LIFE INSURANCE- FINAL EXAM
a life insurance claim which involves a per capita distribution of policy proceeds would be payable to the
named living primary beneficiaries
which of the following is requirement to attain a nonresident producer license
Be licensed as a producer in the producer's state of domicile
which of the following constitutes grounds for suspending an arkansas producer's license
Felony conviction
which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary
interest only
an applicant's character and personal habits can be obtained for underwriting purposes from which source
investigative consumer report
no one is allowed to act as a producer for any insurance company in arkansas that
is unauthorized to do business in arkansas
which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them
life annuity certain
the suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid
minus indebtedness and without interest
a producer making an unfair comparison of two insurance policies is considered to be engaging in
misrepresentation
an insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
misrepresentation
which unfair trade practice involves a producer suggesting that an insurance policy is like a share of stock
misrepresentation
which of the following is not information found in a life insurance buyer's guide
How to take legal action against an insurance company
Providing incorrect, misleading, incomplete, or materially untrue information in the license application is
Misrepresentation
what types of life insurance are normally used for key employee indemnification
term, whole, and universal life insurance
which of these statements regarding the annuitant is CORRECT
the annuitant's life expectancy determines the annuity payments
michael the insurance producer acts in a fiduciary capacity when conducting business with all of these principals except
the commissioner
what does the word "level" in level term describe
the face amount
what will the beneficiary receive if an annuitant dies during the accumulation period
the greater of the accumulated cash value or the total premium paid
what is a certificate of authority
the license required for an insurer to conduct business in the state
if an insured dies during the grace period with no premiums paid
the policy would be payable, minus the premium amount
a field underwriter's main task is
to ensure an applicant's medical information is accurate and complete
failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a(n)
unfair claim settlement practice
under a traditional IRA, interest earned is taxed
upon distribution
which of these would be the best example of a limited pay life insurance policy
whole life policy with premiums paid up after 20 years
an insurance producer must notify the commissioner of a change in legal name, email, or address
within 30 days of the change
which of the following is not considered rebating
Sharing commission with an agent licensed in the same line of business
a foreign insurance company cannot conduct business in arkansas without
a certificate of authority to transact business in arkansas
a producer's license cannot be revoked without
a hearing given to producer
a producer's license CANNOT be revoked without
a hearing given to the producer
which of these is considered to be a living benefit option in a life insurance policy
accelerated death benefit
what is the responsibility of the commissioner
administer insurance laws
an insurance company formed in a country other than the united states is called a(n) __________ company
alien
an individual most likely will have an insurable interest in insuring a person's life if
an economic interest exists for the continuance of the insured's life
in arkansas, replacement forms are required to be obtained for the replacement of which of the following
annual renewable term (ART) insurance
With whom may a producer share commissions
another producer who is licensed in the same line of insurance
an insurer is best described as
any person, corporation, association, or society that writes insurance contracts
a producer may begin to solicit insurance ONLY when
appointed by an insurer
if dividends are illustrated in a life insurance advertisement, the advertisement must state that the dividends
are not guaranteed
how long must the commissioner maintain a complete record for every licensee inn arkansas for
as long as he/she deems necessary
a renewable term life insurance policy can be renewed
at a predetermined date or age, regardless of the insured's health
which of these is not a nonforfeiture option
automatic premium loan option
why are dividends from a mutual insurer not subject to taxation
because dividends are considered to be a return of premium
an individual covered under a group life insurance policy is considered to be a(n)
certificate holder
all of the following are elements of an insurance policy EXCEPT
claim forms
one definition of replacement is "the act of replacing an existing insurance policy with another". replacement is
closely regulated and requires full disclosure
which of the following basics is a producer's fiduciary responsibility
collecting premiums and paying them to the insurance company
which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents
human life value approach
The Arkansas Insurance Department may take each of the following actions EXCEPT:
incarceration
the Arkansas Insurance Department may take each of the following actions EXCEPT
incarceration
mike has inherited his father's traditional IRA. as a beneficiary, he will pay ____________ taxes on any money withdrawn
income
in arkansas, a named beneficiary will be taxed at a rate of __________ for death proceeds collected on a life insurance policy
0%
tonya has replaced her whole life policy with an annuity without incurring a tax penalty. this transaction is called a(n)
1035 exchange
Lapsed individual life insurance may be reinstated at any time within:
3 years
lapsed individual life insurance may be reinstated at any time within
3 years
in arkansas, an insurance company must notify the commissioner within _____ days to terminate a producer's appointment
30
a licensed producer must report any administrative action take against the licensee in another jurisdiction or by another agency department in Arkansas within how many days of the final disposition
30 days
a licensed producer must report any administrative action taken against the licensee in another jurisdiction or by another agency department in arkansas within how many days of final disposition
30 days
if an agent knows or suspects a fraudulent transaction, they must report it to the commissioner within
30 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy without needing to prove insurability?
