Texas General Lines — Life, Accident, Health and HMOHealth InsuranceHard
A health insurance policy contains a provision that states if the insured misstates their age on the application, the benefits payable under the policy will be adjusted to what the premium paid would have purchased at the correct age. This is an example of which uniform provision?
- ALegal Actions
- BRelations to Earnings
- CChange of Occupation
- DMisstatement of Age or Sex
Show answer & explanationAnswer & explanation
Correct answer: D. Misstatement of Age or Sex
The 'Misstatement of Age or Sex' provision allows the insurer to adjust the benefits to reflect what the premium would have purchased at the insured's correct age or sex, rather than voiding the policy.
Why the other options are wrong
- A. The Legal Actions provision specifies the timeframe within which legal action can be taken against the insurer.
- B. The Relations to Earnings provision limits the disability income benefits to a certain percentage of the insured's average earnings.
- C. The Change of Occupation provision allows benefit adjustment if the insured changes to a more or less hazardous occupation.
Misstatement of Age or Sex Provision
A standard health insurance policy provision that allows the insurer to adjust the amount of benefits payable to what the premium paid would have purchased at the insured's correct age or sex.
- Prevents policy from being voided due to minor misrepresentations.
- Protects both the insurer and the insured.
- Applies to accidental or unintentional misstatements.
- Benefits are typically reduced if the correct age is higher than stated.
Memory trick: Uniform provisions standardize the policy's fair play.