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Alabama Life & Health Insurance Exam Test Bank 1
Newest Actual Exam With Complete Questions And
Correct Detailed Answers ||Verified Exam!!!(Verified
Answers) |Already Graded A+||Newest Exam!!!
Which statement best describes the term reserve? -
Answer-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: - Answer-An insurable interest in the life of the
insured
Controlled business may be defined as insurance sold: -
Answer-To the producer, the producer's family and friends,
and the producer's business associates
With regard to life insurance policies, loading refers to: -
Answer-Assignment of the appropriate share of the
company's operating expenses to each policy
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Which of the following statements about the average
number of people who die each year is true? - Answer-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? - Answer-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: - Answer-To have
the applicant pay the initial premium at the time of
application
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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? -
Answer-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: - Answer-Builds no cash value, pays a death benefit
only
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An indeterminate premium policy offers: - Answer-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: - Answer-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: - Answer-The Third
Year
Loan values and retirement income are: - Answer-Called
the living benefits of life insurance
With a modified premium whole life contract, premium
payments: - Answer-Are lower in the early years of the
contract
A variable life policy: - Answer-Death benefit varies to
reflect the investment results of the underlying separate
account, but never falls below a guaranteed minimum
Alabama Life & Health Insurance Exam Test Bank 1
Newest Actual Exam With Complete Questions And
Correct Detailed Answers ||Verified Exam!!!(Verified
Answers) |Already Graded A+||Newest Exam!!!
Which statement best describes the term reserve? -
Answer-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: - Answer-An insurable interest in the life of the
insured
Controlled business may be defined as insurance sold: -
Answer-To the producer, the producer's family and friends,
and the producer's business associates
With regard to life insurance policies, loading refers to: -
Answer-Assignment of the appropriate share of the
company's operating expenses to each policy
,2|Page
Which of the following statements about the average
number of people who die each year is true? - Answer-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? - Answer-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: - Answer-To have
the applicant pay the initial premium at the time of
application
,3|Page
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? -
Answer-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: - Answer-Builds no cash value, pays a death benefit
only
, 4|Page
An indeterminate premium policy offers: - Answer-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: - Answer-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: - Answer-The Third
Year
Loan values and retirement income are: - Answer-Called
the living benefits of life insurance
With a modified premium whole life contract, premium
payments: - Answer-Are lower in the early years of the
contract
A variable life policy: - Answer-Death benefit varies to
reflect the investment results of the underlying separate
account, but never falls below a guaranteed minimum
