ARKANSAS LIFE INSURANCE EXAM
COMPREHENSIVE STUDY GUIDE
◉ 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
COMPREHENSIVE STUDY GUIDE
◉ 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
