Arkansas Life and Health Insurance Practice Exam

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Study for the Arkansas Life and Health Insurance Exam with our comprehensive resources. Utilize multiple-choice questions and flashcards to increase your knowledge and understanding. Get ready to pass your exam and jumpstart your career in the insurance industry!

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Which of the following is true regarding the free-look provision in life insurance policies?

Allows the policyholder to change beneficiaries without fees
Allows the policyholder to review the policy for a set period with the right to return it for a refund
Provides a grace period for late premium payments
Waives the waiting period for pre-existing conditions

The correct answer is: Allows the policyholder to change beneficiaries without fees

The correct answer is B. The free-look provision in life insurance policies allows the policyholder to review the policy for a specific period, usually 10 to 30 days, after receiving it. During this time, the policyholder has the right to cancel the policy for a full refund if they are not satisfied with its terms and conditions. This provision offers a safeguard for the policyholder to ensure they are making an informed decision without facing financial penalties. Option A is incorrect because the free-look provision does not specifically relate to changing beneficiaries without fees. Option C is incorrect as it refers to the grace period for premium payments, which is a separate provision in insurance policies. Option D is incorrect as the free-look provision is not related to waiving waiting periods for pre-existing conditions.