Overview: These provisions must appear in every individual accident and sickness policy. Each addresses a specific vulnerability that policyholders faced historically — late-filed claims, indefinite contestability, delayed payments, and more.

Entire Contract; Changes

The entire contract provision establishes that the policy, the attached application, and any riders or endorsements constitute the complete agreement between the parties. No agent can verbally modify the policy, and no internal company document — marketing brochure, underwriting manual, or corporate bylaw — can be referenced to change its terms. Any modification must be in writing and signed by an authorized executive officer.

This provision protects policyholders from two practical dangers. First, it prevents the insurer from later claiming that some external document altered the policyholder's coverage. Second, and crucially, it contains an attachment rule: if the application is not physically attached to the policy when it is delivered, the insurer cannot use statements made in that application to challenge the policy or deny a claim. This "application attachment" defense is a significant consumer protection — an insurer that issues a policy without attaching the application loses its primary evidence for contesting later.

Statements in the application are treated as representations (beliefs held to be true) rather than warranties (absolute guarantees). This distinction matters because a warranty that turns out to be technically incorrect — even innocently — could theoretically void a contract at common law. The mandatory provision removes that harsh outcome for health insurance policyholders.

Time Limit on Certain Defenses (Incontestability)

After a policy has been in force for two years from its issue date, the insurer generally cannot void coverage or deny claims based on misstatements in the application. This mirrors the incontestability clause in life insurance, addressed in earlier chapters.

The two-year window gives the insurer adequate time to review the application and investigate any concerns. After that window closes, the policyholder has finality — they can rely on their coverage. The provision ends a practice called "post-claim underwriting," in which insurers would accept premiums for years and then comb through the application only after a major claim was submitted, looking for any mistake to justify denial.

There is an important exception: in most states, fraudulent misstatements remain contestable indefinitely in health insurance (unlike life insurance, where the clause may bar even fraud after two years). If an applicant knowingly concealed a known terminal diagnosis to obtain coverage, the insurer may contest that fraud regardless of how long the policy has been in force.

Additionally, this provision contains a second part addressing pre-existing conditions: after two years, the insurer cannot reduce or deny any claim on the grounds that a disease or physical condition existed before the policy's effective date, unless that specific condition was excluded by name at issue. This limitation on pre-existing condition defenses remains especially relevant for non-ACA health products such as disability income and long-term care insurance, where pre-existing condition underwriting still exists.

Grace Period

The grace period is a short window of time after the premium due date during which the policy remains in force even though payment has not yet been made. The required minimum lengths are:

7 days for weekly premium modes
10 days for monthly premium modes
31 days for all other modes (quarterly, semi-annual, annual)

If the insured experiences a covered loss during the grace period, the claim must still be paid — though the insurer may deduct the unpaid premium from the benefit payout. If the premium is never paid and the grace period expires, the policy lapses. The purpose of this provision is simple: it prevents the immediate and permanent loss of coverage from a momentary cash-flow problem or forgotten payment.

Reinstatement

If a policy lapses because premiums were not paid, the reinstatement provision gives the policyholder a defined path to restore it. The policyholder typically submits a reinstatement application (often with payment of overdue premiums). If the insurer does not reject the application within 45 days, the policy is automatically reinstated.

One critical underwriting protection applies to reinstated policies: accident coverage resumes immediately upon reinstatement, but sickness coverage is subject to a 10-day waiting period. This asymmetry exists to prevent adverse selection — specifically, to stop seriously ill individuals from letting their policies lapse and then reinstating just before filing a major sickness claim. Another important consequence: when a policy is reinstated, the two-year contestability clock generally resets from the reinstatement date. The insurer gets a fresh opportunity to contest misstatements made in the reinstatement application.

Notice of Claim

The insured must give written notice of a claim within 20 days of the loss, or as soon as reasonably possible. The practical purpose is to allow the insurer to investigate while the facts are fresh — to examine medical records, interview providers, and assess the nature of the injury or illness. The "as soon as reasonably possible" qualifier protects insureds who are physically or mentally incapacitated during the initial period of a serious injury.

