ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM NEWEST ACTUAL EXAM COMPLETE 230
QUESTIONS AND CORRECT DETAILED ANSWERS
In order for a contract to be valid, it must: - correct answer Contain an offer & acceptance
When does a nondisabled person first qualify for a Medicare Supplement Policy? - correct
answer Age 65
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the: - correct answer Reinsurer
A common exclusion with vision plans is: - correct answer Lasik Surgery
What are applicants statements concerning occupation, hobbies and personal health history? -
correct answer Representation
States that have "no loss, no gain" laws require a replacing policy to: - correct answer Pay for
ongoing claims under the policy it replaces
A rehabilitation benefit is intended to: - correct answer Prepare the insured to return to
employment
Which of the following does coordination of benefits allow? - correct answer The secondary
payor to reduce their benefit payments so no more than 100% of the claim is paid
An insurer may pay a commission in which of the following scenarios: - correct answer To a
licensed producer who is appointed with the insurer
In which of the following situations would the insurer be liable for a loss? - correct answer The
insured suffered an injury during a bank robbery
The Fair Credit and Reporting Act's main purpose is to: - correct answer Protect consumers
with guidelines regarding credit reporting and distribution
J is a producer who has induced an insured through misrepresentation to surrender an existing
insurance policy. What is J guilty of? - correct answer Twisting
What is implied authority defined as? - correct answer Authority that is not specifically given to
an agent contract, but that an agent can reasonably assume to carry out his/her duties
A person who is a nonsmoker, average weight, excellent health would fall into what risk
classification: - correct answer Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - correct answer Annuitization phase
An insurers claim settlement practices are regulated by the: - correct answer State insurance
departments
The two major actions required for a policyholder to comply with the Reinstatement Clause are:
- correct answer provide evidence of insurability, pay past due premiums
, ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM NEWEST ACTUAL EXAM COMPLETE 230
QUESTIONS AND CORRECT DETAILED ANSWERS
An insurers ability to make unpredictable payouts to policy owners is called: - correct answer
Liquidity
Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - correct answer Underwriting
What does the Group Life underwriting risk selection process help protect insurance companies
from? - correct answer Adverse Selection
The Arkansas Life & Disability Insurance Guaranty Association assures payment of benefits from
insurance policies for insolvent insurers, and covers all of the following insured policies,
EXCEPT: - correct answer Liability Insurance
Pat owns a 20-pay life policy with a paid-up dividend option. Which is true? - correct answer
The policy may be paid up early by using policy dividends?
What would happen if a life insurance applicant is given a conditional receipt from an insurance
agent and then dies the next day? - correct answer Claim will be paid if application is approved
A policy owner can receive a percentage payment of the death benefits prior to death by using
what kind of contract? - correct answer Viatical Settlement agreement
A life insurance policy owner does NOT have the right to: - correct answer Revoke an absolute
assignment
An employee under a group insurance policy has the right to name a beneficiary and the right
to: - correct answer Convert to an individual policy in the event of employment termination
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the
consumer price index has gone up 4%, how much may Ron increase the face value of the
policy? - correct answer $4,000
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000.
Which of these statements is true? - correct answer The face amount and premium will remain
constant over the 10-year period
What is Arkansas required grace period for a life insurance contract? - correct answer 31 days
A domestic insurance company in Arkansas MUST: - correct answer Be organized under
Arkansas insurance laws
Which would be considered a possible applicant & contract policyholder for group health
benefits? - correct answer Employer
Amy has a group medical policy through her employer with a $500 deductible and a 90%
coinsurance provision. She incurs a $1,500 in covered healthcare services. How much will her
group insurance carrier pay? - correct answer $1,000
QUESTIONS AND CORRECT DETAILED ANSWERS
In order for a contract to be valid, it must: - correct answer Contain an offer & acceptance
When does a nondisabled person first qualify for a Medicare Supplement Policy? - correct
answer Age 65
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the: - correct answer Reinsurer
A common exclusion with vision plans is: - correct answer Lasik Surgery
What are applicants statements concerning occupation, hobbies and personal health history? -
correct answer Representation
States that have "no loss, no gain" laws require a replacing policy to: - correct answer Pay for
ongoing claims under the policy it replaces
A rehabilitation benefit is intended to: - correct answer Prepare the insured to return to
employment
Which of the following does coordination of benefits allow? - correct answer The secondary
payor to reduce their benefit payments so no more than 100% of the claim is paid
An insurer may pay a commission in which of the following scenarios: - correct answer To a
licensed producer who is appointed with the insurer
In which of the following situations would the insurer be liable for a loss? - correct answer The
insured suffered an injury during a bank robbery
The Fair Credit and Reporting Act's main purpose is to: - correct answer Protect consumers
with guidelines regarding credit reporting and distribution
J is a producer who has induced an insured through misrepresentation to surrender an existing
insurance policy. What is J guilty of? - correct answer Twisting
What is implied authority defined as? - correct answer Authority that is not specifically given to
an agent contract, but that an agent can reasonably assume to carry out his/her duties
A person who is a nonsmoker, average weight, excellent health would fall into what risk
classification: - correct answer Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - correct answer Annuitization phase
An insurers claim settlement practices are regulated by the: - correct answer State insurance
departments
The two major actions required for a policyholder to comply with the Reinstatement Clause are:
- correct answer provide evidence of insurability, pay past due premiums
, ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM NEWEST ACTUAL EXAM COMPLETE 230
QUESTIONS AND CORRECT DETAILED ANSWERS
An insurers ability to make unpredictable payouts to policy owners is called: - correct answer
Liquidity
Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - correct answer Underwriting
What does the Group Life underwriting risk selection process help protect insurance companies
from? - correct answer Adverse Selection
The Arkansas Life & Disability Insurance Guaranty Association assures payment of benefits from
insurance policies for insolvent insurers, and covers all of the following insured policies,
EXCEPT: - correct answer Liability Insurance
Pat owns a 20-pay life policy with a paid-up dividend option. Which is true? - correct answer
The policy may be paid up early by using policy dividends?
What would happen if a life insurance applicant is given a conditional receipt from an insurance
agent and then dies the next day? - correct answer Claim will be paid if application is approved
A policy owner can receive a percentage payment of the death benefits prior to death by using
what kind of contract? - correct answer Viatical Settlement agreement
A life insurance policy owner does NOT have the right to: - correct answer Revoke an absolute
assignment
An employee under a group insurance policy has the right to name a beneficiary and the right
to: - correct answer Convert to an individual policy in the event of employment termination
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the
consumer price index has gone up 4%, how much may Ron increase the face value of the
policy? - correct answer $4,000
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000.
Which of these statements is true? - correct answer The face amount and premium will remain
constant over the 10-year period
What is Arkansas required grace period for a life insurance contract? - correct answer 31 days
A domestic insurance company in Arkansas MUST: - correct answer Be organized under
Arkansas insurance laws
Which would be considered a possible applicant & contract policyholder for group health
benefits? - correct answer Employer
Amy has a group medical policy through her employer with a $500 deductible and a 90%
coinsurance provision. She incurs a $1,500 in covered healthcare services. How much will her
group insurance carrier pay? - correct answer $1,000
