Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: Only an executive officer of the insurer may approve it, and the approval must be endorsed on or attached to the policy

The uniform entire contract provision states that no change in the policy is valid until approved by an executive officer of the insurer and that the approval must be endorsed on or attached to the policy. It also expressly says no agent may change the policy or waive any of its provisions, so the producer cannot bind the company.

Correct answer: Fraudulent misstatements in the application, where the law permits that exception

After the policy has been in force for the stated period during the insured's lifetime, misstatements in the application can no longer be used to void the policy or deny a claim for a later loss — except for fraudulent misstatements, which the law allows to be carved out.

Correct answer: The claim is payable because the policy remains in force during the grace period; the insurer may deduct the unpaid premium

The mandatory grace period provision keeps the policy in force during the stated number of days after the premium due date. A loss occurring in that window is covered, and the insurer may deduct the unpaid premium from benefits payable.

Correct answer: Not covered, because the sickness began within ten days after the date of reinstatement

The reinstated policy covers accidental injury from the date of reinstatement, but sickness only if it begins more than ten days after that date. A sickness beginning June 6, five days after a June 1 reinstatement, falls inside that ten-day window and is not covered.

Correct answer: The policy is reinstated automatically once the period stated in the provision (commonly 45 days from the conditional receipt date) passes with no written disapproval

When a reinstatement application is required, the insurer gives a conditional receipt. The policy is reinstated on the insurer's approval, or automatically if the insurer has not previously given written notice of disapproval within the period stated in the provision — commonly 45 days after the conditional receipt date.

Correct answer: The insurer generally cannot rely on the application answers, because the application is part of the entire contract only if a copy is attached

The entire contract provision makes the policy and the application the entire contract only if a copy of the application is attached. Without attachment, the insurer generally cannot use statements in the application against the insured, even inside the contestable window.

Correct answer: Only a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date

The uniform reinstatement provision limits premium collected on reinstatement to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date.

Correct answer: Pay the claim; after the stated period the insurer may not reduce or deny it on the ground that the condition existed before the effective date

The same clock in the time limit on certain defenses provision protects against pre-existing condition denials: a claim for a loss beginning after the stated period cannot be reduced or denied on the ground that a condition not excluded by name or specific description existed before the effective date.

Correct answer: The waiver has no effect: no change is valid unless approved by an executive officer of the insurer and endorsed on or attached to the policy, and no producer may change the policy or waive any of its provisions.

The uniform entire contract provision states that the policy (with the application if a copy is attached) is the entire contract, that no change is valid unless approved by an executive officer of the insurer and endorsed on or attached to the policy, and that no agent has authority to change the policy or waive any of its provisions. A producer's oral promise therefore cannot bind the company.

Correct answer: The policy together with the application, if a copy of the application is attached to the policy.

The required provision states that the policy, together with the application if a copy of the application is attached, constitutes the entire contract. Because attachment is the condition, an insurer that fails to attach the application generally cannot rely on the applicant's answers to contest a claim.

Correct answer: After the policy has been in force for the period stated in the provision during the insured's lifetime, the insurer may not use misstatements in the application — other than fraudulent misstatements, where the law allows that carve-out — to void the policy or deny a claim for a loss incurred after that period.

The provision limits how far back the insurer may look. Once the policy has been in force for the stated period (commonly two years for individual health coverage) during the insured's lifetime, application misstatements — except fraudulent ones where the carve-out applies — can no longer be used to void the policy or deny a claim for a loss incurred after that period.

Correct answer: The claim is payable, because the policy remains in force during the grace period; the insurer may deduct the unpaid premium from the benefits.

The grace period is a stated number of days after the premium due date during which the premium may still be paid and the policy stays in force. Because coverage continues during that window, a loss occurring in it is payable; the insurer may deduct the premium still owed. Lapse occurs only if the premium remains unpaid when the grace period ends.

Correct answer: It covers accidental injury from June 1 and sickness that begins more than ten days after June 1.

The uniform reinstatement provision states that the reinstated policy covers only loss resulting from accidental injury sustained after the date of reinstatement and sickness that begins more than ten days after that date. The short sickness waiting window discourages reinstating a policy only after symptoms appear.

Correct answer: The policy is reinstated automatically if the insurer has not previously notified the insured in writing of its disapproval within the period stated in the provision — commonly the 45th day following the date of the conditional receipt.

When a reinstatement application is required, the insurer gives a conditional receipt for the premium. The policy is reinstated on approval by the insurer, or automatically if the insurer has not previously given the insured written notice of disapproval within the period stated in the provision — commonly 45 days after the conditional receipt date.

Correct answer: Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date.

The provision limits back-application of reinstatement premium: it may be applied only to a period for which premium has not already been paid, and not to any period more than 60 days before the reinstatement date. This prevents the insurer from collecting for coverage the insured never had and from double-charging.

