Arkansas Life and Health Insurance Practice Exam 2025 – Complete Study Guide

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Exclusions are not one of these provisions because they actually limit coverage, rather than reducing claims or preventing overpayment. Exclusions are specific situations or circumstances that are not covered by the policy. These could include pre-existing conditions, risky activities, or certain types of treatment. The other options, including the consideration clause, elimination period, and waiting period, are all provisions that are designed to help reduce unnecessary claims and prevent overpayment. They may do so by requiring certain conditions to be met before coverage begins, such as a waiting period or elimination period, or by outlining specific guidelines for what is covered and what is not, such as the consideration clause. Therefore, they are all considered important provisions in an insurance contract.