Individual Health Insurance Policy Provisions 14
When can an insured no longer take legal action against an insurer?
An insured cannot take legal action against an insurer more than three years after proof of loss was required.
How is the term "immediately" defined under the time payment of claims provision?
"immediately" is defined by individual states.
John's health insurance policy was reinstated on the tenth of the month. He got sick on the eighteenth and was hospitalized. His policy has a $1,000 deductible and 80/20 coinsurance on the next $5,000 of expenses. His total expenses were $9,500. How much will the insurance policy pay for his expenses?
$0 (John's illness was not covered because he had not satisfied the 10-day waiting period for sickness after reinstatement of his policy. He was hospitalized only eight days after reinstatement.)
Roberto let his individual health insurance policy lapse two months ago. Fearing that he might have cancer, Roberto now wants to reinstate the policy. Assuming the policy is reinstated, how many days must Roberto wait before any illnesses will be covered?
10 DAYS
Your client missed a monthly premium payment on his health insurance policy. Under the grace period provision, how long does he have beyond the due date to pay the premium?
10 days
Bethany was injured in a car accident on May 1. Within how many days must she typically notify her health insurance company about the claim?
20 days
Under the notice of claim provision, how many days does the insured have to notify the insurer after having a covered loss?
20 days
A client wants to reinstate her health insurance policy after it lapsed for failure to pay the premium. She submits an application to reinstate the policy and includes a premium payment. How long does the insurer have to notify the client whether the reinstatement is accepted or rejected?
45 days
Under the proof of loss provision, how many days does the insured have to provide the insurer with written proof of loss?
90 days
All of the following statements about health insurance reinstatement provisions are correct, EXCEPT:
Claims resulting from sickness are covered immediately.
All the following are optional health insurance policy provisions EXCEPT
Grace period provision.
Harry files a notice of claim but does not receive claim forms from his insurer within the required number of days. What can Harry do?
Harry can submit a written statement describing how the loss occurred, the nature of the loss, and how much was lost.
Billie quits her job on March 15 and goes to the mountains for a four-month retreat. When she returns, she takes another job and submits a health insurance claim relating to a condition that she has had for several years. How will the insurer respond?
It will deny the claim because of a break in coverage of more than 63 days.
Mark has satisfied the requirements of reinstatement but receives no notice from the insurer during the 45-day period. Which of the following will happen?
Mark's policy is automatically reinstated.
Which of the following is a required health insurance policy provision?
Martha's policy establishes the order in which plans will pay if she is covered by other insurance.
Sue names Bill as the irrevocable beneficiary of her policy. Can Sue use the change of beneficiary provision to name another beneficiary within three years of the issue date?
No. She cannot make the change because an irrevocable beneficiary designation cannot be changed.
Mallory submitted a notice of claim with ABC Insurers after breaking her leg in a skiing accident. Three weeks later, ABC Insurers had not yet sent the claim forms. What are Mallory's options?
She can submit a written statement describing the nature and extent of the loss.
Susan had a major medical procedure that resulted in a large claim on her health insurance policy. Under the proof of loss provision, the burden of proof is on whom?
Susan
Carl makes a claim two weeks into the 31-day grace period allowed by his health insurance plan. Assuming the claim is valid, what must the insurance carrier do?
The carrier must pay the entire amount of Carl's claim but can deduct the amount of premium due from the claim amount.
Your client was injured in a car accident and submitted proof of loss in a timely manner to Alpha Insurers. After reviewing the claim, Alpha denied any payment. Your client now wants to sue Alpha Insurers. What would you recommend?
The client cannot take legal action until at least 60 days after submitting proof of loss to Alpha.
All of the following are true statements regarding the physical examination and autopsy provision in a health insurance policy EXCEPT:
The insured pays for the required exam.
Four years ago, Warren filed a claim on his health insurance policy. The claim was paid. Last week, however, the insurer discovered that Warren had misstated information about preexisting conditions on the original application. What can the insurer do?
