ARKANSAS LIFE INSURANCE EXAM |242 Q’S AND
A’S
J is a producer who has induced an insured through misrepresentation to
surrender an existing insurance policy. What is J guilty of? - -Twisting
- What is implied authority defined as? - -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? - -Preferred
- Which of the following is considered to be the period when the
accumulated value in an annuity is paid out? - -Annuitization phase
- An insurers claim settlement practices are regulated by the: - -State
insurance departments
- An insurers ability to make unpredictable payouts to policy owners is
called: - -Liquidity
- Which of the following pertains to the analysis of an applicants personal
information and determining whether insurance should be issued or
declined? - -Underwriting
- What does the Group Life underwriting risk selection process help protect
insurance companies from? - -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: - -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? - -Claim will be
paid if application is approved
- A life insurance policy owner does NOT have the right to: - -Revoke an
absolute assignment
- An employee under a group insurance policy has the right to name a
beneficiary and the right to: - -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 - -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? - -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? - -$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? - -The face amount
and premium will remain constant over the 10-year period
- What is Arkansas' REQUIRED grace period for a life insurance contract? - -
31 days
- A domestic insurance company in Arkansas MUST - -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 - -Income period
- What kind of life insurance policy issued by a mutual insurer provides a
return of divisible surplus? - -Participating life insurance policy
- No one is allowed to act as a producer for any insurance company in
Arkansas that - -Is unauthorized to do business in Arkansas
- What MUST the company do prior to conducting an HIV related test? - -
Obtain a written consent from the proposed insured
- Which approach predicts a person's earning potential and determines how
much of that amount would be devoted to dependents? - -Human life value
approach
- If the annuitant dies before the annuity start date, - -The premiums paid
plus interest earned will be given to the beneficiary
- If dividends are illustrated, the advertisement MUST state that the
dividends are: - -Not guaranteed
, - Intentional withholding of material facts that would affect an insurance
policy's validity is called a(n) - -Concealment
- Field underwriting performed by the producer involves - -Completing the
application and collecting initial premium
- Which of the following statements is CORRECT regarding an individual
applying for life or health insurance? - -The applicants medical history may
be analyzed and reported
- Life insurance policies will normally pay for losses arising from - -
Commercial aviation
- An example of rebating would be - -Offering a client something of value
not stated in the contract in exchange for their business
- Which type of insurance company allows their policyowners to elect
governing body? - -Mutual
- Which type of life insurance policy pays the face amount at the end of the
specified period if the insured is still alive? - -Endowment policy
- A life insurance claim which involves a per capita distribution of policy
proceeds would be payable to the - -Named living primary beneficiaries
- A type of group that has a constitution and bylaws and has been organized
for purposes other than obtaining insurance is called a(n) - -Association or
labor group
- What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - -Representation
- Ken is a producer who has obtained Consumer Information Reports under
false pretenses. Under the Fair Credit Reporting Act, what is the maximum
penalty that may be imposed on Ken? - -$5,000
- The _________ must provide an insured with proper disclosure concerning
the replacement of a life insurance policy - -Producer
- Within how many days must a rollover be completed in order to avoid
being taxed as current income? - -60 days to complete the rollover to
another IRA
- Shawn, Mike, and Dave are brothers who have a $100,000 "first to die"
joint life policy covering all three of their lives. If Mike dies first, the policy
proceeds - -Will no longer provide insurance protection
A’S
J is a producer who has induced an insured through misrepresentation to
surrender an existing insurance policy. What is J guilty of? - -Twisting
- What is implied authority defined as? - -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? - -Preferred
- Which of the following is considered to be the period when the
accumulated value in an annuity is paid out? - -Annuitization phase
- An insurers claim settlement practices are regulated by the: - -State
insurance departments
- An insurers ability to make unpredictable payouts to policy owners is
called: - -Liquidity
- Which of the following pertains to the analysis of an applicants personal
information and determining whether insurance should be issued or
declined? - -Underwriting
- What does the Group Life underwriting risk selection process help protect
insurance companies from? - -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: - -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? - -Claim will be
paid if application is approved
- A life insurance policy owner does NOT have the right to: - -Revoke an
absolute assignment
- An employee under a group insurance policy has the right to name a
beneficiary and the right to: - -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 - -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? - -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? - -$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? - -The face amount
and premium will remain constant over the 10-year period
- What is Arkansas' REQUIRED grace period for a life insurance contract? - -
31 days
- A domestic insurance company in Arkansas MUST - -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 - -Income period
- What kind of life insurance policy issued by a mutual insurer provides a
return of divisible surplus? - -Participating life insurance policy
- No one is allowed to act as a producer for any insurance company in
Arkansas that - -Is unauthorized to do business in Arkansas
- What MUST the company do prior to conducting an HIV related test? - -
Obtain a written consent from the proposed insured
- Which approach predicts a person's earning potential and determines how
much of that amount would be devoted to dependents? - -Human life value
approach
- If the annuitant dies before the annuity start date, - -The premiums paid
plus interest earned will be given to the beneficiary
- If dividends are illustrated, the advertisement MUST state that the
dividends are: - -Not guaranteed
, - Intentional withholding of material facts that would affect an insurance
policy's validity is called a(n) - -Concealment
- Field underwriting performed by the producer involves - -Completing the
application and collecting initial premium
- Which of the following statements is CORRECT regarding an individual
applying for life or health insurance? - -The applicants medical history may
be analyzed and reported
- Life insurance policies will normally pay for losses arising from - -
Commercial aviation
- An example of rebating would be - -Offering a client something of value
not stated in the contract in exchange for their business
- Which type of insurance company allows their policyowners to elect
governing body? - -Mutual
- Which type of life insurance policy pays the face amount at the end of the
specified period if the insured is still alive? - -Endowment policy
- A life insurance claim which involves a per capita distribution of policy
proceeds would be payable to the - -Named living primary beneficiaries
- A type of group that has a constitution and bylaws and has been organized
for purposes other than obtaining insurance is called a(n) - -Association or
labor group
- What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - -Representation
- Ken is a producer who has obtained Consumer Information Reports under
false pretenses. Under the Fair Credit Reporting Act, what is the maximum
penalty that may be imposed on Ken? - -$5,000
- The _________ must provide an insured with proper disclosure concerning
the replacement of a life insurance policy - -Producer
- Within how many days must a rollover be completed in order to avoid
being taxed as current income? - -60 days to complete the rollover to
another IRA
- Shawn, Mike, and Dave are brothers who have a $100,000 "first to die"
joint life policy covering all three of their lives. If Mike dies first, the policy
proceeds - -Will no longer provide insurance protection
