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Alabama Life & Health Insurance Exam
Questions with Detailed Verified Answers
(100% Correct Answers) /Already Graded
A+
Term Insurance
Ans: Temporary protection because it only provides coverage for a specific period of time.
Also known as pure life insurance
Term insurance provides what is known as _________________
Ans: pure death protection
Term insurance provides the greatest amount of coverage for the
_______________
Ans: lowest premium
Term insurance has no ____________
Ans: cash value
Three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term:
Ans: 1. Level
2. Increasing
3. Decreasing
Level term insurance
Ans: Most common type of temporary protection purchased. The word level refers to the
death benefit that does not change throughout the life of the policy.
Level in level term insurance refers to the ________________, which does NOT
change
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Ans: death benefit
Annually Renewable Term (ART)
Ans: the purest form of term insurance. The death benefit remains level, and the policy may
be guaranteed to be renewable each year without proof of insurability, but the premium
increases annually according to the attained age, as the probability of death increases.
Level Premium Term
Ans: provides a level death benefit and a level premium during the policy term.
Increasing term
Ans: features level premiums and a death benefit that increases each year over the duration
of the policy term.
Decreasing Term
Ans: policies feature a level premium and a death benefit that decreases each year over the
duration of the policy term. Nonrenewable
Renewable Provision
Ans: allows the policyowner the right to renew the coverage at the expiration date without
evidence of insurability
Convertible Provision
Ans: provides the policyowner with the right to convert the policy to a permanent insurance
policy without evidence of insurability
Re-entry Option
Ans: An option that gives the insured the opportunity for a discounted premium rate with
proof of insurability
Permanent Life Insurance
Ans: A general term used to refer to various forms of life insurance policies that build cash
value and remain in effect for the entire life of the insured as long as the premium is paid.
Most common type of permanent insurance:
Click here for more: Preppass - Stuvia
Alabama Life & Health Insurance Exam
Questions with Detailed Verified Answers
(100% Correct Answers) /Already Graded
A+
Term Insurance
Ans: Temporary protection because it only provides coverage for a specific period of time.
Also known as pure life insurance
Term insurance provides what is known as _________________
Ans: pure death protection
Term insurance provides the greatest amount of coverage for the
_______________
Ans: lowest premium
Term insurance has no ____________
Ans: cash value
Three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term:
Ans: 1. Level
2. Increasing
3. Decreasing
Level term insurance
Ans: Most common type of temporary protection purchased. The word level refers to the
death benefit that does not change throughout the life of the policy.
Level in level term insurance refers to the ________________, which does NOT
change
, Page | 2
Click here for more: Preppass - Stuvia
Ans: death benefit
Annually Renewable Term (ART)
Ans: the purest form of term insurance. The death benefit remains level, and the policy may
be guaranteed to be renewable each year without proof of insurability, but the premium
increases annually according to the attained age, as the probability of death increases.
Level Premium Term
Ans: provides a level death benefit and a level premium during the policy term.
Increasing term
Ans: features level premiums and a death benefit that increases each year over the duration
of the policy term.
Decreasing Term
Ans: policies feature a level premium and a death benefit that decreases each year over the
duration of the policy term. Nonrenewable
Renewable Provision
Ans: allows the policyowner the right to renew the coverage at the expiration date without
evidence of insurability
Convertible Provision
Ans: provides the policyowner with the right to convert the policy to a permanent insurance
policy without evidence of insurability
Re-entry Option
Ans: An option that gives the insured the opportunity for a discounted premium rate with
proof of insurability
Permanent Life Insurance
Ans: A general term used to refer to various forms of life insurance policies that build cash
value and remain in effect for the entire life of the insured as long as the premium is paid.
Most common type of permanent insurance:
