Individual Health Insurance Policy General Provisions
The uniform provisions
Individual health policies must contain a set of mandatory uniform provisions required by state law, plus optional ones. The most tested are:
- Entire contract - the policy plus attached endorsements and a copy of the application.
- Time limit on certain defenses - after two years (three in some states), the insurer cannot contest the policy for misstatements except fraudulent ones, and cannot deny a claim for a condition that began before coverage unless the condition is excluded.
- Grace period - 7 days for weekly premium, 10 days for monthly, 31 days for other modes; coverage continues and the premium is owed.
- Reinstatement - revival within about three years on evidence of insurability and back premiums; a new contestable and preexisting-condition period may apply.
- Claim provisions - notice of claim within 20 days of loss, claim forms within 15 days of notice, proof of loss within 90 days, payment within about 30 days of proof.
- Legal actions - no suit before 60 days after proof of loss and none after the limitation period (commonly three years).
- Physical exam and autopsy - at the insurer's expense.
- Change of beneficiary - the insured may change the beneficiary unless irrevocable.
Optional provisions include change of occupation, misstatement of age, other insurance with the insurer, unpaid premium, cancellation (with 5–45 days' notice), and conformity with state statutes.
Renewability categories
Cancelable - the insurer may cancel any time. Optionally renewable - the insurer may decline renewal at a stated date. Conditionally renewable - renewal is guaranteed unless stated conditions occur. Guaranteed renewable - renewal is guaranteed with no premium change for a class. Noncancelable - guaranteed renewable with premiums that cannot change, the most favorable for the insured and the most expensive.
Rule of thumb
Sort any renewability question along one axis: can the insurer cancel, and can it raise the rate? Noncancelable is the strongest protection and carries the highest premium.