United States
Hong KongHealth policy mandatory provisions
The outline lists sixteen provisions in section VI, which is worth 15 questions. They govern the contract, the claims process and the adjustments an insurer may make. Four carry most of the questions: time limit on certain defenses, notice of claim and proof of loss, payment of claims, and change of occupation.
Section VI is the health half's answer to section II, and it is worth the same 15 questions. Where the life provisions are about the policy's own life cycle, these are mostly about claims: how you tell the insurer, how it checks, and how quickly it has to pay.
The sixteen, grouped by what they do
| Group | Provisions |
|---|---|
| The contract itself | Entire contract; time limit on certain defenses |
| Keeping it in force | Grace period; reinstatement |
| Making a claim | Notice of claim; claim forms; proof of loss |
| Getting paid | Time of payment of claims; payment of claims |
| The insurer's checks | Physical examination and autopsy; legal actions |
| Changes and corrections | Change of beneficiary; misstatement of age or gender; change of occupation |
| Limits on the benefit | Illegal occupation; relation of earnings to insurance |
Seven groups, sixteen provisions, and only two of them are unfamiliar if you have already done the life half. Change of occupation and relation of earnings have no life equivalent, because a life policy does not care what you do for a living once it is issued and a health policy very much does.
Time limit on certain defenses
This is incontestability wearing a different name. After the policy has been in force for the stated period, the insurer cannot void it or deny a claim on the basis of misstatements in the application, fraudulent misstatements aside in some forms.
It also does a second job that the life version does not: after the period, a claim cannot be denied on the ground that the condition existed before the policy started, unless the condition was excluded by name. So the same provision closes both the misrepresentation defense and the preexisting condition defense.
Change of occupation, which has no life equivalent
If an insured moves to a more hazardous occupation, the insurer may reduce the benefit to what the premium paid would have bought at the rate for the new occupation. If they move to a less hazardous one, the insured may ask for a premium reduction and a refund of the difference.
Note what the provision does not do. It does not void the policy, it does not deny the claim, and it does not require the insured to have told anyone. It adjusts. That is the same logic as misstatement of age on a life policy, and recognizing the pattern is worth a mark.
If an insured's income falls after the policy is issued, this provision lets the insurer reduce a disability benefit so it does not exceed the share of earnings the policy was meant to replace. It is the enforcement mechanism behind the rule that disability cover never replaces the whole of an income.
What Texas requires
The Insurance Code carries a chapter of standard provisions for individual accident and health policies, chapter 1201, which sets out what a policy must contain and what it may not. It requires an outline of coverage, sets standards for policy provisions and prohibits others, and it deals with the return of a policy after delivery at TIC 1201.058.
Group accident and health policies have their own chapter. So a provision question can arrive from the general portion as a concept or from the Texas portion as a requirement, and the Texas version is the one where a section number is worth knowing.
An insured with a disability income policy changes from an office job to work as a roofer without telling the insurer, and is later injured. What is the likely outcome?
- The claim is denied, because the insured failed to notify a material change
- The policy is void, because the risk changed
- The benefit is reduced to what the premium paid would have bought at the roofer's rate
- The claim is paid in full, because the provision only applies to future claims
Where the questions sit
- Section
- VI, provisions, clauses and riders, 15 questions
- Heading A
- Mandatory and optional provisions, sixteen items
- Heading B
- Other provisions and clauses, fifteen items
- Headings C and D
- Riders, and rights of renewability
- Our estimate for heading A
- About 6 of the 15, ours and not published
The opinion, and the concession
Study the claims provisions as one sequence rather than four separate rules: notice, forms, proof of loss, time of payment, payment of claims. That is a single story about what happens after something goes wrong, and stories are easier to hold than lists. The two pages after this one take that sequence apart.
The concession: the day counts attached to these provisions come from the model law the states adopted, and we hold neither that model nor the Administrative Code rules Texas layers on top. So this page tells you what each provision does and not how many days it gives you. That is a real gap, and it is the same one that affects every page here where a figure lives outside the Insurance Code.
Common questions
What is the time limit on certain defenses?
The health policy version of incontestability. After the stated period the insurer cannot void the policy or deny a claim because of misstatements in the application, and cannot deny on the ground that a condition predated the policy unless that condition was excluded by name.
What happens if an insured changes to a more dangerous job?
The change of occupation provision lets the insurer reduce the benefit to what the premium already paid would have purchased at the rate for the new occupation. The policy is not voided and the claim is not denied, and there is no requirement to have notified the insurer in advance.
What does relation of earnings to insurance do?
It lets the insurer reduce a disability benefit if the insured's income falls after the policy is issued, so the benefit does not exceed the share of earnings the cover was designed to replace. It enforces the principle that disability insurance never replaces a whole income.
Does Texas set its own health policy provisions?
Yes. Chapter 1201 of the Insurance Code carries standard provisions for individual accident and health policies, covering what a policy must contain, what it may not, the outline of coverage requirement and the effect of returning a policy after delivery at TIC 1201.058.