Uniform Individual Accident and Sickness Provisions

Questions and Answers

What does the entire contract provision state about changes to a health insurance policy?

Any agent of the company can modify the policy.

Only an executive officer can authorize changes to the policy. (correct)

Changes do not need to be documented as part of the contract.

Changes can be made at any time with mutual consent.

Which of the following is NOT a requirement of the NAIC's Uniform Individual Accident and Sickness Policy Provisions Law?

Standard provisions must be included.

Insurers must maintain complete discretion over policy wording. (correct)

Modifications may not be less favorable to policyholders.

Provisions should define the rights and duties of both parties.

What is the primary purpose of including standard provisions in individual health insurance policies?

To allow insurers to redefine their contracts freely.

To ensure uniformity and protection for the policyholder. (correct)

To facilitate quicker claims processing.

To exempt policyholders from being responsible for their premiums.

Which of the following statements about modifications to health insurance policies is correct?

All modifications must be documented and signed by both parties. Signup and view all the answers

What is the minimum grace period for weekly premium policies?

7 days Signup and view all the answers

What happens if the premium isn't paid by the end of the grace period?

The policy will lapse Signup and view all the answers

How does the NAIC's law ensure the rights of policyholders?

By requiring clear definitions of the responsibilities of both parties. Signup and view all the answers

Which of the following can insurers not do under the provisions of the NAIC law?

Change the provisions without written agreement. Signup and view all the answers

Under what condition can reinstatement be automatic?

If the premium is paid and no application is required Signup and view all the answers

What is the coverage period for sickness after a policy is reinstated?

10 days Signup and view all the answers

How long does a company have to respond to a reinstatement application before it is automatically approved?

45 days Signup and view all the answers

Which aspect of a policy is tied directly to the grace period?

Premium payment mode Signup and view all the answers

What action can the policyowner take regarding the beneficiary?

Change the beneficiary at any time Signup and view all the answers

Which of the following is NOT true about the grace period?

The grace period can be less than 7 days for certain policies Signup and view all the answers

What is required for a policyowner to change a beneficiary designation under a non-irrevocable designation?

A written request to the insurer Signup and view all the answers

What is the maximum time frame allowed for submitting a proof of loss after a claim occurs?

1 year Signup and view all the answers

Within how many days must the insurer supply claims forms after receiving a notice of claim?

15 days Signup and view all the answers

If an insurer fails to provide claims forms, what is the alternative requirement for the claimant?

Provide written proof of the occurrence and nature of the loss Signup and view all the answers

What stipulation applies to the time of payment of claims related to disability income benefits?

Benefits must be paid monthly Signup and view all the answers

What is the insured's duty regarding notice of claim after a loss occurs?

Notify within 20 days or as soon as reasonably possible Signup and view all the answers

What happens if the claimant is not legally competent to comply with the one-year limit for submitting proof of loss?

The one-year limit does not apply Signup and view all the answers

In a scenario where a beneficiary designation is irrevocable, what must the policyholder do to make a change?

Obtain permission from the beneficiary Signup and view all the answers

What is the impact of a claim for loss incurred after 2 years from policy issuance?

It cannot be denied based on existing conditions not excluded. Signup and view all the answers

What is the time frame for a claimant to seek legal action against an insurer after proving a loss?

After 60 days but no later than 3 years. Signup and view all the answers

How are benefits adjusted when there is a misstatement of age on an application?

They are adjusted to what the premium would have purchased at the correct age. Signup and view all the answers

What happens to benefits if an insured changes to a more hazardous occupation?

Benefits are reduced according to the new risk level. Signup and view all the answers

What can an insured do if they change to a less hazardous occupation?

Apply for a rate reduction. Signup and view all the answers

What is the primary consideration for insurers when assessing the risk of applicants?

The occupation of the insured. Signup and view all the answers

To whom are benefits of an insurance policy payable while the insured is alive?

To the insured Signup and view all the answers

What happens to benefits if the insured passes away and there is no beneficiary?

They are paid to the deceased's estate Signup and view all the answers

What does the facility of payment clause allow the insurer to do?

Pay up to a specified limit to an equitable individual Signup and view all the answers

Under what circumstances can an insurer deny a claim after a policy has been in force for two years?

