CH. 16 Health insurance policy provisions

Which health policy clause specifies the amount of benefits to be paid?

Insuring In an accident & health policy, the insuring clause states the amount of benefits to be paid.

Renewable Policy

Provision of policy specifying the insured's and insurer's rights to renew or terminate a policy during or after the expiration of the original policy term.

Under what circumstance does an accident and health insurer have the right to request an autopsy?

When not prohibited by state law Under the uniform mandatory provisions, an accident and health insurer has the right to request an autopsy ONLY where not prohibited by law.

Noncancellable Policies

cannot be cancelled nor can its premium rates be increased under any circumstance most commonly found in disability income policies. rarely used in medical expense polices can NOT be changed in anyway by the insurer up to a specified age, so long as premiums are paid

Claim Forms

companies responsibility to supply a claim form to an insured within 15 days after receiving notice of claim if it fails to do so within the time limit, the claimant(person making a claim) may submit the claim in any form, which must be accepted by the company as adequate proof of loss

Misstatement of Age provision

allows the insurance company to adjust the benefit payable if the age of the insured was misstated when application for the policy was made if insured was older at the time of application than is shown in the policy, benefits would be reduced accordingly the reverse would be true if the insured was younger than listed in the application

Change of Occupation provision

allows the insurance company to reduce the maximum benefit payable under the policy if the insured switches to a more hazardous occupation or reduce the premium rate charged if the insured changes to a less hazardous occupation

Periodic health claim payments MUST be made at least

monthly Under an individual health policy, periodic claim payments must be made at least monthly. This applies primarily to disability income benefit payments.

An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must

notify the insurance company in writing

Grace Period

policy-owner is given a number of days after the premiums due date during which time the premium payment may be delayed without penalty and the policy continues in force. before your insurance company can end your coverage, you have a short period of time to pay called a "grace period. if insurer pays an individual accident and health insurance claim during a policy's grace period, the amount of unpaid premium may be subtracted from the reimbursement depending on state, the minimum grace periods typically are 7 days for policies with weekly premium payments (industrial policies), 10 days for policies with premiums payable on a monthly basis, and 31 days for other policies

Proof of Loss

statement that an insured must give an insurance company to show that a loss actually occurred after loss occurs, or after the company becomes liabile for periodic payments (e.g. disability income benefits) the claimant has 90 days to submit proof of loss

Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?

A noncancelable policy This policy may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid.

Unpaid Premiums

Any premium due and unpaid may be deducted from the payment of a claim. if there is an unpaid premium at the time a claim becomes payable, the amount of premium is to be deducted from the sum payable to the insured or beneficiary.

The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?

Benefits can be increased in the event of a covered claim In the event the insured changes to a less hazardous occupation, the Change of Occupation provision states that benefits can be increased in the event of a covered claim.

Cancellable policies

Cancellable policies allow the insurer to cancel the policy at any time (some states require notice of at least 30 days), provided the insurer returns all unearned premiums. coverage may be terminated by either the insured or the insurer renewability provision in a cancellable policy allows the insurer to cancel or terminate the policy at anytime also allows the insurer to increase premiums

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause The Consideration clause sets forth an accident and health insurance policy's premium requirements.

Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?

Reduce the benefit level If an individual covered under a disability income policy is injured while engaged in an occupation that is MORE hazardous than the occupation stated in the policy, the result will be the benefit level is reduced.

How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?

The unpaid premium may be subtracted from the reimbursement Correct. If an insurer pays an individual accident and health insurance claim during a policy's grace period, the amount of unpaid premium may be deducted from the reimbursement.

The standard provisions of an accident and health insurance policy require that the

policy, endorsements, and attached papers constitute the "entire contract" The standard provisions of an accident and health insurance policy require that the policy, attached papers, and endorsements make up the "entire contract".

Illegal Occupation

The insurer is not liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.

cancellation

The insurer may cancel the policy at any time by written notice delivered to the insured stating cancellation is not effective until at least five days later. After the policy has continued beyond its original term, the insured may cancel the policy at any time by written notice stating cancellation is effective upon receipt or later. though prohibited in a number of states, the provision for cancellation gives the company the right to cancel the policy at any time with 45 days written notice to the insured this notice must also be given when the insurer refuses to renew a policy or change the premium rates if the cancellation is for nonpayment of premium, the insurer must given 10 days written notice to the insured, unless the premiums are due monthly or more frequently. also allows the insured to cancel the policy at any time are the policies original term has expired

Notice of Claim provision

describes the policy owners obligation to the insurer to provide notification of loss within a reasonable period of time typically the period is 20 days after the occurrence or a commencement of the loss, or as soon thereafter as is reasonably possible

Entire Contract Provision

health insurance policy that protects the policyowner in the following ways: -includes the actual policy and application -states that nothing outside of the contract (contract includes the signed app, endorsements and any attached policy riders) can be considered part of the contract -assures the policy owner that no changes will be made or will any of the contracts provisions by waived after it has been issued -any change to a policy must be made with the approval of an executive officer of the insurance company whose approval must be endorsed on the policy or attached in a rider

Legal Actions provision

insured can NOT take legal action against the company in a claim dispute until after 60 days from the time the insured submits Proof of Loss. time limit for a legal action provision in a contract is limited to no more than 5 years gives the insurance company (insurer) adequate time to research a claim

Change of Beneficiary

insured may change the beneficiary designation at any time unless a beneficiary has been named irrevocably

Insurance with Other insurer

to deal with potential problem of over insurance, the insurance with other insurer provision states that benefits payable for expenses incurred will be prorated in cases where the company accepted the risk without being notified of other existing coverage for the same risk allows insurer to pay benefits to the insured on a pro-rata basis when the insurer was NOT notifed prior to the claim that the insured has other health coverage If the insured has other valid coverage providing benefits for the same loss on an expense-incurred basis and the insurer was not given written notice prior to the loss, each insurer is only liable for the proportionate share of the loss, and the insurer will return the premiums on a pro rata basis.

Other insurance with Other Insurer provision

total amount of coverage to be underwritten by a company for one person is restricted to a specified maximum amount, regardless of the number of policies issued designed to protect the insurer (insurance companies) If an insured has accident or sickness policies with one insurer in which the total indemnity for certain type(s) of coverage exceeds the policy's maximum, the excess insurance will be void and all premiums paid for such excess coverage will be returned to the insured or to the insured's estate.

Reinstatement

under certain conditions, a policy that has lapsed may be reinstated automatic if the delinquent premium is accepted by the company or its authorized and the company do NOT require an application for reinstatement if insurer takes no action of the app for 45 days, the policy is reinstated automatically to protect the company against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date accidents covered immediately upon reinstatement