Arkansas Health Insurance Exam
Terms Questions and Answers 2025-
2026
Apparent Authority - ANSWER-The appearance or the assumption of authority based
on the actions, words, or deeds of the
principal or because of circumstances the principal created.
Approved Amount - ANSWER-The amount Medicare determines to be reasonable for a
service that is covered under Part B of
Medicare.
Assignment - ANSWER-A claim to a provider or medical supplier to receive payments
directly from Medicare.
Accident - ANSWER-An unplanned, unforeseen event which occurs suddenly and at an
unspecified place.
Accident Insurance - ANSWER-A type of insurance that protects the insured against
loss due to accidental bodily injury.
Accidental Bodily Injury - ANSWER-Unplanned, unforeseen traumatic injury to the body.
Accidental Death and Dismemberment - ANSWER-An insurance policy which pays a
specified amount or a specified multiple of the insured's benefit if the insured dies, loses
his or her sight, or loses two limbs due to an accident.
Accidental Death Benefits - ANSWER-A policy rider that states that the cause of death
will be analyzed to determine if it complies
with the policy description of accidental death.
Acquired Immunodeficiency Syndrome (AIDS) - ANSWER-An infectious and incurable
disease caused by the human
immunodeficiency virus (HIV).
Activities of Daily Living - ANSWER-Activities individuals must do every day such as
moving about, getting dressed, eating, bathing, etc.
Actual Charge - ANSWER-The amount a physician or supplier actually bills for a
particular service or supply.
Adhesion - ANSWER-A contract offered on a "take-it-or-leave-it" basis by an insurer, in
which the insured's only option is to
,accept or reject the contract. Any ambiguities in the contract will be settled in favor of
the insured.
Admitted (Authorized) Insurer - ANSWER-An insurance company authorized and
licensed to transact insurance in a particular state.
Birthday rule - ANSWER-The method of determining primary coverage for a dependent
child, under which the plan of the
parent whose birthday occurs first in the calendar year is designated as primary.
Blanket Medical Insurance - ANSWER-A policy that provides benefits for all medical
costs, including doctor visits, hospitalization, and drugs.
Boycott - ANSWER-An unfair trade practice in which one person refuses to do business
with another until he or she agrees to certain conditions.
Buyer's Guide - ANSWER-A booklet that describes insurance policies and concepts,
and provides general information to help an
applicant make an informed decision.
Cafeteria Plan - ANSWER-A selection of health care benefits from which an employee
may choose the ones that he/she needs.
Capital Amount - ANSWER-A percentage of the principal amount of a policy paid to the
insured if he/she suffered the loss of an appendage.
Carriers - ANSWER-Organizations that process claims and pay benefits in an insurance
policy.
Cease and Desist Order - ANSWER-A demand of a person to stop committing an action
that is in violation of a provision.
Certificate of Authority - ANSWER-A document that authorizes a company to start
conducting business and specifies the
kind(s) of insurance a company can transact. It is illegal for an insurance company to
transact insurance without this
certificate.
Certificate of Insurance - ANSWER-A written document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Claim - ANSWER-A request for payment of the benefits provided by an insurance
contract.
Coercion - ANSWER-An unfair trade practice in which an insurer uses physical or
mental force to persuade an applicant to buy insurance.
, Coinsurance - ANSWER-An agreement between an insurer and insured in which both
parties are expected to pay a certain portion of the potential loss and other expenses.
Adult Day Care - ANSWER-A program for impaired adults that attempts to meet their
health, social, and functional needs in a
setting away from their homes.
Adverse Selection - ANSWER-The tendency of risks with higher probability of loss to
purchase and maintain insurance more
often than the risks who present lower probability.
Agent - ANSWER-An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of an insurer.
Aleatory - ANSWER-A contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss.
Alien Insurer - ANSWER-An insurance company that is incorporated outside the United
States.
Alzheimer's Disease - ANSWER-A disease that causes the victim to become
dysfunctional due to degeneration of brain cells and severe memory loss.
Ancillary - ANSWER-Additional, miscellaneous services provided by a hospital, such as
x-rays, anesthesia, and lab work, but not hospital room and board.
Attained Age - ANSWER-The age of the insured at a determined date.
Attending Physician's Statement (APS) - ANSWER-A statement usually obtained from
the applicant's doctor.
Avoidance - ANSWER-A method of dealing with risk (e.g. if a person wanted to avoid
the risk of being killed in an airplane crash,
he/she might choose never to fly in a plane).
Basic Hospital Expense Insurance - ANSWER-Coverage that provides benefits for
room, board and miscellaneous hospital expenses for a certain number of days during a
hospital stay.
Basic Medical Expense Insurance - ANSWER-Coverage for doctor visits, x-rays, lab
tests, and emergency room visits; benefits, however, are limited to specified dollar
amounts.
