17.1.2 Optional Provisions
The following provisions are optional at the discretion of the insurer as mandated by the NAIC Uniform Health Insurance Policy Provision Law.
Change of Occupation
The occupation of a person directly reflects his/her risk profile, mostly to the risk of disability. If a person changes his job to a more risky profession, the insurance company has the right to raise the premiums and change the benefit policy or vice versa if the person changes to a less risky profession. The benefit and premium changes take place as soon as a person changes jobs. Even if the insured doesn't notify the insurer of the job change in advance, changes to the benefit will still take place (up or down accordingly) if disability occurs.
Misstatement of Age
This provision is the same as in life insurance, with a slightly different end result. This provision, in health insurance, allows the insurer to go back and make changes to the benefits so that they match the correct age. This means if a person stated originally that they were younger, the premiums they had been paying were lower than they should have been, and benefits would be adjusted (decreased) accordingly. Conversely, if a person stated originally that they were older than they really were at the time of application, then they would have been paying a higher premium and, therefore, benefits would be adjusted (increased) accordingly.
Other Insurance In This Insurer
There is a maximum amount an insurer is allowed to cover an individual in order to limit the company's risk. A person may occupy more than one policy with an insurer; however, this provision protects the company and does not allow the coverage to exceed a specified amount.
Insurance With Other Insurer
This provision protects the insurance company against over-insurance in case a person has the same coverage from two different insurance policies and only one is notified when "expenses are incurred." This provision states that benefits payable will be prorated and excess premiums will be refunded to the policyowner.
Insurance With Other Insurers
As you can see, this is similar to the above provision. This provision is to allow people to have insurance with more than one company, however, while still avoiding over-insurance. It calls for prorating benefits on any other reason than "expenses incurred," usually in regard to disability income.
Relation of Earnings to Insurance
This has to do with the amount of monies from premium payments the insurer received versus the loss the insurer suffered through claims payments. If disability income benefits from all disability income policies for the same loss exceed the insured's monthly earnings at the time of disability (or the average monthly earnings for two years preceding), the insurer is liable only for that proportionate amount of benefits as the insured's earnings bear to the total benefits under all such coverage.
In Florida, total indemnities payable to the insured may not be reduced below $500 or the sum total benefits under all applicable coverage, whichever is less. Any premiums paid for the excess coverage are refunded.
Unpaid Premiums
When a benefit is payable to the insured or beneficiary, if there are any unpaid premiums they will be deducted at this time.
Cancelation
When the insurance company exercises its right to cancel a policy, the insured must be notified 45 days in advance and must be reimbursed for any prepaid premiums.
Conformity with State Statutes
All conflicts regarding state statutes of the state the insured lives in are automatically adjusted at the time the policy is issued.
Illegal Occupation
If the insured is connected with a felony or has an illegal occupation and incurs injury, the insurance company is not held responsible.
Intoxicants and Narcotics
The insurer is not responsible for any loss that occurs while the insured is intoxicated or under the influence of narcotics unless drugs were administered by a physician.
