Merritt Personal Lines Manual: Part II: Basic Hospital Expense Policy

Now that we've considered the policy provisions standard to all forms of health insurance, we'll turn our attention to several specific health coverage forms. The most common of these is the Basic Hospital Expense Policy.

INSURING CLAUSE

When we receive proof of a covered injury or sickness and subject to the provisions of this policy, we will provide benefits for expense:

(1) Which is incurred while the person's insurance coverage is in force;

(2) Less any deductible and copayment amount; and

(3) Up to any maximum payment that may be specified.

This is simply an overall insuring agreement (more specific agreements are found in the individual coverage sections which follow). Subject to all applicable policy provisions, the insurance company agrees that when it receives proof of a covered injury or sickness, it will provide benefits for covered expenses incurred while the insurance is in force. Benefits may be subject to deductibles and copayments (which will be subtracted) and maximum benefit amounts (which is the most the insurer will pay).

TEN DAY RIGHT TO EXAMINE THIS POLICY

This policy may be returned within ten days after it is received. Return it to our home office or to the agent from whom it was purchased. We will void this policy and return any premium you have paid.

Each policyholder has a right to what is known as a 10-day free look. You may examine the policy, return it within 10 days if not satisfied for any reason and receive a full refund of any premiums paid.

A caveat: Pay attention to the date you receive the policy if you're thinking about exercising your free look. Most disputes over this issue involve policyholders who keep the thing for several weeks and then try to back out.

POLICY NOTICE

Your policy may not be in force when you have a claim! This policy was issued based on the information entered in the application, a copy of which is attached to this policy. If, to the best of your knowledge and belief, there is any misstatement in this application or if any information concerning your medical history has been omitted, advise us immediately regarding the incorrect or omitted information, otherwise your policy may not be a valid contract.

This is a warning to the insured to check the information given in the application. Under the general provisions, certain misstatements in the application could void the insurance or be used to deny a claim during the first two years of coverage. If a mistake has been made, the insurance company should be notified of the correct information, or else coverage may not apply.

POLICY RENEWAL

We reserve the right to non-renew all policies of this same form in the county where you reside. If we non-renew, we will notify you at least 31 days prior to taking this action.

Each adult insured person may be insured to age 65 or until eligible for Medicare, whichever first happens. Each dependent child may be insured to age 25, to the date of marriage, or when no longer dependent on you, whichever first happens.

Other than as stated above, you have the right to renew this policy by paying the correct premium when due. The premium must be paid in advance of the premium due date or before the end of the grace period.

Premiums will increase each year. Also premiums may change if you move to another area. See premiums on [the declarations] page.

The insurance company has the right not to renew all policies of this same type in any county. In effect, this means it may discontinue using the policy form in a given area. If it takes that action, each policyholder must be notified at least 31 days in advance.

The insurance company may not refuse to renew an individual policy. As long as insured people remain eligible for coverage, the policy may be renewed by making required premium payments before the end of the grace period. Adults may be insured until age 65 or becoming eligible for Medicare--whichever occurs first. Dependent children remain eligible until age 25, the date of marriage, or when dependency ends--whichever occurs first.

Premiums will increase each year due to the advancing age of insured persons and may change if those people move to another area.