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AccidentAndSicknessPolicyProvisions,
Clauses,AndRiders
Bynow,youshouldbeabletolistthedifferenttypesofhealthpolicies
and their defining characteristics. Health insurance policies may
include provisions, clauses, and riders that can have a significant
effect on their terms and benefits. Some provisions are mandatory,
while others are optional. This section will discuss different policy provisions
and riders available in health insurance. In addition, this section will examine
theoptionsavailabletotheinsurancecompanyandtheinsuredforcancelingor
renewing coverage. Part of your duty as a producer is to be able to explain the
different policy provisions and riders to your clients. The knowledge that you
will share with prospective customers will help them make informed decisions
abouttheirhealthinsurancepolicies.

A.MandatoryProvisions
TheUniformIndividualAccidentandSicknessPolicyProvisionsLaw,
whichwasdevelopedbytheNationalAssociationofInsuranceCommissioners
(NAIC),hasbeenadoptedinallstates.Thislawestablishedstandardprovisions
thataretobeincludedinallindividualhealthinsurancepolicies.Althoughthe
wordingmaydifferfromoneinsurertoanother,thebasicprovisionsarethe
same.Someoftheseprovisionsaresimilartolifeinsurancepolicyprovisions.
Thepurposeoftheseprovisionsistodefinetherightsanddutiesofboththe
insurerandthepolicyholder.Anyoftheprovisionsmayberewordedbythe
insurer,solongasmodificationdoesnotmaketheprovisionlessfavorableto
thepolicyholderorbeneficiary.
1.EntireContract

Theentirecontractprovisionstatesthatthehealthinsurancepolicy,together
withacopyofthesignedapplicationandattachedridersandamendments,
constitutestheentirecontract.Nochangesmaybemadetothepolicywithout
theexpresswrittenagreementofbothparties,andanychangesmustalsobe
madeapartofthecontract.Onlyanexecutiveofficerofthecompany,notan
agent,hasauthoritytomakeanychangestothepolicy.
2.GracePeriod

Thegraceperiodistheperiodoftimeafterthepremiumduedateinwhich
premiumsmaystillbepaidbeforethepolicylapsesfornonpaymentofthe
premium.Althoughthegraceperiodmaydifferaccordingtoindividualstate
laws,inmostcasesthegraceperiodcanbenotlessthan7daysforweekly
premiumpolicies(industrialpolicies),10daysformonthlypremium
policies,and31daysforallothermodes.Coveragewillcontinueinforce
duringthegraceperiod.

3.Reinstatement

Ifthepremiumhasnotbeenpaidbytheendofthepolicysgraceperiod,the
policywilllapse(terminate).Thisprovisionstipulatesunderwhatconditions
theinsuredmayreinstatecoverage.Reinstatementisautomaticifthecompany
oranauthorizedrepresentativeacceptsthepolicypremiumanddoesnot
requireareinstatementapplication.However,ifareinstatementapplicationis
requiredandaconditionalreceiptisissuedforthepaymentofthepolicy
premium,thecompanymayapproveordisapprovethereinstatement
application.Coverageisautomaticallyreinstatedifnotrefusedwithin45days
fromthedatetheconditionalreceiptwasissued.Accidentswillbecovered
immediatelyfollowingthereinstatementhowever,sicknessiscoveredonly
after10days.Thishelpstoprotecttheinsurerfromadverseselection.
4.ChangeofBeneficiary

Thechangeofbeneficiaryprovisionstipulatesthatthepolicyownermaychange
thebeneficiaryatanytimebyprovidingawrittenrequesttotheinsurer,unless
thebeneficiaryisdesignatedasirrevocable.Theconsentofthebeneficiary
isnotrequired.Ifthebeneficiarydesignationisirrevocable,thepolicyholder
mustfirstobtainthepermissionofthebeneficiarybeforeanychangecanbe
made.
5.NoticeofClaim

Thenoticeofclaimprovisionspellsouttheinsuredsdutytoprovidethe
insurerwithreasonablenoticeintheeventofaloss.Noticeisrequiredwithin
20daysoftheloss,orassoonasreasonablypossible.Noticetotheagentequals
noticetotheinsurer.
6.ClaimForms

