ALABAMA LIFE HEALTH INSURANCE CORRECT
FINAL EXAM QUESTIONS AND ANSWERS SURE A+
✔✔The field underwriter is the _________ and is not a determiner of insurability. -
✔✔Producer
The producer is in the field soliciting applications for insurance and in effect is another
pair of eyes and ears for the insurer in helping to issue policies to insurable prospects.
✔✔Third-party ownership refers to: - ✔✔A situation where the policyowner is someone
other than the insured
✔✔Which statement best describes the term reserve? - ✔✔That amount that, when
increased by future premiums on outstanding policies, and interest on those premiums
will enable the company to meet future death claims
✔✔The applicant, if other than the proposed insured, must have: - ✔✔An insurable
interest in the life of the insured
✔✔Controlled business may be defined as insurance sold: - ✔✔To the producer, the
producer's family and friends, and the producer's business associates
,✔✔With regard to life insurance policies, loading refers to: - ✔✔Assignment of the
appropriate share of the company's operating expenses to each policy
✔✔Which of the following statements about the average number of people who die
each year is true? - ✔✔It is called the mortality rate
Mortality Rate: which is the statistical probability of death in a large population of
insureds.
✔✔Which of the following is NOT a characteristic of life insurance as property? - ✔✔It
requires a fund portfolio manager
Characteristics:
It creates an immediate estate
It requires no physical maintenance
It may be paid for in installments
✔✔The most effective way to ensure that the applicant will accept the policy when it is
issued is: - ✔✔To have the applicant pay the initial premium at the time of application
✔✔Allen purchases an estate builder (jumping juvenile) policy for his 5-year old son,
Donald. Suppose that when Donald reaches age 21 his father presents him with the
policy as a gift. Which of the following statements is NOT correct? - ✔✔Donald must
change the beneficiaries immediately
CORRECT:
The premium will continue to be based on his original age of 5
Donald has enjoyed protection against the problems of premature death
The face value of Donald's policy has increased by 5 times
✔✔Term insurance differs from permanent insurance in that term: - ✔✔Builds no cash
value, pays a death benefit only
✔✔An indeterminate premium policy offers: - ✔✔A low initial premium with succeeding
premiums based on the company's investment return, mortality and expenses
✔✔With regard to the waiver of premium rider, after the disability a policyowner
normally: - ✔✔Need not repay the premiums paid by the company during disability
, ✔✔In many jurisdictions, permanent policies are required to have some cash value by
the end of: - ✔✔The Third Year
✔✔Loan values and retirement income are: - ✔✔Called the living benefits of life
insurance
✔✔With a modified premium whole life contract, premium payments: - ✔✔Are lower in
the early years of the contract
✔✔A variable life policy: - ✔✔Death benefit varies to reflect the investment results of the
underlying separate account, but never falls below a guaranteed minimum
✔✔The type of policy that can be changed from one that does not accumulate cash
values to one that does is a: - ✔✔Convertible term policy
✔✔A limited pay life policy: - ✔✔Requires premium payments for a specified number of
years or until a specified age is reached
✔✔Should an insured become totally and permanently disabled two months before the
cut-off date for the waiver of premium rider: - ✔✔The insured remains eligible for all
provisions
✔✔Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing.
Later on, Wilma dies and the policy death benefit is paid to the beneficiary. This is
called a: - ✔✔Survivorship or second-to-die policy
✔✔A whole life policy: - ✔✔Requires the insured to pay premiums for life and endows at
age 100
✔✔If Greg's policy on his own life has a guaranteed insurability rider, it means that he
can purchase more insurance: - ✔✔On his own life at certain specified ages without
proof of insurability
✔✔Any extra premium charged for the waiver of premium rider: - ✔✔Does not apply to
the policy's cash value
✔✔If a policyowner has a $100,000 policy with an accumulated cash value of $6,000,
the policyowner can borrow up to: - ✔✔The entire accumulated cash value of $6,000,
less interest for 1 year
✔✔An insured allows a permanent policy to lapse. Unless otherwise instructed, the
insurance company: - ✔✔Will automatically institute the extended term option
FINAL EXAM QUESTIONS AND ANSWERS SURE A+
✔✔The field underwriter is the _________ and is not a determiner of insurability. -
✔✔Producer
The producer is in the field soliciting applications for insurance and in effect is another
pair of eyes and ears for the insurer in helping to issue policies to insurable prospects.
