Unit 14 - Health Insurance Policy Provisions - MANDATORY

Question 1

Time Limit on Certain Defenses (Incontestability Clause)

Answer 1

This provision states that after two years from the date of policy issue, no misstatements, except for fraudulent misstatements made by the applicant in the application for the policy shall be used to void the policy or deny a claim.
Fraudulent statements are grounds to contest a policy at any time.

Question 2

Grace Period

Answer 2

A specified time following the due date of a premium payment in which the premium has not been paid. A loss that occurs during the grace period would be covered minus the premium that was due.

Question 3

What are the times for Grace Periods?

Answer 3

7 days - weekly premium policies
10 days - monthly premium policies
31 days - all other (annually, semiannually, or quarterly)

Question 4

Reinstatement

Answer 4

• The policy is reinstated when the delinquent payment is accepted by the insurer or its agent.
• IF the insurer requires a reinstatement application to be submitted, a conditional receipt will be issued for the premium and reinstatement is effective on approval of the application.
• Coverage is automatically reinstated 45 days after the application is submitted if the insurer has not disapproved the application and notified the applicant by that time.
• Once the policy is reinstated, there is a 10-day probationary period for sickness coverage. No propationary period for accident coverage.

Question 5

Notice of Claim

Answer 5

• A written notice of claim must be given to the insurer withing 20 days after occurence or commencement of any loss covered by the policy or as soon there after as reasonably possible.
• If continuing disability can only be required to provide proof every 6 months.

Question 6

Claim Forms

Answer 6

Insurer’s must provide a claim form within 15 days upon receipt of the insured’s notice of claim.

Question 7

Proof of Loss

Answer 7

Written proof of loss must be provided to the insurer within 90 days of the date of loss. If not possible, may be filed up to one year after loss unless insured has legal incapacity.

Question 8

Time of Payment of Claims

Answer 8

Insurers must pay lump sum claims immediately after receiving proof of loss. For claims involving periodic payments such as disability income, payments must be made at least monthly.

Question 9

Physical Examination and Autopsy

Answer 9

• Insurers may require insureds to submit to a physical exam.
• Insurers may also require an autopsy to be performed on a deceased insured
• The insurer pays the cost of the exam and autopsy

Question 10

Legal Actions

Answer 10

No action at law can be brought to recover on the policy:

• Earliest 60 days after proof of loss
• Maximum three years after proof of loss