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Life & Health Insurance Exam (Arkansas) Questions and Answers 100% Solved
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Life & Health Insurance Exam (Arkansas)
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Life & Health Insurance Exam(Arkansas)
Reserves - answer Funds held by the company to fullfull future claims. Funds are set by
the state department of insurance.
Multi-line Insurer - answer An insurance company selling more than one line of
insurance. (Ex. Home, auto, health, etc)
Stock Companies - answer Owned and controlled by stockholders, whose investment
set the safety margin. Guaranteed fixed premiums. Nonparticipating policies.
nonparticipating policy - answer Insurance under which the insured is not entitled to
share in the divisible surplus of the company.
Mutual Companies - answerOwned by the policy owners and issue participating
policies.
Participating plan. - answerA plan under which the policy owner receives shares
(dividends) of the divisible surplus of the company.
Reinsurer - answerA company that provides financial protection to insurance
companies. Handles risk to large for insurance companies to handle alone.
Fraternal Benefit Society - answerNonprofit organization that provides insurance to its
members. It's agent who sell within the society do not make commission. Stays under
specific premiums.
Fair Credit Reporting Act - answerA federal law requiring a person to know if he/she is
being investigated by an inspection company, and is notified prior to investigation. The
maximum penalty for obtaining consumer information under false pretenses is $5,000
and/or 1 year imprisonment.
Buyer's Guide - answerA booklet that describes insurance policies and concepts, and
provides general information to help an applicant make an informed decision.
Policy Summary - answera written statement describing the features and elements of
the policy being issued. Includes conditions, coverage, limitations, and premiums.
,National Association of Insurance Commissioners (NAIC) - answerOrganization made
up of individual state insurance commissioners whose purpose is to promote uniformity
in regulation by drafting model laws and regulations.
State Guaranty Association - answerprotect policy owners in the event of any insurance
company going out of business, becoming insolvent, or the in ability to pay claims.
Every authorized insurer are legally required to participate.
life insurance - answerinsurance paid to named beneficiaries when the insured person
dies.
Term Life Insurance - answerInsurance that provides financial protection from losses
resulting from a death during a definite period, or term.
whole life insurance - answerInsurance that is kept in force for a person's entire life and
pays a benefit upon the person's death, whenever that may be. Characterized by level
premiums & benefits, & cash value.
Group life insurance - answerA single contract the covers a group of people; employer
to employee. Those covered may or may not pay a portion of the premium, can usually
choose their beneficiary, & does not own the contract.
Consideration - answerThe part of insurance contract setting forth the amount of inital
and renewable premiums and frequency of future payments. Often includes the initial
premium and completed application for insurance. In other words "please consider me
for insurance, here is my initial premium, completed application, and how much/often i
agree to pay in the future."
health insurance - answerA general way of describing health insurance through
sickness and bodily injury. Not just hospital and doctor visits.
disability income insurance - answerprovides payments to replace income when an
insured person is unable to work, sometimes only protecting a portion of ones income.
Insuring Agreement - answerThe section of an insurance policy containing the insurer's
promise to pay, the description of coverage provided and perils insured against. (We
ensure to insure you under these conditions for this amount)
Medical Expense Insurance - answerPays benefits for nonsurgical doctors' fees
commonly rendered in a hospital; sometimes pays for home and office calls.
Entire Contract - answerAn insurance policy provision stating that the application and
policy contain all provisions and constitute the entire contract.
Notice of Claim provision - answerPolicy owner must notify Insurer of loss either in
writing, in person or by phone within 20 days.
, Reinstatement - answerThe act of putting a lapsed policy back in force by giving
satisfactory evidence of insurability and paying any past due premiums.
Property Insurance - answerFinancial reimbursement if theft or damage occurs.
Casualty (Liability) Insurance - answerInsurance includes liability, theft, workers comp,
and elevator insurance. Protects you financially if someone sues you.
property and casualty insurance - answerOften referred to collectively as property and
casualty insurance because the things you own have the potential to harm people in
ways that could cause them to sue you. The main kinds of property and casualty
insurance include auto, home owners, renters, and umbrella insurance.
Proof of loss - answerMandatory health insurance provision stating that the insured
must provide a completed claim form to the insurer within days of the date of the loss. If
the insured wants paid, they must prove the loss occured.
Deductible - answerWhat you pay out of pocket before the insurance begins to pay
benefits. Deductibles typically apply to property, casualty, and health insurance.
Declaration Page - answerA piece of paper which provides basic information about an
insurance policy. Typically the first page is the declaration page. Specifies name of
insured, address, policy period, location of property, policy limits, and other key
information.
Liquidity - answerIndicates a companies ability to make unpredictable payouts to
policyowners.
Pure Assessment Mutual Company - answerOperates on the basis of loss-sharing by
group members. No premium is payable in advance. Each member is assessed an
individual portion of losses that actually occur.
Strong assessment mutual insurers - answerClassified by the way the charge
premiums.
Advance premium assessment (strong assessment mutual insurer) - answerCharges a
premium at the beginning of the policy period. If orginal premiums exceed the operating
expenses and losses, the surplus is returned to the policyholders as dividens.
Lloyd's of London - answerNot an insurer but sell like-policy insurance. Their function is
to gether and disseminate underwriting information, help its associates settle claims and
disputes, & through its member underwriters, provide coverage that might otherwise be
unavailable in certain areas.
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