ARKANSAS LIFE INSURANCE FINAL
STUDY GUIDE 2026 COMPLETE
QUESTIONS AND ANSWERS.
Consideration. Answer: Binding force.
Something of value that each party gives to the other.
Competent Parties. Answer: Both parties be of legal age, mentally
competent to understand the contract, and not under the influence of
drugs/alcohol.
Aleatory Contract. 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. Answer: The insured makes no legally binding
promises.
Insurer is legally bound to pay losses covered by a policy in force.
Conditional Contract. 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. Answer: Part of the application that
includes the general questions about the applicant.
Part 2 - Medical Information. 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. Answer: Provides the agent's personal observations
concerning the proposed insured.
Required Signatures. Answer: Both the agent and the proposed
insured are required to sign the application.
Changes to the Application. 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. Answer: A receipt when agents have collected a
premium. The type of receipt issued will determine when coverage will
be effective.
, Conditional Receipt. 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 later.
Replacement. Answer: A practice of terminating an existing policy
or letting it lapse, and obtaining a new one.
Insurable Interest. Answer: Must exist at the time of application.
Consumer Reports. Answer: Written/oral information regarding a
consumer's credit, character, reputation, or habits collected by a
reporting agency from employment records, credit reports, and other
public sources.
Investigative Consumer Reports. Answer: Same as consumer
reports, but the information is obtained through an investigation and
interviews with associates, friends and neighbors of the consumer.
Medical Examinations. Answer: Policies with higher amounts of
coverage or if the application raised additional questions concerning the
prospective insured's health, the underwriter may require a medical
examination of the insured.
STUDY GUIDE 2026 COMPLETE
QUESTIONS AND ANSWERS.
Consideration. Answer: Binding force.
Something of value that each party gives to the other.
Competent Parties. Answer: Both parties be of legal age, mentally
competent to understand the contract, and not under the influence of
drugs/alcohol.
Aleatory Contract. 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. Answer: The insured makes no legally binding
promises.
Insurer is legally bound to pay losses covered by a policy in force.
Conditional Contract. 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. Answer: Part of the application that
includes the general questions about the applicant.
Part 2 - Medical Information. 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. Answer: Provides the agent's personal observations
concerning the proposed insured.
Required Signatures. Answer: Both the agent and the proposed
insured are required to sign the application.
Changes to the Application. 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. Answer: A receipt when agents have collected a
premium. The type of receipt issued will determine when coverage will
be effective.
, Conditional Receipt. 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 later.
Replacement. Answer: A practice of terminating an existing policy
or letting it lapse, and obtaining a new one.
Insurable Interest. Answer: Must exist at the time of application.
Consumer Reports. Answer: Written/oral information regarding a
consumer's credit, character, reputation, or habits collected by a
reporting agency from employment records, credit reports, and other
public sources.
Investigative Consumer Reports. Answer: Same as consumer
reports, but the information is obtained through an investigation and
interviews with associates, friends and neighbors of the consumer.
Medical Examinations. Answer: Policies with higher amounts of
coverage or if the application raised additional questions concerning the
prospective insured's health, the underwriter may require a medical
examination of the insured.
