ARKANSAS LIFE INSURANCE EXAM
QUESTIONS AND ANSWERS 100%
VERIFIED
J is a producer who has induced an insured through misrepresentation to surrender an
existing insurance policy. What is J guilty of? - correct answer. Twisting
What is implied authority defined as? - correct 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? - correct answer. Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - correct answer. Annuitization phase
An insurers claim settlement practices are regulated by the: - correct answer. State
insurance departments
An insurers ability to make unpredictable payouts to policy owners is called: - correct
answer. Liquidity
,Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - correct answer.
Underwriting
What does the Group Life underwriting risk selection process help protect insurance
companies from? - correct 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: - correct 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? - correct answer. Claim will be paid if
application is approved
A life insurance policy owner does NOT have the right to: - correct answer. Revoke an
absolute assignment
An employee under a group insurance policy has the right to name a beneficiary and
the right to: - correct 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 - correct 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? - correct 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? - correct 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? - correct 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? - correct answer.
31 days
A domestic insurance company in Arkansas MUST - correct answer. Be organized under
Arkansas Insurance laws
, Simon 3has 3purchased 3a 3fixed 3immediate 3annuity. 3His 3payment 3amount 3will 3be
3dependent 3upon 3principal, 3interest, 3and 3the 3contract's 3- 3correct 3answer. 3 Income 3period
What 3kind 3of 3life 3insurance 3policy 3issued 3by 3a 3mutual 3insurer 3provides 3a 3return 3of
3divisible 3surplus? 3- 3correct 3answer. 3 Participating 3life 3insurance 3policy
No 3one 3is 3allowed 3to 3act 3as 3a 3producer 3for 3any 3insurance 3company 3in 3Arkansas 3that 3-
3correct 3answer. 3 Is 3unauthorized 3to 3do 3business 3in 3Arkansas
What 3MUST 3the 3company 3do 3prior 3to 3conducting 3an 3HIV 3related 3test? 3- 3correct 3answer.
3Obtain 3a 3written 3consent 3from 3the 3proposed 3insured
Which 3approach 3predicts 3a 3person's 3earning 3potential 3and 3determines 3how 3much 3of
3that 3amount 3would 3be 3devoted 3to 3dependents? 3- 3correct 3answer. 3 Human 3life 3value
3approach
If 3the 3annuitant 3dies 3before 3the 3annuity 3start 3date, 3- 3correct 3answer. 3 The 3premiums 3paid
3plus 3interest 3earned 3will 3be 3given 3to 3the 3beneficiary
If 3dividends 3are 3illustrated, 3the 3advertisement 3MUST 3state 3that 3the 3dividends 3are: 3-
3correct 3answer. 3 Not 3guaranteed
Intentional 3withholding 3of 3material 3facts 3that 3would 3affect 3an 3insurance 3policy's 3validity
3is 3called 3a(n) 3- 3correct 3answer. 3 Concealment
Field 3underwriting 3performed 3by 3the 3producer 3involves 3- 3correct 3answer. 3 Completing 3the
3application 3and 3collecting 3initial 3premium
Which 3of 3the 3following 3statements 3is 3CORRECT 3regarding 3an 3individual 3applying 3for
3life 3or 3health 3insurance? 3- 3correct 3answer. 3 The 3applicants 3medical 3history 3may 3be
3analyzed 3and 3reported
Life 3insurance 3policies 3will 3normally 3pay 3for 3losses 3arising 3from 3- 3correct 3answer.
3Commercial 3aviation
An 3example 3of 3rebating 3would 3be 3- 3correct 3answer. 3 Offering 3a 3client 3something 3of 3value
3not 3stated 3in 3the 3contract 3in 3exchange 3for 3their 3business
Which 3type 3of 3insurance 3company 3allows 3their 3policyowners 3to 3elect 3governing 3body? 3-
3correct 3answer. 3 Mutual
Which 3type 3of 3life 3insurance 3policy 3pays 3the 3face 3amount 3at 3the 3end 3of 3the 3specified
3period 3if 3the 3insured 3is 3still 3alive? 3- 3correct 3answer. 3 Endowment 3policy
A 3life 3insurance 3claim 3which 3involves 3a 3per 3capita 3distribution 3of 3policy 3proceeds 3would
3be 3payable 3to 3the 3- 3correct 3answer. 3 Named 3living 3primary 3beneficiaries
QUESTIONS AND ANSWERS 100%
VERIFIED
J is a producer who has induced an insured through misrepresentation to surrender an
existing insurance policy. What is J guilty of? - correct answer. Twisting
What is implied authority defined as? - correct 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? - correct answer. Preferred
Which of the following is considered to be the period when the accumulated value in an
annuity is paid out? - correct answer. Annuitization phase
An insurers claim settlement practices are regulated by the: - correct answer. State
insurance departments
An insurers ability to make unpredictable payouts to policy owners is called: - correct
answer. Liquidity
,Which of the following pertains to the analysis of an applicants personal information and
determining whether insurance should be issued or declined? - correct answer.