Uponreceiptofanoticeofclaim,thecompanymustsupplyclaimsformsto
theinsuredwithinaspecifiednumberofdays(usually15,butmayvaryfrom
statetostate).Ifformsarenotfurnished,theclaimantisdeemedtohave
compliedwiththerequirementsofthepolicyifheorshesubmitswrittenproof
oftheoccurrence,natureoftheloss,andextentoflosstotheinsurer.
7.ProofofLoss

Afteralossoccurs,theclaimantmustsubmitproofoflosswithin90daysof
thelossorassoonasreasonablypossible,butnottoexceedoneyear.However,
the1yearlimitdoesnotapplyiftheclaimantisnotlegallycompetenttocomply
withthisprovision.
8.PhysicalExaminationandAutopsy

Thephysicalexamandautopsyprovisiongivestheinsurertherighttoexamine
theinsured,atitsownexpense,asoftenasmaybereasonablynecessarywhilea
claimispending.Theinsureralsousuallyhastherighttoconductanautopsy,if
notforbiddenbyastatelaw.

9.TimeofPaymentofClaims

Thetimeofpaymentofclaimsprovisionspecifiesthatclaimsaretobepaid
immediatelyuponwrittenproofofloss.Thetimeofpaymentforclaimsis
usuallyspecifiedindifferentpoliciesas60days,45days,or30days.However,
iftheclaiminvolvesdisabilityincomebenefits,thebenefitsmustbepaidnot
lessfrequentlythanmonthly.
10.PaymentofClaims

Thepaymentofclaimsprovisionspecifiestowhomclaimspaymentsaretobe
made.Whileliving,allbenefitsarepayabletotheinsured.Iftheinsuredis
deceased,claimspendingarepaidtothebeneficiary.Ifthereisnobeneficiary,
benefitswillbepaidtothedeceasedsestate,unlesstheinsuredhasassigned
thebenefitstobepaiddirectlytoahospitalordoctorwhohasrendered
services.Somestatesallowaprovisionthatgivestheinsurertherightto
expeditepaymentsofurgentlyneededclaimfundsandpayupto$5,000in
benefitstoarelativeorindividualwhoisconsideredtobeequitablyentitledto
payment,calledfacilityofpaymentclause.
11.TimeLimitonCertainDefenses(Incontestable)

Thetimelimitoncertaindefensesprovisionissimilartothe
incontestabilityprovisionfoundinlifeinsurancepolicies.Nostatementor
misstatement(exceptfraudulentmisstatements)madeintheapplicationatthe
timeofissuewillbeusedtodenyaclaimafterthepolicyhasbeeninforcefor2
years.
Aclaimforlossincurredordisabilitycommencingafter2yearsfromthedateof
policyissuemaynotbereducedordeniedonthegroundthatadiseaseor
physicalconditionnotspecificallyexcludedfromcoveragehadexistedpriorto
theeffectivedateofcoverageofthispolicy.
12.LegalActions

Thisprovisionlimitsthetimeinwhichaclaimantmayseekrecoveryfroman
insurerunderapolicy.Theinsuredmustwait60days,butnotlaterthan3
years(inmoststates)afterproofofloss,beforelegalactioncanbebrought
againstthecompany.

B.OptionalProvisions
Inadditiontothemandatoryprovisionsdiscussedabove,theinsurance
companyhastheoptionofincludinganyofthefollowingoptional
provisions.
Aninsurancecompanymaychangethewordingoftheoptionalpolicy
provisionsaslongastherewordingisnotlessfavorabletothepolicyholder.
1.ChangeofOccupation

Becausetheoccupationoftheinsuredisanimportantunderwriting
consideration,particularlyfordisabilityincomeinsurance,healthinsurance
policiesusuallyincludeaprovisionthatallowstheinsurertoadjustbenefitsif
theinsuredchangesoccupations.Iftheinsuredmakesachangetoamore
hazardousoccupation,uponclaim,benefitswillbereducedtothatwhich
premiumspaidwouldhavepurchasedassumingthemorehazardous
occupation.Ifthechangeistoalesshazardousoccupation,theinsuredis
entitledtoapplytotheinsurerforaratereduction.
2.MisstatementofAge

