Free Individual Accident and Health Provisions Study Guide
New Jersey Life, Accident & Health exam — Individual Accident and Health Provisions.
The uniform individual accident and health policy provisions come from the NAIC model law and are explained in the national Individual Accident and Health Provisions guide. New Jersey enacted them in N.J.S.A. 17B:26-2 through 17B:26-27, with a few state additions. This guide lists the New Jersey version of each provision with its deadline, so you can answer the state questions without guessing.
Policy form rules
- Printed text must be at least 10-point type (N.J.S.A. 17B:26-2a(4)).
- An individual policy may cover family members, including children up to an age the policy states, which can't exceed 19 (N.J.S.A. 17B:26-2a(3)).
- Handicapped dependents: coverage doesn't end at the limiting age while the child is incapacitated and chiefly dependent on the insured, if proof is given within 31 days of reaching that age (N.J.S.A. 17B:26-2b).
- Free look: an individual health policy (not group or blanket) must allow return within 10 days after receipt for a prompt refund of premium, fees and charges (N.J.S.A. 17B:26-3.1).
- A provision that conflicts with the statute is automatically amended to meet it (N.J.S.A. 17B:26-25).
Required provisions
| Provision | New Jersey rule |
|---|---|
| Entire contract; changes | The policy and attached papers are the entire contract. A change is valid only if an executive officer approves it and it's endorsed on or attached to the policy. No agent may change the policy or waive a provision (N.J.S.A. 17B:26-4). |
| Time limit on certain defenses | After 2 years from issue, no misstatement except a fraudulent one can void the policy or deny a claim for a loss starting after that time. After 2 years, a claim can't be denied because a condition existed before the policy began, unless the condition was excluded by name or specific description (N.J.S.A. 17B:26-5). |
| Grace period | At least 7 days for weekly-premium policies, 10 days for monthly-premium policies and 31 days for all others (N.J.S.A. 17B:26-6). If the insurer may refuse renewal, the grace period doesn't apply when it gave written notice of nonrenewal at least 5 days before the due date. |
| Reinstatement | Accepting a late premium without requiring an application reinstates the policy. If the insurer requires an application and gives a conditional receipt, the policy is reinstated on the 45th day after the receipt unless disapproved in writing before then. A reinstated policy covers injuries after reinstatement and sickness beginning more than 10 days after it (N.J.S.A. 17B:26-7). |
| Notice of claim | Written notice within 20 days after the loss occurs or begins, or as soon as reasonably possible (N.J.S.A. 17B:26-8). |
| Claim forms | The insurer furnishes forms within 15 days after notice. If it doesn't, the claimant can send proof of loss in any written form (N.J.S.A. 17B:26-9). |
| Proof of loss | Within 90 days after the loss. Late proof is still accepted if given as soon as reasonably possible and, absent legal incapacity, within 1 year after it was due (N.J.S.A. 17B:26-10). |
| Time of payment of claims | Non-periodic benefits are paid immediately on proof. Periodic (income) benefits are paid at least monthly (N.J.S.A. 17B:26-11). |
| Payment of claims | Death benefits go to the named beneficiary, or to the insured's estate if no designation is in effect. Other benefits go to the insured. An optional facility of payment clause lets the insurer pay up to $1,000 to a relative it considers equitably entitled (N.J.S.A. 17B:26-12). |
| Physical examination and autopsy | At the insurer's expense, as often as reasonably required while a claim is pending, with autopsy where the law allows it (N.J.S.A. 17B:26-13). |
| Legal actions | No lawsuit until 60 days after proof of loss is furnished, and none more than 3 years after proof was required (N.J.S.A. 17B:26-14). |
| Change of beneficiary | The insured may change the beneficiary. The beneficiary's consent isn't needed unless the designation is irrevocable (N.J.S.A. 17B:26-15). |
Optional provisions
The insurer may add these (N.J.S.A. 17B:26-16 to -27):
- Change of occupation: if the insured moves to a more hazardous job, benefits are reduced to what the premium would have bought at the riskier rate. A move to a less hazardous job lowers the rate, and the excess unearned premium is refunded (N.J.S.A. 17B:26-17).
- Misstatement of age: benefits are what the premium would have bought at the correct age (N.J.S.A. 17B:26-18).
- Relation of earnings to insurance: if total disability income from all policies exceeds the insured's monthly earnings when disability began (or average earnings over the prior 2 years, if greater), the insurer pays only its proportionate share (N.J.S.A. 17B:26-22).
- Unpaid premium: a premium due and unpaid can be deducted from a claim payment (N.J.S.A. 17B:26-23).
- Cancellation: New Jersey's statute still allows this clause. The insurer may cancel on at least 5 days' written notice and refunds unearned premium pro rata. The insured may cancel once the policy has continued beyond its original term, and the refund is then figured on a short-rate basis (N.J.S.A. 17B:26-24).
- Illegal occupation or felony: no liability for a loss to which committing or attempting a felony, or working in an illegal occupation, contributed (N.J.S.A. 17B:26-26).
- Intoxicants and narcotics: no liability for a loss sustained while the insured is intoxicated or under the influence of a narcotic, unless the narcotic was taken on a physician's advice (N.J.S.A. 17B:26-27).
Common exam traps
- Grace period depends on premium mode: 7 days weekly, 10 days monthly, 31 days for everything else.
- Reinstatement: reinstated automatically on the 45th day after a conditional receipt, and sickness is covered only if it begins more than 10 days later.
- 20 / 15 / 90 days: notice of claim, claim forms, proof of loss. The outside limit for late proof is 1 year.
- Lawsuits: wait 60 days after proof; sue within 3 years.
- New Jersey's statute still permits a cancellation clause (5 days' notice, pro rata refund). The current NAIC model has no such provision, so don't carry this rule to other states.
- Facility of payment is capped at $1,000.
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Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
