Exam (elaborations)
NC Accident and Health Licensing Questions and Answers Fully Solved
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NC Accident and Health Licensing
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NC Accident and Health LicensingInsurance - answer a plan of spreading the risk of possible loss over a large number of
people
Representation - answer information believed to be true to the best of one's knowledge
Agents - answer Representatives of the INSURER - represents single insurer
Brokers - answer Representatives of the INSURED - represents multiple firms
Unilateral Contract - answer Type of contract that is an exchange of an act for a
promise - i.e. - the INSURED may discontinue coverage at any time and the INSURER
can not enforce the continuation of the policy
Adhesion Contract - answer Type of contract that is take it or leave it - i.e. - The insurer
writes the insurance contract and the insured is "stuck" with that wording.
Aleatory Contract - answer Type of contract that features an unequal exchange of value
between the parties - i.e. - a policy owner may have submitted only one premium
payment with the insured dies and the policy's full amount would be payable.
Insuring Agreement - answer The heart of the contract that states the perils (accidents
or sickness) that are covered by the policy and establishes the insurer's commitment to
pay the death benefit.
Conditions - answer Provisions and stipulations of the policy
Exclusions / Waivers - answer States what perils or losses are NOT covered
Riders (Endorsements) - answer Modify the basic contract and are considered added
benefits.
Twisting - answer Misrepresentation of a policy's terms and values to induce the lapse
or replacement of an existing contract of insurance.
Declarations Page - answer Personalized part of the policy that includes: Parties to the
contract, policy term, amount of insurance purchased, amount of premium to be paid,
object or person insured.
Adverse Underwriting Decision - answerWhen an application for insurance has been
rejected, a policy has been terminated or coverage has been rated as substandard risk
, Pretext Interviews - answerWhen an individual does not reveal their identity or pose as
someone else in order to obtain information and are PROHIBITED except in claims
investigations.
Consumer Report - answerAny report, written or oral, that contains information
regarding a persons history or reputation used in an insurance transaction.
Investigative Consumer Report - answerA consumer report gathered through personal
interviews. It may NOT be compiled unless the applicant/insured has been informed that
they may request a copy of this report.
Notice of Information Practices - answerSummarizes the applicant's rights under the act
including the right to know what information was gathered and from whom. It is
delivered at the time collection of information is initiated (time of application) if the
information is from non-public sources.
Disclosure Authorization Form - answerGrants permission for the insurance company to
obtain and or release specified information from specified persons. Max time 30
months.
Disability Income Policy - answerPolicies that provide weekly or monthly benefits to
replace salary or wages lost while sick or injured. Typical benefit will be between 50%-
70% of gross income.
Total Disability - answerInability to perform duties of ANY occupation (MOST
restrictive), Inability to perform duties of OWN occupation (LEAST restrictive)
Presumptive Disability - answerObvious total permanent disability requiring no
demonstration of an inability to work (any 2 limbs, eye sight, hearing, loss of speech).
You are NOT required to be under doctors care for this type of disability. Picks up where
totally disability leaves off and pays through policy term.
Combination Disability - answerDefinitions of stability will be liberal at the beginning of a
disability and become more restrictive after being disabled for a specified period -
Protects the company against Malingering.
Partial Disability - answerInability to perform one or more duties of an occupation. Less
than half of business time, concerns injuries only. Typical benefit will be at 50% of
amount payable for total disability.
Residual Disability - answerAttempts to measure the amount of income list and benefits
will be paid when a partial disability reduces the total income below a designated level.
Benefits are reduced as income increases.
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