Alabama Life Insurance Exam
Questions with Answers
100% Verified Graded A
1. Which clause allows the insured to change an existing policy to any other policy of any
type as long as the new policy has a higher premium, without any proof of insurability?
Answer> Privilege of change clause
2. The extended term nonforfeiture option provides
Answer> Paid-up term coverage equal to that of the original policy
3. With a collateral assignment of a life policy to a creditor
Answer> You assign a partial amount of the policy values to the creditor
4. An accounting measure used to determine a contract owner's interest in the separate
account of a variable annuity before payments begin is called
Answer> An accumulation unit
5. Group Insurance Market
A certificate of insurance is issued to whom?
Answer> -
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7
, Each individual covered by the group life insurance
6. The principal difference between an entity purchase and a cross purchase buy-sell
agreement is
Answer> The identity of the policy owner (the main difference is who owns the policy)
7. How long is the probationary period for group life insurance?
Answer> The proba- tionary period is usually 90 days.
8. What is the primary purpose of a section 303 redemption?
Answer> To provide liquidity to pay estate taxes and administration and funeral costs
9. What is it called when an insurance company sells part of their risk to another
insurance company?
Answer> Reinsurance (also, risk-sharing)
10. The policy conditions represent the obligation of whom?
Answer> Both the insured and the insurer
11. Does social insurance provide equal benefits to all citizens that con- tribute?
Answer> No. As income is re-distributed through the governmental system, insureds who put
less into the system such as the poor, elderly, and those with dependents get
proportionately greater benefits.
12. In determining whether disability is permanent, most companies call for a waiting
2/
7
Questions with Answers
100% Verified Graded A
1. Which clause allows the insured to change an existing policy to any other policy of any
type as long as the new policy has a higher premium, without any proof of insurability?
Answer> Privilege of change clause
2. The extended term nonforfeiture option provides
Answer> Paid-up term coverage equal to that of the original policy
3. With a collateral assignment of a life policy to a creditor
Answer> You assign a partial amount of the policy values to the creditor
4. An accounting measure used to determine a contract owner's interest in the separate
account of a variable annuity before payments begin is called
Answer> An accumulation unit
5. Group Insurance Market
A certificate of insurance is issued to whom?
Answer> -
1/
7
, Each individual covered by the group life insurance
6. The principal difference between an entity purchase and a cross purchase buy-sell
agreement is
Answer> The identity of the policy owner (the main difference is who owns the policy)
7. How long is the probationary period for group life insurance?
Answer> The proba- tionary period is usually 90 days.
8. What is the primary purpose of a section 303 redemption?
Answer> To provide liquidity to pay estate taxes and administration and funeral costs
9. What is it called when an insurance company sells part of their risk to another
insurance company?
Answer> Reinsurance (also, risk-sharing)
10. The policy conditions represent the obligation of whom?
Answer> Both the insured and the insurer
11. Does social insurance provide equal benefits to all citizens that con- tribute?
Answer> No. As income is re-distributed through the governmental system, insureds who put
less into the system such as the poor, elderly, and those with dependents get
proportionately greater benefits.
12. In determining whether disability is permanent, most companies call for a waiting
2/
7
