Example: Terms of Coverage


Here we have included the terms of coverage for a national carrier, outlining the basics of what this particular product line covers, its exclusions and limitations, and the appeals and reconsideration processes for underwriting. This can be used as an example of what a major health insurance company required of agents and applicants when issuing their plans before the health care law was passed. Keep in mind that these terms may be different now that the law is in place.


Terms of Coverage

Coverage remains in effect as long as the required premium charges are paid and eligibility is maintained. Coverage will be terminated if the member becomes ineligible due to:

1. Non-payment of premiums

2. Residency requirements

3. Obtaining duplicate coverage

Pre-existing Conditions and Limitations:

A pre-existing condition is an illness or injury for which medical
advice or treatment was recommended or received within the six months preceding the effective date of coverage.

For individuals age 19 and older: during the first 12 months following a member’s effective date of coverage, no coverage will be provided for the treatment of a pre-existing condition.

If the applicant had prior creditable coverage within 63 days immediately before the signature date on the application then the pre-existing conditions exclusion of the
plan will be waived.

Pre-existing conditions do not apply to dependents age 18 or younger.

Appeals Process

Applicants may appeal an underwriting declination if they consider the decision was based on incorrect or outdated information from their application health statement or
medical records. The applicant may submit an appeal if they:

•    Do not agree with the declination
•    Wish to provide additional or omitted medical information

Applicants have 180 days from the underwriting decision in which to appeal their declination. In order to request an Appeal the Applicant must submit:

•    A letter requesting the appeal and the reason why
•    A copy of the underwriting decision letter
•    Medical records to support the appeal request

Appeals cannot be initiated with:

•    Verbal requests
•    Requests from anyone other than the applicant or their legal representative
•    Incomplete medical information, such as letters from a physician, pharmacy reports or medical records that don’t include the applicant’s history for the past 5 years. Incomplete requests for appeal will be closed and the applicant notified of the information required to open their appeal.

If the appeal is over turned the original requested effective date will be assigned:

•    If the applicant wishes a later effective date they will have to reapply with a new application and updated health history.

Reconsideration Process

Applicants may request Carrier A to reconsider the underwriting decision to rate up their medical conditions if they consider the decision was based on incorrect or outdated information from their Carrier A application health statement or medical records. The applicant may submit a request for reconsideration if they:

•    Do not agree with the assigned premium rate up
•    Wish to provide additional or omitted medical information

The applicant must submit a written request within 30 days of the underwriting decision and provide the follow information:

•    A letter from the applicant requesting the reconsideration and the reason why
•    A copy of the underwriting decision letter to the applicant
•    Medical records to support the reconsideration request
•    Reconsiderations cannot be initiated with:
•    Verbal requests
•    Requests from anyone other than the applicant or their legal representative
•    Incomplete medical records or information, such as letters from a physician or pharmacy reports.

Reconsideration after 30 days of the Underwriting Decision

•    Requests for premium rate reviews will not be addressed until the policy has been if force for 6 months
•    A new application will be required with updated medical information and/or medical records.