Arkansas Life and Health Insurance Practice Exam

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Prepare for the Arkansas Life and Health Insurance Exam. Utilize flashcards and multiple-choice questions with hints and explanations for each question. Get thoroughly ready for your certification test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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The Smith family has a $1,000 annual family deductible with a coinsurance provision of 80/20. The family's claims for the year are $200, $300, $400, $500, $300, and $300, totaling $2,000. The insurer is responsible for paying:

$600
$800
$1,000
$1,200

The correct answer is: $600

In this scenario, the family's total claims for the year amount to $2,000, but they have a $1,000 annual family deductible. Since the deductible has not been met yet, the insurer is responsible for paying the amount above the deductible according to the coinsurance provision of 80/20. Therefore, the insurer is responsible for paying 80% of the amount exceeding the $1,000 deductible, which is $1,000. 80% of $1,000 is $800, so the correct answer is $800, which is option B.