arkansas insurance exam

which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Misrepresentation

on a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are?

Not taxable since the IRS treats them as a return of a portion of the premium paid

which of the following documents must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the?

Other-insured rider

Who might receive dividends from a mutual insurer?

Policyholders

when a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to?

Purchase a single premium policy for a reduced face amount

the Ownership provision entitles the policyowner to do all of the following EXCEPT?

Set premium rates

which of the following policies would be classified as traditional level premium contract?

Straight life

all of the following would be different between qualified and nonqualified retirement plans EXCEPT?

Taxation on accumulation

which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

Term rider

The initial amount of credit life insurance may NOT exceed?

The amount to be repaid under the contract

which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

what does "level" refer to in level term insurance?

face amount

an insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. what is this an example of?

false advertising

all of the following are divided options EXCEPT?

fixed - period installments

A person takes out a loan in order to pay off his house. He dies several years later, having paid off only a small portion of the debt. Which of the following is true?

if the lender has credit insurance, this amount will be paid to the lender

All advertisements are the responsibility of the?

insurer

what is the maximum fine for a single violation of the Insurance Code if a person knew or should have known that an act would result in a violation?

$5,000

once a claim is processed, and all claim investigations are completed, within how many days must the insurer mail or deliver a claim check?

10 working days

if an insurance producer allows for his license to lapse, within how many months of the due date of the continuation fee may the producer reinstate the license without having to pass a written examination?

12 months

how long is the licensing period in arkansas?

2 years

a purchaser of an individual long - term care insurance policy has the right to return the policy for a full refund of the premium if done within?

30 days of its delivery

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

which of the following is INCORRECT regarding a $100,000 20 - year level term policy?

At the end of 20 years, the policy's cash value will equal $100,000.

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized or admitted

all of the following statements concerning dividends are true EXCEPT?

Dividend amounts are guaranteed in the policy

which of the following is true regarding the accumulation period of annuity?

It is a period during which the payments into the annuity grow tax deferred.

which of the following is true regarding the annuity period?

It may last for the lifetime of the annuitant

what describes the specific information about a policy?

Policy summary

what is the purpose of settlement options?

They determine how death proceeds will be paid

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal Life

which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

what is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?

War or military service

the minimum interest rate on equity indexed annuity is often based on?

an index like Standard & Poor's 500

which of the following is the basic source of information used by the company in the risk selection process?

application

which of the following is NOT an essential element of an insurance contract?

counteroffer

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered?

discrimination