Insurance Policy Provisions Quiz

Policy Provisions and Clauses

• Provision: Outlines benefits, terms, conditions, and policy features.

• Entire Contract: The policy, application, and any riders or amendments form the full agreement. No prior statements change it.

• Grace Period: A time after a premium is due to make a payment without losing coverage; typically fewer than 30 days.

• Time Limit on Certain Defenses: Limits the time insurers can deny claims or void policies due to insured misstatements.

• Reinstatement: Conditions for restoring a lapsed policy, often needing overdue premiums and proof of insurability.

• Notice of Claim: Insured must notify the insurer within specified time frames, often 20 days from the claim occurrence.

• Claim Forms: Insurers must provide claim forms within a certain time (usually 15 days).

• Proof of Loss: Insured must present supporting information for a claim, usually around 90 days.

• Time of Payment of Claims: Claims paid promptly after insurer receives notification and proof of the loss; around 45 days.

• Payment of Claims: Defines who receives claim payments.

• Physical Exam and Autopsy: Insurers can require physical exams and autopsies, at their cost, to investigate claims.

• Legal Actions: Insured can't sue insurer within 60 days of submitting proof of loss.

• Change of Beneficiary: Allows insured to change beneficiaries, except for irrevocably named ones.

• Misstatement of Age/Gender: Policy adjustments if age or gender was incorrectly stated.

• Change of Occupation: Adjusts benefits or premiums if the insured's occupation becomes more hazardous.

• Illegal Occupation: Coverage is not provided for injuries during illegal activities.

• Relation of Earnings to Insurance: Insurer might change policy benefits if insured's earning drop. Part of premium could be refunded.

Coverage and Limitations

• Insuring Clause: States covered perils and policy limits.

• Free Look: Allows policy owners 30 days to review the policy without obligation.

• Consideration Clause: Specifies premium amounts and payment frequency.

• Probationary Period: Time between policy start and full coverage; no benefits during this period.

• Elimination Period: Time between a disability and when benefits start; usually around 30 days.

• Waiver of Premium: Waives premium payments during total disability.

• Exclusions and Limitations: Lists conditions and situations not covered.

• Preexisting Conditions: Conditions before policy start date may be excluded or have waiting periods.

• Coinsurance: Percentage of medical costs shared by the insured and insurer after the deductible is met.

• Deductibles: Amount insured pays before insurer provides benefits.

• Eligible Expenses: Medical costs covered by the policy.

• Co-payments: Fixed amounts paid by insured for covered services.

• Pre-authorizations/Prior Approval: Requirements for certain services before coverage.

• Usual, Reasonable, and Customary (URC) Charges: Insurer determines covered amount based on reasonable expenses within an area.

• Lifetime/Annual/Per Cause Maximum Benefit Limits: Limits on total benefits over time or per instance or annually.

Additional Policy Features

• Riders: Amendments to policies, adding or waiving specific coverage.

• Impairment/Exclusions: Hazards or conditions for which a policy doesn't provide a benefit.

• Guaranteed Insurability (GIB): Allows individuals to purchase additional insurance without proof of insurability at certain specified points in the future

• Future Increase Option: Option to increase coverage amounts at future times without re-exam.

• Noncancelable: Policy cannot be canceled by the insurance company unless for non-payment of premiums, and coverage is guaranteed until the insured reaches a certain age without changes in premium.

• Cancelable: Policy can be canceled by the insurance company.

• Guaranteed Renewable Policies: Policies must be renewed until the insured reaches a specific age (e.g., 60 or 65), but with possible premium changes.