How long is the grace period for health insurance policies with monthly due premiums Quizlet

3. Which of the following statements pertaining to the grace period and reinstatement provisions in health insurance policies is NOT correct?

A. Craig's health policy has a grace period of 31 days. He had a premium due June 15 while he was on vacation. He returned home July 7, mailed his premium the next day and the insurer received it July 10. His policy would have remained in force.

B. Warren's medical expense policy was reinstated on September 30 and he became ill and entered the hospital on October 5. His hospital expense will not be paid by the insurer.

C. Under a health policy's reinstatement terms, insured losses from accidental injuries and sickness are covered immediately after reinstatement.

D. States may require grace periods of 7,10 or 31 days, depending on the mode of premium payment or term of insurance; however, many states require a 31-day grace period in any case.

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Study guide Health licensing

Terms in this set (35)

Overinsurance

term used to describe the situation that is created when an individual purchases duplicating coverage with the intent to collect from each policy for a single loss.

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
AHold the claim as pending until the end of the grace period.
BDeny the claim.
CPay half of her claim because the insured had an outstanding premium.
DPay the claim

DPay the claim

Optional Misstatement of Age provision

If an insured misstates his or her age upon policy application, this provision will change the payable benefit to that which would have been purchased at the insured's actual age.

Noncancelable Policy

The insurance company cannot cancel a the policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.

Optional Policy Provisions

can be changed by an insurer, as long as the changes do not adversely affect the policyholder.

Unpaid Premium Provision

If a premium is past due and the insurer owes claim payment, the amount of the premium will be deducted from the amount of the claim. For example, if a claim is worth $500 and the premium costs $200, the insured would receive the net total of $300 from his insurer.

Entire Contract Provision

The policy, together with the attached application, This provision limits the use of evidence other than the contract and the attached application in a test of the contract's validity. This is a mandatory provision in life insurance.

The Waiver of Premium rider

causes the insurer to waive future premiums when an accident or disease causes a disability lasting at least six months.

generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability.

The Payment of Claims provision

states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.

The Time Payment of Claims provision

requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.
the insurance company must pay Medical Expense claims immediately

Exclusions

restrictions of coverage as stated in the policy.

Items stipulated in the contract that the insurer will not provide coverage for are found in-

Assignment

The right to transfer a policy's ownership is specified in this provision.

Conformity with State Statutes provision

states that any provision of the policy which, on its effective date, the insured resides on that date, is automatically amended to conform to the minimum requirement of the statutes.

Insurance Code

The laws of the state, written by legislature, that regulate insurance companies and agents

guaranteed renewable health insurance policy,

>The insured has a unilateral right to renew the policy for the life of the contract.
>Coverage is not renewable beyond the insureds age
>The insured benefits can not be reduced.

has all the same features that the noncancelable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.

conditionally renewable provision

policies may be canceled for specific conditions contained in the policy

optionally renewable provision

allow the insurer to cancel a policy for any reason whatsoever. Policies can only be cancelled by class on the policy anniversary or premium due date (renewal date). If the insurer elects to renew coverage, it can also increase the policy premium.

provisions can be changed by an insurer, as long as the changes do not adversely affect the policyholder.

If a claim involves disability income benefits

the policy must pay those benefits not less frequently than monthly. In all other cases, the company may specify the time period of 45 or 60 days for payment of claims.

Grace Period Provision

A mandatory provision of life insurance policies requires the period of time after the premium due date in which premiums may still be paid before the policy lapses for nonpayment of the premium.

Notice of claim

provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss

spells out the insured's duty to provide the insurer with reasonable notice in the event of a loss.

Notice of Claim provision

Under the mandatory uniform provision, the first notice of injury or sickness covered under an accident and health policy must contain
A statement that is sufficiently clear to identify the insured and the nature of the claim.

The Insurance Code requires that each policy must include, "Written ___________must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible".

consideration clause

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.

The relation of earnings to insurance provision

allows the insurance company to limit the insured's benefits to his/her average income over the last 24 months.

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last
A6 months.
B12 months.
C18 months.
D24 months

24 months

A waiver of premium provision may be included with which kind of health insurance policy?
ADisability income
BBasic medical
CHospital indemnity
DDread disease

ADisability income

While a claim is pending, an insurance company may require

AAn independent examination as often as reasonably required.
BThe insured to be examined only within the first 30 days.
CThe insured to be examined only once annually.
DAn independent examination only once every 45 days.

AAn independent examination as often as reasonably required.

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

AStays the same
BDoubles
CIncreases
DDecreases

DDecreases

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

ABiweekly.
BMonthly
CWithin 45 days.
DWeekly.

BMonthly

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

If a policy premium is not paid by the end of the grace period, and the policy lapses, an insured may pay the outstanding premium and have the policy reinstated. If the insurer does not refuse reinstatement within 45 days from the date the conditional receipt was issued, the policy will be automatically reinstated.

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
A10 days
B25 days
C30 days
D45 day

D45 days

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
ABeneficiary of the death benefit.
BThe spouse of the insured
CThe insured
DCreditors.

CThe insured

The free-look period

is a mandatory provision found in health insurance policies that allows the applicant to examine the policy and if dissatisfied for any reason, return the policy for a full refund.

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

AInsurer to the insured
BInsured to the insurer
CInsurer to the Department of Insurance
DInsured to the Department of Insurance

AInsurer to the insured
Upon receipt of a notice of claim, the company must supply claims forms to the insured within a specified number of days.

Entire contract

is a mandatory provision that is required by law.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract.

Adverse Selection

to protect the insurer against losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date. 10 days

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