Alabama Life and Health Exam Questions &
Answers | Updated 2026
What are the 3 types of hazards - CORRECT ANSWER -Physical, Moral, Morale
Human Life Value Approach - CORRECT ANSWER -the financial method of determining the value
of a persons life based on there future earnings
Needs Based Value Approach - CORRECT ANSWER -A method of determining a person's
financial value based on the amount of money needed for current and future expenses. For
Example: final expenses, spouse's income, mortgage, college education, and retirement.
Commercial Insurers - CORRECT ANSWER -Private, non-government insurers; these are often
the insurance options available through employers.
Stock Companies - CORRECT ANSWER -Owned by the stockholders who provide the capital
necessary to establish and operate the insurance company and who share in any profits or losses.
Mutual Companies - CORRECT ANSWER -Insurance organizations that have no capital stock, but
are owned by the policyholders.
Fraternal Benefit Societies - CORRECT ANSWER -Must be nonprofit, have a lodge system, and
offer insurance to its members only
Risk Retention Group - CORRECT ANSWER -A liability insurance company owned by its
members, which are exposed to similar liability risks by being in the same business or industry.
Speculative Risk - CORRECT ANSWER -Chance of loss or gain
Answers | Updated 2026
What are the 3 types of hazards - CORRECT ANSWER -Physical, Moral, Morale
Human Life Value Approach - CORRECT ANSWER -the financial method of determining the value
of a persons life based on there future earnings
Needs Based Value Approach - CORRECT ANSWER -A method of determining a person's
financial value based on the amount of money needed for current and future expenses. For
Example: final expenses, spouse's income, mortgage, college education, and retirement.
Commercial Insurers - CORRECT ANSWER -Private, non-government insurers; these are often
the insurance options available through employers.
Stock Companies - CORRECT ANSWER -Owned by the stockholders who provide the capital
necessary to establish and operate the insurance company and who share in any profits or losses.
Mutual Companies - CORRECT ANSWER -Insurance organizations that have no capital stock, but
are owned by the policyholders.
Fraternal Benefit Societies - CORRECT ANSWER -Must be nonprofit, have a lodge system, and
offer insurance to its members only
Risk Retention Group - CORRECT ANSWER -A liability insurance company owned by its
members, which are exposed to similar liability risks by being in the same business or industry.
Speculative Risk - CORRECT ANSWER -Chance of loss or gain