Iftheinsuredmisstatedhisorherageorgenderatthetimeoftheapplication,
thebenefitspaidunderthepolicywouldbeadjustedtowhatthepremium
paidwouldhavebeenpurchasedatthecorrectage.
3.IllegalOccupation

Thisprovisionstatesthatliabilitywillbedeniediftheinsuredisinjuredwhile
committinganillegalactorisengagedinanillegaloccupation.

C.OtherProvisionsAndClauses
Allindividualhealthinsurancepoliciesarerequiredtoincludecertainstandard
provisions(calledUniformMandatoryProvisions).Inadditiontothese
mandatoryprovisions,someprovisionssuchasfreelookarerequiredin
individualpolicies,whileotherprovisionsarerequiredinbothindividualand
groupcontracts.Insurersmayuseadditionalprovisionsthatarenotinconflict
withtheuniformprovisions,aslongastheyareapproved(allowed)bythestate
wherethepolicyisdelivered.Althoughitisimpossibletocatalogallofthe
provisionsusedbyinsurers,thefollowingarethemorecommonlyused.
1.InsuringClause

Theinsuringagreementorclauseisusuallylocatedonthefirstpageofthe
policy.Itissimplyageneralstatementthatidentifiesthebasicagreement
betweentheinsurancecompanyandtheinsured.Itidentifiestheinsured
andtheinsurancecompanyandstateswhatkindofloss(peril)is
covered.
2.FreeLook

Thefreelookorrighttoexamineprovisionallowstheinsuredaperiodof
severaldaystolookoverthepolicy,andifdissatisfiedforanyreason,returnit
forafullrefund.Itiscommonly10daysfromthedatethepolicyisdelivered,
butmayvaryfordifferenttypesofpolicies.Thisprovisionismandatedfor
individualpoliciesinmoststates.
3.ConsiderationClause

Theconsiderationclause,whichisusuallylocatedonthefirstpageofthe
policy,makesitclearthatbothpartiestothecontractmustgivesomevaluable

consideration.Thepaymentofthepremiumandthestatementsinthe
applicationaretheconsiderationgivenbytheapplicant.Theinsurers
considerationisthepromisetopayinaccordancewiththecontractterms.
4.ProbationaryPeriod

Theprobationaryperiodprovisionstatesthataperiodoftimemustlapse
beforecoverageforspecifiedconditionsgoesintoeffect.Thisprovisionismost
commonlyfoundindisabilityincomepolicies.Theprobationaryperiodalso
appliestonewemployeeswhomustwaitacertainperiodoftimebeforetheycan
enrollinthegroupplan.Thepurposeofthisprovisionistoavoidunnecessary
administrativeexpensesincasesofemployeeturnover.
5.EliminationPeriod

Theeliminationperiodisatypeofdeductiblethatiscommonlyfoundin
disabilityincomepolicies.Itisaperiodofdayswhichmustexpireafterthe
onsetofanillnessoroccurrenceofanaccidentbeforebenefitswillbepayable.
Thelongertheeliminationperiod,thelowerthecostofcoverage.
6.WaiverofPremium

Thewaiverofpremiumprovisionorriderisusuallyincludedwith
guaranteedrenewableandnoncancellabledisabilityincomepolicies.Itprovides
thatintheeventofpermanentandtotaldisability,premiumswillbewaivedfor
thedurationofthedisability.Toqualify,theinsuredmustbetotallydisabledfor
aspecifiedperiodoftime,usually3to6months.Duringthis3to6months
waitingperiod,theinsuredmustcontinuetopaythepolicypremium,but
usuallythewaiverisretroactivetothedatethedisabilitybeganandany
premiumspaidduringthewaitingperiodwillberefunded.Thisridergenerally
expireswhentheinsuredattainsage65however,aslongastheinsured
becomesdisabledpriortoage65,thepremiumswillcontinuetobewaivedfor
thedurationofthedisability.
7.PreexistingConditions