If the applicant committed fraud Signup and view all the answers

What is required from the insured during a claim process according to the duties outlined?

Submit a notice of claim and proof of loss Signup and view all the answers

What right does the insurer have regarding physical examinations during a claim?

To examine the insured as often as necessary at its own expense Signup and view all the answers

Which provision prevents the insurer from using certain statements to deny a claim after a specific time period?

Time limit on certain defenses Signup and view all the answers

What does the insurer typically require in regard to an autopsy?

It is performed at the insurer’s expense, unless state law prohibits it Signup and view all the answers

Under what circumstance will liability be denied to the insured?

If the insured commits an illegal act Signup and view all the answers

What is the minimum benefit that can be reduced to under the relation of earnings to insurance provision?

$200 per month Signup and view all the answers

What happens if the total benefits exceed the insured's average monthly earnings?

The insurer only pays a proportionate amount of the benefit Signup and view all the answers

How is the insurer's liability calculated if there are multiple policies involved?

By considering the insured's earnings from the last 24 months Signup and view all the answers

In the event of reduced benefits, what does the insurer require to return?

Premiums for the part of the benefit not payable Signup and view all the answers

Study Notes

Mandatory Provisions Overview

The Uniform Individual Accident and Sickness Policy Provisions Law is adopted in all states, standardizing provisions in individual health insurance policies.
Provisions define rights and duties of insurers and policyholders, allowing for rewording if it favors the policyholder.

Entire Contract

The policy, signed application, and amendments constitute the entire contract.
Changes require written agreement from both the insurer and policyholder, enforced only by an executive officer.

Grace Period

A grace period allows for late premium payment without policy lapse.
Minimum grace periods are:
- 7 days for weekly policies
- 10 days for monthly policies
- 31 days for other payment modes.
Coverage remains active during the grace period.

Reinstatement

Policies lapse if premiums are unpaid after the grace period.
Reinstatement may be automatic if the insurer accepts the premium without a new application.
If a new application is needed, coverage reinstated within 45 days; accidents covered immediately, sickness after 10 days.

Change of Beneficiary

Policyholders can change beneficiaries at any time with a written request.
Consent from beneficiaries is not needed unless their designation is irrevocable.

Claims Procedures

Insured must provide notice of claim within 20 days or as soon as possible; notice to an agent is considered notice to the insurer.
Insurers must provide claims forms within 15 days of notice.
Proof of loss must be submitted within 90 days of loss.
Claims payable within specified times (30, 45, or 60 days); disability payments must be monthly.

Payment of Claims

Claims are payable to the insured while living; upon death, to the beneficiary or estate.
Some policies may expedite urgent claim payments through a facility of payment clause.

Physical Examination and Autopsy

Insurers may require physical exams at their expense as necessary during a claim.
Autopsies may also be conducted unless restricted by law.

Time Limit on Certain Defenses (Incontestable)

No application misstatements (except fraud) can deny a claim after 2 years of policy issuance.
Insurers may deny claims for fraud at any time.

Loss Incurred or Disability After 2 Years

Claims for losses or disabilities starting after 2 years cannot be denied due to pre-existing conditions.

Legal Actions

Claimants must wait 60 days and have a maximum of 3 years to initiate legal action after proof of loss.

Misstatement of Age or Gender

Claims benefits may adjust based on the corrected age or gender as per premiums paid.

Change of Occupation

Insurers may adjust benefits if an insured changes to a more hazardous occupation, reverting to what premiums would have covered for that risk.
Policyholders can request rate reductions if moving to a less hazardous occupation.

Illegal Occupation

Liability is denied for injuries sustained during illegal activities or occupations.

Relation of Earnings to Insurance

Benefits can be limited to the average income over the last 24 months.
Excess benefits for all policies result in pro-rata reductions, not to fall below $200 per month, with unused premiums returned.

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Description

This quiz focuses on the key provisions of the Uniform Individual Accident and Sickness Policy Provisions Law, as established by the NAIC. It covers standard regulations that apply to individual health insurance policies across all states, highlighting similarities with life insurance. Test your understanding of these important insurance concepts.