Arkansas Life Insurance Exam Questions & Answers (SCORED A)

Ordinary Life - ANSWER Individual life insurance that includes many types of temporary and permanent insurance protection plans written as individuals Term Life - ANSWER Provides low cost insurance protection for a specified period (or term) and pays a benefit only if the insured dies during that period Term Life - ANSWER The initial premium is lower than for an equivalent amount of whole life insurance Level Term - ANSWER Insurance provides a level amount of protection for a specified period, after which the policy expires Decreasing Term - ANSWER Polices are characterized by benefit amounts that decrease gradually over the term of protection and have level premiums Decreasing Term - ANSWER Commonly used to protect an insured's mortgage Credit Life - ANSWER Sold to cover the outstanding balance on a loan, is based on decreasing term insurance Increasing Term - ANSWER The amount of increase is usually stated as specific amounts or as a percentage of the original amount Increasing Term - ANSWER Insurance may be sold as a separate policy, but is usually purchased as a cost of living rider to a policy Term Life - ANSWER Policies are issued for a specified period, defined in terms of years or age Renewable - ANSWER The premiums for the renewal period will be higher than the initial premium Conversion - ANSWER The option to convert gives the insured the right to convert or exchange their term policy for a whole life plan without evidence of insurability Whole Life - ANSWER Insurance is called this because it provides permanent protection for one's entire life-from the date of issue to the date of the insured's death Whole Life - ANSWER Cash values and maturity at age 10 Cash Value - ANSWER Policy's cash value, builds over the life of the policy. This is because whole life insurance plans are credited with a certain guaranteed rate of interest. Cash Value - ANSWER The cash value is often regarded as a savings element because it represents the amount of money the policyowner will receive if the policy is ever surrendered Whole Life Premiums - ANSWER The shorter the payment period, the higher the p