ARKANSAS LIFE INSURANCE 242 EXAM STUDY QUESTIONS WITH
COMPLETE SOLUTIONS 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 1 / 3
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 has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's - Correct Answer Income period What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? - Correct Answer Participating life insurance policy 2 / 3
No one is allowed to act as a producer for any insurance company in Arkansas that - Correct Answer Is unauthorized to do business in Arkansas What MUST the company do prior to conducting an HIV related test? - Correct 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? - Correct Answer Human life value approach If the annuitant dies before the annuity start date, - Correct 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: - Correct Answer Not guaranteed Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) - Correct Answer Concealment Field underwriting performed by the producer involves - Correct Answer Completing the application and collecting initial premium Which of the following statements is CORRECT regarding an individual applying for life or health insurance? - Correct Answer The applicants medical history may be analyzed and reported Life insurance policies will normally pay for losses arising from - Correct Answer Commercial aviation An example of rebating would be - Correct 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? - Correct Answer Mutual
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