Preexistingconditionsareconditionsforwhichtheinsuredhasreceived
diagnosis,advice,care,ortreatmentduringaspecifictimeperiodpriortothe
applicationforhealthcoverage.UptoJanuary2014,healthinsurance
policiescouldhavetheseconditionsexcludedfromcoveragehowever,the
recentlyenactedhealthcarereformeliminatedpreexistingconditions
restrictionsinindividualandgrouphealthinsuranceplans.Note,however,that
preexistingconditionlimitationsmaystillapplyinMedicareSupplement
policiesandlongtermcareinsurance.
8.RecurrentDisability

Arecurrentdisabilityprovisioninahealthinsuranceordisabilityincomepolicy
specifiestheperiodoftimethatmustlapsebetweentwoillnessesinorderfora
newsetofbenefitstobeavailableforthesecondillness.Itisusuallytothe
insured'sadvantagetoconsideranyrelapseasacontinuationofthepriorclaim

becauseanyeliminationperiodordeductiblewouldnothavetobesatisfied
again.
9.Coinsurance

Mostmajormedicalpoliciesincludeacoinsuranceprovisionthatprovidesfor
thesharingofexpensesbetweentheinsuredandtheinsurancecompany.After
theinsuredsatisfiesthepolicydeductible,theinsurancecompanywillusually
paythemajorityoftheexpenses,typically80%,withtheinsuredpayingthe
remaining20%.Othercoinsurancearrangementsexistsuchas90/1075/25or
50/50.Thelargerthepercentagethatispaidbytheinsured,thelowerthe
requiredpremiumwillbe.Thepurposeofthecoinsuranceprovisionisforthe
insurancecompanytocontrolcostsanddiscourageoverutilizationofthepolicy.
Mostpoliciesalsolimittheamountofoutofpocketexpensestheinsuredcan
incurduringapolicyyear.Astoplosslimitisaspecifieddollaramount
beyondwhichtheinsurednolongerparticipatesinthesharingofexpenses.The
insurancecompanypays100%oftheexpensesthatareabovethespecifiedstop
losslimit.
10.Deductibles

Adeductibleisaspecifieddollaramountthattheinsuredmustpayfirstbefore
theinsurancecompanywillpaythepolicybenefits.Thepurposeofadeductible
istohavetheinsuredabsorbthesmallerclaims,whilethecoverageprovided
underthepolicywillabsorbthelargerclaims.Consequently,thelargerthe
deductible,thelowerthepremiumthatisrequiredtobepaid.
Mostmajormedicalpoliciesfeatureanannualdeductible(alsocalleda
calendaryeardeductible)that,asthenameimplies,ispaidonceinanyyear,
regardlessoftheamountofclaimsinthatyear.Thepolicymaycontainan
individualdeductible,inwhicheachinsuredispersonallyresponsiblefora
specifieddeductibleamounteachyear,orafamilydeductiblewherebythe
annualdeductibleissatisfiediftwoormorefamilymemberspayadeductiblein
agivenyear,regardlessoftheamountofclaimsincurredbyadditionalfamily
members.Somepoliciescontainwhatisknownasaperoccurrence
deductibleorflatdeductiblewhichtheinsuredisrequiredtopayforeach
claim,possiblyresultinginmorethanonedeductiblebeingpaidinagivenyear.
Thepolicymayalsocontainaprovisionwhichapplieswhenmorethanone
familymemberisinjuredinasingleaccident,alsocalledthecommon
accidentprovision.Inthiscase,onlyonedeductibleappliesforallfamily
membersinvolvedinthesameaccident.
Somesupplementalmajormedicalplansalsoincludeanintegrated
deductibleinwhichcasetheamountofthedeductiblemaybesatisfiedbythe
amountpaidunderbasicmedicalexpensecoverage.Forexample,ifthe
supplementalcoverageincludeda$1,000integrateddeductible,andtheinsured
incurs$1,000inbasicmedicalexpenses,thedeductiblewillbesatisfied.Ifthe
basicpolicyonlycovered$800ofthebasicexpenses,theinsuredwouldhaveto
satisfytheremaining$200difference.

