Health Insurance : Chapter 3

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a policy that is written on a noncancellable basis with the right to renew guaranteed

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GUARANTEED RENEWABLE

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a beneficiary who has a vested interest in the policy and therefore the policyowner may not exercise certain rights without the consent of the beneficiary

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IRREVOCABLE BENEFICIARY

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National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 5 U.S. territories, formed to resolve insurance regulatory issues

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NAIC

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inability of the insured to perform any occupation for which he or she is reasonably suited by reason of education, training or experience

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TOTAL DISABILITY

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relinquishment of a right or interest

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WAIVER

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law that established standard provisions that are to be included in all individual health insurance policies. Although wording may change basic provisions are the same

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UNIFORM INDIVIDUAL ACCIDENT AND SICKNESS POLICY PROVISIONS

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health insurance policy, signed application and attached riders and amendments

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ENTIRE CONTRACT

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period of time after the premium due date in which premiums may still be paid before the policy lapses for nonpayment

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GRACE PERIOD

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policyowner may change the beneficiary at any time by providing a written request to the insurer

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CHANGE OF BENEFICIARY

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claims are to be paid immediately upon written proof of loss ; the time of payment differs depends on the policy (60,45 or 30 days ) if it involves disability income benefits then it must be paid not less frequently than monthly

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TIME OF PAYMENT OF CLAIMS

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specifies to whom claims payments are to be made

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PAYMENT OF CLAIMS

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gives the insurer the right to examine the insured at its own expense as often as reasonably necessary while a claim is pending. The insurer also usually has the right to conduct and autopsy if not forbidden by state law

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PHYSICAL EXAMINATION AND AUTOPSY

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no statement of misstatement made in the application at the time of issue will be used to deny a claim after the policy has been in force for 2 years.

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TIME LIMIT ON CERTAIN DEFENSES

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this provision states that liability will be denied if the insured is injured while committing an illegal act or is engaged in an illegal occupation

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ILLEGAL OCCUPATION

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provision allows the insurance company to limit the insured's benefits to his/her average income over the last 24 months. if necessary the benefits are reduced on a pro rate basis

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RELATION OF EARNINGS TO INSURANCE

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general statement that identifies the basic agreement between the insurance company and the insured. located on the first page of the policy. it identifies the insured and the insurance company and states what kind of loss (peril) is covered

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INSURING CLAUSE

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allows the insured a period of several days to look over the policy and if dissatisfied for any reason it can be returned for a full refund. commonly 10 days from the date the policy is delivered

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FREE LOOK OR RIGHT TO EXAMINE

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first page of policy ; makes it clear that both parties to the contract must give some valuable consideration. the payment of the premium and the statements in the application are the consideration given by the applicant. the insurer's is the promise to pay in accordance with the contract terms

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CONSIDERATION CLAUSE

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states that a period of time must lapse before coverage for specified conditions goes into effect. most commonly found in disability income policies. also applies to new employees who much wait a certain period of time before they can enroll into a group plan

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PROBATIONARY PERIOD

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type of deductible that is commonly found in disability income policies. it is a period of days which must expire after the onset of an illness or occurrence of an accident before benefits will be payable. the longer the period the lower the cost of coverage

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ELIMINATION PERIOD

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usually included with guaranteed renewable and noncancellable disability income policies. in the even of permanent and total disability, premiums will be waived for the duration of the disability. to qualify the insured must be totally disabled at least 3-6 months

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WAIVER OF PREMIUM

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conditions for which the insured has received diagnosis, advice, care or treatment during a specific time period prior to the application for health coverage

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PRE-EXISTING CONDITIONS

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specified dollar amount beyond which the insured no longer participates in the sharing of expenses. insurance company pays 100% of the expenses that are above the amount

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STOP- LOSS LIMIT

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medical expenses covered by a health insurance plan ; specified in the policy

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ELIGIBLE EXPENSES

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insurance company will pay an amount for a given procedure based upon the average charge for that procedure in that specific geographic area

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USUAL, REASONABLE, AND CUSTOMARY (URC) CHARGES

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specifies a benefit amount that is the most a policy will pay during the lifetime of the insured

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LIFETIME LIMIT

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the most a policy will pay each year that policy is in force

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ANNUAL LIMIT

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is the most a policy will pay for expenses incurred from the same or related causes

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PER-CAUSE LIMIT

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specifies for what the insurer will not pay

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EXCLUSIONS

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will allow the insured to purchase additional amounts of disability income coverage without evidence of insurability

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GUARANTEED INSURABILITY RIDER