Health Insurance Policy Provisions, Riders, and Exclusions
Required and Common Provisions
Know the uniform policy provisions commonly tested: entire contract, time limit on certain defenses (incontestability), grace period, reinstatement, claim forms, proof of loss, time of payment of claims, payment of claims, physical examination and autopsy, legal actions, change of occupation, misstatement of age, overinsurance, unpaid premium, cancellation, and conformity with state statutes. Understand that the incontestability clause generally bars the insurer from contesting the policy after it has been in force for a stated period (commonly two years) for misstatements, except fraudulent misstatements, and that the grace period keeps coverage in force during late premium payment.
Riders and exclusions: waiver of premium, return of premium, guaranteed insurability, cost-of-living adjustment, and long-term care riders. Common exclusions include pre-existing conditions (subject to look-back and exclusion-period rules), self-inflicted injury, war, military service, intoxication, and elective/cosmetic procedures.
Traps in Questions
- Reinstatement. After lapse, reinstatement may require evidence of insurability; a new pre-existing condition period may apply, but the original incontestability period generally continues from the original date.
- Misstatement of age. The insurer adjusts the benefit, not the policy's validity.
- Time limit on certain defenses. Fraudulent misstatements may remain contestable; ordinary misstatements are barred after the stated period.
- Physical exam. The insurer may require it at its own expense, not the insured's.
Rule of Thumb
Match the provision to its purpose: grace period protects against accidental lapse; incontestability protects against late rescission; reinstatement restores coverage after lapse.