Arkansas Life Insurance Training Questions & Answers 100% Accurate!

Twisting - ANSWER Misrepresenting for the purpose of inducing or tending to induce the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. Unfair Discrimination - ANSWER Permitting individuals of the same class and equal life expectancy to be charged different rates for life insurance or annuities. Boycott, Coercion, Intimidation - ANSWER Entering into action resulting in an unreasonable restraint of, or monopoly in, the business of insurance. False Financial Statements - ANSWER Making any false or misleading statements about the dividends or share of surplus previously paid on any insurance policy. Churning of Business - ANSWER Replacing an existing policy of life insurance or accident and health insurance, or both, where the replacement: Does not include the required memorandum comparing the existing coverage to the proposed coverage Is without demonstration by the licensee of the purpose of replacing the policy for the benefit of the insured Defamation - ANSWER Making of any false or maliciously critical statement regarding the financial condition of any person with the intent to injure such person Right to Examine (Free Look) - ANSWER The free-look period on individual life insurance policies is 10 days. Grace Period - ANSWER The grace period for individual life insurance policies must be at least 30 days. Reinstatement - ANSWER The period within which to reinstate a lapsed life insurance policy is 3 years. Incontestability - ANSWER An individual life insurance policy is incontestable after it has been in force during the lifetime of the insured for 2 years from its date of issue, except for fraud in procurement and for nonpayment of premiums. Misstatement of Age - ANSWER If the age of the insured has been misstated, and their age is considered in determining the premium, any amount payable under the policy will be adjusted as if the age of the insured was originally stated correctly. Limitation of Liability - ANSWER Life insurance policies may exclude coverage for death while the insured is a resident outside the continental United States or Canada. They may also exclude death benefits for specified hazardous occupations. Death by suicide is contestable for 2 years. Holding of Proceeds - ANSWER The death benefit under a policy of life insurance is exempt from the claims of creditors. Unpaid Premium - ANSWER In determining the death benefit due under a life insurance policy, a deduction may be made for any unpaid premiums and the principal and accrued interest of any outstanding policy loan or other indebtedness. Refund of Premium - ANSWER The proceeds payable upon death under an individual life insurance policy must include the amount of any premiums paid beyond the end of the policy month in which death occurred. Death benefits and unearned premiums must be paid in a lump sum within 30 days after the insurer receives proof of death. If death proceeds and unearned premiums are not paid within 30 days of receiving a proof of death, these funds will accrue interest at 8% per year from the insured's date of death. Stock Insurance Company - ANSWER A stock insurer is owned by its stockholders, or shareholders. The stockholders elect a Board of Directors to manage the company, but th