Chapter 25 H

Flashcards covering optional provisions and exclusions found in individual Health Insurance policies, including Change of Occupation, Illegal Occupation, Other Insurance provisions, and various optional exclusions like pre-existing conditions and work-related losses.

What is the primary purpose of optional provisions in individual Health Insurance policies?

To protect the Insurer by limiting coverage, often acting as exclusions.

According to the Change of Occupation Provision, what happens if an Insured changes to a higher-risk occupation and notifies the company?

The premium will increase.

Under the Change of Occupation Provision, if an Insured changes to a riskier occupation but does not notify the company before a claim, how are benefits paid?

The company will pay lower benefits based on what the already-paid premium would have purchased if the new dangerous job had been properly reported.

How does the Change of Occupation Provision handle a situation where an Insured changes to a less risky occupation and notifies the company?

The premium will decrease.

If an Insured changes to a less risky occupation and does not notify the company before a claim, what happens to the benefits and premiums?

The company will pay benefits according to the policy, and then refund the portion of the overcharged premium.

What does the Illegal Occupation Provision state regarding Health claims?

The company won't pay Health claims that arise from the Insured's commission of, or involvement in, a felony or pursuit of an illegal occupation.

How does a Life Insurance policy typically differ from a Health Insurance policy regarding claims arising from illegal occupations?

Life Insurance will generally cover claims even if the death occurs during an illegal act, unlike Health Insurance which excludes such claims.

When may the Intoxicants or Narcotics Provision exclude Health Insurance coverage?

If an accident claim arises from the Insured's use of alcohol or other intoxicants, or from the use of narcotics, unless prescribed by a physician.

What is the purpose of the Other Insurance with This Insurer Provision?

To prevent Insureds from financially profiting by owning multiple individual policies with the same company ('stacking'), by paying claims pro rata and refunding excess premiums.

What does the Insurance with Other Insurers Provision facilitate?

It prevents 'stacking' with duplicate policies from different companies, causing multiple companies to share pro rata in paying benefits commensurate with only a single policy, and refunding excess premiums.

Is 'stacking' or owning multiple policies generally permitted in Life Insurance or Health Insurance?

Stacking is permitted in Life Insurance (companies will pay even with multiple policies), but not permitted in Health Insurance.

What right does the Cancellation Provision acknowledge for the Insured?

The Insured's right to cancel the policy at any time without affecting any pending claims.

What is the effect of the Conformity with State Statutes Provision?

If a Health Insurance contract's language does not conform to state law, it is automatically amended to conform, ensuring no policy contradicts state law.

What action may an Insurer take according to the Unpaid Premiums Provision before paying a Health Insurance claim?

The Insurer may deduct past due premiums plus interest from the benefits.

Name two types of losses that are commonly excluded as optional provisions in a Health policy.

War-related losses and Military service losses.

How are pre-existing conditions typically handled as an optional exclusion in individual Health policies?

The Insurer may exclude pre-existing conditions to the extent allowed by state law.

What is a 'non-occupational policy' in the context of Health Insurance?

A Medical Expense policy that contains an Occupational Accidents and Sicknesses Exclusion, meaning it excludes claims covered by Workers' Compensation Insurance.

Does a standard Medical Expense policy typically cover custodial care?

No, nursing home custodial care is generally excluded unless the policy is a Long-Term Care policy specifically designed for it.

What is the purpose of an Exclusion Rider (also known as an Exclusion Waiver or Impairment Rider)?

To allow an applicant with a specific pre-existing condition to qualify for an individual Health Insurance policy by excluding coverage for that particular condition.

Maxine has a history of lower back problems and applies for Health Insurance. How might an Insurer use an Exclusion Rider in this situation?

The Insurer could issue a policy that covers everything normally covered, except for Maxine's back problems, which are excluded by the rider.