✔✔Third-party ownership refers to: - ✔✔A situation where the policyowner is someone
other than the insured
✔✔Which statement best describes the term reserve? - ✔✔That amount that, when
increased by future premiums on outstanding policies, and interest on those premiums
will enable the company to meet future death claims
✔✔The applicant, if other than the proposed insured, must have: - ✔✔An insurable
interest in the life of the insured
✔✔Controlled business may be defined as insurance sold: - ✔✔To the producer, the
producer's family and friends, and the producer's business associates
,✔✔With regard to life insurance policies, loading refers to: - ✔✔Assignment of the
appropriate share of the company's operating expenses to each policy
✔✔Which of the following statements about the average number of people who die
each year is true? - ✔✔It is called the mortality rate
Mortality Rate: which is the statistical probability of death in a large population of
insureds.
✔✔Which of the following is NOT a characteristic of life insurance as property? - ✔✔It
requires a fund portfolio manager
Characteristics:
It creates an immediate estate
It requires no physical maintenance
It may be paid for in installments
✔✔The most effective way to ensure that the applicant will accept the policy when it is
issued is: - ✔✔To have the applicant pay the initial premium at the time of application
✔✔Allen purchases an estate builder (jumping juvenile) policy for his 5-year old son,
Donald. Suppose that when Donald reaches age 21 his father presents him with the
policy as a gift. Which of the following statements is NOT correct? - ✔✔Donald must
change the beneficiaries immediately
CORRECT:
The premium will continue to be based on his original age of 5
Donald has enjoyed protection against the problems of premature death
The face value of Donald's policy has increased by 5 times
✔✔Term insurance differs from permanent insurance in that term: - ✔✔Builds no cash
value, pays a death benefit only
✔✔An indeterminate premium policy offers: - ✔✔A low initial premium with succeeding
premiums based on the company's investment return, mortality and expenses
✔✔With regard to the waiver of premium rider, after the disability a policyowner
normally: - ✔✔Need not repay the premiums paid by the company during disability
, ✔✔In many jurisdictions, permanent policies are required to have some cash value by
the end of: - ✔✔The Third Year
✔✔Loan values and retirement income are: - ✔✔Called the living benefits of life
insurance
✔✔With a modified premium whole life contract, premium payments: - ✔✔Are lower in
the early years of the contract
✔✔A variable life policy: - ✔✔Death benefit varies to reflect the investment results of the
underlying separate account, but never falls below a guaranteed minimum
✔✔The type of policy that can be changed from one that does not accumulate cash
values to one that does is a: - ✔✔Convertible term policy
✔✔A limited pay life policy: - ✔✔Requires premium payments for a specified number of
years or until a specified age is reached
✔✔Should an insured become totally and permanently disabled two months before the
cut-off date for the waiver of premium rider: - ✔✔The insured remains eligible for all
provisions
✔✔Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing.
Later on, Wilma dies and the policy death benefit is paid to the beneficiary. This is
called a: - ✔✔Survivorship or second-to-die policy
✔✔A whole life policy: - ✔✔Requires the insured to pay premiums for life and endows at
age 100
✔✔If Greg's policy on his own life has a guaranteed insurability rider, it means that he
can purchase more insurance: - ✔✔On his own life at certain specified ages without
proof of insurability
✔✔Any extra premium charged for the waiver of premium rider: - ✔✔Does not apply to
the policy's cash value
✔✔If a policyowner has a $100,000 policy with an accumulated cash value of $6,000,
the policyowner can borrow up to: - ✔✔The entire accumulated cash value of $6,000,
less interest for 1 year
✔✔An insured allows a permanent policy to lapse. Unless otherwise instructed, the
insurance company: - ✔✔Will automatically institute the extended term option
