EXAMFX - Exam FX Insurance Health Policy Provisions Questions and Answers 1 — Questions and Answers
Question 1: An insured with a health policy that is paid on a quarterly basis forgets to pay the premium. Ten days after the due date, the insured has an accident and files a claim. How will the insurance company likely handle this claim?
- Pay the claim, minus the overdue premium. (Correct answer)
- Deny the claim because the policy has lapsed.
- Pay the claim in full and issue a warning.
- Deny the claim and require reinstatement of the policy.
Correct answer: Pay the claim, minus the overdue premium.
Health insurance policies have a Grace Period provision that allows for late premium payments without the policy lapsing. For policies with premiums paid quarterly, the grace period is typically 31 days. Since the claim occurred only 10 days after the due date, the policy is still in force. The insurer will pay the claim but will deduct the amount of the outstanding premium.
Question 2: Which of the following mandatory health policy provisions prevents an insurer from voiding a policy for misstatements in the application after two years, except in cases of fraud?
- Entire Contract
- Reinstatement
- Time Limit on Certain Defenses (Correct answer)
- Legal Actions
Correct answer: Time Limit on Certain Defenses
The Time Limit on Certain Defenses provision, also known as the Incontestability clause, states that after a policy has been in force for a specified period (usually two years), the insurer cannot use misstatements on the application to void the policy or deny a claim, unless those misstatements were fraudulent.
Question 3: An individual's health insurance policy lapses due to nonpayment of premium. If the insured applies for reinstatement and the insurer does not require a new application, when is the policy considered reinstated?
- Immediately upon the insurer's approval.
- After a 10-day waiting period for both sickness and accidents.
- Automatically upon acceptance of the late premium by the insurer. (Correct answer)
- After the insured submits a new proof of insurability.
Correct answer: Automatically upon acceptance of the late premium by the insurer.
According to the Reinstatement provision, if a lapsed policy is reinstated and the insurer accepts the overdue premium without requiring a new application, the policy is automatically reinstated. Accidents are covered immediately upon reinstatement, but there is typically a 10-day waiting period for sickness coverage to prevent adverse selection.
Question 4: Under the uniform policy provisions, an insured must provide written notice of a claim to the insurer within how many days of a loss?
- 10 days
- 15 days
- 30 days
- 20 days (Correct answer)
Correct answer: 20 days
The Notice of Claim provision requires the insured to give written notice to the insurer within 20 days after a covered loss occurs, or as soon as reasonably possible. This timely notification allows the insurer to begin the claims investigation process.
Question 5: After an insurer receives a notice of claim, the Claim Forms provision requires the insurer to furnish the claimant with the necessary forms within how many days?
- 10 days
- 15 days (Correct answer)
- 20 days
- 30 days
Correct answer: 15 days
The Claim Forms provision mandates that an insurer must provide the claimant with the required claim forms within 15 days of receiving the notice of claim. If the insurer fails to do so, the claimant can submit the proof of loss in any written form.
Question 6: An insured suffers a covered loss and submits a notice of claim on time. According to the Proof of Loss provision, how long does the insured typically have to submit written proof of the loss to the insurer?
- 30 days
- 60 days
- 90 days (Correct answer)
- 120 days
Correct answer: 90 days
The standard Proof of Loss provision requires the insured to provide written proof of loss to the insurer within 90 days of the date of loss, or as soon as reasonably possible. This timeframe allows the insured adequate time to gather necessary documentation, such as medical bills and physician statements.
EXAMFX - Exam FX Insurance Health Policy Provisions Questions and Answers 1
An insured with a health policy that is paid on a quarterly basis forgets to pay the premium.
Ten days after the due date, the insured has an accident and files a claim.
How will the insurance company likely handle this claim?