Health Insurance Policy Provisions

Questions and Answers

Which of the following types of policies did J purchase?

Reinstatement

Guaranteed renewable

Noncancelable (correct)

Conditionally renewable

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 (correct)

Waiver of Premium

Time Limit on Certain Defenses

Insuring Clause

Which health policy clause specifies the amount of benefits to be paid?

Payment of Claims

Entire Contract

Waiver of Premium

Insuring (correct)

When does a probationary period provision become effective in a health insurance contract?

At the policy's inception Signup and view all the answers

How will the insurer handle a claim for a chronic neck problem that originated before the application was taken?

Claim will be paid and coverage will remain in force Signup and view all the answers

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15 Signup and view all the answers

What 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. Signup and view all the answers

Under the Change of Occupation provision, what action may the insurance company take?

Increase her policy's coverage amount. Signup and view all the answers

What is the insuring clause?

States the scope and limits of the coverage. Signup and view all the answers

What is the characteristic of a waiver of premium provision?

Keeps coverage in force without premium payments. Signup and view all the answers

What is the Time Limit on Certain Defenses provision?

Limits the time during which an insurer can deny a claim. Signup and view all the answers

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65?

Guaranteed Renewable Signup and view all the answers

What is the grace period in health insurance policies?

The additional period of time after a premium payment is due. Signup and view all the answers

Which clause specifies the conditions that must be met for a policy to be valid?

Consideration clause Signup and view all the answers

What is the notice of claims provision?

Spells out the insured's duty to provide reasonable notice in the event of a loss. Signup and view all the answers

What does the Payment of Claims provision state?

It defines to whom the insurer will pay benefits. Signup and view all the answers

What is the purpose of the Grace Period?

To give the policyowner additional time to pay overdue premiums. Signup and view all the answers

What happens if the insurer does not send claims forms within the required time period?

Submit the claim in any form. Signup and view all the answers

What is a characteristic of a Conditionally Renewable Health Insurance policy?

Premiums may increase at time of renewal. Signup and view all the answers

What does the Time of Payment of Claims provision ensure?

It prevents the insurance company from delaying claim payments. Signup and view all the answers

What is the minimum frequency for periodic health claim payments?

Monthly Signup and view all the answers

Which of the following statements describes what an Accident and Health policyowner may NOT do?

Adjust the premium payments Signup and view all the answers

Study Notes

Disability Income Policies

A Noncancelable Disability Income Policy can only be terminated by the policyowner, with stable rates guaranteed.
Claims for preexisting conditions are honored after the incontestable period, typically 2 to 3 years, regardless of undisclosed information at application.

Health Policy Provisions

The Entire Contract provision prohibits producers from altering a policy or waiving provisions without authority.
The Insuring Clause specifies covered benefits for accidents or illnesses.
The Probationary Period starts at the policy's inception, during which no benefits are paid.
The Waiver of Premium provision suspends premium payments if the insured is totally disabled for a specified period.

Claim Processing

Insurers must provide claim forms within 15 days of receiving notice of a loss under the Claims Forms provision.
The Time Limit on Certain Defenses limits the duration insurers can dispute claims based on misstatements made in applications.
The Notice of Claims provision clarifies the insured's obligation to inform the insurer of a loss in a timely manner.

Coverage and Renewability

Policies like Guaranteed Renewable policies can be renewed with premium adjustments based on risk classifications.
Conditionally Renewable policies may adjust premium rates upon renewal.
The Grace Period allows for late premium payments to keep coverage active.

Legal and Compliance Clauses

The Consideration Clause details required conditions for policy validity, including completion of medical history questions.
The Payment of Claims provision defines to whom benefits are payable.

Claims and Exclusions

Medical claims must be reported within 20 days post-accident.
Health insurance excludes benefits related to acts of war and intoxication.
Periodic payment requirements for benefits, especially for disability income, must occur at least monthly.

Policy Adjustments

The Change of Occupation provision allows insurers to modify benefits if the insured changes to a higher-risk job.

Important Definitions

Proof of Loss is required to validate a claim.
Coverage may be denied if conditions laid out in the policy, such as the time limits related to defense, are not met.

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Test your knowledge on health insurance policy provisions with these flashcards. Each card covers key terms and definitions essential for mastering disability income policies. Perfect for students or professionals looking to refresh their understanding of insurance concepts.