Arkansas Life Insurance Study Guide 2024 Questions and Answers
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Course
Arkansas Life Insurance
Institution
Arkansas Life Insurance
Arkansas Life Insurance Study Guide
2024 Questions and Answers
Adverse Selection - CORRECT ANSWER-Insuring of risks that are more prone to
losses than the average risk.
Death Benefit - CORRECT ANSWER-The amount paid upon the death of the insured in
a life insurance policy.
Insurance Policy ...
Arkansas Life Insurance Study Guide 2024 Questions an d Answers Adverse Selection - CORRECT ANSWER -Insuring of risks that are more prone to losses than the average risk. Death Benefit - CORRECT ANSWER -The amount paid upon the death of the insured in a life insurance policy. Insurance Policy - CORRECT ANSWER -A contract between a policyowner/insured and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events. Insured - CORRECT ANSWER -Person covered by the insurance policy; may or may not be the policyowner Insurer (Principle) - CORRECT ANSWER -The company who issues an insurance policy. Lapse - CORRECT ANSWER -Policy termination due to nonpayment of premium. Life Insurance - CORRECT ANSWER -Coverage on human lives. Policyowner - CORRECT ANSWER -The person entitled to exercise the rights and privileges in the policy. Premium - CORRECT ANSWER -The money paid to the insurance company for the insurance policy. Insurance transfers what? - CORRECT ANSWER -The risk of loss from and individual to and insurance company. Elements of a Legal Contract - CORRECT ANSWER -1. Agreement (offer and acceptance) 2. Consideration 3. Competent Parties 4. Legal Purpose Offer and Acceptance - CORRECT ANSWER -Offer happens when application is submitted. Acceptance takes place when an insurer's underwriter approves the application and issues a policy. Consideration - CORRECT ANSWER -Binding force. Something of value that each party gives to the other. Competent Parties - CORRECT ANSWER -Both parties be of legal age, mentally competent to understand the contract, and not under the influence of drugs/alcohol. Aleatory Contract - CORRECT ANSWER -There is an exchange of unequal amounts/values. The premium paid by the insured is small in relation to the amount that will be paid by the insurer in the event of loss. Unilateral Contract - CORRECT ANSWER -The insured makes no legally binding promises. Insurer is legally bound to pay losses covered by a policy in force. Conditional Contract - CORRECT ANSWER -Certain conditions must be met by the policyowner and the company in order the the contract to be executed, and before each party fulfills its obligations. (Pay premium and provide proof of loss for an insurer to cover claim.) Part 1 - General Information - CORRECT ANSWER -Part of the application that includes the general questions about the applicant. Part 2 - Medical Information - CORRECT ANSWER -Part of the application that includes information on the prospective insured's medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives. Agents Report - CORRECT ANSWER -Provides the agent's personal observations concerning the proposed insured. Required Signatures - CORRECT ANSWER -Both the agent and the proposed insured are required to sign the application. Changes to the Application - CORRECT ANSWER -Changes made to an application need to be initialed by the applicant or need to fill out a new application. Agents should never white out any information. Premium Receipt - CORRECT ANSWER -A receipt when agents have collected a premium. The type of receipt issued will determine when coverage will be effective. Conditional Receipt - CORRECT ANSWER -A receipt when agents have collected a premium. The type of receipt issued that will determine when the coverage will be effective. Either on the date of the application or the date of the medical exam, whichever is lat er.
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