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Arkansas State life insurance exam Questions with correct Answers
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Arkansas State life insurance exam
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Arkansas State life insurance examRob has a benefit at work which enables him to defer his current receipt of income and
have it paid at a later date, when he will probably be in a lower tax bracket. Which
benefit fits this description? - answer Income deferral option
Who were Keogh plans designed to provide pension benefits for? - answer the self-
employed
What correctly describes a certificate of authority? - answer Permits an insurance
company to transact business in Arkansas
An example of replacement is - answer canceling a term life policy to buy a whole life
policy
Loans obtained by a policyowner against the cash value of a life insurance policy -
answer would not be treated as taxable income
If an insured dies during the grace period with no premiums paid - answer the policy
would be payable, minus the premium amount
Pre-death distributions from a modified endowment contract (MEC) receive different tax
treatment than other life insurance policies because - answerthe MEC tends to be an
investment vehicle
When does an immediate annuity begin making payments? - answerAfter the first
premium has been paid
When a producer is replacing an existing ordinary life insurance policy, the producer
must take all of the following actions EXCEPT - answerobtain the beneficiary's signature
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance
could she purchase that is designed to pay off the loan balance if she dies within the 30-
year period? - answerdecreasing term insurance
What is a corridor in relation to a Universal Life insurance policy? - answerThe gap
between the total death benefit and the policy's cash value
The automatic premium loan provision authorizes an insurer to withdraw from a policy's
cash value the amount of - answerpast due premiums that have not been paid by the
end of the grace period
, Which statement concerning Traditional IRAs is correct - answerearnings are taxable
when withdrawn
Which dividend option would an insurer invest the policyowner's money and add any
interest earnings as the dividends accrue? - answeraccumulation at interest option
Which of these is a method of determining the level of funds required for ongoing
support in the event of the breadwinner's death? - answerHuman life value
What is the primary purpose of a rating service company such as A.M. Best? -
answerDetermine financial strength of an insurance company
Which of the following is not a federal requirement of a qualified plan? -
answerEmployee must be able to make unlimited contributions
The coverage, conditions, and limitations in the master policy of a group contract can be
found in which document? - answerCertificate of coverage and benefits
Lapsed individual life insurance may be reinstated at any time within: - answer3 years
Which market index is normally associated with an indexed annuity's rate of return? -
answerS&P 500
A policyowner may change two policy features on what type of life insurance? -
answerAdjustable life
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit
in payments of $10,000 per month until the principal and interest has been paid out.
Which option was chosen? - answerFixed amount
What is the name of the provision which states that a copy of the application must be
attached to the policy when issued? - answerEntire contract
A life insurance policy that is subject to a contract interest rate is referred to as -
answerUniversal life
Within how many days must a traditional IRA be rolled over to another IRA in order to
avoid tax consequences? - answer60
A permanent life insurance policy where the policyowner pays premiums for a specified
number of years is called a(n) - answerLimited pay policy
An insured's status under Social Security can be described as - answerfully insured
T or F: Flexible surrender value is a characteristic of a universal life policy -
answerFalse
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