ARKANSAS LIFE INSURANCE EXAM
ACTUAL VERIFIED STUDY
QUESTIONS AND ANSWERS
J is a producer who has induced an insured through misrepresentation to
surrender an existing insurance policy. What is J guilty of? - ANSWER-Twisting
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
Which approach predicts a person's earning potential and determines how
much of that amount would be devoted to dependents? - ANSWER-Human
life value approach
, If the annuitant dies before the annuity start date, - ANSWER-The premiums
paid plus interest earned will be given to the beneficiary
If dividends are illustrated, the advertisement MUST state that the dividends
are: - ANSWER-Not guaranteed
Intentional withholding of material facts that would affect an insurance
policy's validity is called a(n) - ANSWER-Concealment
Field underwriting performed by the producer involves - ANSWER-Completing
the application and collecting initial premium
Which of the following statements is CORRECT regarding an individual
applying for life or health insurance? - ANSWER-The applicants medical
history may be analyzed and reported
Life insurance policies will normally pay for losses arising from - ANSWER-
Commercial aviation
An example of rebating would be - ANSWER-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? - ANSWER-Mutual
Which type of life insurance policy pays the face amount at the end of the
specified period if the insured is still alive? - ANSWER-Endowment policy
A life insurance claim which involves a per capita distribution of policy
proceeds would be payable to the - ANSWER-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) - ANSWER-
Association or labor group
What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - ANSWER-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? - ANSWER-$5,000
The _________ must provide an insured with proper disclosure concerning the
replacement of a life insurance policy - ANSWER-Producer
ACTUAL VERIFIED STUDY
QUESTIONS AND ANSWERS
J is a producer who has induced an insured through misrepresentation to
surrender an existing insurance policy. What is J guilty of? - ANSWER-Twisting
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
Which approach predicts a person's earning potential and determines how
much of that amount would be devoted to dependents? - ANSWER-Human
life value approach
, If the annuitant dies before the annuity start date, - ANSWER-The premiums
paid plus interest earned will be given to the beneficiary
If dividends are illustrated, the advertisement MUST state that the dividends
are: - ANSWER-Not guaranteed
Intentional withholding of material facts that would affect an insurance
policy's validity is called a(n) - ANSWER-Concealment
Field underwriting performed by the producer involves - ANSWER-Completing
the application and collecting initial premium
Which of the following statements is CORRECT regarding an individual
applying for life or health insurance? - ANSWER-The applicants medical
history may be analyzed and reported
Life insurance policies will normally pay for losses arising from - ANSWER-
Commercial aviation
An example of rebating would be - ANSWER-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? - ANSWER-Mutual
Which type of life insurance policy pays the face amount at the end of the
specified period if the insured is still alive? - ANSWER-Endowment policy
A life insurance claim which involves a per capita distribution of policy
proceeds would be payable to the - ANSWER-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) - ANSWER-
Association or labor group
What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - ANSWER-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? - ANSWER-$5,000
The _________ must provide an insured with proper disclosure concerning the
replacement of a life insurance policy - ANSWER-Producer
