1. Mandatory Provisions
1.1. National Association of Insurance Commissioners
1.1.1. Uniform Individual Accident and Sickness Policy Provisions Law
1.2. 1. Entire Contract
1.2.1. Only an executive officer, not agent, can make changes
1.3. 2. Grace Period
1.3.1. Coverage continues
1.3.2. Length depends on Premium Mode
1.3.2.1. Weekly Premium: 7 days
1.3.2.2. Monthly Premium: 10 days
1.3.2.3. Other: 31 days
1.4. 3. Reinstatement
1.4.1. protects from adverse selection
1.4.2. Reinstatement Application
1.4.2.1. If not required and acceptance of premium: Automatic Reinstatement
1.4.2.2. If required and conditional receipt issued for premium: Application is contestable for 45 days from conditional receipt issuance
1.4.2.2.1. if #>days, automatically reinstated
1.4.3. Waiting Period:
1.4.3.1. 4 Sickness: 10 days
1.4.3.2. 4 Accident: None
1.5. 4. Change of Beneficiary
1.6. 5. Claims Procedures
1.6.1. Notice of Claim Provision
1.6.1.1. 20 days from event to notify Insurer of loss
1.6.1.2. Insurer has 15 days to supply Claims forms upon receipt of notice
1.6.1.3. 90 days to submit proof of loss, no longer than 1 year
1.6.2. Time of Payment of Claims Provision
1.6.2.1. immediate payment of claims upon written proof of loss
1.6.2.2. 60, 45, 30 days
1.6.2.3. Disability income benefits: must be paid monthly
1.6.3. Payment of claims
1.6.3.1. Insured receives benefits, if dead: pending claims payable to beneficiary, if no beneficiary: benefits paid to estate
1.6.3.1.1. Facility of Payment Clause (not for all)
1.7. 6. Physical Exam and Autopsy
1.7.1. right to examine insured/ conduct autopsy, at insurers expense
1.7.2. as often as necessary during pending claims
1.8. 7. Time Limit on Certain Defenses (Incontestable)
1.8.1. After 2 years: No statement/ misstatement made during application issue can be used to deny a claim
1.8.2. Excludes: Fraudulent Misstatements
1.9. 8. Legal Actions
1.9.1. Insured must wait 60 days after proof of loss before legal action can be brought against company
1.9.2. Max Time limit: 3 years
1.10. 9. Misstatement of Age
1.11. 10. Change of Occupation
1.11.1. If more hazardous: benefits reduce
1.11.2. If less hazardous: can apply for rate reductions
1.12. 11. Illegal Occupation
1.12.1. Claims denied if injured during illegal act/job
1.13. 12. Relation of Earnings to Insurance
1.13.1. Benefits limited to insured's average annual income
1.13.2. If total amount of benefits for 1 loss> monthly earnings or avg mo. earnings from 2 years= Insurer returns premiums for part of nonpayable benefit
1.13.2.1. Insurer only liable for proportionate amount of benefit
1.13.3. No event= benefits may b reduced to < $200 per month
2. Other Provisions/ Clauses
2.1. 1. Insuring Clause
2.1.1. identifies insured, insurer, perils that are covered
2.2. 2. Free Look
2.2.1. 10 days
2.3. 3. Consideration Clause
2.4. 4. Probationary Period
2.4.1. waiting period for coverage to go into effect (disability income, business group policies)
2.4.2. avoids unnecessary administrative expenses in cases of turnover
2.5. 5. Elimination Period
2.5.1. Waiting period for payable benefits
2.5.2. Type of Deductible in Disability Income
2.5.3. Longer Period= Lower Costs
2.6. 6. Waiver of Premium
2.6.1. must be totally disabled for 3-6 months and pay premium
2.6.2. Expires at age 65, if disability event before age 65 = premiums are still waived
2.6.3. Included with Guaranteed renewable/ noncancellable disability income policies
2.7. 7. Pre-Existing Conditions
2.7.1. Affordable Care act eliminated restrictions in individual/ group health plans