Somepoliciesalsoincludeacarryoverprovisionthatstatesthatifthe
insureddidnotincurenoughexpensesduringtheyeartomeetthedeductible,
anyexpensesincurredduringthelast3monthsmaybecarriedovertothenext
policyyeartosatisfythenewannualdeductible.
Forexample,ifaninsuredhasa$500deductibleandincurs$100inthefirst
halfoftheyear,andanother$250duringthelastquarter,thusnotreachingthe
totaldeductiblefortheyear,the$250couldbecarriedforwardtothenextyear,
andtheinsuredwouldbeeligibleforclaimpaymentswhen/ifheincurredan
additional$250inthenewyear.
Disabilityincomeandlongtermcarepoliciesusuallyhaveatimedeductible
intheformofeliminationperiod.
11.Copayments

Acopaymentprovisionissimilartothecoinsurancefeatureinthattheinsured
sharespartofthecostforserviceswiththeinsurer.Unlikecoinsurance,a
copaymenthasasetdollaramountthattheinsuredwillpayeachtimecertain
medicalservicesareused.
12.EligibleExpenses

Eligibleexpensesarethosemedicalexpensescoveredbyahealthinsurance
plan.Theeligibleexpensesarespecifiedinthepolicy.
13.Exclusions

Exclusionsspecifyforwhattheinsurerwillnotpay.Thesearecausesofloss
thatarespecificallyexcludedfromcoverage.Reductionsareadecreasein
benefitsbecauseofcertainspecifiedconditions.Themostcommonexclusionsin
healthinsurancepoliciesareinjuryorlossthatresultsfromanyofthe
following:
War
Militaryduty
Selfinflictedinjury
Dentalexpense
Cosmeticmedicalexpenses
Eyerefractionsor
Careingovernmentfacilities.
Inaddition,mostpolicieswilltemporarilysuspendcoveragewhileaninsured
residesinaforeigncountryorwhileservinginthemilitary.
MentalandEmotionalDisordersUsuallythelifetimebenefitformajor
medicalcoveragelimitstheamountpayableformentaloremotionaldisorders.
Thebenefitisusuallyexpressedasaseparatelifetimebenefitandthereis
frequentlyalimitonthenumberofoutpatientvisitsperyear.Thebenefitmay
alsopayamaximumlimitpervisit.Theselimitationsusuallydonotapplyto
inpatienttreatment.

SubstanceabuseAswithmentalandemotionaldisorders,outpatient
treatmentofsubstanceabuseisusuallylimitedtoamaximumlimit.
14.PreAuthorizationsandPriorApprovalRequirements

Somehealthinsurancepolicieswillrequirethepreauthorizationorprior
approvalofcertainmedicalprocedures,tests,orhospitalstays.Theinsured
mustobtaintheinsurer'sapprovalbeforetheprocedure,test,orhospitalstayto
besurethepolicywillcovertheexpenses.
15.Usual,ReasonableandCustomary(URC)Charges

Somemedicalexpenseinsuranceplanscontainabenefitschedule,whichvery
specificallystatesexactlywhatiscoveredintheplanandforhowmuch.Other
plansmayincorporatethetermusual/reasonable/customary.
Usual/reasonable/customarymeansthattheinsurancecompanywillpayan
amountforagivenprocedurebasedupontheaveragechargeforthatprocedure
inthatspecificgeographicarea.
16.Lifetime,AnnualorPerCauseMaximumBenefitLimits

Themaximumbenefitisthelargestbenefitamountapolicywillpay.Thismay
beexpressedasalifetimelimit,anannuallimit,orapercauselimit.
Thelifetimelimitspecifiesabenefitamountthatisthemostapolicywillpay
duringthelifetimeoftheinsured.
Anannuallimitisthemostapolicywillpayeachyearthatpolicyisinforce.
Thepercauselimitisthemostapolicywillpayforexpensesincurredfrom
thesameorrelatedcauses.

