Chapter 3 Flashcards
(50 cards)
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus?
✔️✔️-Participating life insurance policy
No one is allowed to act as a producer for any insurance company in Arkansas that:
✔️✔️-Is unauthorized to do business in Arkansas
What MUST a company do prior to conducting an HIV related test?
✔️✔️-Obtain a written consent from the proposed insured
Which approach predicts a persons earning potential and determines how much of that
amount would be devoted to dependents?
✔️✔️-Human life value
approach
If the annuity dies before the annuity start date:
✔️✔️-The premium paid
+ interest earned will be given to the beneficiary
If dividends are illustrated, the advertisement MUST state that the dividends are
✔️✔️-Not guaranteed
Intentional withholding of material facts that would affect an insurance policy’s validity is
called a:
✔️✔️-Concealment
Field underwriting performed by the producer involves
✔️✔️-Completing
the application and collecting initial premium
Which is correct regarding an individual applying for life and health insurance?
✔️✔️-The applicants medical history may be analyzed and reported
Life insurance policies will normally pay for losses arising from
✔️✔️-
Commercial aviation
Example of rebating:
✔️✔️-Offering a client something of value not
stated in the contract in exchange for their business
In an employer-sponsored contributory group Disability Income plan, the employer pays
60% of the premium and each employee pays 40% of the premium. Any income
benefits paid are taxed to the employee at:
✔️✔️-60% of the benefit
David submits a $500 claim for medical expenses. There is a past-due amount owed for
insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This
deduction came as a result of which provision?
✔️✔️-Unpaid provision
Tyler purchased a disability policy with a waiver of premium rider on April 1. He is
disabled on May 1. On June 1, he receives proof of permanent and total disability, and
submits a claim. He begins receiving benefits on June 15. When are his premiums
waived?
✔️✔️-May 1
Sonya applied for a health insurance policy on April 1. Her agent submitted the
information to the insurance company on April 6. She paid the premium on May 15 with
the policy indicating the effective date being May 30. On which date would Sonya have
the coverage?
✔️✔️-May 30, the effective date
Ken is a producer who has obtained Consumer Information Reports under false
pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may
be imposed on Ken?
✔️✔️-$5,000
According to the principle of Utmost Good Faith, the insured will answer questions on
the application to the best of their knowledge and pay the required premium, while the
insurer will deal fairly with the insured and it’s:
✔️✔️-Promises made
The purpose of the Coordination of Benefits provision in group accident and health
plans is to:
✔️✔️-Avoid overpayment of claims
Which of the following would be considered an underwriting duty of an agent?
✔️✔️-Completing all applications and collecting initial premiums
A medical provider that accepts Medicare Assignment must:
✔️✔️-
Accept payment based upon a defined Medicare schedule as payment in full
What is implied authority defined as?
✔️✔️-Authority that is not
specifically given to an agent in the agency contract, but that an agent can reasonably
assume to carry out his/her duties
Which type of disability would be less than total impairment and equal to permanent
impairment?
✔️✔️-Permanent partial disability
A nonparticipating company is sometimes called a(n):
✔️✔️-Stock
insurer
When the principal gives the agent authority in writing, it’s referred to as:
✔️✔️-Express authority
