ARKANSAS HEALTH INSURANCE
EXAM QUESTIONS AND VERIFIED
ANSWERS
An insurer may pay a commission in which of the following scenarios: - 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? - ANSWER-
The insured suffered an injury during a bank robbery
The Fair Credit and Reporting Act's main purpose is to: - 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? - ANSWER-Twisting
What is implied authority defined as? - ANSWER-Authority that is not specifically given
to an agent contract, but that an agent can reasonably assume to carry out his/her
duties
In order for a contract to be valid, it must: - ANSWER-Contain an offer & acceptance
When does a nondisabled person first qualify for a Medicare Supplement Policy? -
ANSWER-Age 65
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the: - ANSWER-Reinsurer
A common exclusion with vision plans is: - ANSWER-Lasik Surgery
What are applicants statements concerning occupation, hobbies and personal health
history? - ANSWER-Representation
States that have "no loss, no gain" laws require a replacing policy to: - ANSWER-Pay
for ongoing claims under the policy it replaces
A rehabilitation benefit is intended to: - ANSWER-Prepare the insured to return to
employment
Which of the following does coordination of benefits allow? - ANSWER-The secondary
payor to reduce their benefit payments so no more than 100% of the claim is paid
What does the Group Life underwriting risk selection process help protect insurance
companies from? - 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: - ANSWER-Liability Insurance
Pat owns a 20-pay life policy with a paid-up dividend option. Which is true? - 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? - 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? - ANSWER-Viatical Settlement agreement
A life insurance policy owner does NOT have the right to: - ANSWER-Revoke an
absolute assignment
An employee under a group insurance policy has the right to name a beneficiary and
the right to: - 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? - 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? - 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? - ANSWER-31
days
A person who is a nonsmoker, average weight, excellent health would fall into what risk
classification: - ANSWER-Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - ANSWER-Annuitization phase
An insurers claim settlement practices are regulated by the: - ANSWER-State insurance
departments
The two major actions required for a policyholder to comply with the Reinstatement
Clause are: - ANSWER-provide evidence of insurability, pay past due premiums
, An insurers ability to make unpredictable payouts to policy owners is called: -
ANSWER-Liquidity
Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - ANSWER-Underwriting
A domestic insurance company in Arkansas MUST: - ANSWER-Be organized under
Arkansas insurance laws
Which would be considered a possible applicant & contract policyholder for group health
benefits? - 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? - ANSWER-$1,000
"Maximum benefits" refers to the: - ANSWER-Upper limit of the total lifetime benefits the
insurance company will pay
What does Medicare part D cover? - ANSWER-Prescription drugs
Which best describes a conditional insurance contract? - ANSWER-A contract that
requires certain conditions or acts by the insured individual
A professional liability for which producers can be sued for mistakes of putting a policy
into effect is called: - ANSWER-Errors and omissions
A long-term care policy typically provides all of the following levels of care EXCEPT: -
ANSWER-Acute care
Convincing a prospective insured to buy an insurance policy based on exaggerations is
called: - ANSWER-Misrepresentation
Maria the producer completes a sale by collecting the required signatures on the
application by obtaining the initial premium. After, she deposits the check into her
personal checking account. She has committed what crime? - ANSWER-Fraud
Medicare Part B covers: - ANSWER-Hospital room/board
Medicare provides coverage for all EXCEPT: - ANSWER-Custodial care
In Arkansas, which of the following is considered an unfair trade practice? - ANSWER-
Coercion
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus? - ANSWER-Participating life insurance policy
EXAM QUESTIONS AND VERIFIED
ANSWERS
An insurer may pay a commission in which of the following scenarios: - 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? - ANSWER-
The insured suffered an injury during a bank robbery
The Fair Credit and Reporting Act's main purpose is to: - 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? - ANSWER-Twisting
What is implied authority defined as? - ANSWER-Authority that is not specifically given
to an agent contract, but that an agent can reasonably assume to carry out his/her
duties
In order for a contract to be valid, it must: - ANSWER-Contain an offer & acceptance
When does a nondisabled person first qualify for a Medicare Supplement Policy? -
ANSWER-Age 65
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the: - ANSWER-Reinsurer
A common exclusion with vision plans is: - ANSWER-Lasik Surgery
What are applicants statements concerning occupation, hobbies and personal health
history? - ANSWER-Representation
States that have "no loss, no gain" laws require a replacing policy to: - ANSWER-Pay
for ongoing claims under the policy it replaces
A rehabilitation benefit is intended to: - ANSWER-Prepare the insured to return to
employment
Which of the following does coordination of benefits allow? - ANSWER-The secondary
payor to reduce their benefit payments so no more than 100% of the claim is paid
What does the Group Life underwriting risk selection process help protect insurance
companies from? - 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: - ANSWER-Liability Insurance
Pat owns a 20-pay life policy with a paid-up dividend option. Which is true? - 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? - 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? - ANSWER-Viatical Settlement agreement
A life insurance policy owner does NOT have the right to: - ANSWER-Revoke an
absolute assignment
An employee under a group insurance policy has the right to name a beneficiary and
the right to: - 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? - 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? - 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? - ANSWER-31
days
A person who is a nonsmoker, average weight, excellent health would fall into what risk
classification: - ANSWER-Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - ANSWER-Annuitization phase
An insurers claim settlement practices are regulated by the: - ANSWER-State insurance
departments
The two major actions required for a policyholder to comply with the Reinstatement
Clause are: - ANSWER-provide evidence of insurability, pay past due premiums
, An insurers ability to make unpredictable payouts to policy owners is called: -
ANSWER-Liquidity
Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - ANSWER-Underwriting
A domestic insurance company in Arkansas MUST: - ANSWER-Be organized under
Arkansas insurance laws
Which would be considered a possible applicant & contract policyholder for group health
benefits? - 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? - ANSWER-$1,000
"Maximum benefits" refers to the: - ANSWER-Upper limit of the total lifetime benefits the
insurance company will pay
What does Medicare part D cover? - ANSWER-Prescription drugs
Which best describes a conditional insurance contract? - ANSWER-A contract that
requires certain conditions or acts by the insured individual
A professional liability for which producers can be sued for mistakes of putting a policy
into effect is called: - ANSWER-Errors and omissions
A long-term care policy typically provides all of the following levels of care EXCEPT: -
ANSWER-Acute care
Convincing a prospective insured to buy an insurance policy based on exaggerations is
called: - ANSWER-Misrepresentation
Maria the producer completes a sale by collecting the required signatures on the
application by obtaining the initial premium. After, she deposits the check into her
personal checking account. She has committed what crime? - ANSWER-Fraud
Medicare Part B covers: - ANSWER-Hospital room/board
Medicare provides coverage for all EXCEPT: - ANSWER-Custodial care
In Arkansas, which of the following is considered an unfair trade practice? - ANSWER-
Coercion
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus? - ANSWER-Participating life insurance policy