31 days
what is Arkansas' REQUIRED grace period for a life insurance contract
31 days
The Commissioner must examine the financial affairs of each admitted insurer operating in Louisiana at least once every how many years?
5
a company shall reserve the right to defer payment of any cash surrender value for a period of _____ months after demand for payment of the cash surrender value and surrender of the policy
6
an insured may continue coverage under a group plan during their total disability if the premiums are paid for how long
6 months
a life policy loan in arkansas cannot charge a fixed rate of interest higher than
8%
pat is insured with a life insurance policy and karen is his primary beneficiary. they are both involved in an automobile accident where pat dies instantly and karen dies 5 days later. which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits
common disaster clause
the beneficiary of any life insurance policy or annuity contract is protected from the ____________ of the insured
creditors
which of these is NOT subject to income taxation under Modified Endowment Contract (MEC)
death benefit
credit life insurance can be best described as insurance issued on a _________ to cover outstanding balanced on installment loans
debtor
making a statement that is false of maliciously critical of the financial condition of an insurer is known as
defamation
making a statement that is false or maliciously critical of the financial condition of an insurer is known as
defamation
what is the primary purpose of a rating service company such as A.M Best
determine financial strength of an insurance company
all of these are standard exclusions found in a life insurance policy EXCEPT
disability
a group life insurance policy can be converted to an individual whole life policy under which circumstance
employment termination
what is the name of the provision which states that a copy of the application must be attached to the policy when issued
entire contract
how often must an insurance producer's license be renewed
every 2 years
The act of an insurance company publishing misleading information about its policy's provisions is called
false advertising
in arkansas, an insurer licensed to conduct business in arkansas, but domiciled in new jersey, is called a(n)
foreign company
a producer who knowingly submits a false statement in support of a claim may be found guilty of
fraud
underwriters can acquire information from all of the following sources EXCEPT
genetic testing
A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Commissioner is required to
give written notice to the producer
the commissioner is appointed by the
governor
which of these is not a prerequisite for becoming a licensed resident producer in arkansas
high school graduate
a producer who sells insurance in Arkansas but resides in another state is called a(n)
nonresident producer
what must be signed by both the producer and applicant when an existing life insurance policy is being reissued with a reduction in cash value
notice regarding replacement
When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT
obtain the beneficiary's signature
an example of rebating would be
offering a client something of value not stated in the contract in exchange for their business
An example of unfair discrimination would be
offering different terms of coverage for different policyowners having the same risk classification
in Arkansas, anyone who lies under oath during a hearing is guilty of
perjury
which is the best way to describe controlled business
policies written on people that a producer has influence over
a producer who sells an individual life insurance policy in arkansas must deliver to the policyowner a(n)
policy summary and buyer's guide
a person who places insurance on behalf of anyone seeking insurance is required to be licensed as a(n)
producer
an individual who has a contract with an insurance company to represent it is called a(n)
producer
the _______ must provide an insured with proper disclosure concerning the replacement of a life insurance policy
producer
all of the following are considered appropriate uses of life insurance for business purposes EXCEPT
protecting the business by covering entry level employees with life insurance
what is the purpose of thee arkansas life and health insurance guaranty association
protects policyowners against insolvent insurance companies
which one of these options is NOT considered false advertising
putting a license number on a flyer
an insurance producer agrees to pay the first monthly premium for an insurance applicant. this is called a(n)
rebate
a producer who shares commissions with a client may be guilty of
rebating
the promise of a discount in premium as an inducement to purchase insurance is an unfair trade practice known as
rebating
in an insurance contract, the applicant's "consideration" is the
statements made in the application and the premium
