Arkansas Life Insurance Licensing Exam
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1. Which component increases in the increasing term in- Death Benefit
surance?
A) Interest on the Proceeds
B)Premium
C) Cash Value
D) Death Benefit
2. Increasing Term Features level annual pre-
miums and a death bene-
fit that increases each year
over the duration of the
term.
3. The death benefit in a variable universal life policy Depends on the perfor-
A) Depends on the performance of a separate account. mance of a separate ac-
B) Always equal the face amount stated in the policy. count.
C) Is fixed
D) Is guaranteed to be higher than when the policy is
originally issued
4. What happens when a policy is surrendered for its cash Coverage ends and the
value? policy cannot be reinstat-
A) Coverage ends and the policy cannot be reinstated. ed.
B) Coverage ends but the policy can be reinstated at
any time.
C) The policy can be converted to term coverage.
D) The policy can be reinstated by paying back all policy
loans and premiums.
5. Which type of life insurance policy allows the policy- Universal Life
owner to pay more or less than the planned premium?
A) Universal Life
, Arkansas Life Insurance Licensing Exam
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B) Straight Whole Life
C) Decreasing term
D) Variable whole life
6. If an insurance company wishes to order a consumer Prior Insurance
report on an applicant to assist in the underwriting
process, and if a notice of insurance information prac-
tices has been provided, the report may contain all of
the following information EXCEPT the applicant's
A) Prior insurance.
B) Ancestry.
C) Habits.
D) Credit history.
7. Fixed annuities provide all of the following EXCEPT Hedge against inflation
A) Equal monthly payments for life.
B) Minimum guaranteed rate of interest.
C) Hedge against inflation.
D) Future income payments.
8. If taken as a lump sum, life insurance proceeds to Free of federal income tax-
beneficiaries are passed ation
A) Tax-deductible.
B) Free of federal income taxation.
C) Part tax-free and part taxable.
D) Without interest.
9. What do individuals use to transfer their risk of loss to Insurance
a larger group?
A) Insurance
B) Exposure
C) Insurable interest
D) Indemnity
, Arkansas Life Insurance Licensing Exam
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10. The interest earned on policy dividends is Taxable
A) Taxable.
B) 40% taxable, similar to a capital gain.
C) Tax deductible.
D) Nontaxable.
11. An insured purchased a 15-year level term life insur- $200,000
ance policy with a face amount of $100,000. The policy The beneficiary will most
contained an accidental death rider, offering a double likely receive twice the face
indemnity benefit. The insured was severely injured in value of the policy, since
an auto accident, and after 10 weeks of hospitalization, the insured's fatal injuries
died from the injuries. How much will the beneficiary were caused by an acci-
receive from the policy? dent and he died with-
A) $0 in the 90 day benefit limit
B) $200,000 stipulated in most policies.
C) $100,000
D) $100,000 plus the total of paid premiums
12. Which of the following statements is TRUE concerning It will pay double or triple
the Accidental Death Rider? the face amount
A) It is only available in group insurance.
B) This rider is only available to insureds over the age
of 65.
C) It will pay double or triple the face amount.
D) It is also known as a triple indemnity rider.
13. An insured misstates her age at the time the life in- Adjustment in the amount
surance application is taken. This misstatement may of death benefit
result in
A) No change whatsoever.
B) Automatic lapse.
Study online at https://quizlet.com/_es9o9h
1. Which component increases in the increasing term in- Death Benefit
surance?
A) Interest on the Proceeds
B)Premium
C) Cash Value
D) Death Benefit
2. Increasing Term Features level annual pre-
miums and a death bene-
fit that increases each year
over the duration of the
term.
3. The death benefit in a variable universal life policy Depends on the perfor-
A) Depends on the performance of a separate account. mance of a separate ac-
B) Always equal the face amount stated in the policy. count.
C) Is fixed
D) Is guaranteed to be higher than when the policy is
originally issued
4. What happens when a policy is surrendered for its cash Coverage ends and the
value? policy cannot be reinstat-
A) Coverage ends and the policy cannot be reinstated. ed.
B) Coverage ends but the policy can be reinstated at
any time.
C) The policy can be converted to term coverage.
D) The policy can be reinstated by paying back all policy
loans and premiums.
5. Which type of life insurance policy allows the policy- Universal Life
owner to pay more or less than the planned premium?
A) Universal Life
, Arkansas Life Insurance Licensing Exam
Study online at https://quizlet.com/_es9o9h
B) Straight Whole Life
C) Decreasing term
D) Variable whole life
6. If an insurance company wishes to order a consumer Prior Insurance
report on an applicant to assist in the underwriting
process, and if a notice of insurance information prac-
tices has been provided, the report may contain all of
the following information EXCEPT the applicant's
A) Prior insurance.
B) Ancestry.
C) Habits.
D) Credit history.
7. Fixed annuities provide all of the following EXCEPT Hedge against inflation
A) Equal monthly payments for life.
B) Minimum guaranteed rate of interest.
C) Hedge against inflation.
D) Future income payments.
8. If taken as a lump sum, life insurance proceeds to Free of federal income tax-
beneficiaries are passed ation
A) Tax-deductible.
B) Free of federal income taxation.
C) Part tax-free and part taxable.
D) Without interest.
9. What do individuals use to transfer their risk of loss to Insurance
a larger group?
A) Insurance
B) Exposure
C) Insurable interest
D) Indemnity
, Arkansas Life Insurance Licensing Exam
Study online at https://quizlet.com/_es9o9h
10. The interest earned on policy dividends is Taxable
A) Taxable.
B) 40% taxable, similar to a capital gain.
C) Tax deductible.
D) Nontaxable.
11. An insured purchased a 15-year level term life insur- $200,000
ance policy with a face amount of $100,000. The policy The beneficiary will most
contained an accidental death rider, offering a double likely receive twice the face
indemnity benefit. The insured was severely injured in value of the policy, since
an auto accident, and after 10 weeks of hospitalization, the insured's fatal injuries
died from the injuries. How much will the beneficiary were caused by an acci-
receive from the policy? dent and he died with-
A) $0 in the 90 day benefit limit
B) $200,000 stipulated in most policies.
C) $100,000
D) $100,000 plus the total of paid premiums
12. Which of the following statements is TRUE concerning It will pay double or triple
the Accidental Death Rider? the face amount
A) It is only available in group insurance.
B) This rider is only available to insureds over the age
of 65.
C) It will pay double or triple the face amount.
D) It is also known as a triple indemnity rider.
13. An insured misstates her age at the time the life in- Adjustment in the amount
surance application is taken. This misstatement may of death benefit
result in
A) No change whatsoever.
B) Automatic lapse.