Correct answer: The claim must be paid: for a loss beginning after the stated period, coverage may not be reduced or denied on the ground that a condition not excluded by name or specific description existed before the effective date.

The same clock that ends contestability for application misstatements also ends pre-existing condition defenses: a claim for a loss beginning after the stated period may not be reduced or denied because a condition not excluded by name or specific description existed before the effective date. Because the back condition was never named or specifically described as an exclusion, it is no longer a defense.

Correct answer: A change is valid only if an executive officer of the insurer approves it and the approval is endorsed on or attached to the policy.

The uniform entire contract provision requires that no change in the policy be valid unless approved by an executive officer of the insurer and unless the approval is endorsed on or attached to the policy; it also states that no agent has authority to change the policy or waive any of its provisions (Tex. Ins. Code ch. 1201).

Correct answer: The insurer generally may not rely on the application statements, because the application is part of the entire contract only if a copy is attached to the policy.

The entire contract provision makes the policy and the application the entire contract only if a copy of the application is attached to the policy. Without attachment, the application statements generally cannot be used against the insured to contest the policy or deny a claim (Tex. Ins. Code ch. 1201).

Correct answer: A fraudulent misstatement made in the application

After the policy has been in force for the stated period, misstatements in the application may no longer be used to void the policy or to deny a claim for a loss incurred after that period — except for fraudulent misstatements, where the law permits that carve-out (Tex. Ins. Code § 1201.208(a)). Section 1201.208(b)(2) also leaves the misstatement-of-age provision (§ 1201.220) in force after that period, but that provision merely resizes the benefit to what the premium paid would have purchased at the correct age; it does not let the insurer void the policy or deny the claim. Fraud therefore remains the only surviving defense.

Correct answer: The policy was in force during the grace period, so the claim is payable and the insurer may deduct the unpaid premium.

The grace period provision keeps the policy in force during the stated number of days after the premium due date, so a loss occurring in that window is covered; the insurer may deduct the premium still owed (Tex. Ins. Code ch. 1201).

Correct answer: If the insurer has not previously notified the insured in writing of disapproval within the period stated in the provision, commonly 45 days after the conditional receipt date

When a reinstatement application is required, the policy is reinstated on the insurer's approval or, lacking approval, automatically on the stated day — commonly the forty-fifth day following the date of the conditional receipt — unless the insurer has previously notified the insured in writing of its disapproval (Tex. Ins. Code ch. 1201).

Correct answer: The broken ankle is covered because accidental injury is covered from the date of reinstatement; the sickness is not, because it began within ten days after reinstatement.

The uniform reinstatement provision covers accidental injury sustained from the date of reinstatement and sickness that begins more than ten days after that date. The June 4 injury is covered; a sickness beginning June 6, only five days after reinstatement, falls inside the waiting window (Tex. Ins. Code ch. 1201).

Correct answer: Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date

Premium accepted in connection with reinstatement may be applied only to a period for which premium has not already been paid, and generally not to any period more than 60 days prior to the date of reinstatement (Tex. Ins. Code ch. 1201).

Correct answer: The insurer may not reduce or deny the claim on the ground that the condition existed before the effective date.

The time limit on certain defenses provision bars reducing or denying a claim for a loss beginning after the stated period on the ground that a condition not excluded by name or specific description existed before the effective date of coverage (Tex. Ins. Code ch. 1201).

Correct answer: The policy together with the application, if a copy of the application is attached to the policy

The uniform entire contract provision states that the policy, together with the application if a copy of the application is attached to the policy, constitutes the entire contract. Nothing outside those documents is part of the deal, which is why an insurer that fails to attach the application generally cannot use the applicant's answers against the insured.

Correct answer: It has no effect; a change is valid only if approved by an executive officer of the insurer and endorsed on or attached to the policy

The entire contract provision requires that no change in the policy be valid until approved by an executive officer of the insurer and unless the approval is endorsed on or attached to the policy. It also states that no agent has authority to change the policy or waive any of its provisions, so the producer's signed note is unenforceable.

Correct answer: The insurer may not use misstatements in the application, other than fraudulent misstatements where the law permits that carve-out, to void the policy or deny a claim for a loss incurred after that period

The uniform time limit on certain defenses provision says that after the policy has been in force for the stated period during the insured's lifetime, misstatements in the application may no longer be used to void the policy or deny a claim for a loss incurred after that period, except for fraudulent misstatements where the law permits that exception. Innocent or merely negligent material misrepresentation stops being a defense.

Correct answer: Pay the claim, because the policy continues in force during the grace period; the insurer may deduct the unpaid premium

The grace period provision states that after the first premium the insured has a stated number of days after the due date during which payment may be made and the policy continues in force. A loss occurring within the grace period is therefore covered, and the insurer may offset the unpaid premium against benefits.

