Accident and Sickness Policy Provisions, Clauses, and Riders

Whats the rights of renewability rider

! This rider allows the insurer to cancel the policy at any time, or at the end of the policy period. Any unearned premium must be returned to the policyholder. If the insurer cancels, the unearned premium will be returned on a pro rata basis.

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50

What is the stop limit loss

A "stop-loss limit" is a specified dollar amount beyond which the insured no longer participates in the sharing of expenses.

A waiver of premium provision may be included with which kind of health insurance policy?

Disability Income A waiver of premium rider generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the .

Entire contract clause Entire contract is a mandatory provision that is required by law.

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions Exclusions are restrictions of coverage as stated in the policy.

A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?

Immediately

A guaranteed renewable disability insurance policy

Is renewable at the insureds option up to a specified age Guaranteed renewable means that the insured has the right to keep the policy until a specific age; however, while the insurer cannot increase the rates on an individual basis, the insurer can increase the rates for all insureds by class.

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

L would first pay the $500 deductible; out of the remaining $2,000, the insurer will pay 80% ($1,600) and the insured will pay 20% ($400).

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal Actiomn

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would

Pay the claim Because the accident occurred during the grace period, the insurance company will pay the claim.

Insurers may change which of the following on a guaranteed renewable health insurance policy?

Rates by Class On a guaranteed renewable health insurance policy, the insurer may increase premiums on a class basis only and not on an individual policy.

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met?

Stop Limit Loss

Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?

Stop limit loss

What does the proof of loss provision state

The "proof of loss" provision states the claimant must submit a proof of loss within 90 days; however, if it is not possible to comply, the time parameter is extended to 1 year. The one-year limit does not apply if the claimant is not legally competent to comply with this provision.

What is the misstatement of age provison?

The Misstatement of Age provision says that if a client has misstated her age, whether intentional or unintentional, they will adjust the benefit being paid. It doesn't matter when the mistake was found.

what is the free look period

The free-look period is a mandatory provision found in health insurance policies that allows the applicant to examine the policy and if dissatisfied for any reason, return the policy for a full refund.

Which of the following riders would NOT increase the premium for a policyowner?

The impairment rider

whats the The impairment rider

The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.

insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?

The insured may carry over the amount of this years expenses to next year, which will help satisfy next years deductible Under the carry over provision, if the insured did not incur sufficient medical costs during the year to meet the deductible, any medical expenses incurred during the last three months may be carried forward to the next year, offsetting the total deductible costs for that year.

The free-look provision allows for which of the following?

A right to return the policy for a full premium refund

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

A statement that is sufficiently clear to identify the insured and the nature of the claim

A policy with a 31-day grace period implies

AThe policy will not lapse for 31 days if the premium is not paid when due.

Ifthe insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk A part of the premium rating concerns the hazard of occupation.

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age

What is the changes of occupation provision

Change of occupation provision allows the insurer to adjust benefits if the insured changes occupations.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause

What is the main difference between coinsurance and copayments?

Copayment is a set dollar amount

Which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.

The insuring clause of a disability policy usually states all of the following

The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.

Which of the following statements is true regarding coinsurance?

The larger the percentage that is paid by the insured, the lower the required premium will be.

What is the legal actions provision?

This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.

Whats the illegal occupation provision

This optional provision specifically excludes coverage for injuries incurred while performing an illegal act. The insurer will not be 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.

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

Unlimited The Physical Exam and Autopsy provision allows the insurer to examine the insured as much as is reasonably necessary while the claim is being processed, provided that the insurer pays the expenses.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary, and reasonable

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible but not to exceed 1 year

Whats the usual, customary, and reasonable approach?

approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.

What type of policy allows the insurance company to cancel a policy at any time?

cancellable

The insuring clause usually states all of the following

lists the insured, the insurance company, what kind of losses are covered, and for how much the losses would be compensated.

Which of the following does the Insuring Clause specify?

lists the insured, the insurance company, what kind of losses are covered, and for how much the losses would be compensated.

What are features of a noncancellable policy

the insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.

The expense for an autopsy covered under the physical exam and autopsy provision is paid by

the insurer