ARKANSAS LIFE INSURANCE EXAM
WITH 100% CORRECT ANSWERS
2026 VERIFIED A+
◉ Increasing Term.
Answer: Features level annual premiums and a death benefit that
increases each year over the duration of the term.
◉ The death benefit in a variable universal life policy
A) Depends on the performance of a separate account.
B) Always equal the face amount stated in the policy.
C) Is fixed
D) Is guaranteed to be higher than when the policy is originally issued.
Answer: Depends on the performance of a separate account.
◉ What happens when a policy is surrendered for its cash value?
A) Coverage ends and the policy cannot be reinstated.
B) Coverage ends but the policy can be reinstated at any time.
C) The policy can be converted to term coverage.
D) The policy can be reinstated by paying back all policy loans and
premiums..
Answer: Coverage ends and the policy cannot be reinstated.
,◉ Which type of life insurance policy allows the policyowner to pay
more or less than the planned premium?
A) Universal Life
B) Straight Whole Life
C) Decreasing term
D) Variable whole life.
Answer: Universal Life
◉ If an insurance company wishes to order a consumer report on an
applicant to assist in the underwriting process, and if a notice of
insurance information practices has been provided, the report may
contain all of the following information EXCEPT the applicant's
A) Prior insurance.
B) Ancestry.
C) Habits.
D) Credit history..
Answer: Prior Insurance
◉ Fixed annuities provide all of the following EXCEPT
A) Equal monthly payments for life.
B) Minimum guaranteed rate of interest.
C) Hedge against inflation.
D) Future income payments..
Answer: Hedge against inflation
, ◉ If taken as a lump sum, life insurance proceeds to beneficiaries are
passed
A) Tax-deductible.
B) Free of federal income taxation.
C) Part tax-free and part taxable.
D) Without interest..
Answer: Free of federal income taxation
◉ What do individuals use to transfer their risk of loss to a larger group?
A) Insurance
B) Exposure
C) Insurable interest
D) Indemnity.
Answer: Insurance
◉ The interest earned on policy dividends is
A) Taxable.
B) 40% taxable, similar to a capital gain.
C) Tax deductible.
D) Nontaxable..
Answer: Taxable
WITH 100% CORRECT ANSWERS
2026 VERIFIED A+
◉ Increasing Term.
Answer: Features level annual premiums and a death benefit that
increases each year over the duration of the term.
◉ The death benefit in a variable universal life policy
A) Depends on the performance of a separate account.
B) Always equal the face amount stated in the policy.
C) Is fixed
D) Is guaranteed to be higher than when the policy is originally issued.
Answer: Depends on the performance of a separate account.
◉ What happens when a policy is surrendered for its cash value?
A) Coverage ends and the policy cannot be reinstated.
B) Coverage ends but the policy can be reinstated at any time.
C) The policy can be converted to term coverage.
D) The policy can be reinstated by paying back all policy loans and
premiums..
Answer: Coverage ends and the policy cannot be reinstated.
,◉ Which type of life insurance policy allows the policyowner to pay
more or less than the planned premium?
A) Universal Life
B) Straight Whole Life
C) Decreasing term
D) Variable whole life.
Answer: Universal Life
◉ If an insurance company wishes to order a consumer report on an
applicant to assist in the underwriting process, and if a notice of
insurance information practices has been provided, the report may
contain all of the following information EXCEPT the applicant's
A) Prior insurance.
B) Ancestry.
C) Habits.
D) Credit history..
Answer: Prior Insurance
◉ Fixed annuities provide all of the following EXCEPT
A) Equal monthly payments for life.
B) Minimum guaranteed rate of interest.
C) Hedge against inflation.
D) Future income payments..
Answer: Hedge against inflation
, ◉ If taken as a lump sum, life insurance proceeds to beneficiaries are
passed
A) Tax-deductible.
B) Free of federal income taxation.
C) Part tax-free and part taxable.
D) Without interest..
Answer: Free of federal income taxation
◉ What do individuals use to transfer their risk of loss to a larger group?
A) Insurance
B) Exposure
C) Insurable interest
D) Indemnity.
Answer: Insurance
◉ The interest earned on policy dividends is
A) Taxable.
B) 40% taxable, similar to a capital gain.
C) Tax deductible.
D) Nontaxable..
Answer: Taxable
