Chap 6 Health Insurance Policy Provisions

Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?

Entire Contract. An Entire Contract policy provision prohibits an insurance company from incorporating external documents into an insurance policy

J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age.

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy. An insurance company can usually contest the information contained in an accident and health application for two years from the date the insurance company dates the policy.

What type of renewability guarantees premium rates and renewability?

non cancelable, non cancelable policies provides guaranteed renewability and premium rates.

When does a Probationary Period provision become effective in a health insurance contract?

At the policy's inception. The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

Change of occupation provision. The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.

P is a Major Medical policy owner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?

Claim will be denied. If a person is injured while committing an illegal act, health insurance will not cover the expense of the injury.

Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions?

Entire Contract. The Entire Contract provision states that the producer does NOT have the authority to change the policy or waive any of the provisions.

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss. The insured may file written proof of loss in any form if the insurer does NOT furnish forms after the insured gives notice of loss.

The provision that defines to whom the insurer will pay benefits to is called:

Payment of Claims. The Payment of Claims provision in a Health Insurance policy states to whom claims will be paid.

Which of these is considered a mandatory provision?

Payment of claims. Payment of Claims is considered a mandatory provision and directs where the claim benefits will go. The others are considered optional provisions.

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

Premiums are waived after the insured has been totally disabled for a specified time period. The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?

Premiums may increase at time of renewal. A Conditionally Renewable Health Insurance policy can increase premiums at time of renewal.

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

Premiums normally increase at time of renewal. A Guaranteed Renewable Insurance policy can have increasing premiums at time of renewal.

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer. The purpose of the Time of Payment of Claims provision is to prevent the insurance company from delaying claim payments.

The insuring clause

States the scope and limits of the coverage. The purpose of the insuring clause if to specify the scope and limits of the coverage provided.

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called:

Time Limit on Certain Defenses. The Time Limit on Certain Defenses (incontestability) provision limits the time during which the insurance company may challenge the validity of an insurance claim on the basis of a misstatement made on the insured's application.

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?

Monthly. 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.

Periodic health claim payments MUST be made at least:

Monthly. Under an individual health policy, periodic claim payments must be made at least monthly.

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

Time Limit on Certain Defenses. This provision limits the period during which an insurer can deny a claim based on a misstatement made by the insured.