D.Riders
1.ImpairmentRider

Theimpairment(exclusion)ridermaybeattachedtoacontractforthe
purposeofeliminatingcoverageforaspecificallydefinedpreexistingcondition,
suchasbackinjuries.Impairmentridersmaybetemporaryormaybecomea
permanentpartofthepolicy.Attachingthisriderexcludescoveragefora
conditionthatwouldotherwisebecovered.Oftenaperson'sonlymeansof
purchasinginsuranceatareasonablecostwhentheyhaveanexisting
impairmentisthroughapolicywhichexcludescoverageforthespecific
impairment.
Forexample,aphysicianmayhavesufferedfromabackinjurypriortoapplying
foradisabilitypolicy.Thecompanymayagreetoissueadisabilitypolicy,but
withanexclusionrider,excludingcoverageforanyclaimrelatedtohis
back.Thepolicywouldcoveranyotherdisabilityhemayincurinthefuture,as
longasitisnotrelatedtohisback.Thismaybetheonlywaytheinsuredisable
toobtaincoverage.Theunderwritermakesadecisionwhenwritingthecontract
whethertomaketheexclusionpermanent,or,forashorttimeonly(suchas
iftheinsuredisabletogoaspecifiedperiodoftimewithnofurther
treatment).Thetermsoftheriderwillbeclearlystatedinthepolicy.

Mostridersinbothlifeandhealthinsuranceaddsomeformofadditional
coverageoftenthereisextracostaddedtothepremiumfortherider.The
impairment(exclusion)riderisanexceptioninthatittakessomethingaway
fromstandardcoverage.Thereisnoextrachargeforthis,noristhepremium
reducedtoreflectareductionincoverage.
2.GuaranteedInsurabilityRider

ThispolicyriderisalsoreferredtoastheFutureIncreaseOptionorthe
GuaranteedPurchaseOption.Thisoption,whichisalsoavailableonlife
insurancepolicies,willallowtheinsuredtopurchaseadditionalamountsof
disabilityincomecoveragewithoutevidenceofinsurability.Theinsuredis
usuallyprovidedanumberofoptiondates,suchaseverytwoyears,onwhich
theadditionalpurchaseoptionmaybeexercised.Mostcompaniesdonotallow
theinsuredtoexercisetheadditionalpurchaseoptionbeyondacertainage,
usuallyage50.Thepremiumfortheadditionalamountofinsurancewillbe
basedontheinsuredsattainedageatthetimetheoptionisexercised.Inorder
topreventoverinsurance,theinsuredmustmeetanearningstestpriortoeach
purchase.Inaddition,theinsurerwillusuallylimittheamountthatmaybe
purchasedateachoftheoptiondatestosomespecifiedamount,suchas$500
$5,000.
3.MultipleIndemnityRider(Double,Triple)

Multipleindemnityisaprovisionorriderfoundinsomelifeinsurance
policiesoraccidentaldeathpoliciesunderwhichcertainbenefitsaredoubled
ortripledwhendeathoftheinsuredwasduetocertainspecified
circumstances.Generallythisprovisionstipulatesthatdeathmustoccurpriorto
aspecifiedageandresultfromaccidentalbodilyinjuryandnotbecontributed
tobyanyothercause.Multipleindemnityprovisionalsostatesthatthedeath
mustoccurwithinaspecifiedperiodoftime,suchas90or100daysfromthe
datetheaccidentoccurred.

