Exam (elaborations)
ARKANSAS LIFE INSURANCE EXAM QUESTIONS AND ANSWERS 2024
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ARKANSAS LIFE INSURANCE EXAM
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ARKANSAS LIFE INSURANCE EXAMJ 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? - answerReferred
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 applicant’s 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: - answerConvert 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 - answerProvide 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? - answerThe 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? - answerThe face amount and premium
will remain constant over the 10-year period
What is Arkansas' REQUIRED grace period for a life insurance contract? - answer31
days
A domestic insurance company in Arkansas MUST - answerBe 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 - answerIncome period
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus? - answerParticipating life insurance policy
No one is allowed to act as a producer for any insurance company in Arkansas that -
answerIs unauthorized to do business in Arkansas
What MUST the company do prior to conducting an HIV related test? - answerObtain 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? - answerHuman life value approach
If the annuitant dies before the annuity start date, - answerThe premiums paid plus
interest earned will be given to the beneficiary
If dividends are illustrated, the advertisement MUST state that the dividends are: -
answerNot guaranteed
Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n) - answerConcealment
, Field underwriting performed by the producer involves - answerCompleting the
application and collecting initial premium
Which of the following statements is CORRECT regarding an individual applying for life
or health insurance? - answerThe applicants medical history may be analyzed and
reported
Life insurance policies will normally pay for losses arising from - answerCommercial
aviation
An example of rebating would be - answerOffering 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? -
answerMutual
Which type of life insurance policy pays the face amount at the end of the specified
period if the insured is still alive? - answerEndowment policy
A life insurance claim which involves a per capita distribution of policy proceeds would
be payable to the - answerNamed 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) - answerAssociation or labor group
What are an applicant's statements concerning occupation, hobbies, and personal
health history regarded as? - answerRepresentation
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 - answerProducer
Within how many days must a rollover be completed in order to avoid being taxed as
current income? - answer60 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 - answerWill no
longer provide insurance protection
An insurer may pay commissions directly to any person for services as a producer
provided the producer is licensed and ________ - answerAppointed
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