19 - Health Insurance Policy Provisions

Under the misstatement of age provision in a health insurance policy, what can a company do if it discovers that an insured gave a wrong age at the time of application? A) Adjust the benefits. B) Assess a penalty. C) Cancel the policy. D) Increase the premium.

A) Adjust the benefits. If the insured's age or sex is misstated in an application for insurance, the benefit payable is adjusted to reflect the actual age or sex of the insured.

Diana, the beneficiary under her husband's AD&D policy, submits an accidental death claim on May 1, 2010 following his death. However, the company denies the claim on the basis that death was due to natural causes. She decides to talk to her attorney. What is the earliest date for taking legal action against the insurer? A) July 1, 2010. B) May 1, 2011. C) May 2, 2010. D) June 1, 2010.

A) July 1, 2010. The insured cannot take legal action against the company in a claim dispute until after 60 days from the time the insured submits proof of loss.

According to the notice of claims provision in a health insurance policy, a claimant normally must notify the insurance company of loss within how many days after the loss occurs? A) 40. B) 20. C) 60. D) 10.

B) 20. The notice of claims provision states the claimant must notify the insurance company within 20 days after the loss occurs.

Which of the following is the usual grace period for a semi-annual premium policy? A) 7 days. B) 31 days. C) 20 days. D) 60 days.

B) 31 days. The typical grace period for a policy paid on a semi-annual basis is 31 days.

A policy that the insurer may not cancel or increase the premium for is referred to as A) cancellable. B) noncancellable. C) guaranteed renewable. D) optionally renewable.

B) noncancellable. A noncancellable policy cannot be cancelled nor can its premium rates be increased under any circumstances.

The minimum grace period on a health insurance policy paid on a quarterly basis is? A) 90 days. B) 10 days. C) 31 days. D) 7 days.

C) 31 days. The correct answer is "31 days". The grace period on a quarterly-paid health insurance policy is typically 31 days.

An insured has a health insurance policy that has been in effect beyond the incontestable period. A fraudulent statement was made in the application. This statement would normally void the policy, but now it is beyond the incontestable period. If the policy is not guaranteed renewable, what amount will the company have to pay? A) 66% of claim. B) 50% of the claim. C) 80% of claim. D) Nothing.

D) Nothing. Nothing will be paid because fraud was committed during the application process, which is grounds for contest at any time with a health insurance policy.

What type of policy gives the insurer the option to terminate the policy on a date specified in the contract? A) Cancellable. B) Conditionally renewable. C) Optionally cancellable. D) Optionally renewable.

D) Optionally renewable. The renewability provision in an optionally renewable policy gives the insurer the option to terminate the policy on a date specified in the contract. Furthermore, this provision allows the insurer to increase the premium for any class of optionally renewable insureds.

Under a provision known as time payment of claims in a health insurance policy, after receiving proof of loss, all benefits other than those that are paid in periodic installments are supposed to be paid? A) At the end of the month. B) Within 30 days. C) Immediately. D) Within 60 days.

C) Immediately. Generally, all claims other than those for periodic installments should be paid immediately after the insurer has received proof of loss.

Individual health insurance policies may include a provision concerning unpaid premiums. When the provision applies, if a premium payment is overdue when a claim for benefits is made? A) The insurer may pay the claim and then cancel the policy. B) Coverage is suspended until the premium is paid. C) The insurer may deduct the overdue premium from the benefits. D) A written demand for premium payment will be sent to the insured.

C) The insurer may deduct the overdue premium from the benefits. This is a standard provision in almost all life and health insurance policies. The insurer always has the right to deduct overdue premiums from any benefits paid.

The Affordable Health Care Act mandates that children of the insured are eligible for health insurance coverage until they attain age? A) 20. B) 22. C) 21. D) 26.

D) 26. The Affordable Care Act allows young adults to stay on their parents health care plan until age 26.

