ARKANSAS LIFE INSURANCE LATEST 2026 TEST PAPER
QUESTIONS AND ANSWERS MARKED A+
✔✔Alice finds she no longer is able to pay premiums on her $50,000 Whole Life Policy,
but needs that amount of protection for her family. Which Nonforfeiture Option provides
this protection? - ✔✔Extended Term. Extended Term would allow the present cash
value of the policy to buy a single premium term policy of the same face amount for as
long a period as it will buy. Fixed Amount is a Settlement Option, and Paid-Up Option is
a Dividend Option.
✔✔When a life insurance policy's ownership is changed from the original owner to a
new owner without payment, this is known as a(n) ___________. - ✔✔Absolute
assignment
When a life insurance policy's ownership is changed from the original owner to a new
owner, this is known as an absolute assignment when no money is involved.
✔✔What is the intent of the suicide clause? - ✔✔To discourage individuals from
purchasing an insurance policy while contemplating suicide
✔✔Which provision commences at the time of the delivery of the policy to the insured? -
✔✔Free look period
The insured/owner has the right to examine the policy for 10 days (this may vary by
state) after receipt of delivery. If returned within that period, a full refund of premium is
granted. It is the insurer's responsibility to prove date of receipt.
✔✔Which of the following beneficiary designations is a class designation? - ✔✔Any
children of this marriage
A class designation is when the beneficiary is not directly identified by name.
✔✔The interest earned on dividends is: - ✔✔Taxable
The dividends themselves are generally not taxable, but any interest earned on the
dividends is taxable.
✔✔If the beneficiary is concerned about a payout for a particular period of time, the
_______ settlement option should be selected. - ✔✔fixed period
✔✔Partial surrenders are typically available only on _______________ insurance types
of policies. - ✔✔Universal life
,✔✔Albert owns a life insurance policy insuring his son David. He wants a Settlement
Option that, if David were to die, would provide guaranteed payments to Albert and his
wife until both of them die. Albert's producer should recommend: - ✔✔Life Income Joint
and Survivor
✔✔K has a $100,000 traditional whole life policy with $30,000 of cash values and a
$10,000 loan outstanding. What is the maximum additional amount she could borrow
from the policy at this time? - ✔✔$20,000
She can borrow up to the policy's cash value. She already has a loan of $10,000, so
she could borrow another $20,000 at this time.
✔✔___________ in a policy allow the owner to name the beneficiary, choose a dividend
option or settlement option, or borrow against the contract. - ✔✔Ownership Provision
The rights of ownership are a standard contract provision and allows the policyowner to
do all of these things and more.
✔✔The nonforfeiture option that provides protection equal to the policy's face amount
for a specified number of years and days is: - ✔✔Extended term
With Extended Term, the Present cash value is used to buy a single premium term
policy of the same face amount for as long a period as it will buy, expressed a
combination of years and days. This option is sometimes referred to as the Automatic
(or Default) Option if no other option has been selected. This option and the policy will
expire prior to age 100.
✔✔The technical name of the person who makes a policy assignment is the: -
✔✔Assignor
The original owner (the assignor) will name a new owner of the policy (the assignee).
✔✔Life insurance benefits are usually paid ____________, unless another mode of
settlement has been selected. - ✔✔lump sum
Life insurance benefits are usually paid in a lump sum, unless another mode of
settlement has been selected.
✔✔An individual owns a variable annuity. Upon annuitization, the number of Annuity
Units on which the benefit amount is based will __________ from month to month. -
✔✔Remain the same
, It is important that the individual understand that upon annuitization, the number of units
used to calculate the benefit amount will always be the same. It will be the unit value
that fluctuates according to the performance of the separate account(s).
✔✔The period of time over which a single sum or periodic deposits grow within an
annuity is referred to as the: - ✔✔Accumulation period
✔✔Sam wants to know at what age he should annuitize in order to receive the highest
monthly income benefit payment: - ✔✔Age 70
*The longer Sam waits to annuitize his annuity, the higher each monthly income benefit
payment will be because of the shorter expected payout period.
✔✔Which of the following will receive the smallest monthly income benefit check if an
annuity is annuitized? - ✔✔50 year old female - The younger ages receive the smaller
payments because they can be paid out for a longer period of time. Females also
receive smaller income checks due to a longer life expectancy.
✔✔All of the following are traits of a Fixed Annuity - ✔✔The purchasing power of a fixed
dollar benefit amount decreases as the cost of living increases
The insurer's general account assets guarantee the fixed annuity contract
The insurer bears any investment risk
✔✔_____________ are allowed as a way to access annuity values without having to
elect a settlement option or surrender the contract. - ✔✔Systematic withdrawals
✔✔At the time of her retirement at age 62, Jolene chose a Life Income Payment Option
to have her annuity distributed. Five years later, when her health declines, she needs
the distribution to be increased. How is this accomplished? - ✔✔She cannot change the
distribution once commenced
The selection of a lifetime annuity payment option is critical because once chosen it
typically may not be changed. An alternative to annuitization is a 'systematic withdrawal
plan' that allows the amount of withdrawal to be changed in the future. It is not a lifetime
income guarantee, and the payments will end when the last dollar of cash value is
taken.
✔✔Jill wants to know how much to put into her annuity in order to receive the greatest
benefit payment amount. Which of the following will provide her with the largest monthly
income regardless of the settlement option selected? - ✔✔$1,000,000
All other factors being equal, the larger the premium deposit, the larger the benefit
payment.
