ARKANSAS LIFE INSURANCE EXAM | 180
+ QUESTIONS AND ANSWERS GRADED
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An insured owns a $50,000 permanent life policy that she purchased 4
years ago that has a disability waiver of premium. The insured becomes
disabled and pays premiums during the waiting period until the waiver
begins. Once the waiver begins, what happens to the premiums she paid
during the waiting period?
A. It is added to the policy's cash values
B. It is held in escrow until the disability is over then refunded
C. It is kept by the insurer as part of the cost of providing the benefit
D. The insurer refunds it
- Correct Answer - D. The insurer refunds it
How is a life settlement transaction similar to a viatical settlement
transaction?
A. The policy is overfunded
B. The policy is about to lapse
C. The insured is terminally ill
D. A third party buys a life insurance policy for less than its face amount
,- Correct Answer - D. A third party buys a life insurance policy for less
than its face amount
Cash values within an ordinary straight whole life insurance policy
_______ over time.
A. Increases
B. Remain constant
C. Decrease
D. Vary
- Correct Answer - A. Increases
The insuring clause is found:
A. On the last page of the policy
B. Right before the copy of the application
C. On the first page of the policy
D. In front of a copy of the paramedical exam results
- Correct Answer - C. On the first page of the policy
In a viatical settlement transaction, the life insurance policyowner is
referred to as the _________.
A. Viator
B. Viatee
,C. Provider
D. Third Party
- Correct Answer - A. Viator
Which of the following is FALSE about the Automatic Premium Loan
Provision (APL)?
A. The APL is treated like any other policy
B. For it to be included in the policy, there is an additional premium
charge
C. It is only available on cash value policies
D. It is designed to prevent unintentional policy lapse
- Correct Answer - B. For it to be included in the policy, there is an
additional premium charge
All of the following are situations in which the insurer is obligated to pay
out a death benefit after the insured has died, except:
A. The insured was an experienced pilot who died in a plane crash but
had a policy issued with an aviation rider for an additional premium
B. The insurer discovers the gender of the insured was misstated
C. The premiums have not been paid and have been overdue for 3 years
D. An insured commits suicide 7 years after the policy was issued
- Correct Answer - C. The premiums have not been paid have been
overdue for 3 years
, All of the following are considered to be methods of unfair competition,
except:
A. Twisting
B. Replacement
C. Unfair Discrimination
D. Churning
- Correct Answer - B. Replacement
Which of the following statements regarding the temporary insurance
license is correct?
A. Temporary licenses are issued on the same basis as other insurance
licenses
B. Temporary licenses are granted for a term of up to 90 days
C. Temporary licenses may be granted without an exam
D. A temporary license is only granted when an agent dies or is disabled
- Correct Answer - C. Temporary licenses may be granted without an
exam
Which of the following statements appearing in a life insurance
advertisement would be in compliance with the rules governing life
insurance advertising?
A. After 15 years the policy's cash surrender value will exceed the total
premiums paid, which effectively reduces the net cost to zero
+ QUESTIONS AND ANSWERS GRADED
A+ | DOWNLOAD FOR A GUARANTEED A+
An insured owns a $50,000 permanent life policy that she purchased 4
years ago that has a disability waiver of premium. The insured becomes
disabled and pays premiums during the waiting period until the waiver
begins. Once the waiver begins, what happens to the premiums she paid
during the waiting period?
A. It is added to the policy's cash values
B. It is held in escrow until the disability is over then refunded
C. It is kept by the insurer as part of the cost of providing the benefit
D. The insurer refunds it
- Correct Answer - D. The insurer refunds it
How is a life settlement transaction similar to a viatical settlement
transaction?
A. The policy is overfunded
B. The policy is about to lapse
C. The insured is terminally ill
D. A third party buys a life insurance policy for less than its face amount
,- Correct Answer - D. A third party buys a life insurance policy for less
than its face amount
Cash values within an ordinary straight whole life insurance policy
_______ over time.
A. Increases
B. Remain constant
C. Decrease
D. Vary
- Correct Answer - A. Increases
The insuring clause is found:
A. On the last page of the policy
B. Right before the copy of the application
C. On the first page of the policy
D. In front of a copy of the paramedical exam results
- Correct Answer - C. On the first page of the policy
In a viatical settlement transaction, the life insurance policyowner is
referred to as the _________.
A. Viator
B. Viatee
,C. Provider
D. Third Party
- Correct Answer - A. Viator
Which of the following is FALSE about the Automatic Premium Loan
Provision (APL)?
A. The APL is treated like any other policy
B. For it to be included in the policy, there is an additional premium
charge
C. It is only available on cash value policies
D. It is designed to prevent unintentional policy lapse
- Correct Answer - B. For it to be included in the policy, there is an
additional premium charge
All of the following are situations in which the insurer is obligated to pay
out a death benefit after the insured has died, except:
A. The insured was an experienced pilot who died in a plane crash but
had a policy issued with an aviation rider for an additional premium
B. The insurer discovers the gender of the insured was misstated
C. The premiums have not been paid and have been overdue for 3 years
D. An insured commits suicide 7 years after the policy was issued
- Correct Answer - C. The premiums have not been paid have been
overdue for 3 years
, All of the following are considered to be methods of unfair competition,
except:
A. Twisting
B. Replacement
C. Unfair Discrimination
D. Churning
- Correct Answer - B. Replacement
Which of the following statements regarding the temporary insurance
license is correct?
A. Temporary licenses are issued on the same basis as other insurance
licenses
B. Temporary licenses are granted for a term of up to 90 days
C. Temporary licenses may be granted without an exam
D. A temporary license is only granted when an agent dies or is disabled
- Correct Answer - C. Temporary licenses may be granted without an
exam
Which of the following statements appearing in a life insurance
advertisement would be in compliance with the rules governing life
insurance advertising?
A. After 15 years the policy's cash surrender value will exceed the total
premiums paid, which effectively reduces the net cost to zero
