Unit 14: Health Insurance Policy Provisions

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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


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