Chapter 1 Flashcards by Hunter Marshall

In order for a contract to be valid, it must:

✔️✔️-Contain an offer &
acceptance

How well did you know this?

Not at all

Perfectly

When does a nondisabled person first qualify for a Medicare Supplement Policy?

✔️✔️-Age 65

How well did you know this?

Not at all

Perfectly

A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the:

✔️✔️-Reinsurer

How well did you know this?

Not at all

Perfectly

A common exclusion with vision plans is:

✔️✔️-Lasik Surgery

How well did you know this?

Not at all

Perfectly

What are applicants statements concerning occupation, hobbies and personal health
history?

✔️✔️-Representation

How well did you know this?

Not at all

Perfectly

States that have “no loss, no gain” laws require a replacing policy to:

✔️✔️-Pay for ongoing claims under the policy it replaces

How well did you know this?

Not at all

Perfectly

A rehabilitation benefit is intended to:

✔️✔️-Prepare the insured to
return to employment

How well did you know this?

Not at all

Perfectly

Which of the following does coordination of benefits allow?

✔️✔️-The
secondary payor to reduce their benefit payments so no more than 100% of the claim is
paid

How well did you know this?

Not at all

Perfectly

An insurer may pay a commission in which of the following scenarios:

✔️✔️-To a licensed producer who is appointed with the insurer

How well did you know this?

Not at all

Perfectly

In which of the following situations would the insurer be liable for a loss?

Answer ✔️✔️-The insured suffered an injury during a bank robbery

How well did you know this?

Not at all

Perfectly

The Fair Credit and Reporting Act’s main purpose is to:

✔️✔️-Protect
consumers with guidelines regarding credit reporting and distribution

How well did you know this?

Not at all

Perfectly

J is a producer who has induced an insured through misrepresentation to surrender an
existing insurance policy. What is J guilty of?

✔️✔️-Twisting

How well did you know this?

Not at all

Perfectly

What is implied authority defined as?

✔️✔️-Authority that is not
specifically given to an agent contract, but that an agent can reasonably assume to
carry out his/her duties

How well did you know this?

Not at all

Perfectly

A person who is a nonsmoker, average weight, excellent health would fall into what risk
classification:

✔️✔️-Preferred

How well did you know this?

Not at all

Perfectly

Which of the following is considered to be the period when the accumulated value in an
annuity is paid out?

✔️✔️-Annuitization phase

How well did you know this?

Not at all

Perfectly

An insurers claim settlement practices are regulated by the:

✔️✔️-State
insurance departments

How well did you know this?

Not at all

Perfectly

The two major actions required for a policyholder to comply with the Reinstatement
Clause are:

✔️✔️-provide evidence of insurability, pay past due
premiums

How well did you know this?

Not at all

Perfectly

An insurers ability to make unpredictable payouts to policy owners is called:

✔️✔️-Liquidity

How well did you know this?

Not at all

Perfectly

Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined?

✔️✔️-
Underwriting

How well did you know this?

Not at all

Perfectly

What does the Group Life underwriting risk selection process help protect insurance
companies from? -

✔️✔️-Adverse Selection

How well did you know this?

Not at all

Perfectly

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:

✔️✔️-Liability Insurance

Pat owns a 20-pay life policy with a paid-up dividend option. Which is true?

✔️✔️-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?

✔️✔️-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:

✔️✔️-Revoke an absolute assignment

An employee under a group insurance policy has the right to name a beneficiary and the right to:

✔️✔️-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?

✔️✔️-$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?

✔️✔️-The face amount and premium will remain constant over the 10-year period

What is Arkansas required grace period for a life insurance contract?

✔️✔️-31 days

A domestic insurance company in Arkansas MUST:

✔️✔️-Be organized under Arkansas insurance laws

Which would be considered a possible applicant & contract policyholder for group health benefits? -

✔️✔️-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?

✔️✔️-$1,000

"Maximum benefits" refers to the:

✔️✔️-Upper limit of the total lifetime benefits the insurance company will pay

What does Medicare part D cover?

✔️✔️-Prescription drugs

Which best describes a conditional insurance contract?

✔️✔️-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:

✔️✔️-Errors and omissions

A long-term care policy typically provides all of the following levels of care EXCEPT:

✔️✔️-Acute care

Convincing a prospective insured to buy an insurance policy based on exaggerations is called:

✔️✔️-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? -

✔️✔️- Fraud

Medicare Part B covers:

✔️✔️-Hospital room/board

Medicare provides coverage for all EXCEPT:

✔️✔️-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?

✔️✔️-Participating life insurance policy

Medicare Supplement Insurance is guaranteed issue if the policy effective date is within ______ months of the insured's Medicare Part B:

✔️✔️-6 months

Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?

✔️✔️-Calendar year deductible

A Medicare Supplement policy must NOT contain benefits which:

✔️✔️- Duplicate Medicare benefits

A healthcare provider claim may be settled using which of the following payment methods?

✔️✔️-Fee-for-service

Who is responsible for assembling the policy forms for insureds?

✔️✔️- Insurance carriers

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the commissioner is required to:

✔️✔️-Give written notice to the producer

When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?

✔️✔️-When the contribution or participation rules have been violated