Chapter 3- Ind Health Insurance Provisions

Question 1

What is cancellation in insurance?

Answer 1

Termination of a policy before its expiration date by the insurer or insured.

Question 2

What is a claim?

Answer 2

A request to an insurance company for payment based on the policy.

Question 3

What is an expense-incurred basis?

Answer 3

Policy pays reimbursement based on actual expenses.

Question 4

What is a guaranteed renewable policy?

Answer 4

A policy that guarantees the right to renew but can raise premiums.

Question 5

What is an irrevocable beneficiary?

Answer 5

A beneficiary who must give consent before policyowner makes certain changes.

Question 6

What is a lapse?

Answer 6

Termination of a policy due to nonpayment of premiums.

Question 7

What is a provision?

Answer 7

A legal clause stating duties/rights of insured and insurer.

Question 8

What is reinstatement?

Answer 8

Returning a lapsed policy to active status.

Question 9

What is a statute?

Answer 9

A formal written law, including those in the state insurance code.

Question 10

What is the entire contract provision?

Answer 10

Includes policy, application, and amendments. Changes require executive officer approval in writing.

Question 11

What is the time limit on certain defenses?

Answer 11

Misstatements can’t deny claims after 2 years (unless fraud).

Question 12

What is the grace period?

Answer 12

Time to pay overdue premium: 7 days (weekly), 10 (monthly), 31 (other).

Question 13

What is the reinstatement provision?

Answer 13

Policy is restored if accepted or not denied within 45 days.

Question 14

What is notice of claim?

Answer 14

Insured must notify insurer within 20 days of loss (or ASAP).

Question 15

What is the claim form provision?

Answer 15

Insurer must send claim forms within ~15 days.

Question 16

What is proof of loss?

Answer 16

Must be submitted within 90 days of the loss.

Question 17

What is time of payment of claims?

Answer 17

Claims must be paid upon proof; disability claims paid at least monthly.

Question 18

Who is responsible for claim notifications?

Answer 18

• Insured: Notice of claim & proof of loss
• Insurer: Provide forms & pay claims on time.

Question 19

What does the physical exam & autopsy provision allow?

Answer 19

Insurer can require exams or autopsies (if legal in state).

Question 20

What is payment of claims provision?

Answer 20

Specifies who receives payment—beneficiary or estate.

Question 21

What is the legal actions provision?

Answer 21

Insured must wait 60 days after proof of loss but act within 3 years.

Question 22

What is the change of beneficiary rule?

Answer 22

Can be changed anytime unless irrevocable (requires consent).

Question 23

What happens with cancellation?

Answer 23

Insurer must give 5 days’ notice. Refunds differ:
* Insurer: pro rata
* Insured: short-rate (with fee)

Question 24

What happens if the insured changes jobs?

Answer 24

Benefits are adjusted (change of occupation provision).

Question 25

What if the insured lied about their age?

Answer 25

Benefits adjusted to match correct age's premium.

Question 26

What is 'Other Insurance with This Insurer'?

Answer 26

Prevents profit by prorating benefits across multiple policies.

Question 27

What if insured has multiple insurers?

Answer 27

They share liability proportionately.

Question 28

What is relation of earnings to insurance?

Answer 28

Limits disability benefits to income average over 2 years.

Question 29

What happens with unpaid premiums at claim time?

Answer 29

They’re deducted from the claim payout.

Question 30

Will an illegal activity be covered?

Answer 30

No, claims from illegal acts are denied.

Question 31

Are intoxication-related injuries covered?

Answer 31

No, insurer is not liable.

Question 32

What if a policy conflicts with state law?

Answer 32

It’s automatically amended to comply (conformity provision).

Question 33

What is the free-look period?

Answer 33

Allows full refund if returned within a set period (e.g., 10 days).

Question 34

What is the insurance clause?

Answer 34

Agreement between insurer and policyowner.

Question 35

What is the consideration clause?

Answer 35

Each party provides value: insured pays premium, insurer promises coverage.

Question 36

What is non-cancellable?

Answer 36

Cannot cancel or raise premiums, renewable until age 65.

Question 37

What is guaranteed renewable?

Answer 37

Can raise premiums (class-wide), renewable until age 65.

Question 38

What is conditionally renewable?

Answer 38

Can terminate under certain conditions, not for claims history.

Question 39

What is renewable at insurer’s option?

Answer 39

Insurer may choose not to renew on certain dates, may raise premium.

Question 40

What is nonrenewable (cancelable/term)?

Answer 40

Covers only a specific time, then ends.

Question 41

What is 'interest on claims proceeds'?

Answer 41

If insurer loses a lawsuit, they pay interest from proof of loss date to judgment date.

Question 42

What is the military suspense provision?

Answer 42

Coverage suspended during service; premiums refunded/reduced.

Question 43

What is a probationary period?

Answer 43

Time that must pass before some conditions are covered.

Question 44

What is an elimination period?

Answer 44

Waiting period before disability benefits begin.

Question 45

What is coinsurance?

Answer 45

Shared cost between insured and insurer, after deductible.

Question 46

What are exclusions?

Answer 46

Specific causes of loss that are not covered.