E.RightsOfRenewability
Thefacepageoftheindividualhealthinsurancecontractmustclearlystate
underwhatconditionsthepolicymayberenewed.Iftheinsurerreservesthe
righttorefuserenewal,theinsurermustdeliverormailtothepolicyholder's
lastknownaddressawrittennoticeofitsintentionnottorenewthepolicy
beyondtheperiodforwhichthepremiumhasbeenaccepted.
Sinceindividualhealthinsurancepoliciesprovidecoverageforaspecifiedterm,
theabsenceofacancellationprovisiondoesnotguaranteecontinuing
protection.Evenwhentheinsurercannotcancelapolicy,theinsurermayretain
therighttorefusetorenewthepolicy.
Eachpolicyshouldbecarefullyexaminedtodeterminewhichrenewalprovision
itcontains,astheseareextremelyimportantprovisions.
1.Noncancelable

Theinsurancecompanycannotcancelanoncancellablepolicy,norcanthe
premiumbeincreasedbeyondwhatisstatedinthepolicy(notethatthepolicy
maycallforanincreaseinacertainyear,suchas"age65,"butthatmustbe
statedintheoriginalcontract).Theinsuredhastherighttorenewthepolicyfor
thelifeofthecontracttheinsurercannotincreasethepremiumabovethe
amountforwhichthepolicywasoriginallyissued.However,theguaranteeto
renewcoverageusuallyonlyappliesuntiltheinsuredreachesage65,atwhich
timetheinsuredisusuallyeligibleforMedicare.Fordisabilityincomeinsurance
thepolicywillberenewedbeyondage65onlyiftheinsuredcanprovide
evidencethatheorshehascontinuedtoworkinafulltimejob.
2.Cancelable

Thisprovisionallowstheinsurertocancelthepolicyatanytime,orattheend
ofthepolicyperiod.Therearenoguaranteesthattheinsurerwillcontinue
coverageattheendofthepolicyperiod.Theinsurermustprovidetheinsured
withproperwrittennoticeofthecancellationandarefundofanyunearned
premiumpaid.Iftheinsuredisinthemidstofaclaimatthetimeof
cancellation,theinsurancecompanymustcontinuetohonortheclaim.This
typeofrenewabilityprovisionisnotverycommon,andisevenillegalinmany
states.
3.GuaranteedRenewable

Theguaranteedrenewableprovisionissimilartothenoncancellable
provision,withtheexceptionthattheinsurercanincreasethepolicypremium
onthepolicyanniversarydate.Theinsured,however,hastheunilateralrightto
renewthepolicyforthelifeofthecontract.Theinsurermayincreasepremiums
onaclassbasisonlyandnotonanindividualpolicy.Aswiththe
noncancellablepolicy,coveragegenerallyisnotrenewablebeyondtheinsured's
age65.MedicareSupplementsandlongtermcarepoliciesmustbe
writtenasguaranteedrenewablecontracts,andcannotbecancelledbythe
companyattheinsured'sage65.
4.ConditionallyRenewable

Withaconditionallyrenewablepolicy,theinsurermayterminatethecontract
onlyatrenewalforcertainconditionsthatarestipulatedinthecontract.For
example,oneconditionmaybethattheinsuredmustbeemployedtocollect
disabilitypayments.Inaddition,thepolicypremiumsmaybeincreased.The
companymaynotdenyrenewalduetoclaimsexperience.
5.OptionallyRenewable

Optionalrenewabilityissimilartoconditionalrenewability,exceptthatthe
insurermaycancelthepolicyforanyreason,oncertainhomogeneousclasses
(notindividualswithinaclass).Renewabilityisattheoptionoftheinsurer.The
insurercanonlydecidenottorenewapolicyonthepolicyanniversaryor
premiumduedate(renewaldate).Iftheinsurerelectstorenewcoverage,itmay
alsoincreasethepolicypremium.

6.PeriodofTime

Insomecases,anindividualmayneedhealthinsuranceforaspecifiedperiodof
time.Coverageisthenconsideredatermhealthpolicy,whichisnotrenewable.
Whenthetermexpires,theinsuredmustpurchaseanotherpolicy.These
policiesarealsocalledperiodoftimepoliciesastheyareonlyeffectivefora
specificperiodoftime,andwillbecancelledbythecompanyattheendofthe
term.
Examplesoftermhealthpoliciesaretravelaccidentpolicies,shorttermhealth
plans,oraccidentonlypolicies.Policieswhichcoverspecificevents,suchas
schoolfunctions,summercamp,orathleticevents,areotherexamples.Once
theeventisover,coverageisnolongerinplace.