Health Insurance Policy Provisions
The uniform provisions
Individual health policies follow a standard set of required provisions: entire contract, time limit on certain defenses (typically two years, after which misstatements cannot void the policy except fraud), grace period (commonly 7 days weekly, 10 days monthly, 31 days other), reinstatement (coverage restored with evidence of insurability; a new contestable period applies to new statements), notice of claim (usually 20 days), claim forms (15 days), proof of loss (90 days), time of payment of claims (immediate/45 days), physical examination, legal actions (no suit before 60 days, generally within 3 years), change of occupation (benefits reduced if the insured moves to a more hazardous class), misstatement of age, unpaid premium, cancellation (5–10 days' notice), and conformity with state statutes.
Other important clauses
Preexisting-condition limitations, coordination of benefits (primary/secondary rules prevent duplicate payment), subrogation, conversion privilege (group to individual without evidence of insurability), continuation, and exclusions (war, self-inflicted injury, illegal occupation, elective cosmetic procedures).
Traps
- The contestable period protects against misrepresentation, not against a preexisting condition exclusion, which runs its own time clock.
- Grace period lengths differ by premium mode - memorize the pattern.
- Under COB, the plan covering the patient as an employee is usually primary over a plan covering them as a dependent.
Worked example: An insured submits proof of loss 120 days after an accident. Because the required proof-of-loss window is 90 days, the insurer may deny the claim unless the insured can show it was not reasonably possible to file on time.