Which section of a health insurance policy specifies the conditions, times, and circumstances under which the insured is NOT covered by the policy? A) Insuring clause. B) Exclusions. C) Coverages. D) Coinsurance provision.

B) Exclusions. Exclusions are specified hazards listed in a policy for which benefits will not be paid.

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments? A) During the time an insured is confined in a hospital. B) Following an accidental injury, but not during sickness. C) After an insured has become totally disabled as defined in the policy. D) Whenever an insured is unable to work.

C) After an insured has become totally disabled as defined in the policy. The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.

The part of a health insurance policy that states the kind of benefits provided and the circumstances under which they will be paid is/are the? A) Definitions. B) Face of the policy. C) Insuring clause. D) Conditions.

C) Insuring clause. The part of a health insurance policy that states the kind of benefits provided and the circumstances under which they will be paid is the insuring clause.

All of the following are required uniform provisions in individual health insurance policies EXCEPT? A) Entire contract. B) Grace period. C) Reinstatement. D) Change of occupation.

D) Change of occupation. An insured's change of occupation is not a required uniform provision in individual health insurance policies.

Which of the following is a standard optional provision for health policies? A) Change of beneficiary. B) Physical exam autopsy. C) Grace period. D) Misstatement of age.

D) Misstatement of age. Misstatement of age is one of the standard optional provisions for health policies. The misstatement of age provision allows the insurer to adjust the benefit payable if the age of the insured was misstated when application for the policy was made. Benefit amounts payable in such cases will be an amount the premiums paid would have purchased at the correct age.

Suppose an insurance contract contains inconsistent or contradictory provisions. Various parts of the contract are printed, typewritten, and handwritten. In seeking to determine the original intent, a court is likely to rely on? A) The printed material first, then the typewritten, and then the handwritten. B) All parts of the contract, giving equal importance to each. C) The typewritten material first, then the printed, and then the handwritten. D) The handwritten material first, then the typewritten, and then the printed.

D) The handwritten material first, then the typewritten, and then the printed. Any handwritten material will be considered first because it probably reflects last minute revisions of the terms. After that the typewritten material will be considered and then the printed material.

All of the following are true about a coordination of benefits provision in group health insurance policies except? A) It is designed to prevent overcompensation for incurred losses. B) It limits benefits when insurance is provided under more than one plan. C) It coordinates benefits under all available group and individual policies. D) It establishes which plan pays first.

C) It coordinates benefits under all available group and individual policies. Coordination of benefit provisions applies only to group insurance plans. Any benefits under individual policies are not affected.

Which of the following statements pertaining to the grace period and reinstatement provisions in health insurance policies is NOT correct? A) Warren's medical expense policy was reinstated on September 30 and he became ill and entered the hospital on October 5. His hospital expense will not be paid by the insurer. B) Craig's health policy has a grace period of 31 days. He had a premium due June 15 while he was on vacation. He returned home July 7, mailed his premium the next day and the insurer received it July 10. His policy would have remained in force. C) States may require grace periods of 7,10, or 31 days, depending on the mode of premium payment or term of insurance. However, many states require a 31-day grace period in any case. D) Under a health policy's reinstatement terms, insured losses from an illness are covered immediately after reinstatement.

D) Under a health policy's reinstatement terms, insured losses from an illness are covered immediately after reinstatement. This is not correct. Losses resulting from an illness up to 10 days after reinstatement are not covered. After 10 days, the insured is fully covered.

The conformity with state statutes provision in a health insurance policy stipulates that any policy provision that is in conflict with the statutes of the state where the insured resides is? A) to be rewritten if the policy is returned to the company. B) to be submitted to the chief financial officer for approval. C) cause for the insured's policy to be voided. D) automatically amended to conform to the minimum requirements of the state's statutes.

D) automatically amended to conform to the minimum requirements of the state's statutes. Any policy provision that is in conflict with state statutes in the state where the insured lives at the time the policy is issued is automatically amended to conform with the minimum statutory requirements.