Health Policy Provisions, Clauses and Riders
11.5% of the exam 2 min
About 15 of the 130 scored questions: the uniform mandatory and optional provisions as Texas writes them in TIC Chapter 1201, cost-sharing terms, and renewability.
Mandatory provisions about the contract and premiums
Entire contract: the policy, endorsements and attached papers are the whole contract, and only an executive officer can change it; no agent may change or waive provisions (TIC 1201.207). Time limit on certain defenses: after two years, a non-fraudulent misstatement cannot void the policy or deny a claim, and a condition not excluded by name cannot be called preexisting (1201.208). Grace period: 7 days for weekly premiums, 10 for monthly, 31 for all others, with the policy in force (1201.209). Reinstatement: accepting a late premium without an application reinstates the policy; with a conditional receipt it is reinstated on approval or on day 45, and it covers accidents after reinstatement and sickness beginning more than 10 days after (1201.210).
Mandatory provisions about claims
Notice of claim within 20 days of the loss, or as soon as reasonably possible (1201.211). Claim forms within 15 days of notice, or the claimant may send written proof in any form (1201.212). Proof of loss within 90 days, and never more than one year late absent legal incapacity (1201.213). Time of payment: immediately for lump sums, at least monthly for periodic benefits (1201.214). Payment of claims: death benefits to the beneficiary or, if none, the estate; other benefits to the insured (1201.215). Physical exam and autopsy at the insurer's expense (1201.216). Legal actions: not before 60 days after proof of loss, nor after three years (1201.217). Change of beneficiary: the insured's right unless irrevocable (1201.218).
Optional provisions
Change of occupation: a move to a more hazardous job reduces benefits to what the premium buys at that class; a safer job lowers the rate (1201.219). Misstatement of age: benefits adjust to the correct age (1201.220). Other insurance with this insurer: excess coverage is void and its premium returned (1201.221). Relation of earnings: benefits may be prorated when total disability income exceeds the greater of current or two-year average earnings (1201.222). Unpaid premium: deducted from a claim (1201.223). Cancellation: the insurer gives at least five days' written notice and refunds unearned premium (1201.224). Conformity with state statutes: conflicting provisions are amended to the minimum the state requires (1201.225). Illegal occupation: no liability for losses caused by committing a felony (1201.226).
Cost sharing and renewability
The deductible is paid first; coinsurance splits covered costs after it (such as 80/20) up to the out-of-pocket maximum. A copayment is a flat amount per service. The probationary period delays coverage for sickness after the policy starts; the elimination period is the waiting time after a disability begins before benefits are paid. Renewability, from weakest to strongest: cancelable, optionally renewable, conditionally renewable, guaranteed renewable (must renew, may raise rates by class) and noncancelable (must renew at the same premium).
Where people lose points
✗ "Notice of claim is due in 21 days."
✓ The statute says before the 21st day, which means within 20 days.
✗ "An agent can waive a provision to keep a client happy."
✓ The entire contract provision says no agent may change the policy or waive its provisions.
✗ "After reinstatement, sickness is covered immediately."
✓ Only sickness beginning more than 10 days after reinstatement is covered; accidents after it are covered right away.
✗ "The probationary period and the elimination period are the same thing."
✓ Probationary: after the policy starts, for sickness. Elimination: after each disability begins, before benefits.
✗ "Guaranteed renewable locks the premium."
✓ Guaranteed renewable lets the insurer raise rates for the whole class; only noncancelable locks the premium.
Numbers to memorize
| Grace period | 7 / 10 / 31 days (TIC 1201.209) |
| Time limit on defenses | 2 years (TIC 1201.208) |
| Reinstatement approval | Day 45 if no notice (TIC 1201.210) |
| Sickness after reinstatement | Covered if it begins after 10 days |
| Notice of claim | 20 days (TIC 1201.211) |
| Claim forms | 15 days (TIC 1201.212) |
| Proof of loss | 90 days, 1-year outer limit (TIC 1201.213) |
| Legal actions | After 60 days, within 3 years (TIC 1201.217) |
| Insurer cancellation notice | 5 days (TIC 1201.224) |
Test yourself
No answers here on purpose — retrieving them is the practice. Drill this domain if any of these stall you.
- Give the three grace periods and when each applies.
- What does the time limit on certain defenses prevent after two years?
- What can a claimant do if claim forms do not arrive within 15 days?
- Who receives a death benefit when no beneficiary designation is in effect?
- Rank the five renewability provisions from weakest to strongest.
Go deeper on these
- Health policy uniform provisions, with the Texas numbers
- Texas required life insurance policy provisions