Arkansas Life Insurance Exam |
Correctly Answered and Graded A+ |
2024/2025 Guide
Bert is the owner and insured of a permanent life insurance policy he
purchased 20 years ago. He has never missed a premium payment. He
would like to buy a new car but his bank account is running low. How can
he obtain the necessary funds while still maintaining coverage?
- Correct Answer - Take a policy loan from the insurer
With indexed life, the interest credited to the policy is:
- Correct Answer - Based on a percentage of the increase in a stipulated
stock index
refers to the location, or jurisdiction (state, district, territory, or country),
where an insurer is formed or incorporated. The three kinds of insurer
domicile are domestic, foreign, and alien.
- Correct Answer - Domicile
The insurer must give _______________ to the insurance applicant
(consumer) that a credit report may be requested as part of the insurer's
underwriting requirements, and must have pre-authorization
,by obtaining the applicant's written consent to request the report.
- Correct Answer - Pre-notification
The producer will obtain the signature at the time of application. If an
adverse action is taken, such as denial of coverage, the insurer must
provide
- Correct Answer - post-notification to the applicant by stating the
reasons for the adverse action and the right to request a copy of the
credit report.
With the increase of drug trafficking and acts of terrorism, the desire and
demand for laundered money has also increased. The ____________
was passed to help detect and prevent this illegal activity.
- Correct Answer - Patriot act
to compensate for a loss, or to make one whole again
- Correct Answer - Indemnity
is a personal statement submitted by the producer, to the insurer,
regarding the applicant's financial condition, any personal knowledge of
the applicant, etc. - Correct Answer - Agents Report
There are two basic types of life insurance policies:
- Correct Answer - temporary (term)
,permanent (whole life)
is the death benefit payable on the policy if the insured dies before the
policy ends.
- Correct Answer - Face amount
If protection is needed to meet short-term goals, such as to provide
benefits to pay for education in case the insured dies before his/her
teenagers finish college, then ____________________ will meet that
need. - Correct Answer - Temporary insurance
If the insured wants to provide benefits to a surviving spouse,
_________ or ______ might be needed.
- Correct Answer - Long-term or permanent
Permanent policies provide _________, which is cash accumulation in
the policy that can be accessed through a policy loan or cancellation
(surrender) of the policy. Is considered a living benefit in a permanent
policy causing the premiums to be higher than term insurance.
- Correct Answer - Cash Value
an added benefit attached to the policy that supplements existing
coverage. - Correct Answer - Rider
, Term insurance is considered - Correct Answer - pure insurance and
provides a pure death benefit
level term life insurance - Correct Answer - The death benefit remains
level and the premiums remain level during the policy term.
Decreasing term life insurance - Correct Answer - The death benefit
decreases, but premiums remain level for the policy term. Often such
policies are sold as mortgage protection with the amount of insurance
decreasing as the balance of the mortgage decreases. If the insured
dies, the proceeds of the policy can be used to pay off the mortgage.
The premiums paid for decreasing term are lower than the premiums
payable for level term since the benefit decreases throughout the term of
the policy.
Increasing term life insurance
- Correct Answer - The death benefit increases over the life of the policy
while the premiums remain level. This type of term is normally written as
a rider to provide cost of living or return of premium benefits.
The ______ of a Term Policy allows conversion to a Permanent Policy
without evidence of insurability, but it is not an option that lasts forever.
Typically the policyowner must do so within the first 10 years or so, and
not after a specified age, such as 60. - Correct Answer - Conversion
Option
Correctly Answered and Graded A+ |
2024/2025 Guide
Bert is the owner and insured of a permanent life insurance policy he
purchased 20 years ago. He has never missed a premium payment. He
would like to buy a new car but his bank account is running low. How can
he obtain the necessary funds while still maintaining coverage?
- Correct Answer - Take a policy loan from the insurer
With indexed life, the interest credited to the policy is:
- Correct Answer - Based on a percentage of the increase in a stipulated
stock index
refers to the location, or jurisdiction (state, district, territory, or country),
where an insurer is formed or incorporated. The three kinds of insurer
domicile are domestic, foreign, and alien.
- Correct Answer - Domicile
The insurer must give _______________ to the insurance applicant
(consumer) that a credit report may be requested as part of the insurer's
underwriting requirements, and must have pre-authorization
,by obtaining the applicant's written consent to request the report.
- Correct Answer - Pre-notification
The producer will obtain the signature at the time of application. If an
adverse action is taken, such as denial of coverage, the insurer must
provide
- Correct Answer - post-notification to the applicant by stating the
reasons for the adverse action and the right to request a copy of the
credit report.
With the increase of drug trafficking and acts of terrorism, the desire and
demand for laundered money has also increased. The ____________
was passed to help detect and prevent this illegal activity.
- Correct Answer - Patriot act
to compensate for a loss, or to make one whole again
- Correct Answer - Indemnity
is a personal statement submitted by the producer, to the insurer,
regarding the applicant's financial condition, any personal knowledge of
the applicant, etc. - Correct Answer - Agents Report
There are two basic types of life insurance policies:
- Correct Answer - temporary (term)
,permanent (whole life)
is the death benefit payable on the policy if the insured dies before the
policy ends.
- Correct Answer - Face amount
If protection is needed to meet short-term goals, such as to provide
benefits to pay for education in case the insured dies before his/her
teenagers finish college, then ____________________ will meet that
need. - Correct Answer - Temporary insurance
If the insured wants to provide benefits to a surviving spouse,
_________ or ______ might be needed.
- Correct Answer - Long-term or permanent
Permanent policies provide _________, which is cash accumulation in
the policy that can be accessed through a policy loan or cancellation
(surrender) of the policy. Is considered a living benefit in a permanent
policy causing the premiums to be higher than term insurance.
- Correct Answer - Cash Value
an added benefit attached to the policy that supplements existing
coverage. - Correct Answer - Rider
, Term insurance is considered - Correct Answer - pure insurance and
provides a pure death benefit
level term life insurance - Correct Answer - The death benefit remains
level and the premiums remain level during the policy term.
Decreasing term life insurance - Correct Answer - The death benefit
decreases, but premiums remain level for the policy term. Often such
policies are sold as mortgage protection with the amount of insurance
decreasing as the balance of the mortgage decreases. If the insured
dies, the proceeds of the policy can be used to pay off the mortgage.
The premiums paid for decreasing term are lower than the premiums
payable for level term since the benefit decreases throughout the term of
the policy.
Increasing term life insurance
- Correct Answer - The death benefit increases over the life of the policy
while the premiums remain level. This type of term is normally written as
a rider to provide cost of living or return of premium benefits.
The ______ of a Term Policy allows conversion to a Permanent Policy
without evidence of insurability, but it is not an option that lasts forever.
Typically the policyowner must do so within the first 10 years or so, and
not after a specified age, such as 60. - Correct Answer - Conversion
Option
