Health Insurance Policy Provisions
Mandatory uniform provisions
State law requires individual health policies to contain a standard set of provisions, and the timelines supply most exam questions.
- Entire contract: the policy plus the attached application.
- Time limit on certain defenses: after two years the insurer generally cannot contest the application; pre-existing conditions may be excluded for a stated period.
- Grace period: 7 days for weekly mode, 10 days for monthly, 31 days for other modes.
- Reinstatement: coverage restored on evidence of insurability and payment of the overdue premium, usually with a new contestable period.
- Claim procedures: notice of claim within 20 days, claim forms within 15 days, proof of loss within 90 days.
- Time of payment of claims: immediately, typically within 45 days after proof of loss.
- Legal actions: not before 60 days after proof and within 3 years.
- Change of occupation, misstatement of age, other insurance with this insurer, and cancellation with 10 days' notice for nonpayment.
Definitions that matter
Elimination period (waiting period before benefits begin), benefit period (how long benefits last), presumptive disability (loss of sight or limbs), recurrent disability (a relapse within a stated period continues the prior claim), and residual disability (income loss rather than total disability).
Traps
Notice of claim (20 days) versus proof of loss (90 days). Grace period (no new application needed) versus reinstatement (new evidence required).
Rule of thumb
Memorize the chain 20 – 15 – 90 – 45 – 60/3: notice, forms, proof, payment, and lawsuit windows.