Claim Forms

Within 15 days of receiving the notice of claim, the insurer must provide the appropriate claim forms. If the insurer fails to deliver claim forms within 15 days, the insured is permitted to satisfy the requirement by submitting any written description of the loss that outlines its nature and extent. This prevents the insurer from using bureaucratic delay — withholding forms — as a mechanism to frustrate legitimate claims.

Proof of Loss

Written proof of loss must be submitted within 90 days of the date of the loss, or within 90 days after the end of a period of continuing disability. If it is not reasonably possible to file within 90 days, the insured may file up to one year after that date (unless they lack legal capacity, in which case the deadline may be extended further). The purpose is the same as the notice of claim requirement: to give the insurer timely documentation to evaluate the claim.

Time of Payment of Claims

Specific, determinable losses — a hospital bill, a surgical charge, an accidental death benefit — must be paid immediately upon receipt of due written proof of loss. Where a policy provides periodic indemnity payments (such as monthly disability benefits), those payments must be made at least monthly. This provision prevents the insurer from sitting on a validated claim indefinitely.

Payment of Claims

This provision designates who receives the benefit payment. For most health insurance benefits, payment goes to the insured, unless the insured has assigned benefits directly to a healthcare provider. For policies that include accidental death benefits, payment goes to the named beneficiary, or to the insured's estate if no beneficiary is designated. The provision also permits the insurer to pay a limited amount directly to a provider on behalf of the insured in certain circumstances.

Physical Examination and Autopsy

While a claim is pending, the insurer has the right to require a physical examination of the insured as often as is reasonably necessary at the insurer's expense. In the event of death, the insurer may require an autopsy unless prohibited by state law, again at the insurer's expense. This provision gives the insurer a mechanism to verify claim validity and detect fraud without forcing the insured to bear the cost of the examination.

Legal Actions

The insured cannot file a lawsuit against the insurer until 60 days after submitting written proof of loss. This gives the insurer time to resolve the claim before litigation begins. The other boundary runs in the opposite direction: any legal action must be initiated within 3 years from the date that proof of loss was required to be filed. Together, these limits create a balanced window — enough time for the insurer to process the claim, but not so much time that evidence grows stale or the dispute lingers indefinitely.

Change of Beneficiary

For policies that pay death benefits — such as accidental death and dismemberment (AD&D) coverage — the policy owner has the right to change the beneficiary designation at any time without the beneficiary's consent, unless the beneficiary was designated as irrevocable. An irrevocable designation locks in the beneficiary; the owner cannot change it without that beneficiary's written consent. This provision preserves the policyholder's control over their own coverage while protecting irrevocably designated beneficiaries.

FAQ

Q: What happens if the insured misses the 20-day notice-of-claim deadline?
The provision says notice must be given within 20 days "or as soon as reasonably possible." Courts have generally held that an insurer cannot deny a claim simply because the notice was late if the insured was genuinely unable to file sooner — for instance, because they were unconscious, hospitalized, or legally incapacitated. However, an insured who simply forgot or delayed without a good reason may face complications. The exam typically tests the 20-day standard without focusing on edge cases.

Q: Can the insurer deny a claim that falls within the 60-day waiting period for legal actions?
The 60-day waiting period prevents the insured from suing immediately — it does not prevent the insurer from paying claims. The insurer can and should process valid claims during those 60 days. The provision only governs when litigation can begin, not when payment must occur.

Q: Does the two-year incontestability period protect against all claim denials?
No. The provision prevents the insurer from challenging the validity of the policy contract itself based on application misstatements. It does not force the insurer to pay claims for services that were never covered under the policy in the first place. If a policy excludes dental care and the insured files a dental claim in year three, the insurer can still deny it — not because the policy is invalid, but because dental care was never covered.