QUESTIONS AND ANSWERS MARKED A+
✔✔Alice finds she no longer is able to pay premiums on her $50,000 Whole Life Policy,
but needs that amount of protection for her family. Which Nonforfeiture Option provides
this protection? - ✔✔Extended Term. Extended Term would allow the present cash
value of the policy to buy a single premium term policy of the same face amount for as
long a period as it will buy. Fixed Amount is a Settlement Option, and Paid-Up Option is
a Dividend Option.
✔✔When a life insurance policy's ownership is changed from the original owner to a
new owner without payment, this is known as a(n) ___________. - ✔✔Absolute
assignment
When a life insurance policy's ownership is changed from the original owner to a new
owner, this is known as an absolute assignment when no money is involved.
✔✔What is the intent of the suicide clause? - ✔✔To discourage individuals from
purchasing an insurance policy while contemplating suicide
✔✔Which provision commences at the time of the delivery of the policy to the insured? -
✔✔Free look period
The insured/owner has the right to examine the policy for 10 days (this may vary by
state) after receipt of delivery. If returned within that period, a full refund of premium is
granted. It is the insurer's responsibility to prove date of receipt.
✔✔Which of the following beneficiary designations is a class designation? - ✔✔Any
children of this marriage
A class designation is when the beneficiary is not directly identified by name.
✔✔The interest earned on dividends is: - ✔✔Taxable
The dividends themselves are generally not taxable, but any interest earned on the
dividends is taxable.
✔✔If the beneficiary is concerned about a payout for a particular period of time, the
_______ settlement option should be selected. - ✔✔fixed period
✔✔Partial surrenders are typically available only on _______________ insurance types
of policies. - ✔✔Universal life
,✔✔Albert owns a life insurance policy insuring his son David. He wants a Settlement
Option that, if David were to die, would provide guaranteed payments to Albert and his
wife until both of them die. Albert's producer should recommend: - ✔✔Life Income Joint
and Survivor
✔✔K has a $100,000 traditional whole life policy with $30,000 of cash values and a
$10,000 loan outstanding. What is the maximum additional amount she could borrow
from the policy at this time? - ✔✔$20,000
She can borrow up to the policy's cash value. She already has a loan of $10,000, so
she could borrow another $20,000 at this time.
✔✔___________ in a policy allow the owner to name the beneficiary, choose a dividend
option or settlement option, or borrow against the contract. - ✔✔Ownership Provision
The rights of ownership are a standard contract provision and allows the policyowner to
do all of these things and more.
✔✔The nonforfeiture option that provides protection equal to the policy's face amount
for a specified number of years and days is: - ✔✔Extended term
With Extended Term, the Present cash value is used to buy a single premium term
policy of the same face amount for as long a period as it will buy, expressed a
combination of years and days. This option is sometimes referred to as the Automatic
(or Default) Option if no other option has been selected. This option and the policy will
expire prior to age 100.
✔✔The technical name of the person who makes a policy assignment is the: -
✔✔Assignor
The original owner (the assignor) will name a new owner of the policy (the assignee).
✔✔Life insurance benefits are usually paid ____________, unless another mode of
settlement has been selected. - ✔✔lump sum
Life insurance benefits are usually paid in a lump sum, unless another mode of
settlement has been selected.
✔✔An individual owns a variable annuity. Upon annuitization, the number of Annuity
Units on which the benefit amount is based will __________ from month to month. -
✔✔Remain the same
, It is important that the individual understand that upon annuitization, the number of units
used to calculate the benefit amount will always be the same. It will be the unit value
that fluctuates according to the performance of the separate account(s).
✔✔The period of time over which a single sum or periodic deposits grow within an
annuity is referred to as the: - ✔✔Accumulation period
✔✔Sam wants to know at what age he should annuitize in order to receive the highest
monthly income benefit payment: - ✔✔Age 70
*The longer Sam waits to annuitize his annuity, the higher each monthly income benefit
payment will be because of the shorter expected payout period.
✔✔Which of the following will receive the smallest monthly income benefit check if an
annuity is annuitized? - ✔✔50 year old female - The younger ages receive the smaller
payments because they can be paid out for a longer period of time. Females also
receive smaller income checks due to a longer life expectancy.
✔✔All of the following are traits of a Fixed Annuity - ✔✔The purchasing power of a fixed
dollar benefit amount decreases as the cost of living increases
The insurer's general account assets guarantee the fixed annuity contract
The insurer bears any investment risk
✔✔_____________ are allowed as a way to access annuity values without having to
elect a settlement option or surrender the contract. - ✔✔Systematic withdrawals
✔✔At the time of her retirement at age 62, Jolene chose a Life Income Payment Option
to have her annuity distributed. Five years later, when her health declines, she needs
the distribution to be increased. How is this accomplished? - ✔✔She cannot change the
distribution once commenced
The selection of a lifetime annuity payment option is critical because once chosen it
typically may not be changed. An alternative to annuitization is a 'systematic withdrawal
plan' that allows the amount of withdrawal to be changed in the future. It is not a lifetime
income guarantee, and the payments will end when the last dollar of cash value is
taken.
✔✔Jill wants to know how much to put into her annuity in order to receive the greatest
benefit payment amount. Which of the following will provide her with the largest monthly
income regardless of the settlement option selected? - ✔✔$1,000,000
All other factors being equal, the larger the premium deposit, the larger the benefit
payment.
