Browse all questions

1. Which California law sets the standardized required and optional provisions that every individual accident and health policy must follow?

The UPPL, codified beginning at Cal. Ins. Code §10350, divides A&H policy language into required and optional provisions. Knox-Keene governs HMOs; Holden-Bagley addresses life and disability; the LTC Act covers long-term care contracts.

2. Under the Time Limit on Certain Defenses provision, after how many years from issue can the insurer no longer rescind an A&H policy for a non-fraudulent misstatement on the application?

The incontestability window for individual A&H policies is two years from the date of issue. After that, only fraudulent misstatements remain contestable; ordinary errors no longer support rescission.

3. Sergio's individual health policy was issued four years ago. The insurer discovers that on the application he deliberately concealed a prior cancer diagnosis to obtain coverage. May the insurer rescind the policy?

The incontestability provision does not protect fraudulent statements. Even after the two-year window, an insurer may rescind a policy issued in reliance on a deliberately false answer.

4. An individual A&H policy is paid on a monthly mode. What is the length of the required grace period?

The standard grace period is 7 days for weekly mode, 10 days for monthly mode, and 31 days for all other modes. Coverage continues during the grace period.

5. An A&H policy is reinstated on June 1. The insured suffers a covered injury on June 2 and is diagnosed with a covered sickness on June 7. Which loss(es) will the reinstated policy cover?

A reinstated policy covers accidental injuries from the date of reinstatement, but sicknesses are only covered if they begin more than 10 days after reinstatement. The June 7 sickness falls inside the 10-day exclusion window.

6. Within how many days after a covered loss must written notice of claim be given to the insurer under the standard required provision?

Notice of Claim must be given within 20 days after the occurrence or commencement of any loss, or as soon as reasonably possible. After receiving notice, the insurer must supply claim forms within 15 days.

7. After receiving a notice of claim, within how many days must the insurer furnish claim forms to the claimant?

The insurer must supply claim forms within 15 days after receiving notice of claim. If it fails to do so, the claimant may submit any written proof describing the occurrence, character, and extent of loss.

8. Written proof of loss must generally be furnished to the insurer within how many days after the date of loss?

Proof of Loss must be furnished within 90 days after the date of loss (or after the end of each disability period for periodic disability benefits). Late proof is still acceptable if it was not reasonably possible, generally no later than one year.

9. Under the Legal Actions provision, an insured cannot start a lawsuit on the policy until at least how long after written proof of loss has been furnished?

The Legal Actions provision bars suit sooner than 60 days after proof of loss has been furnished and later than 3 years after proof of loss was required. This gives the insurer time to investigate and pay.

10. What is the maximum number of years after written proof of loss was required during which the insured may bring a legal action on the policy?

The Legal Actions provision sets an outside limit of 3 years from the time proof of loss was required. After that, the insurer has a complete defense to the suit.

11. When an insurer discovers that an insured's age was misstated on an A&H application, what is the typical result under the optional Misstatement of Age provision?

The Misstatement of Age provision is a corrective remedy, not a voiding remedy. The benefit (or premium) is adjusted to what the correct age premium would have purchased; the contract stays in force.

12. Which renewability classification gives the insured the strongest protection by preventing the insurer from raising the premium or refusing renewal during the contract period?

A noncancellable policy locks both the premium and the renewal right. Guaranteed renewable lets the insurer raise the premium by class; conditionally and optionally renewable allow non-renewal under stated or any conditions.

13. Under a guaranteed renewable individual health policy, what may the insurer do at renewal?

Guaranteed renewable means the insurer must renew up to the stated age, cannot cancel except for non-payment, and may only adjust premiums on a class basis — never against a single insured.

14. Maria and Carlos are married with two dependent children covered under both spouses' group health plans. Maria's birthday is March 8 and Carlos's is October 21. Under California's birthday rule for coordination of benefits, which plan is primary for the children?

The birthday rule looks at the month and day of birth, not the year. The parent whose birthday falls earlier in the calendar year carries the primary plan for dependent children. Maria's March 8 birthday is earlier than Carlos's October 21.

15. What is the primary purpose of Coordination of Benefits (COB) provisions?

COB rules prevent over-insurance. They order multiple plans into primary and secondary roles so the combined payments do not exceed 100% of the actual covered expense.

16. A hospital indemnity rider pays benefits in what manner?

Hospital indemnity coverage pays a stated daily, weekly, or monthly cash amount during a covered hospital stay. The cash is paid to the insured and is not tied to the actual hospital bill.

17. Tomas adds a critical illness rider to his policy. Six months later he is diagnosed with a covered heart attack and survives. How is the benefit typically paid?

Critical illness (also called dread disease) riders pay a single lump sum upon first diagnosis of a listed condition such as heart attack, stroke, cancer, kidney failure, or major organ transplant. The insured may use the money for any purpose.

18. What is the elimination period on a disability income policy?

The elimination period is the time-based deductible at the front end of a disability claim. Longer elimination periods (such as 90 or 180 days) lower the premium because the insurer pays for fewer short claims.

19. Which statement about pre-existing-condition exclusions is correct under current federal and California rules?

The Affordable Care Act eliminated pre-existing-condition exclusions on major medical plans (both individual and group). Limited-benefit products outside the major medical market, such as long-term care, individual disability income, and supplemental policies, may still impose them.

20. Under the Time of Payment of Claims required provision, periodic disability income benefits that have accrued must be paid at least how often during the period the insurer is liable?

Accrued periodic disability income benefits must be paid at least monthly during the period of liability. Any unpaid balance at the end of liability must be paid immediately upon receipt of due written proof.