ARKANSAS LIFE INSURANCE EXAMPREP
QUESTIONS AND DETAILED SOLUTIONS
◉ Krissa purchases a 10-year level term life insurance policy that
has a death benefit of $200,000. Which of these statements is true?
Answer: The face amount and premium will remain constant over
the 10-year period
◉ What is Arkansas' REQUIRED grace period for a life insurance
contract?
Answer: 31 days
◉ A domestic insurance company in Arkansas MUST
Answer: Be organized under Arkansas Insurance laws
◉ Simon has purchased a fixed immediate annuity. His payment
amount will be dependent upon principal, interest, and the
contract's
Answer: Income period
◉ What kind of life insurance policy issued by a mutual insurer
provides a return of divisible surplus?
,Answer: Participating life insurance policy
◉ No one is allowed to act as a producer for any insurance company
in Arkansas that
Answer: Is unauthorized to do business in Arkansas
◉ What MUST the company do prior to conducting an HIV related
test?
Answer: Obtain a written consent from the proposed insured
◉ Which approach predicts a person's earning potential and
determines how much of that amount would be devoted to
dependents?
Answer: Human life value approach
◉ If the annuitant dies before the annuity start date,
Answer: The premiums paid plus interest earned will be given to the
beneficiary
◉ If dividends are illustrated, the advertisement MUST state that the
dividends are:
Answer: Not guaranteed
,◉ Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n)
Answer: Concealment
◉ Field underwriting performed by the producer involves
Answer: Completing the application and collecting initial premium
◉ Which of the following statements is CORRECT regarding an
individual applying for life or health insurance?
Answer: The applicants medical history may be analyzed and
reported
◉ Life insurance policies will normally pay for losses arising from
Answer: Commercial aviation
◉ An example of rebating would be
Answer: Offering a client something of value not stated in the
contract in exchange for their business
◉ Which type of insurance company allows their policyowners to
elect governing body?
Answer: Mutual
, ◉ Which type of life insurance policy pays the face amount at the
end of the specified period if the insured is still alive?
Answer: Endowment policy
◉ A life insurance claim which involves a per capita distribution of
policy proceeds would be payable to the
Answer: Named living primary beneficiaries
◉ A type of group that has a constitution and bylaws and has been
organized for purposes other than obtaining insurance is called a(n)
Answer: Association or labor group
◉ What are an applicant's statements concerning occupation,
hobbies, and personal health history regarded as?
Answer: Representation
◉ 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?
Answer: $5,000
◉ The _________ must provide an insured with proper disclosure
concerning the replacement of a life insurance policy
Answer: Producer
QUESTIONS AND DETAILED SOLUTIONS
◉ Krissa purchases a 10-year level term life insurance policy that
has a death benefit of $200,000. Which of these statements is true?
Answer: The face amount and premium will remain constant over
the 10-year period
◉ What is Arkansas' REQUIRED grace period for a life insurance
contract?
Answer: 31 days
◉ A domestic insurance company in Arkansas MUST
Answer: Be organized under Arkansas Insurance laws
◉ Simon has purchased a fixed immediate annuity. His payment
amount will be dependent upon principal, interest, and the
contract's
Answer: Income period
◉ What kind of life insurance policy issued by a mutual insurer
provides a return of divisible surplus?
,Answer: Participating life insurance policy
◉ No one is allowed to act as a producer for any insurance company
in Arkansas that
Answer: Is unauthorized to do business in Arkansas
◉ What MUST the company do prior to conducting an HIV related
test?
Answer: Obtain a written consent from the proposed insured
◉ Which approach predicts a person's earning potential and
determines how much of that amount would be devoted to
dependents?
Answer: Human life value approach
◉ If the annuitant dies before the annuity start date,
Answer: The premiums paid plus interest earned will be given to the
beneficiary
◉ If dividends are illustrated, the advertisement MUST state that the
dividends are:
Answer: Not guaranteed
,◉ Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n)
Answer: Concealment
◉ Field underwriting performed by the producer involves
Answer: Completing the application and collecting initial premium
◉ Which of the following statements is CORRECT regarding an
individual applying for life or health insurance?
Answer: The applicants medical history may be analyzed and
reported
◉ Life insurance policies will normally pay for losses arising from
Answer: Commercial aviation
◉ An example of rebating would be
Answer: Offering a client something of value not stated in the
contract in exchange for their business
◉ Which type of insurance company allows their policyowners to
elect governing body?
Answer: Mutual
, ◉ Which type of life insurance policy pays the face amount at the
end of the specified period if the insured is still alive?
Answer: Endowment policy
◉ A life insurance claim which involves a per capita distribution of
policy proceeds would be payable to the
Answer: Named living primary beneficiaries
◉ A type of group that has a constitution and bylaws and has been
organized for purposes other than obtaining insurance is called a(n)
Answer: Association or labor group
◉ What are an applicant's statements concerning occupation,
hobbies, and personal health history regarded as?
Answer: Representation
◉ 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?
Answer: $5,000
◉ The _________ must provide an insured with proper disclosure
concerning the replacement of a life insurance policy
Answer: Producer
