Unit 14 - Health Insurance Policy Provisions - OPTIONAL Flashcards
Change of Occupation
- More hazardous - insurer will reduce benefits
- Less hazardous - insurer will reduce the premium
Misstatement of Age
- Younger than stated on application - benefits increased
- Older than stated on appllication - benefits reduced
Other Insurance with This Insurer
Total of all policies exceeds maximum
- Benefits reduced
- Excess premiums refunded
Insurance with Other Insurers
- Each company pays a proportionate share
- Excess premiums are refunded
Relation of Earnings to Insurance (Average Earnings)
If an insured’s total disability income benefit exceeds the greater of the insured’s earnings at the time of disability or the insured’s average monthly earnings for the past two years, the benefit payable is reduced accordingly and the premium paid for the excess coverage is refunded to the insured.
- Disability benefit exceeds earnings:
- Benefits reduced
- Excess premiums refunded
Unpaid Premium
If a premium is due at the time a claim is made, the amount of the premium will be deducted from the benefit payable under the claim.
Cancellation
- The insurer may cancel a policy at any time by giving the insured five days written notice.
- Cancellation is effective when written notice is received by the insurer
- Cancellation does not affect any pending claim
Right to Examine / Free Look
When a policy is delivered to the insured they have a right to look it over and decide whether to keep it or not.
- 10 days from receipt
- 30 days for Senior products - Medicare Supplements, Long Term Care
- If policy returned, complete refund of money
Insuring Clause
States the insurer’s promise to pay under the conditions described in the policy. Also identifies the type of loss covered by the contract.
Consideration Clause
CONSIDERATION = THINK MONEY $$$$$
- Company promises to pay
- Applicant provides information and pays premium
Renewability Provisions 5 classification types
They are listed from least favorable / least expense for the insured to most favorable / most expensive for the insured:
- Cancelable - the insurer can cancel any time
- Optionally renewable - the insurer has the option to renew or not for any reason on a premium due or anniversary date. Premiums may be increased on the policy anniversary for a class of insureds
- Conditionally renewable - the insurer may terminate coverage but only for reasons not based on the insured’s health such as reaching a certain age. Premiums may be increased on the policy anniversary for class of insureds
- Guaranteed Renewable - the policy cannot be canceled except for non-payment of premium, and premiums may increase on a renewal date if the insurer has raised premiums for all insureds in that coverage classification
- Non-cancelable - the insurer cannot cancel coverage (except for non-payment of premium) or raise premiums
Renewability Provision - 1. Cancelable
the insurer can cancel any time
Renewability Provision - 2. Optionally renewable
the insurer has the option to renew or not for any reason on a premium due or anniversary date. Premiums may be increased on the policy anniversary for a class of insureds
Renewability Provision - 3. Conditionally renewable
the insurer may terminate coverage but only for reasons not based on the insured’s health such as reaching a certain age. Premiums may be increased on the policy anniversary for class of insureds
Renewability Provision - 4. Guaranteed Renewable
the policy cannot be canceled except for non-payment of premium, and premiums may increase on a renewal date if the insurer has raised premiums for all insureds in that coverage classification
