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Arkansas Life Insurance Exam Terms Questions and Answers 2025, Exams of Advanced Education

Arkansas Life Insurance Exam Terms Questions and Answers 2025

Typology: Exams

2024/2025

Available from 06/25/2025

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Arkansas Life Insurance Exam Terms
Accelerated Benefits - answer Riders attached to life insurance policies which allow
death benefits to be used to cover nursing or convalescent home expenses.
Accidental Death Benefits - answer A policy rider that states that the cause of death will
be analyzed to determine if it complies with the policy description of accidental death.
Accidental Death Insurance - answer An insurance policy that provides payment if the
insured's death is the result of an accident.
Accumulation Period - answerThe time before an annuitant's retirement during which
the annuitant is making payments or investments in an annuity
Acquired Immunodeficiency Syndrome (AIDS) - answerAn infectious and incurable
disease caused by the human immunodeficiency virus (HIV).
Actual Cash Value (ACV) - answerThe required amount to pay damages or for property
loss. This amount is calculated based on the property's current replacement value
minus depreciation.
Actuary - answerA person trained in the technical aspects of insurance and related
fields, particularly in the mathematics of insurance; a person who, on behalf of the
company, determines the mathematical probability of loss.
Adhesion - answerA contract offered on a "take-it-or leave-it" basis by an insurer, in
which the insured's only option is to either accept or reject the contract. Any ambiguities
in the contract will be settled in favor of the insured.
Adjustable Life - answerLife insurance which permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period.
Adjuster - answerA representative of an insurance company who investigates and acts
on the behalf of the company to obtain agreements for the amount of the insurance
claim.
Administrator - answerAn individual appointed by a court as a fiduciary to settle the
financial affairs and estate of a deceased person.
Admitted (Authorized) Insurer - answerAn insurance company authorized and licensed
to transact business in a particular state.
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Arkansas Life Insurance Exam Terms

Accelerated Benefits - answer Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses. Accidental Death Benefits - answer A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death. Accidental Death Insurance - answer An insurance policy that provides payment if the insured's death is the result of an accident. Accumulation Period - answerThe time before an annuitant's retirement during which the annuitant is making payments or investments in an annuity Acquired Immunodeficiency Syndrome (AIDS) - answerAn infectious and incurable disease caused by the human immunodeficiency virus (HIV). Actual Cash Value (ACV) - answerThe required amount to pay damages or for property loss. This amount is calculated based on the property's current replacement value minus depreciation. Actuary - answerA person trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurance; a person who, on behalf of the company, determines the mathematical probability of loss. Adhesion - answerA contract offered on a "take-it-or leave-it" basis by an insurer, in which the insured's only option is to either accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured. Adjustable Life - answerLife insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period. Adjuster - answerA representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim. Administrator - answerAn individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person. Admitted (Authorized) Insurer - answerAn insurance company authorized and licensed to transact business in a particular state.

Adult Day Care - answerA program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes. Adverse Selection - answerThe tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability. Agency - answerAn insurance sales office or company. Agent - answerAn individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. Agent's Authority - answerSpecial powers granted to an agent by his or her agency contract. Aleatory - answerA contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss. Alien Insurer - answerAn insurance company that is incorporated outside the United States. Alzheimer's disease - answerA disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss. Annual Statement - answerA detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business. Annuity - answerA contract that provides income for a specified period of years, or for life. Apparent Authority - answerThe appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created. Applicant - answerA person making application for, or offering him/herself or another to be insured under an insurance contract. Application - answerA document that provides information for underwriting purposes. After the policy is issued, any unanswered questions are considered waived by the insurer. Assignment - answerThe transfer of ownership rights of a life insurance policy from one person to another. Attained Age - answerThe age of the insured at a determined date.

Claim - answerA request for payment of the benefits provided by an insurance contract. Coercion - answerAn unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance. Coinsurance Clause - answerA provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance. Commingling - answerA practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with funds he/she is holding in trust. Commission - answerThe payment made by insurers to agents or brokers for the sale and service of policies. Commissioner - answerThe chief executive and administrative officer of a state insurance department. Concealment - answerThe withholding of known facts which, if material, can void a contract. Conditional Contract - answerA type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable Consideration - answerThe binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss. Consumer Report - answerA written and/or oral statement regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources. Contract - answerAn agreement between two or more parties enforceable by law. Contributory - answerA group insurance plan that requires the employees to pay part of the premium. Controlled Business - answerAn entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer or employees. Convertible - answerA policy that may be exchanged for another type of policy by contractual provision, at the option of the policyowner, and without evidence of insurability (i.e. term life changed to a form of permanent life).

Coordination of Benefits - answerA provision that helps determine the primary provider in situations where an insured is covered by more than one policy, thus avoiding claims overpayments. Countersignature - answerThe act of signing an insurance policy by a licensed resident agent. Coverage - answerThe inclusion of causes of loss (perils) which are covered within a scope of a policy. Credit Life Insurance - answerA special type of coverage written to pay off the balance of a loan in the event of the death of the debtor. CSO Table (The Commissioner's Standard Ordinary Table) - answerA mortality table used in life insurance that mathematically predicts the likelihood of death. Custodial Care - answerCare that is rendered to help an insured complete his/her activities of daily living. Death Benefit - answerThe amount payable upon the death of the person whose life is insured. Decreasing Term - answerA type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy. Defamation - answerAn unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation. Dependent - answerA person who relies on another for support and maintenance. Director - answerThe chief executive and administrative officer of the Insurance Department. Disclosure - answerAn act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation. Domestic Insurer - answerAn insurance company that conducts business in the state of incorporation. Domicile of Insurer - answerInsurer's location of incorporation and the legal ability to write business in a state. Earned Premium - answerThe amount of the premium for which the policy protection has been given.

Flexible Premium - answerA policy feature that allows the policyholder to vary premium payments in the amount and/or timing. Foreign Insurer - answerAn insurance company that is incorporated in another state. Fraternal Benefit Societies - answerLife or health insurance companies formed to provide insurance for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government. Fraud - answerIntentional misrepresentation or deceit with the intent to induce a person to part with something of value. Free Look - answerA period of time, usually required by law, during which a policyowner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for any reason. Grace Period - answerPeriod of time after the premium due date during which premiums may still be paid, and the policy and its riders remain in force.