Life & Health Insurance Exam (National Portion)Policy Provisions, Options, and RidersMedium
A health insurance policy includes a provision that requires the insurer to pay claims immediately after receiving proof of loss, but no later than a specified number of days after receiving such proof. This provision is known as the:
- APayment of Claims provision
- BLegal Actions provision
- CTime Limit on Certain Defenses provision
- DProof of Loss provision
Show answer & explanationAnswer & explanation
Correct answer: A. Payment of Claims provision
The Payment of Claims provision specifies how and when the insurer will pay benefits. It typically states that benefits will be paid immediately upon receipt of due written proof of loss, but usually no later than 30 or 60 days.
Why the other options are wrong
- B. Legal Actions specifies the time frame within which an insured can take legal action against the insurer.
- C. Time Limit on Certain Defenses restricts the insurer's ability to deny claims based on misstatements after a certain period.
- D. Proof of Loss describes the requirement for the insured to submit documentation, not the insurer's payment timeline.
Payment of Claims Provision
A mandatory health insurance policy provision detailing the insurer's responsibility and timeline for paying benefits once proof of loss is received.
- Mandatory provision
- Specifies payment timeline (e.g., within 30-60 days)
- Requires due written proof of loss
Memory trick: NOTICE, PROOF, PAY, LEGAL