Free Individual Accident and Health Provisions Study Guide
South Carolina Life, Accident & Health exam — Individual Accident and Health Provisions.
South Carolina's individual accident and health provisions are in S.C. Code 38-71-340 (required) and 38-71-370 (optional). The state adds several rules of its own:
- No insurer cancellation of individual policies.
- A 31-day nonrenewal and rate-increase notice.
- A 6-year outer limit for lawsuits.
- A 30-day free look for direct response policies.
What each provision means in general is in the national Individual Accident and Health Provisions guide.
Free look (38-71-150, 38-71-160)
- An individual health policy sold through a licensed agent may be returned within 10 days for a full refund.
- A policy sold by a direct response insurer gets 30 days. It counts as returned on the earlier of the postmark date or the date the insured notifies the insurer or its agent.
Required provisions (38-71-340)
| Provision | South Carolina rule |
|---|---|
| Entire contract | The policy, the application and attached papers |
| Time limit on certain defenses | After 2 years, only fraudulent misstatements can void the policy or deny a claim |
| Grace period | 7 days weekly, 10 days monthly, 31 days otherwise |
| Reinstatement | Automatic on the 45th day after a conditional receipt. Premium can't be applied more than 60 days back. Sickness covered only if it begins more than 10 days after reinstatement. |
| Notice of claim | Within 20 days. For disability benefits of 2 years or more, continuance notice may be required every 6 months. |
| Claim forms | Sent within 15 days, or the claimant may submit proof in their own words |
| Proofs of loss | Within 90 days, and no later than 1 year after that, absent legal incapacity |
| Payment of claims | To the insured. Optional facility of payment up to $1,000 to a relative. |
| Physical exam and autopsy | At the insurer's expense. An autopsy must be performed in South Carolina. |
| Legal actions | No suit within 60 days after proof of loss, and none after 6 years from when proof is required |
| Change of beneficiary | The beneficiary's consent is needed only if the designation is irrevocable |
| Conformity with state statutes | Conflicting provisions are amended to meet the minimum law |
Optional provisions (38-71-370, 38-71-380)
- Change of occupation: moving to a more hazardous job reduces benefits to what the premium buys at that class.
- Other coverage with the same insurer: if an applicant shows other life, accident and health coverage with the same insurer, the insurer must tell the applicant the total existing coverage within 60 days (38-71-370(3)).
- Relation of earnings to insurance:
- Benefits are compared to the insured's monthly earnings when the disability began, or the average for the prior 2 years, whichever is greater.
- Total monthly benefits can't be cut below the lesser of total benefits or $200.
- Illegal occupation: no liability for a loss caused by the insured committing a felony or working in an illegal occupation.
- Intoxicants and narcotics: this exclusion may not be used in medical expense policies issued or renewed after 2017 (38-71-380).
Renewal, cancellation and premium notices (38-71-335, 38-71-610, 38-71-620)
Cancellation and renewability
- Individual and family A&H policies may not give the insurer the right to cancel midterm.
- Policies (other than individual health insurance coverage under 38-71-670) may not be optionally renewable.
Notices
- Nonrenewal: at least 31 days' written notice.
- Rate increases: at least 31 days' written notice.
- Annual mail billing: a premium due notice goes out at least 10 days before the due date.
Family and dependent rules
- Children's age limit: a family policy may cover children up to an age that can't exceed 19 (38-71-330).
- Newborns: covered from birth. Notice and any required premium are due within 31 days (38-71-140).
- Disabled children: coverage continues past the limiting age if proof is given within 31 days (38-71-350).
- Former spouses: after a divorce decree ends coverage, the former spouse may buy an individual policy without evidence of insurability within 60 days (38-71-170).
- Transfers: a policyholder may switch to a policy from the same insurer with equal or lesser benefits (38-71-650).
Common exam traps
- Free look: 10 days through an agent, 30 days for direct response.
- Time limit on certain defenses: 2 years. Legal actions: 60 days to 6 years.
- No insurer cancellation of individual A&H policies. Nonrenewal and rate increases need 31 days' notice.
- Intoxicants exclusion: barred from medical expense policies.
- Autopsy must be done in South Carolina.
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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.
