Health Insurance and Policy Provisions

Peril of an Accident

Unintentional bodily injury caused by an unforeseenhow to event

Peril of a Sickness

Medical care not caused by an accident

• Hospital and medical bills

• Loss of income-disability

• Dental bills

• Long-term care-medical and non medical expenses

Health Insurance Covered Benefits

Individual Health Plans

• Anyone can apply for coverage

• each person has a policy

• the individual can choose coverage from whatever is available in the health insurance market

• the individual’s health is evaluated. a medical exam may be required

• coverage is renewable at the option of the insured, sometime the insurer

• all accidents are covered regardless of when or where they occur

Group Health Plans

• Only group members may be covered. The group must meet size and purpose definitions.

• There is one master contract. Individuals are given certificates as evidence of coverage

• Benefits are essentially the same for all group members. Individuals may be able to choose among a limited number of pre-established packages.

• The group as a whole is evaluated, usually there is no individual underwriting. No evidence of insurability is required if the individual enrolls within a given time after becoming eligible

• The group sponsor may change the coverage. Coverage stops when the insured leaves the group

• Only off-the-job accidents are generallly covered. (On-the-job accidents are covered by workers’ compensation, a state-mandated program)

Federal Government Health Insurance

• Most programs are funded with tax dollars

• Tricare-military

• Veterans- former military

• Medicare- primarily for senior citizens and Social Security disability

• Social Security disability

Limited Plans

• Limited benefits

• Limited Perils-such as cancer or vision

• Notice-insured must be informed of the limited benets

• Accident Only

• Dread disease

• Critical illness

• Hospital indemnity

• Credit disability

• Blanket coverage

• Prescription drugs

• vision

• hearing

• short-term medical expense plans

Limited Benefit Policies

Credit disability

If you take a loan or a line of credit and you were to get sick or injured and you can’t work the policy will cover your loan.

Blanket Coverage

Offered to group plans where the members are constantly evolving and changing. Whoever under the blanket will get coverage.

• intentional

• war or act of war

• elective cosmetic surgery

• workers’ compensation

• felony

Health Insurance Common Exclusions

Entire Contract Clause

• Application

• Insurance Policy

• Riders

• Changes must be signed and attached to the policy

Incontestability Clause

Time Limit:

• 2 years after application

• Fraud in the application can void the policy when discovered

Grace Period

Follows the due date of the premium:

• 7 days if the premium is paid weekly

• 10 days if the premium is paid monthly

• 31 days if the premium is paid annually, semiannually, or quarterly

• Insurance is still in force during the grace period

• Unpaid premiums are deducted from a claim

Reinstatement

• application and receipt

• Must deny within 45 days after application or the policy is in effect

• Accident claims are covered immediately

• Sickness claims are covered 10 days after reinstatement

Notice of Claim

• 20 days after loss

• if continuing disability, can only be required to provide proof every six months

Claim Forms

• Insurer must provide a claim form to the insured

• must be furnished to the insured within 15 days of notice of loss

Proof of Loss

Written proof of loss within 90 days

Time Payment of Claims

• Immediately after receiving proof of loss

• at least monthly if a periodic claim, such as a long-term disability policy or long-term care policy

Payment of Claims

• States how and to whom payments will be made

• any death benefits

  • beneficiary

  • insured’s estate

• facility of payment

  • 1,000 to a family member

Medical Exams and Autopsy

• If the company requires and state law allows

• Insurer pays all costs if either of these are necessary

Legal Action Against the Insurer

• Earliest: 60 days after proof of loss

• Maximum: three years after proof of loss

• Revocable- anytime by the owner

• Irrevocable-permission of the beneficiary needed

Change of Beneficiary

• More hazardous

  • Reduction of benefits

• Less hazardous

  • Refund of excess premium

Change of Occupation

Misstatement of Age

• younger than stated in the application

  • Benefits increased

• Older than stated in the application

  • Benefits Reduced

Other Insurance with Insurer

• Total of all policies exceeds the maximum

  • Benefits reduced

  • Excess premiums refunded

Insurance with other insurer

• Each company pays a proportionate share

• excess premiums are refunded

Relation of Earnings

• Disability benefit exceeds earnings

• Benefit reduced

• Excess premiums refunded

Unpaid Premium

Can be deducted from the claim

Cancellation

• Company must give at least a five-day notice

• Unearned premium must be refunded pro rata

• Insured cancels-short rate penalty will apply

Conformity With the State

Makes the policy comply with laws of the insured’s state of residence

Illegal Occupation

No benefits if:

• committing a felony

• engaged in an illegal occupation

Alcohol & Narcotics

No benefits for:

• loss caused by alcohol or narcotics, unless by a doctor’s orders

Free Look

• 10 days from receipt (30 days for senior products-Medicare supplements, long-term care)

• Begins on the date the policy is received by the policyholder

• If the policy is returned- complete refund of money

Insuring clause

• First provision

• Promise to pay

• conditions of payment

Consideration Clause

• Company promises to pay

• applicant provides information and pays the premium

Renewability

Extentionsion of Policy

• Five types of provisions

• More favorable for insured = higher premium

Cancelable

Any time

Optionally Renewable

• company may not renew

• Anniversary or premium due date

Conditionally Renewable

• Nonrenewal can occur only under certain conditions

• Such as reaching age 65

Guaranteed Renewability

• Insurer must renew

• Premiums can be raised by classes

Noncancelable

• Insurer must renew

• Premiums cannot be raised

Military Suspension

• Temporary suspension while in the military

• Reactivated after leaving the military