Unit 14: Health Insurance Policy Provisions
Hubert, the insured, changes to a more hazardous job than the one he had when he applied for his disability income policy. According to the policy's change of occupation provision, what will happen when the insurer learns of his job change?
Policy benefits will be reduced to the amount the premiums would have purchased if they were based on the more hazardous occupation
Jasmine is covered under her employer's health plan. She is called to active military duty. Upon her return, which of the following statements regarding her coverage is CORRECT?
She will be fully covered, without the need to provide proof of insurability
Changes made to a policy must be
approved in writing by an executive officer of the insurance company
Bob is severely injured after falling off of his roof while cleaning the gutters. If he is unable to provide proof of loss within 90 days, it may
be filed up to one year after the date of loss
After a proof of loss is submitted, legal action may be taken to recover on an individual health insurance policy only during what time period?
between 60 days and 3 years
Under the relation of earnings to insurance provision, the insured's benefit
cannot exceed earnings
Which of the following is a required policy provision?
change of beneficiary
The time of payment of claims provision requires that
claims must be paid after the insurer is notified and receives the proof of loss
The time of payment of claims provision in an accident and health insurance policy requires that
claims must be paid immediately after the insurer receives a written proof of loss
Which of the following types of health insurance policies prevents the insurer from changing the premium rate or modifying the coverage in any way?
noncancclable
If the insurer cancels policy, unearned premium will be returned to the insured
on a pro rata basis
Which of the following renewability provisions is the least favorable provision for the insured?
optionally renewable
Which renewability provision allows an insurer to not renew a health insurance policy on a given date as specified in the policy?
optionally renewable
The optional provisions that deal with multiple insurance policies of the same type on a single insured deal with the problem of
over-insurance
Which of the following term relates directly to the consideration clause?
premium
The grace period varies according to
premium payment frequency
Tim decided to quit his desk job and become a profession skydiver. Due to this change of occupation, the insurer will
reduce his benefits
Maynard earns $70,000 a year. Under his disability income policy, the maximum amount of monthly benefit he will receive is $7,000 a month. Under the relation of earnings to insurance provision, his disability income benefit will be
reduced, and he will be refunded for any premiums he paid for excess coverage
With what provision of a standard health insurance policy would the following clause be associated: "The insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium"?
reinstatement provision
With an optionally renewable policy, the insurance company reserves the right to
terminate coverage at any policy anniversary date or premium due date
Keenan has coverage with two separate insurers that provide similar benefits. If he has a loss,
the amount paid by the two insurers will be prorated and Keenan will be refunded any excess premium
KAC Health Insurance Company insures a risk without being notified that the insured already has existing coverage for the same risk. The policy that KAC issued contains the insurance with other insurers provision. When a loss occurs, the total coverage that the insured had purchased (including the coverage that KAC was unaware of at the time of application) would pay $5,000. Had KAC been the only insurer, it would have paid $2,500. What amount is KAC liable to pay?
$1,250
Alberto falls from his ladder while hanging holiday lights around his house. He breaks his arm and files a claim for $3,100. His health insurance premium which is $310 is due at the end of the month and has not yet been paid. How much of the benefit will be paid, assuming no deductibles or coinsurance?
$2,790
Naomi is killed in an auto accident before she is able to pay the semiannual $80 premium on her $30,000 accident policy. Under the policy's unpaid premium provision, her beneficiary will receive a check for:
$29,920
An accident and health insurance policy that provides for monthly payments has a grace period of:
10 days
Disability insurance policies must include a provision entitling policyholders to a grace period for premium payment. At least how long must the grace period be for monthly premium policies?
10 days
Marcus pays his insurance premium monthly and has a grace period of
10 days
Under the required claim forms provision of a health insurance policy, and insurer must furnish the claim form to the insured within how many days after receiving a notice of claim?
15 days
According to the disability insurance time limit on certain defenses provision, how long after the date of a policy's issue can innocent misstatements on an application be used to void a claim?
