Health Insurance Policy Provisions
Uniform mandated provisions
Most states adopt the NAIC uniform provisions. The entire contract clause includes the application and any riders. The time limit on certain defenses, or incontestability, bars the insurer from contesting the application after two years. The grace period is 7 days for weekly premiums, 10 days for monthly, and 31 days for other modes. Reinstatement restores coverage on evidence of insurability and payment of the overdue premium, and a new contestable period may apply. Notice of claim must be given within 20 days of loss, claim forms within 15 days, and proof of loss within 90 days. Claims are payable immediately or within a stated period. The insurer may require a physical exam or autopsy. Legal actions cannot begin until 60 days after proof of loss and no later than three years. Change of occupation and misstatement of age provisions adjust benefits rather than void the policy.
Optional and common provisions
Free look (10 to 30 days), pre-existing condition waiting periods, elimination periods, and renewability clauses: cancellable, optionally renewable, conditionally renewable, guaranteed renewable, and noncancellable.
Coordination
Coordination of benefits and subrogation prevent double recovery; overinsurance provisions limit total benefits.
Traps
The time limit on certain defenses and the legal action limit both use multi-year periods, so do not confuse two years (contestability) with three years (legal action). The grace period varies by premium mode.
Rule of thumb
Remember the sequence: 7, 10, and 31 days of grace; 20 days for notice; 15 days for forms; 90 days for proof of loss.