Arkansas Health Insurance Study Questions & Solutions (SCORED A)

At what point must a life insurance applicant be informed of their right that fall under the Fair Credit Reporting Act? - ANSWER upon completion of the application Who elects the governing body of a mutual insurance company? - ANSWER policyholders An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the - ANSWER Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ANSWER Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called - ANSWER Reserves Which statement is TRUE regarding a group accident and health policy issued to an employer? *Neither the employer or employee are policy owners *The employer is issued a certificate of coverage and each employee receives a policy * The employer receives the policy and each employee is issued a certificate *Both the employer and employee are policy owners. - ANSWER The employer receives the policy and each employee is issued a certificate. G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is *Business Overhead Expense * Disability Income *Key Employee Life * Contributory - ANSWER Business Overhead Expense-- this policy's purpose is to cover certain overhead expenses that continue when the business own is disabled. How does group insurance differ from individual insurance? - ANSWER Group insurance differs from individual insurance in that it provided coverage at a lower cost. The difference between group insurance and blanket health policies is - ANSWER Blanket health policies do not issue certificates. Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that used the "accidental means" definition? *double indemnity *benefits are taxable * more restrictive *less restrictive - ANSWER Less restrictive. A policy that uses "accidental bodily injury" definition of an accident is less restrictive than the one that uses the "accidental means" definition. Which of the following characteristics is associated with a large group disability income policy? *no waiting periods *no medical underwriting *no elimination periods * no limit of benefits - ANSWER No medical underwriting. A large group disability income policy can be distinguished by no medical underwriting. Which contract permits the remaining partners to buy-out the interest of a disabled business partner? - ANSWER A disability buy-sell plan allows the remaining partners to buy out the interest of the disabled business partner. An insurance company would MOST likely pay benefits under Accidental Death and Dismemberment policy who which of the following losses? *loss of life due to a heart