Correct answer: The policy is reinstated automatically once the period stated in the provision (commonly 45 days after the conditional receipt date) passes without written notice of disapproval

When the insurer requires a reinstatement application and issues a conditional receipt, the policy is reinstated either upon the insurer's approval or automatically if the insurer has not previously notified the insured in writing of its disapproval within the period stated in the provision, commonly 45 days after the conditional receipt date. Insurer silence works in the insured's favor.

Correct answer: The broken ankle is covered because accidental injury is covered from the date of reinstatement, but the sickness is not, because only sickness beginning more than ten days after reinstatement is covered

The reinstatement provision states that the reinstated policy covers only loss resulting from accidental injury sustained after the date of reinstatement and sickness that begins more than ten days after that date. A June 6 injury is covered; a sickness beginning June 7, only six days after reinstatement, falls inside the ten-day window and is not covered.

Correct answer: Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date

The reinstatement provision limits premium application: premium accepted in connection with reinstatement may be applied only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the date of reinstatement. This prevents the insurer from charging for a long stretch of lapsed, uncovered time.

Correct answer: The insurer must pay: the loss began after the period stated in the time limit on certain defenses and the condition was not excluded by name or specific description, and the unattached application cannot be used against the insured

Two mandatory provisions converge. The time limit on certain defenses bars reducing or denying a claim for a loss beginning after the stated period on the ground that a condition not excluded by name or specific description existed before the effective date. Separately, the entire contract provision makes the application part of the contract only if a copy is attached, so an insurer that failed to attach it generally cannot use application statements against the insured.

Correct answer: An executive officer of the insurer, whose approval is endorsed on or attached to the policy

The entire contract provision states that the policy, together with the application if a copy is attached, is the whole agreement, and that no change is valid unless approved by an executive officer of the insurer and that approval is endorsed on or attached to the policy. It also states expressly that no agent may change the policy or waive any of its provisions (Tex. Ins. Code ch. 1201).

Correct answer: It has no effect: the policy and the attached application are the entire contract, and no agent may change the policy or waive any of its provisions

The entire contract provision confines the agreement to the policy and the application when a copy is attached, and it states that no agent may change the policy or waive any of its provisions. An oral promise at delivery — like a brochure or an illustration — is outside the four corners of the contract and cannot expand coverage (Tex. Ins. Code ch. 1201).

Correct answer: It is payable, because the policy remained in force during the grace period; the insurer may deduct the unpaid premium from the benefit

The grace period provision keeps the policy in force for a stated number of days after the premium due date, so a loss occurring in that window is covered. The insurer may deduct the premium that remains unpaid from the amount it pays (Tex. Ins. Code ch. 1201).

Correct answer: Accidental injury from the date of reinstatement and sickness that begins more than ten days after that date

The reinstatement provision states that the reinstated policy covers only loss resulting from accidental injury sustained after the date of reinstatement and sickness that begins more than ten days after that date. The short sickness waiting window discourages reinstating only after symptoms appear (Tex. Ins. Code ch. 1201).

Correct answer: Neither reduce nor deny the claim on the ground that the condition pre-existed, because the loss began after the period stated in the provision and the condition was never excluded by name

The time limit on certain defenses provision bars an insurer from reducing or denying a claim for a loss beginning after the stated period on the ground that a condition not excluded by name or specific description existed before the effective date. Because the loss began well after that window and no named exclusion applies, the pre-existing condition defense is gone (Tex. Ins. Code ch. 1201).

Correct answer: The policy is reinstated automatically, because the insurer did not previously notify the insured in writing of its disapproval within the period stated in the provision (commonly the forty-fifth day after the conditional receipt date)

When the insurer requires a reinstatement application, it gives a conditional receipt for the premium. The policy is reinstated when the insurer approves the application, or automatically if the insurer has not previously notified the insured in writing of its disapproval within the period stated in the provision — commonly forty-five days after the conditional receipt date (Tex. Ins. Code ch. 1201).

Correct answer: It may not use the misstatement to void the policy or deny the claim, because the loss was incurred after the stated period and the misstatement was not fraudulent

After the policy has been in force for the period stated in the provision during the insured's lifetime, misstatements in the application — other than fraudulent misstatements, where the law permits that carve-out — may not be used to void the policy or to deny a claim for a loss incurred after that period. A material but non-fraudulent misstatement discovered four years in is no longer a defense (Tex. Ins. Code ch. 1201).

Correct answer: Only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the reinstatement date

The reinstatement provision limits the insurer's use of the premium it collects: it may be applied only to a period for which premium has not already been paid, and generally not to any period more than 60 days before the date of reinstatement. The insurer and insured otherwise retain all rights under the policy, subject to any endorsement attached at reinstatement (Tex. Ins. Code ch. 1201).