Underwriting
What does the Group Life underwriting risk selection process help protect insurance
companies from? - correct 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: - correct 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? - correct answer. Claim will be paid if
application is approved
A life insurance policy owner does NOT have the right to: - correct answer. Revoke an
absolute assignment
An employee under a group insurance policy has the right to name a beneficiary and
the right to: - correct 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 - correct 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? - correct 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? - correct 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? - correct 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? - correct answer.
31 days
A domestic insurance company in Arkansas MUST - correct answer. Be organized under
Arkansas Insurance laws
, Simon 3has 3purchased 3a 3fixed 3immediate 3annuity. 3His 3payment 3amount 3will 3be
3dependent 3upon 3principal, 3interest, 3and 3the 3contract's 3- 3correct 3answer. 3 Income 3period
What 3kind 3of 3life 3insurance 3policy 3issued 3by 3a 3mutual 3insurer 3provides 3a 3return 3of
3divisible 3surplus? 3- 3correct 3answer. 3 Participating 3life 3insurance 3policy
No 3one 3is 3allowed 3to 3act 3as 3a 3producer 3for 3any 3insurance 3company 3in 3Arkansas 3that 3-
3correct 3answer. 3 Is 3unauthorized 3to 3do 3business 3in 3Arkansas
What 3MUST 3the 3company 3do 3prior 3to 3conducting 3an 3HIV 3related 3test? 3- 3correct 3answer.
3Obtain 3a 3written 3consent 3from 3the 3proposed 3insured
Which 3approach 3predicts 3a 3person's 3earning 3potential 3and 3determines 3how 3much 3of
3that 3amount 3would 3be 3devoted 3to 3dependents? 3- 3correct 3answer. 3 Human 3life 3value
3approach
If 3the 3annuitant 3dies 3before 3the 3annuity 3start 3date, 3- 3correct 3answer. 3 The 3premiums 3paid
3plus 3interest 3earned 3will 3be 3given 3to 3the 3beneficiary
If 3dividends 3are 3illustrated, 3the 3advertisement 3MUST 3state 3that 3the 3dividends 3are: 3-
3correct 3answer. 3 Not 3guaranteed
Intentional 3withholding 3of 3material 3facts 3that 3would 3affect 3an 3insurance 3policy's 3validity
3is 3called 3a(n) 3- 3correct 3answer. 3 Concealment
Field 3underwriting 3performed 3by 3the 3producer 3involves 3- 3correct 3answer. 3 Completing 3the
3application 3and 3collecting 3initial 3premium
Which 3of 3the 3following 3statements 3is 3CORRECT 3regarding 3an 3individual 3applying 3for
3life 3or 3health 3insurance? 3- 3correct 3answer. 3 The 3applicants 3medical 3history 3may 3be
3analyzed 3and 3reported
Life 3insurance 3policies 3will 3normally 3pay 3for 3losses 3arising 3from 3- 3correct 3answer.
3Commercial 3aviation
An 3example 3of 3rebating 3would 3be 3- 3correct 3answer. 3 Offering 3a 3client 3something 3of 3value
3not 3stated 3in 3the 3contract 3in 3exchange 3for 3their 3business
Which 3type 3of 3insurance 3company 3allows 3their 3policyowners 3to 3elect 3governing 3body? 3-
3correct 3answer. 3 Mutual
Which 3type 3of 3life 3insurance 3policy 3pays 3the 3face 3amount 3at 3the 3end 3of 3the 3specified
3period 3if 3the 3insured 3is 3still 3alive? 3- 3correct 3answer. 3 Endowment 3policy
A 3life 3insurance 3claim 3which 3involves 3a 3per 3capita 3distribution 3of 3policy 3proceeds 3would
3be 3payable 3to 3the 3- 3correct 3answer. 3 Named 3living 3primary 3beneficiaries