2.7.2. Limitations may still apply: Medicare Supplement and Long Term Care
2.8. 8. Coinsurance
2.8.1. sharing of expenses after insured pays deductible (80-20%)
2.8.1.1. Stop Loss Limit- once $ amt is reached insurer pays 100%
2.8.2. Larger % paid by insured= Lower deductible
2.8.3. Controls costs/ discourages overutilization
2.9. 9. Copayment
2.9.1. set amount insured pays for certain medical services
2.10. 10. Deductibles
2.10.1. amount insured pays before insurer pays benefits
2.10.2. Larger deductible= Lower premium
2.10.3. Annual Deductible
2.10.3.1. paid regardless of claim amounts- common with Major Medical Policies
2.10.3.2. Individual Deductible: insured is responsible for deductible
2.10.3.3. Family Deductible: 2+ members pay deductible
2.10.4. Flat deductible (Per occurence deductible)
2.10.4.1. insured pays deductible each claim
2.10.4.2. Common Accident Provision: one deductible applies for all family involved in same accident
2.10.5. Integrated Deductible
2.10.5.1. Deductible is paid for by basic medical expense coverage
2.10.5.2. Supplemental Major Medicaal
2.10.6. Carry-over Provision
2.10.6.1. expenses incurred during last 3 months are carried over to next policy year to satisfy new annual deductible
2.10.6.2. if insured didn't incur enough expenses to meet deductible
2.10.7. Time Deductible = Elimination Period (Disability Income/ LTC)
2.11. 11. Exclusions and Limitations
2.11.1. War/ Military- temp suspension if foreign country/ military
2.11.2. Self Inflicted Injury
2.11.3. Dental
2.11.4. Cosmetic Medical Exp
2.11.5. Eye refractions
2.11.6. Care in government facilities
2.11.7. Limitations: Mental and Emotional Disorders/Substance abuse
2.11.7.1. Lifetime benefit limits amount payable/ visits
2.11.7.2. Do not apply to inpatient tratment
2.12. 12. Eligible Expenses
2.12.1. Specified in policy, covered by plan
2.13. 13. Pre-authorizations and Prior Approval requirements
2.13.1. insurer's approval before procedure, test, or stay to check that they are covered
2.14. 14. Usual, Reasonable, and Customary (URC) charges
2.14.1. benefit schedule: what is covered/ cost
2.14.2. URC: amounts based on average charge for geographic area
2.15. 15. Benefit Limits
2.15.1. 1. Lifetime Limit
2.15.2. 2. Annual Limit
2.15.3. 3. Per-cause Limit
2.15.3.1. for same/ related causes
3. Riders
3.1. 1. Impairment (Exclusion)
3.1.1. Eliminates coverage for specifically defined pre-existing condition
3.1.2. No extra cost/ premium reduction to account for reduced coverage
3.2. 2. Guaranteed Insurability
3.2.1. To prevent over-insurance: insured meets earnings test before each purchase
3.2.2. Limit on amts for each purchase ($500-5k)
3.2.3. Purchases additional amounts of life insurance/ disability income without evidence
3.2.4. Option dates
4. Rights of Renewability
4.1. Right to refuse renewal
4.1.1. Insurer deliver/mail written notice of intention not to renew policy
4.2. 1. Noncancellable
4.2.1. Can't cancel Policy
4.2.2. Can't increase premium above amount stated in policy (originally issued)
4.2.3. Expires at age 65 (eligible for medicare)
4.2.3.1. if disability income: renewed beyond 65 if evidence continued to work full time
4.3. 2. Cancellable
4.3.1. Insurer cancels policy at any time/ end of period
4.3.2. Insurer provides written notice of cancellation and refunds unearned premiums paid
4.4. 3. Guaranteed Renewable
4.4.1. Insurer can increase policy premium on anniversary date
4.4.1.1. must increase on class basis only
4.4.2. required for Medicare Supplements/ LTC
4.4.2.1. cant be cancelled at age 65