy can be _ if the insurer accepts the defaulted premium,. The ___ policy will cover loss resulting from accidental injury immediately following the reinstatement, and sickness if it begins more than 10 days after the date of premium acceptance. This helps to protect the insurer from adverse selection.

payment of claims

This provision specifies to whom claims payments are to be made. All benefits are payable to the insured while he r she is living. If the insred is deceased, claims that are pending are paid to the beneficiary. If there is no beneficiary, benefits will be paid to the deceased's estate, unless the insured has assigned the befits to be paid directly to a hospital or doctor who has rendered services.

change of beneficiary pro

This provision stipulates that the policy owner may change he beneficiary at any time y providing a written request to the insurer, unless the beneficiary is designated as irrevocable. The consent of the beneficiary is not required. If the beneficiary is not required. If he beneficiary designation is irrevocable, the policyholder must first obtain the permission of the beneficiary before any change can be made.

claims forms

Upon receipt of a notice of claim, the company must supply ___ to the insured within a specified number of days (usually 15 bu may vary from state to state)

War or act of war intentionally self-inflicted injuries elective cosmetic surgery experimental/investigation procedures conditions covered by workers compensation government plans participation in criminal activity injuries resulting from drug or alcohol intoxication

What losses or exclusions are typically not covered in individual r group medical expense policies?

irrevocable beeficiary

a beneficiary who has a vested interest in the policy and therefore, the policy owner may not exercise certain rights without the consent of the beneficiary

statute

a formal written law enacted by legislature; can be found in the state insurance code

Provision

a legal clause in an insurance contract spelling out mandatory or optional duies and rights of the insred and the insurer

Guaranteed renewable

a policy that is written on a noncancellable basis with the right to renew guaranteed

Claim

a request filed with an insurance company asking for payment according to the terms of an insurance policy

Proof of loss

after a loss occurs, the claimant must submit within 90 days of the loss or as soon as reasonably possible, but not to exceed one year. However, if the claim involves disability income benefits, the benefits must be paid not less frequently than monthly.

term

individual may need health insurance for a specified period of time. Coverage is then considered a ___ health policy which is not n\renewable. When expired, the insured must purchase another policy. These policies are also called period of time policies as they are only effective for a specific period of time, and will be cancelled by the company at the end of the term.

Grace Period

is the period of time after the premium due date in which premiums may still be paid before the policy lapses for nonpayment of the premium. All health and accident policies in Louisiana must offer a ___ of 30 days from the date the premium is due.

Insuring Agreement or Clause

is usually located on the first page of the policy. It is simply a general statement that identifies the basic agreement between the insurance company and the insured. It identifies the insured and the insurance company and states what kind of loss (peril) is covered.

Lapse

policy termination due to nonpayment of premium

nonrenewable cancellable

provision allows the insurer to cancel the policy at any time, or at the end of the policy period. There are no guarantees that the insurer will continue coverage at the end of the policy period. The insurer must provide the insured with proper written notice of the of cancellation and a refund of any unearned premium paid. If the insured is n the midst of a claim at the time f cancellation, the insurance company must continue to honor the claim. This type of renewability provision is not very common, and is even illegal in many states.

Time Limit on Certain Defenses

provision stipulates that no statement or misstatement (except fraudulent misstatements) made in the application at the time of issue will be used to void a policy or deny a claim after the policy has been in force for 3 years.

notice of claim

provisions spells out the insured's duty to provide he insurer with reasonable notice in the event of a loss. Notice is required within 20 days of the loss, or as soon as reasonably possible. Notice to the agent equals notice o the insurer.

reinstatement

returning a lapsed policy to activate status

renewable at option of insurer

similar to conditional renewability, except that the insurer may cancel the policy for any reason, on certain homogeneous classes (not individuals within a class. The insurer can only decide not to renew a policy on the policy anniversary or premium due date (renewal date). If he insurer elects to renew coverage, it may also increase he policy premium.

probationary period provision

states that a period of time must lapse before coverage for specified conditions goes into effect. This provision is most commonly found in disability income policies. Also applies to new employees who must wait a certain period of time before they can enroll in the group plan. Purpose is to avoid unnecessary administrative expenses in cases of employee turnover.

illegal occupation provision

states that liability will be denied if the insured is injured while committing an illegal act or is engaged in an illegal occupation

cancellation

termination of an in-force insurance policy, by either the insured or the insurer, prior to the expiration date shown in the policy

conditionally renewable policy

the insurer may terminate the contract only at renewal for certain conditions that are stipulated in the contract. Ex. one condition may be that the insured must be employed to collect disability payments. In additions, the policy premiums may be increased. The company may not deny renewal due to claims experience.

Free Look or Right to Examine Provision

this provision allows the insured a period of several days to look over the policy and if dissatisfied for any reason, return it for a full refund. It is commonly 10 days from the date the policy is delivered , but may vary for different types of policies. This provision is mandated for individual policies in most states.

physical exam and autopsy

this provision gives the insurer the right to examine the insured, at its own expense, as often as may be reasonably necessary while a claim pending. The insurer also usually has the right to conduct an autopsy, if not not forbidden by a state law.

guaranteed renewable provision

this provision is similar to the noncancellable provision, with he exception that the insurer can increase the policy premium on the policy anniversary date.

time of payment of claims

this provision specifies that claims are to be paid immediately upon written proof of loss. The time of payment for claims is usually specified in different policies as 60 days, 45 days, or 30 days. However, if the claim involves disability income benefits, the benefits must be paid not less frequently than monthly.

consideration clause

usually located on the first page of the policy, makes it clear that both parties to the contract must give some valuable consideration. The payment of the premium and the statements in the application are the consideration given by the applicant. The insurer's consideration is the promise to pay in accordance with the contract terms.

Uniform individual accident and sickness policy provisions law

was developed by the National Association of Insurance Commissionsers (NAIC), has been adopted in all states. This law established standard provisions hat are to be included in all individual health insurance policies. Although the wording may differ form one insurer o another, the basic provisions are he same. Some of these provisions are similar to life insurance policy provisions. The purpose of these provisions is to define the rights and duties of both the insurer and the policyholder.

travel accident policies, short term health plans, or accident only policies. Policies which cover specific events, such as school functions, summer camp or athletic events, are other examples. Once the event is over, coverage is no longer in place.

what are examples of term healthpolicies