The insurer cannot contest the policy. (Most states limit the contestability period to no more than two years, which means a health insurance policy cannot be voided nor a claim denied based on misrepresentation after two years from the effective date of the policy.)
If a claim involves a loss of life, what must the insurer do?
The insurer must pay the claim to the insured's beneficiary.
What is the normal reinstatement period for health insurance policies?
The normal reinstatement period is three years from the date of lapse.
Jason wishes to make a minor change to his new health insurance contract. Who can make the change?
an executive officer of the company
Your client reads his health insurance policy and asks you about a clause that prevents changes to the contract on the basis of information not specified in writing and contained in the contract. Which provision is he referring to?
entire contract provision
In order to make legal delivery of a health policy with an exclusion rider, an agent is required to
explain the rider to the client and have them sign a statement of their acceptance.
The NAIC's model law sets forth certain optional provisions that can be included in a health insurance policy. Which of these is NOT one of these optional provisions?
incontestability provision
As set forth by the NAIC, 12 provisions must appear in all health insurance policies. Which of these is not one of those provisions?
misstatement of age
If a claim is filed because the insured died, what can the insurer do?
order an autopsy to determine the cause of death
What must the insurer do if a claim involves a loss of life and the insured did not specify a beneficiary?
pay the claim to the insured's estate
Best describes the purpose of the time payment of claims provision?
payment of claims occurs as soon as possible after the insurer receives proof of loss.
After the insurer receives proof of loss of a claim under a health insurance policy, which provision specifies to whom payment will be made?
payment of claims provision
How would you respond to a client who asks you to explain the legal actions provision in a health insurance policy?
tell the client that the provision defines the period in which the insured can take legal action against the insurer
The 12 mandatory provisions included in all health policies originated with which of the following?
the NAIC Uniform Accident and Sickness Policy Provision Law
Which of the following provisions applies to cases in which the policy provides a death benefit and a beneficiary has been designated?
the change of beneficiary provision
Which of the following provisions states that the insurer must provide claim forms to the insured within a certain number of days of receiving a notice of claim?
the claim forms provision
The time limit on certain defenses provision in a health insurance policy is like
the incontestable clause
Children who are covered under the health plans of two working parents consequently have a primary and secondary provider. The assigned primary provider typically will be which of the following?
the insurance plan of the parent with the earlier birthday month
Which of the following provisions details how claims are paid?
the payment of claims provision
Which of the following provisions requires the insurer to pay claims immediately after receiving proper proof of loss?
the time payment of claims provision
The normal reinstatement period is up to
three years from the date of lapse.
The time limit on certain defenses limits the time in which an insurer can void a contract or deny a claim for material misrepresentations in the application. What is this period in most states?
two to three years
Under the legal actions provision, when can an insured take legal action against an insurer?
The insured cannot take legal action against the insurer until at least 60 days after the insured provides proof of loss to the insurer.
Under a health insurance policy with an optionally renewable provision, which of the following does the insurer have the right to do?
cancel the policy on a date specified in the contract
Which of the following provisions requires that insurers must receive written proof of loss within a certain number of days of the loss?
proof of loss provision
Glen files a notice of claim with his insurer. What is he notifying his insurer of?
He will be making a claim against the policy and that the insurer should send Glen the required claim forms.
Cindy's health insurance policy provides maternity benefits but excludes coverage for involuntary complications of pregnancy. Cindy is insured under which of the following?
Medicaid
The payment of claims provision in a health insurance policy states that
if the insured dies, health insurance claims will be paid to the beneficiary.
Which of the following provisions allows the insurer to require the insured to take a physical exam during the claims investigation process?
the physical examination and autopsy provision
Which of the following is NOT one of the 12 required provisions for health insurance policies set forth by the NAIC?
waiver of premium provision
When does an insurer have the right to have an autopsy performed on the deceased insured?
when it is not prohibited by law
