Health Policy Provisions, Clauses & Riders
Individual health policies contain a set of standard provisions, many required by the Uniform Provisions Law, that define the rights and duties of the insured and insurer. This topic covers the mandatory and optional provisions, key clauses, and riders that shape how a health policy operates.
Mandatory Uniform Provisions
State law requires certain provisions in individual health policies. The entire contract provision makes the policy and application the whole agreement. The grace period keeps coverage in force for a set number of days after a missed premium. The reinstatement provision restores a lapsed policy under stated conditions. The time limit on certain defenses (incontestability) prevents the insurer, after a set period, from denying a claim for application misstatements except fraud where allowed. Additional required provisions govern notice of claim, claim forms, proof of loss, time of payment of claims, payment of claims, physical examination and autopsy, and legal actions.
Optional Provisions and Key Clauses
Optional provisions, if included, further define coverage. The change of occupation provision may adjust benefits if the insured moves to a more or less hazardous job. The misstatement of age provision adjusts benefits to what the premium would have bought at the correct age. Important clauses include the insuring clause (the insurer's promise), the free-look provision (a right to return a new policy for a refund), the probationary period (a wait before certain conditions, like sickness, are covered), and the pre-existing condition provision, which limits or excludes coverage for conditions that existed before the policy took effect for a stated period.
Riders and Renewability
Riders customize health coverage. An impairment (exclusion) rider excludes coverage for a specified condition. A guaranteed insurability rider allows added coverage without new evidence of insurability. A future increase option and a cost-of-living rider help benefits keep pace with inflation. Renewability provisions determine the insurer's ability to end or reprice coverage: noncancelable policies guarantee both renewal and a fixed premium; guaranteed renewable policies guarantee renewal but allow premium changes by class; conditionally renewable, optionally renewable, and cancelable forms give the insurer more control. Renewability strongly affects the value and security of a health policy.