Insurance Policy Provisions Overview

Questions and Answers

According to the entire contract provisions, the entire contract includes all of the following Except

The insurance policy

Any attachments

Any endorsements

The premium payment (correct)

In most states, the policy becomes incontestable after

3 years

4 years

2 years (correct)

5 years

All insurance policies may be canceled at any time by

Neither the insurer or the insured

The insurer only

The insured only (correct)

Neither the insurer nor the insured

Normally, written proofs of loss must be furnished within how many days after the loss?

90 Signup and view all the answers

If there is no beneficiary listed on a policy, benefits will be paid to

The insurer's estate Signup and view all the answers

The insurer may generally require an autopsy at its own expense unless

The state has an applicable law that forbids autopsy Signup and view all the answers

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 provisions and the insurance company discovers this 4 years later, Betty's policy

Limits will be lowered Signup and view all the answers

The optional provisions that deal with multiple insurance policies of the same type on a single insured deal with the problem of

Overinsurance Signup and view all the answers

If a policyholder has two or more policies from different companies that cover the same expenses and the insurers were not notified that the other coverage existed, each insurer will

Pay a proportionate share of the claim Signup and view all the answers

If a policy includes the provisions on conformity with state statutes, and the state changes the law to be in conflict with another provision of the policy

The provision will automatically be amended to conform to the minimum requirement of the statute Signup and view all the answers

A pro rata return is one in which the insurer returns

All of the unearned premium Signup and view all the answers

The grace period varies according to

Premium payment frequency Signup and view all the answers

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 Signup and view all the answers

A reinstated policy will cover

Accidents immediately and sickness after 10 days Signup and view all the answers

If an insured is disabled for at least 2 years, the insurer may require proof of continuance of disability every

6 months Signup and view all the answers

Because the insurer needs time to respond to a claim, the law provides the insurer with a window during which the insured cannot sue to recover under the claim. This window lasts for

60 days Signup and view all the answers

The maximum time during which suit can be filed is how many years after written proof of loss is finished?

3 Signup and view all the answers

A revocable beneficiary

May be changed without the beneficiary's consent Signup and view all the answers

Which of the following is NOT a required provision under the Uniform Provisions Model Act?

Change of occupation Signup and view all the answers

Which of the following is an optional provision under the Uniform Provisions Model Act?

Cancellation Signup and view all the answers

Julia worked as a race car driver until recently, when she took a job in the promotions office handling media inquiries. If she has the same health insurance, her premiums are more likely to

Go down Signup and view all the answers

Joe took a disability policy working as a very successful stockbroker. A few years later, he decides to take a less stressful job at a not-for-profit organization, writing about financial issues. He loves his new job and doesn't mind the fact that he makes a lot less money. When he becomes disabled 3 years later, his disability benefit is more than he has made in salary in 3 years. If the policy contains an average earnings clause, Joe's benefit will be

The greater of Joe's monthly earnings at the time the disability started, or the average monthly earnings for the period of 2 years immediately preceding his disability. In addition, the insurer will return some of the excess premiums that were paid for the benefit Joe is not eligible to receive Signup and view all the answers

Cindy has a claim for $2,000 and a past due premium of $200. The insurer will

Pay the claim minus the past due premium Signup and view all the answers

If Lois cancels her health insurance policy, the insurer will issue

A short-rate refund of most of the unearned premium Signup and view all the answers

Joel is hit by a car while crossing the street against a light. If Joel's policy contains the illegal occupation provision, the insurer

Will pay the claim because crossing the street against the light is not a felony or a regular occupation Signup and view all the answers

Carmen gets her health insurance policy on May 1, and on May 3 she decides she doesn't want it and returns it to the company. On May 6, she is hit by a car. The company will

Only return any premium Carmen has paid and not any resulting claim Signup and view all the answers

The insuring clause does all of the following EXCEPT

Describe the insured Signup and view all the answers

Consideration for a health policy includes

The statements made in the application and the premium Signup and view all the answers

Jennifer takes out an optionally renewable health policy with an annual premium due on June 14. The insurer decides it no longer wants to insure people with first names longer than 5 letters. The insurer may

Cancel the policy, but only on June 14 of the next year Signup and view all the answers

CeeCee's policy is guaranteed renewable. Which of the following may the insurer NOT do?

Increase the premiums on CeeCee's policy only Signup and view all the answers

George has a noncancelable policy. Which of the following may the insurer do?

Cancel the policy if George fails to pay premiums Signup and view all the answers

Which of the following statements is TRUE?

An exclusion is a provision that eliminates coverage for a specified condition; a reduction is a provision that decreases benefits as a result of a specified condition Signup and view all the answers

Study Notes

Policy Provisions Overview

The entire contract includes the insurance policy, endorsements, and attachments; premium payment is excluded.
Policies become incontestable after 2 years in most states.
Only the insured can cancel an insurance policy at any time.

Claims and Proof of Loss

Written proof of loss must be submitted within 90 days of the loss occurrence.
In the absence of a designated beneficiary, benefits are paid to the insured's estate.
Insurers may require an autopsy at their expense unless prohibited by state law.

Age Misstatement Impact

If an insured misstated their age, benefits may be lowered, not canceled, even after the incontestable period.

Insurance Overlap and State Compliance

Optional provisions address the problem of overinsurance when multiple policies exist.
If a law changes that conflicts with a policy, the policy provisions will change to meet the new minimum requirements.

Financial Adjustments and Refunds

Pro rata returns involve returning all unearned premiums upon cancellation.
Grace periods vary based on the frequency of premium payments.
A reinstated policy covers accidents immediately and sickness after 10 days.

Disability and Claim Timelines

Proof of disability may be required every 6 months if the insured is disabled for over two years.
Legal action cannot commence until 60 days after a claim is filed.
The maximum time to file a suit after written proof of loss is 3 years.

Beneficiary Designations

A revocable beneficiary can be changed without the beneficiary’s consent.
Under the Uniform Provisions Model Act, "Change of occupation" is not a required provision but "Grace Period," "Time of payment of claims," and "Proof of loss" are required provisions.

Claim Payments and Premium Refunds

Insurers will pay claims minus any past due premiums.
Refunds issued for canceled health insurance policies are typically short-rate for unearned premiums.

Insuring Clause Details

The insuring clause outlines the general scope of coverage, provides necessary definitions, and specifies conditions for benefit payments.

Consideration Elements

Consideration for a health policy involves both the statements made in the application and the premiums paid.

Cancellation Policies

Insurers can cancel optionally renewable policies on specified dates; they cannot increase premiums solely based on recipient names.
Noncancelable policies can be canceled for non-payment of premiums but not otherwise.

Exclusions and Reductions

An exclusion eliminates coverage for specified conditions, while a reduction decreases benefits due to specified conditions.

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Description

This quiz covers key provisions of insurance policies, including claims processes, the impact of age misstatements, and compliance with state laws. Test your understanding of how these elements affect coverage, benefits, and cancellations. Ideal for anyone studying insurance or finance topics.