Health Insurance Policy Provisions
Required uniform provisions
Health policies contain statutory provisions that protect the insured. Know these:
- Entire contract / changes: only an officer of the insurer may change the contract, in writing.
- Time limit on certain defenses: after a set period (commonly two years, three in some policies) the insurer cannot contest the application or deny a claim for misstatement - except fraud.
- Grace period: 7 days for weekly premiums, 10 days for monthly (longer for other modes). Coverage continues during grace.
- Reinstatement: reinstates coverage for an agreed premium; a new contestable period may apply and a waiting period for sickness may be reimposed.
- Claim requirements: notice of claim within 20 days, claim forms within 15 days of notice, proof of loss within 90 days, and payment within 30 days after proof.
- Legal actions: suit may not begin before 60 days after proof of loss, nor after the stated limit (commonly 3 years).
- Physical exam & autopsy at the insurer's expense; change of beneficiary by the owner.
Renewability terms
Noncancelable (insurer cannot cancel or raise premium, guaranteed renewable), guaranteed renewable (renewal guaranteed, rates may rise by class), conditionally renewable, optionally renewable.
Benefit-limiting clauses
Elimination period, probationary period, pre-existing condition, recurring disability, residual disability, waiver of premium, coordination of benefits, subrogation, extension of benefits, conversion privilege.
Traps
- An elimination period is a time deductible, not a dollar deductible.
- The 60-day waiting period protects the insurer from premature lawsuits; the 3-year limit protects the insurer from stale claims.
- "Noncancelable" means the premium cannot be increased; "guaranteed renewable" does not.
Rule of thumb
When a question asks who may change the policy, the answer is the insurer's authorized officer in writing - never the agent, verbally.