2 years
An accident and health insurance policy may not be rescinded, except for fraud, after it has been in effect for
2 years
At what point after the effective date of an accident and health insurance policy does it become incontestable?
2 years
Which of the following provisions must be included in an individual accident and health insurance policy?
2-year time limit on certain defenses
All individual health insurance policies must include a notice of claim provision requiring that a written notice of claim must be given to the insurer within how long after the occurance of the loss?
20 days
Written notice of a claim must be given to the insurer within how many days of the occurance?
20 days
A required provision of individual health insurance policies is that a written notice of claim must be given to the insurer within
20 days after the loss occurs or commences, or as soon as is reasonably possible
Identify the number of days the insured or insurer must to the following in this order: notice of claim, claim forms, proof of loss, waiting period for sickness claims upon reinstatement
20, 15, 90, 10
The right to examine, or free-look, provision in a long-term care policy allows for an insured to return a policy within how many days for a full refund of premiums paid?
30 days
An accident and health policy whose premiums are paid on a quarterly basis must contain a grace period of at least
31 days
Patricia has a health insurance policy for which she pays a semiannual premium. If the premium is due on July 1, her grace period will end in
31 days
The grace period for an annual, semiannual, or quarterly premium policy is
31 days
After how many days is coverage is automatically reinstated if the insurer has not disapproved the application and notified the insured?
45 days
How many days' notice must the insured be given if an insurer cancels a policy?
5
An insurer can cancel a health insurance policy by delivering written notice to the insured at least how many days before the effective date of cancellation?
5 days
How many days' notice must an insurer give the insured if the policy is going to be cancelled?
5 days
Under the standard cancellation provision, an insurance company has the right to cancel a policy at any time with how many days' written notice to the insured?
5 days
Claire had back surgery in May and in September her doctor informs her that she will need to undergo several more surgeries within the next two years. Since her injury is considered a continuing disability, how often will Claire need to provide Notice of Claim to the insurer?
6 months
An individual may take legal cation to recover on an accident and health insurance policy no sooner than how many days after a written proof of loss is provided?
60 days
The grace period for weekly premium health insurance policies is
7 days
What is the minimum grace period that an individual accident and health insurance policy must include if the premiums are due weekly?
7 days
Generally, written proofs of loss must be furnished within how many days after the loss?
90
How many days from the date of loss does the insured have to submit a completed claim form to the insurer?
90 days
A reinstated policy will cover
Accidents immediately, sickness after 10 days
Mike allows his policy to lapse, then applies for reinstatement using the company's required application. The company does not inform Mike either that the policy has been accepted or that the policy is being rejected. At what point can Mike consider the policy reinstated?
After 45 days
The insurer under a health policy is liable for which of the following losses?
Those sustained while under the influence of a prescribed medication
Under the time of payment of claims provision, policies that provide for periodic payment of benefits (such as disability income policies) must pay these benefits at least
monthly
Luis has 3 individual health insurance policies and is concerned that the benefits may overlap. What will happen in the event he makes a claim for coverage under all 3 policies?
If 1 insurer covers the risk, it will pay the claim and any premiums that apply to any excess will be returned to luis
Which of the following is the best example of the insurance with another insurer provision?
The insured has a hospital income policy with company A with a $100 daily benefit, and a hospital income policy with company B with a $200 daily benefit. Company A would pay one third of the loss, subject to its policy limit
Which of the following statements about reinstated health insurance policies is CORRECT?
`they only cover illnesses that began more than 10 days after the policy is reinstated
The exchange of something of value is known as
a consideration
An individual accident and health insurance policy must include which of the following provisions?
a provision that the policy, including any endorsements or riders, constitutes the entire contract
What kinds of risks does a health insurance policy cover during the 10-day waiting period after it has been reinstated?
accidents
Under the misstatement of age provision in a health insurance policy, what can an insurer do if it discovers that in sured gave a wrong age at the time of the application?
adjust the benefits
Beth's health insurance policy contains a provision that allows her to renew coverage up to age 65. However, the policy also states that should Beth lose her job, the insurance company will cancel the policy, regardless of Beth's age. In terms of renewability, what type of policy does Beth have?
