Health Insurance Policy Provisions, Clauses, and Riders

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?

$900 (Deductible + 20% of the bill after the deductible [20% of $2,000] )

If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy?

10 days

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least...

2 years

In the event a policy lapses due to non payment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

What is a deductible in a health insurance policy?

A specified dollar amount that the insured must pay before the insurer will pay the policy benefits

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

While a claim is pending, an insurance company may require...

An independent examination as often as reasonably required

According to the time limit on certain defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application?

Any time while the policy is in force

The premium charged for exercising the guaranteed insurability rider is based upon the insured's...

Attained age

What are usual/responsible and customary charges based on?

Average charge for a given procedure in the specific geographic area

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

Cancellable

What is the name of the act by the insured to voluntarily give up insurance?

Cancellation

How will changing one's occupation to be more hazardous affect the health insurance policy in force?

Claim benefits will be reduced to what the premium would have bought for a more hazardous occupation

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the illegal occupation provision

The provision that provides for the sharing of expenses between the insured and the insurance company is...

Coinsurance

What provision provides for the sharing of expenses between the insured and the insurance company?

Coinsurance

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 copay?

Copay is a set dollar amount; coinsurance is a percentage of the expenses

A waiver of premium provision may be included with what type of health insurance policies?

Disability income

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day....

Elimination period

What selection of a health insurance policy lists the services for which the insurer will not provide coverage?

Exclusions

What health policy provision allows the insured a period of time to examine the policy and determine whether to keep it?

Free-look period

According to the Reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents?

Immediately

What rider would NOT increase the premium for a policyowner?

Impairment rider

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to the insured

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring clause

In a group health policy, a probationary period is intended for people who....

Join the group after the effective date

What health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided?

Legal actions

Under an individual disability income policy, the benefits must be paid on at least what schedule?

Monthly

What health provision defines the insured's duty to provide the insurer with responsible notice in the event of loss?

Notice of claim

What health policy provision states to whom the claim benefits must be paid?

Payment of claims

What provision would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Payment of claims

With respect to the consideration clause, what would be considered consideration on the part of the applicant for insurance?

Payment of premium

What is mandatory for health insurance policies?

Physical examination and autopsy

A guaranteed renewable health insurance policy allows the....

Policyholder to renew the policy to a stated age, with the company having the right to increase the premiums on the entire class

After the elimination period, a totally disabled insured qualified for benefits from a disability income policy that has a waiver of premium rider. What will happen to the premium that was paid into the policy during the elimination period?

Premium will be refunded

Insurers may change what on a guaranteed renewable health insurance policy?

Rates by class

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

Rates by class

What health policy provision describes the insured's right to cancel coverage?

Renewability provision

Which health insurance provision describes the insured's right to cancel coverage?

Renewal provision

What does the free-look period allow the insured to do?

Return the policy for a full refund of premium within a specified time period (usually 10 days)

An insured has endured multiple surgeries and hospitalizations for an illness during the last few months. Her insurer no longer bills her for medical expenses. What would allow for that.

Stop-loss limit

What term describes the specified dollar amount beyond which the insured no longer participates in sharing of expenses?

Stop-loss limit

The insured on a health policy misstated his age on the insurance application. If this misrepresentation is discovered, what will happen to the policy?

The benefit amount payable

Who decides which optional provisions would be included in a health policy?

The insurance company

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 year's expenses to the next year, which will help satisfy next year's deductible

Who pays the expanse for an autopsy under the physical examination and autopsy provision?

The insurer

What is not a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. What statement correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer

What is true about the renewability rider for cancellable policies?

The insurer must provide the insured a written notice of the cancelation , claims incurred before cancellation must be honored , and an insurance company may cancel the policy at any time

What is true regarding elimination periods and the cost of coverage?

The longer the emanation period, the lower the cost of coverage

The insuring clause of a disability policy usually states....

The method of premium payment

What will determine the length of the grace period in a health insurance policy?

The mode of the premium payment

What is a probationary period in group health insurance?

The period of time that must lapse before an employee is eligible for group health coverage

What is the probationary period in group health insurance?

The period of time that must lapse before an employee is eligible for group health coverage

If a health insurance policy has a 31-day grace period, what does that mean?

The policy remains in effect for 31 days after the premium is due and not paid

What will happen to a health insurance policy if the premium has not been paid by the end of the grace period?

The policy will be cancelled

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of payment claims

What is the purpose of the coinsurance provision in health insurance policies?

To prevent overutilization of the policy benefits

When the insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees....

To renew the policy until the insured has reached the age of 65

According to the rights of renewability rider for cancellable policies, what would be an untrue statement?

Unearned premiums are retained by the insurance company

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 charges for a specific procedure by a doctor of similar training and experience in the geographic area known as...

Usual, customary, and reasonable

Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes

Waiver of premium rider

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, not not to exceed 1 year

When can an irrevocable beneficiary be changed?

Yes , only with the written consent of the beneficiary

Under a health insurance policy, other than death benefits, that have not otherwise been assigned, will be paid to....

the insured - Payments for loss of life benefits are to be made to the designated beneficiary. If no beneficiary has been named, payment proceeds are to be paid to the deceased insured's estate. Claims other than death benefits are to be paid to the insured or the insured's estate, unless otherwise assigned by the insured.