ARKANSAS LIFE INSURANCE
CERTIFICATION COMPREHENSIVE TEST
QUESTIONS AND CORRECT ANSWERS
GRADED A+
⩥ What is implied authority defined as?
Answer: Authority 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?
Answer: Preferred
⩥ Which of the following is considered to be the period when the
accumulated value in an annuity is paid out?
Answer: Annuitization phase
⩥ An insurers claim settlement practices are regulated by the:
Answer: State insurance departments
⩥ An insurers ability to make unpredictable payouts to policy owners is
called:
,Answer: Liquidity
⩥ Which of the following pertains to the analysis of an applicants
personal information and determining whether insurance should be
issued or declined?
Answer: Underwriting
⩥ What does the Group Life underwriting risk selection process help
protect insurance companies from?
Answer: Adverse 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:
Answer: Liability Insurance
⩥ What would happen if a life insurance applicant is given a conditional
receipt from an insurance agent and then dies the next day?
Answer: Claim will be paid if application is approved
⩥ A life insurance policy owner does NOT have the right to:
Answer: Revoke an absolute assignment
,⩥ An employee under a group insurance policy has the right to name a
beneficiary and the right to:
Answer: Convert 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
Answer: Provide 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?
Answer: The 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?
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?
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
CERTIFICATION COMPREHENSIVE TEST
QUESTIONS AND CORRECT ANSWERS
GRADED A+
⩥ What is implied authority defined as?
Answer: Authority 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?
Answer: Preferred
⩥ Which of the following is considered to be the period when the
accumulated value in an annuity is paid out?
Answer: Annuitization phase
⩥ An insurers claim settlement practices are regulated by the:
Answer: State insurance departments
⩥ An insurers ability to make unpredictable payouts to policy owners is
called:
,Answer: Liquidity
⩥ Which of the following pertains to the analysis of an applicants
personal information and determining whether insurance should be
issued or declined?
Answer: Underwriting
⩥ What does the Group Life underwriting risk selection process help
protect insurance companies from?
Answer: Adverse 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:
Answer: Liability Insurance
⩥ What would happen if a life insurance applicant is given a conditional
receipt from an insurance agent and then dies the next day?
Answer: Claim will be paid if application is approved
⩥ A life insurance policy owner does NOT have the right to:
Answer: Revoke an absolute assignment
,⩥ An employee under a group insurance policy has the right to name a
beneficiary and the right to:
Answer: Convert 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
Answer: Provide 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?
Answer: The 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?
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?
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
