ALABAMA LIFE INSURANCE EXAM 2 2024 WITH 100% CORRECT ANSWERS UPDATED

Dividend options are defined as ways in which the policy owner can: - ANSWERS receives dividends paid on any stock held A life insurance company may pay a death claim for less than the face amount of a policy under which of the following conditions? - ANSWERS All of the above Which policy will have immediate cash? - ANSWERS single premium The process of underwriting primarily involves what two key steps? - ANSWERS risk selection and pricing Sherwood has no valid will but has named his estate as the beneficiary of his life insurance policy. As a result, he can expect that the policy proceeds - ANSWERS are distributed according to state law the disability income rider of a life insurance policy normally - ANSWERS all of the above Oliver has a life insurance policy with a $50,000 death benefit. At his death, there is a $5000 policy loan outstanding. Which of the following statement is CORRECT? - ANSWERS the insurer will subtract the amount of the loan and pay $45,000 to the beneficiary. which statement is correct? - ANSWERS Concealment is the withholding of information that should have been provided to an insurer all of the following are requirements to receive an Alabama insurance producer license EXCEPT: - ANSWERS An applicant must have a diploma from an approved college or university You can withdraw money from an annuity without penalty(assuming no surrender penalty) beginning at what age? - ANSWERS 59.5 years of age Which of the following factors determines the amount of each payment under the fixed period settlement option? - ANSWERS all of the above a parent who purchases a policy on the life of a minor child and wishes to retain complete control of the policy until the child reaches age 18 may do so by means of - ANSWERS the ownership clause A payor rider protects against death or disability of the policy owner when the insured is a minor. Once the minor reached a specified age, what typically happens? - ANSWERS The insured is offered the opportunity to make premium payments According to the Alabama Insurance regulations, all of the following are included as advertisements except: - ANSWERS a birthday card sent to a policyholder by his or her agent Alabama law regulates life insurance benefits with respect to minors. What statement is FALSE? - ANSWERS 18-year olds may receive a limit of $3000 in life benefits in any one year Should an insured die while a policy is in its grace period, the amount of past-due premium is - ANSWERS deducted from the face amount of the policy before payment is made to the beneficiary the "entire contract" law in Alabama says - ANSWERS the policy and the application (or a summary of the application) consults the entire contract The Incontestable Clause has what effect on coverage? - ANSWERS Misstatements on the application will not negate coverage if a loss occurs following the incontestable period In general, advertising would include each of the following EXCEPT: - ANSWERS Communication of administrative matters the authority of an insurance producer included in the agreement between the producer and the company is known as - ANSWERS expressed authority if you decided to start withdrawing money at the end of the Accumulation Period, your choices are each of the following EXCEPT: - ANSWERS Tax-free stream of payments at 75% Most life insurance policies - ANSWERS will pay the face amount if the insured is killed while a a passenger of a regularly scheduled commercial airliner the kind of life insurance that acquires no cash value is - ANSWERS term life Offering to give a prospect anything of value not specified in the contract to persuade the prospect to purchase the insurance is: A) rebating. B) twisting. C) allowed. D) encouraged. - ANSWERS rebating in the life insurance agency relationship, what party is the principal? - ANSWERS the insurance company an individual otherwise qualified except for having taken and passed the examination can be issued a temporary insurance producer license, which is valid for a maximum period of - ANSWERS six months a term policy in which the protection remains constant for the term of the policy is - ANSWERS level term with the "reduce premium" dividend option, dividends will be used to - ANSWERS apply to the next premium due a 20-pay life policy would indicate what? - ANSWERS the premiums are paid for 20 years the income period when a surviving spouse does not qualify for social security survivor or retirement benefits is called the - ANSWERS blackout period in noncontributory group insurance plans, what percentage of eligible employees must be covered by the plan? - ANSWERS 100% a company chartered in alabama would be considered what type of insurance company in ohio? - ANSWERS foreign which life insurance nonforfeiture option provides the same amount of death protection as the original policy, but decreases the time coverage will remain in effect? - ANSWERS extended term which of the following is a tax advantage of a qualified retirement plan? - ANSWERS all of the above Joe, whose life insurance policy has a waiver of premium rider, becomes disabled for two years, during which time the company pays over $1,500 in premiums. Joe recovers and now must - ANSWERS begin paying the premiums again as they become due A policy owner decides to pay life insurance premiums quarterly instead of annually. Select the correct statement. - ANSWERS the total outlay of annual premium dollars will be increased what are "nonforfeiture values"? - ANSWERS when a policy owner stops paying premiums on a limited pay policy, he or she is entitled to receive its face amount in cash who must meet alabamas requirements to earn 24 hours of continuing education hours every two years? - ANSWERS a producer who only sells property and casualty insurance which of the following riders could decrease the amount of the policy death benefit if utilized? - ANSWERS automatic premium loan rider according to the alabama insurance regulations, when using an illustration in the sale of a life insurance policy, an insurance producer may legally do which of the following? - ANSWERS use an illustration which has "non-guaranteed" elements the fundamental insurance concept that an insured should not profit from a loss but should be restored in whole or in part to the approximate financial condition occupied before the loss is known as the principle of - ANSWERS indemnity this rider can be attached to a permanent life insurance policy to add more coverage for a limited time - ANSWERS term rider the waiver of premium rider suspends premium payments without penalty for what situations? - ANSWERS long term disability a straight life annuity pays a periodic income - ANSWERS during the annuitants lifetime with no refund upon death the purpose for social security is - ANSWERS to help working Americans with financial problems brought on by retirement, death and disability Factors commonly used by health insurers to classify risk include all of the following except - ANSWERS education to sell a variable life insurance policy, an insurance producer must - ANSWERS all of the above all of the following provisions of an adjustable life policy may be adjusted to meet the policyholders changing needs except: - ANSWERS the insured if the premium is not paid during the grace period of a Term Policy, what will occur? - ANSWERS the policy will lapse under a disability income rider of a life insurance policy, the benefit amount paid to an insured is based on which of the following? - ANSWERS the face amount of the policy the insurance company that issues a new life policy to an insured to replace an existing policy is called the - ANSWERS replacing insurer mortality figures are usually developed by the analysis of statistics - ANSWERS relating to the deaths of millions of individuals over extended periods of time