Terms Questions and Answers 2025-
2026
Apparent Authority - ANSWER-The appearance or the assumption of authority based
on the actions, words, or deeds of the
principal or because of circumstances the principal created.
Approved Amount - ANSWER-The amount Medicare determines to be reasonable for a
service that is covered under Part B of
Medicare.
Assignment - ANSWER-A claim to a provider or medical supplier to receive payments
directly from Medicare.
Accident - ANSWER-An unplanned, unforeseen event which occurs suddenly and at an
unspecified place.
Accident Insurance - ANSWER-A type of insurance that protects the insured against
loss due to accidental bodily injury.
Accidental Bodily Injury - ANSWER-Unplanned, unforeseen traumatic injury to the body.
Accidental Death and Dismemberment - ANSWER-An insurance policy which pays a
specified amount or a specified multiple of the insured's benefit if the insured dies, loses
his or her sight, or loses two limbs due to an accident.
Accidental Death Benefits - ANSWER-A policy rider that states that the cause of death
will be analyzed to determine if it complies
with the policy description of accidental death.
Acquired Immunodeficiency Syndrome (AIDS) - ANSWER-An infectious and incurable
disease caused by the human
immunodeficiency virus (HIV).
Activities of Daily Living - ANSWER-Activities individuals must do every day such as
moving about, getting dressed, eating, bathing, etc.
Actual Charge - ANSWER-The amount a physician or supplier actually bills for a
particular service or supply.
Adhesion - ANSWER-A contract offered on a "take-it-or-leave-it" basis by an insurer, in
which the insured's only option is to
,accept or reject the contract. Any ambiguities in the contract will be settled in favor of
the insured.
Admitted (Authorized) Insurer - ANSWER-An insurance company authorized and
licensed to transact insurance in a particular state.
Birthday rule - ANSWER-The method of determining primary coverage for a dependent
child, under which the plan of the
parent whose birthday occurs first in the calendar year is designated as primary.
Blanket Medical Insurance - ANSWER-A policy that provides benefits for all medical
costs, including doctor visits, hospitalization, and drugs.
Boycott - ANSWER-An unfair trade practice in which one person refuses to do business
with another until he or she agrees to certain conditions.
Buyer's Guide - ANSWER-A booklet that describes insurance policies and concepts,
and provides general information to help an
applicant make an informed decision.
Cafeteria Plan - ANSWER-A selection of health care benefits from which an employee
may choose the ones that he/she needs.
Capital Amount - ANSWER-A percentage of the principal amount of a policy paid to the
insured if he/she suffered the loss of an appendage.
Carriers - ANSWER-Organizations that process claims and pay benefits in an insurance
policy.
Cease and Desist Order - ANSWER-A demand of a person to stop committing an action
that is in violation of a provision.
Certificate of Authority - ANSWER-A document that authorizes a company to start
conducting business and specifies the
kind(s) of insurance a company can transact. It is illegal for an insurance company to
transact insurance without this
certificate.
Certificate of Insurance - ANSWER-A written document that indicates that an insurance
policy has been issued, and that states both the amounts and types of insurance
provided.
Claim - ANSWER-A request for payment of the benefits provided by an insurance
contract.
Coercion - ANSWER-An unfair trade practice in which an insurer uses physical or
mental force to persuade an applicant to buy insurance.
, Coinsurance - ANSWER-An agreement between an insurer and insured in which both
parties are expected to pay a certain portion of the potential loss and other expenses.
Adult Day Care - ANSWER-A program for impaired adults that attempts to meet their
health, social, and functional needs in a
setting away from their homes.
Adverse Selection - ANSWER-The tendency of risks with higher probability of loss to
purchase and maintain insurance more
often than the risks who present lower probability.
Agent - ANSWER-An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of an insurer.
Aleatory - ANSWER-A contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in
premiums is unequal to the amount the insurer will pay in the event of a loss.
Alien Insurer - ANSWER-An insurance company that is incorporated outside the United
States.
Alzheimer's Disease - ANSWER-A disease that causes the victim to become
dysfunctional due to degeneration of brain cells and severe memory loss.
Ancillary - ANSWER-Additional, miscellaneous services provided by a hospital, such as
x-rays, anesthesia, and lab work, but not hospital room and board.
Attained Age - ANSWER-The age of the insured at a determined date.
Attending Physician's Statement (APS) - ANSWER-A statement usually obtained from
the applicant's doctor.
Avoidance - ANSWER-A method of dealing with risk (e.g. if a person wanted to avoid
the risk of being killed in an airplane crash,
he/she might choose never to fly in a plane).
Basic Hospital Expense Insurance - ANSWER-Coverage that provides benefits for
room, board and miscellaneous hospital expenses for a certain number of days during a
hospital stay.
Basic Medical Expense Insurance - ANSWER-Coverage for doctor visits, x-rays, lab
tests, and emergency room visits; benefits, however, are limited to specified dollar
amounts.