conditionally renewable
Which provision allows new insureds the right to examine a policy for specified period of time with the option to return it?
free look period
Which kind of health insurance policy ensures renewability up to a specific age of the insured, although the insurer reserves the right to change the premium rate on a class basis?
guarantee renewable
Mary has an insurance policy that cannot be canceled for any reason except for nonpayment of the premium, and premiums may increase on the renewal date. Which of the following type of renewability provision did Mary purchase?
guaranteed renewable
What accident and health insurance renewability clause provides that the insurer cannot unilaterally change any provision while the policy is in force but can change premium rates by class?
guaranteed renewable
Applicants for which of the following types of policies would normally require the most comprehensive underwriting?
guaranteed renewable disability income insurance
Smith and Jones Insurance has totally revised its individual health insurance policy. Tamika likes the coverage she already has and is concerned about the changes. She contract the producer who sold her the policy, who tells her that
her policy will not be affected by the changes
Trudy has been promoted from being a firefighter to working at a desk in the arson unit. How will this affect her health care according to the change of occupation provision?
her premium will be reduced and the insurer will return the excess pro-rata unearned premium to her
Thomas, an insured, submits a claim and proof of loss for medical expenses covered by his major medical policy. According to the time of payment of claims provision, how soon must the company pay the claim?
immediately
Any standard health insurance policy provision that is in conflict with a state statute
is automatically amended to conform to the state statue
How does an insurer treat benefits that are payable for expenses incurred when the company accepted the risk without being notified of other existing coverage for the same risk?
it prorates them
The optional other insurance in this insurer provision is specifically designed to
limit the risk with any 1 individual insured by the insurance company
When Betty purchased her insurance policy, her age was recorded as 32 when she was actually 34. Assuming her policy includes the misstatement of age provision and the insurance company discovers this four years later, Betty's policy
limits will be lowered
Joanie was injured in an automobile accident. She is now in a coma and expected to die. Under the terms of her individual accidental death and dismemberment (AD&D) policy, which of the following is CORRECT?
the beneficiary cannot be changed
An individual health insurance policy holder can change the beneficiary of the policy under what circumstances?
the change can be made without the beneficiary's consent, unless the original designation is irrevocable
Which of the following statements regarding proofs of loss is CORRECT?
the insured must file a proof of loss within 90 days of the date of the loss
If there is no beneficiary listed on a policy, benefits will be paid to
the insured's estate
Who is responsible for examination costs when required by the insurer?
the insurer
Under the optional illegal occupation provision, which of the following applies if a loss occurs while the insured is participating in a felony or an illegal occupation?
the insurer is not liable for that specific loss
Which of the following statements characterizes a cancelable policy?
the insurer may cancel the policy at any time
If total disability (loss-of-time) benefits from all disability income coverage for the same loss exceed the insured's monthly earnings at the time of disability, what is the insurer's liability to the insured?
the insurer must pay the proportionate amount of benefits that the insured's earnings bear to the total benefits
Jane submits written notice of a health insurance claim to her insurance company. After a month has passed, the insurer still has not provided her with a claim form. Which of the following statements is CORRECT?
the insurer should have furnished Jane with a claim form no later than 15 days after receiving the notice of the claim
A broad statement that generally appears on the first page of a health insurance policy and specifies conditions under which benefits will be paid is known as
the insuring clause
Which of the following states the insurer's promise to pay under the conditions described in the policy?
the insuring clause
Insured losses are covered immediately after a health policy is reinstated when
the losses result from accidental injuries
Which of the following statements pertaining to provisions in health insurance policies is CORRECT?
the misstatement of age provision allows the insurer to adjust the benefits payable under the policy is the age of the insured was misstated in the policy application
A pro rata return is one in which the insurer returns
the proportionate amount of the unearned premium
The insurer may generally require an autopsy at its own expense unless
the state has an applicable law that forbids autopsy
Which of the following provisions is optional in an individual health insurance policy?
unpaid premium