Arkansas Life Insurance With Complete Solution

Arkansas Life Insurance With Complete Solution J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? - correct answerTwisting What is implied authority defined as? - correct answerAuthority that is not specifically given to an agent contract, but that an agent can reasonably assume to carry out his/her duties A person who is a nonsmoker, average weight, excellent health would fall into what risk classification? - correct answerPreferred Which of the following is considered to be the period when the accumulated value in an annuity is paid out? - correct answerAnnuitization phase An insurers claim settlement practices are regulated by the: - correct answerState insurance departments An insurers ability to make unpredictable payouts to policy owners is called: - correct answerLiquidity Which of the following pertains to the analysis of an applicants personal information and determining whether insurance should be issued or declined? - correct answerUnderwriting What does the Group Life underwriting risk selection process help protect insurance companies from? - correct answerAdverse Selection The Arkansas Life & Disability Insurance Guaranty Association assures payment of benefits from insurance policies for insolvent insurers, and covers all of the following insured policies, EXCEPT: - correct answerLiability Insurance What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day? - correct answerClaim will be paid if application is approved A life insurance policy owner does NOT have the right to: - correct answerRevoke an absolute assignment An employee under a group insurance policy has the right to name a beneficiary and the right to: - correct answerConvert to an individual policy in the event of employment termination The two major actions required for a policyholder to comply with the Reinstatement Clause are - correct answerProvide evidence of insurability, past due premiums Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? - correct answerThe policy may be paid up early by using policy dividends Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? - correct answer$4,000 ($100,000 X .04 = $4,000) Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true? - correct answerThe face amount and premium will remain constant over the 10-year period What is Arkansas' REQUIRED grace period for a life insurance contract? - correct answer31 days A domestic insurance company in Arkansas MUST - correct answerBe 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 - correct answerIncome period What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? - correct answerParticipating life insurance policy No one is allowed to act as a producer for any insurance company in Arkansas that - correct answerIs unauthorized to do business in Arkansas What MUST the company do prior to conducting an HIV related test? - correct answerObtain 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? - correct answerHuman life value approach If the annuitant dies before the annuity start date, - correct answerThe premiums paid plus interest earned will be given to the beneficiary If dividends are illustrated, the advertisement MUST state that the dividends are: - correct answerNot guaranteed Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) - correct answerConcealment Field underwriting performed by the producer involves - correct answerCompleting the application and collecting initial premium Which of the following statements is CORRECT regarding an individual applying for life or health insurance? - correct answerThe applicants medical history may be analyzed and reported Life insurance policies will normally pay for losses arising from - correct answerCommercial aviation An example of rebating would be - correct answerOffering 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? - correct answerMutual Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? - correct answerEndowment policy A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the - correct answerNamed 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) - correct answerAssociation or labor group What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? - correct answerRepresentation 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? - correct answer$5,000 The _________ must provide an insured with proper disclosure concerning the replacement of a life insurance policy - correct answerProducer Within how many days must a rollover be completed in order to avoid being taxed as current income? - correct answer60 days to complete the rollover to another IRA Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds - correct answerWill no longer provide insurance protection An insurer may pay commissions directly to any person for services as a producer provided the producer is licensed and ________ - correct answerAppointed The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? - correct answerInsurable interest can be based on the love and affection of individuals related by blood or law Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? - correct answerPremiums paid plus interest earned is returned to the beneficiary All of these are considered key factors in underwriting life insurance EXCEPT - correct answerMarital status The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as: - correct answerRebating Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this? - correct answerChild term rider Which of the following basics is a producer's fiduciary responsibility? - correct answerCollecting premiums and paying them to the insurance company Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? - correct answerCan be converted to permanent coverage without evidence of insurability In Arkansas, replacement forms are required to be obtained for the replacement of which of the following - correct answerAnnual Renewable Term (ART) insurance What is involved when a life insurance policy has been backdated? - correct answerMaking the policy effective on an earlier date than the present Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen? - correct answerFixed amount In Arkansas, which of the following is considered an Unfair Trade Practice? - correct answerCoercion Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? - correct answerNothing Level premium term life insurance policies - correct answerHave premiums that are averaged over the policy period An insured may continue coverage under a group plan during their total disability if the premiums are paid for how long? - correct answer6 months from the date the disability started Which is considered to be misrepresentation? - correct answerA producer guaranteeing a policy's dividends A type of insurer that is owned by its policyowners is called - correct answerMutual Which is true regarding the annuitant? - correct answerThe annuitants life expectancy determines the annuity payments An insurer may pay a commission in which of the following scenarios? - correct answerTo a licensed producer who is appointed with the insurer