Alabama Health and Life Ins Exam A+ Graded study
Questions and Answers 2026 Updates
According to the Alabama Insurance Regulations, all of the following are included as
advertisements
except: - ANSWER-A birthday card sent to a policyowner by his or her agent
According to the Alabama Insurance regulations, when using an illustration in the sale of a life
insurance policy, an insurance producer may legally do what? - ANSWER-Use an illustration
which has "non-guaranteed" elements
According to the Optional Provision of a standard Health policy dealing with the issue of
"unpaid
premium", what will happen if you sustain an insured loss during the grace period? - ANSWER-
The claim will be paid after deducting the unpaid premium
According to the required provision 3, the minimum grace period for all policies, other than
monthly or weekly premium policies is: - ANSWER-31 days
A company domiciled in another state that has received permission from the insurance
commissioner to
do business in this state is called: - ANSWER-Foreign admitted company
A contract requires an offer and acceptance. What constitutes a valid offer? - ANSWER-An
application and a premium payment submitted to the company or one of its agents
Adverse selection will exist when: - ANSWER-The group for risk of insurance is more likely than
the average group experience loss
A family medical expense policy typically covers: - ANSWER-Every member of the family
A form of welfare that provides assistance to the needy is: - ANSWER-Medicaid
A health savings account: - ANSWER-Works with a high deductible plan
A level term policy is one where: - ANSWER-The premium and the protection remain constant
for the term of the policy
A life insurance company may pay a death claim for less than the face amount of a policy under
which of the following conditions? - ANSWER-All of the above
,All of the following are common characteristics of Health Maintenance Organizations EXCEPT: -
ANSWER-They pioneered Nurse Practitioners
All of the following provisions of an adjustable life policy may be adjusted to meet the
policyholders
changing needs except: - ANSWER-The face amount of the policy
All other factors being equal, which of the following policies is the least expensive as far as the
total amount of premium paid is concerned, assuming the insured lived to be 100? - ANSWER-
Single Premium
An accident policy would normally cover: - ANSWER-A bullet wound suffered when an individual
is shot by a hunter who mistook the individual for a deer
An employee covered by the employers group life plan is terminated. The employer fails to
inform the departing employee about the plans conversion option. When the former employee
is killed bungee jumping a week later: - ANSWER-The insurance company must pay the full
benefits of the policy
An immediate annuity with quarterly payments will begin making payments: - ANSWER-1
month after the annuity is purchased
An insurance producer must keep complete records pertaining to transactions under the
producer's license for at least: - ANSWER-Three years
An insurance producer who violates the Alabama long-term care insurance regulation may be
fined up to three times the amount of any commissions paid for each policy involved, or up to
_____, whichever is greater. - ANSWER-$10,000
An insured can increase the monthly benefits paid under a disability income policy by a
specified
percentage or in relation to an economic index with which of the following riders? - ANSWER-
Cost of living adjustment
nother way insurance companies are classified is on the basis of where they receive their
authority to operate, or their original charter. A company chartered in Alabama would be
considered what type of insurance company in Alabama? - ANSWER-Domestic
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: - ANSWER-The ownership clause
, A policyholder decides to pay life insurance premiums quarterly instead of annually, what is the
correct statement? - ANSWER-The total outlay of annual premium dollars will increase
A rider to a whole life policy that pays part or all of the death benefit to a terminally ill insured
before his or her death is called: - ANSWER-An accelerated benefit option
A straight life annuity pays a periodic income: - ANSWER-To two annuitants until one dies, after
which all payments cease
A term policy in which protection remains constant for the term of the policy is: - ANSWER-level
term
A term policy that allows the policyowner to switch to permanent insurance is called - ANSWER-
convertible term
A written legal agreement between two or more parties for a consideration is called a(n): -
ANSWER-contract
A 20-pay life policy would indicate what? - ANSWER-premiums are paid for 20 years
Because certain events must occur before an insurance company is obligated to pay under an
insurance contract, an insurance policy is said to be: - ANSWER-conditional
Because there is a mutual reliance of truthfulness of both parties; an insurance contract is said
to be? - ANSWER-contract of upmost good faith
Before Cranston was disabled, he was a full-time engineer earning about $70,000 annually.
Now, two years later, he is able to work part-time, earning about $25,000 annually. It is likely
that Cranston would be classified as: - ANSWER-partially disabled
Bill's Major Medical policy is reinstated on September 10. If he hit by a truck and hospital on
September 15, he will receive: - ANSWER-full benefits
Brenda names her husband as the beneficiary of the accidental death benefit in her health
policy. She
has relinquished her right to change the beneficiary designation. Brenda's husband is: -
ANSWER-an irrevocable beneficiary
Contracts must have consideration. Insurance contracts are considered to be aleatory contracts.
This means what? - ANSWER-The promise to pay claims will most likely not be equal to all
premium payments
Questions and Answers 2026 Updates
According to the Alabama Insurance Regulations, all of the following are included as
advertisements
except: - ANSWER-A birthday card sent to a policyowner by his or her agent
According to the Alabama Insurance regulations, when using an illustration in the sale of a life
insurance policy, an insurance producer may legally do what? - ANSWER-Use an illustration
which has "non-guaranteed" elements
According to the Optional Provision of a standard Health policy dealing with the issue of
"unpaid
premium", what will happen if you sustain an insured loss during the grace period? - ANSWER-
The claim will be paid after deducting the unpaid premium
According to the required provision 3, the minimum grace period for all policies, other than
monthly or weekly premium policies is: - ANSWER-31 days
A company domiciled in another state that has received permission from the insurance
commissioner to
do business in this state is called: - ANSWER-Foreign admitted company
A contract requires an offer and acceptance. What constitutes a valid offer? - ANSWER-An
application and a premium payment submitted to the company or one of its agents
Adverse selection will exist when: - ANSWER-The group for risk of insurance is more likely than
the average group experience loss
A family medical expense policy typically covers: - ANSWER-Every member of the family
A form of welfare that provides assistance to the needy is: - ANSWER-Medicaid
A health savings account: - ANSWER-Works with a high deductible plan
A level term policy is one where: - ANSWER-The premium and the protection remain constant
for the term of the policy
A life insurance company may pay a death claim for less than the face amount of a policy under
which of the following conditions? - ANSWER-All of the above
,All of the following are common characteristics of Health Maintenance Organizations EXCEPT: -
ANSWER-They pioneered Nurse Practitioners
All of the following provisions of an adjustable life policy may be adjusted to meet the
policyholders
changing needs except: - ANSWER-The face amount of the policy
All other factors being equal, which of the following policies is the least expensive as far as the
total amount of premium paid is concerned, assuming the insured lived to be 100? - ANSWER-
Single Premium
An accident policy would normally cover: - ANSWER-A bullet wound suffered when an individual
is shot by a hunter who mistook the individual for a deer
An employee covered by the employers group life plan is terminated. The employer fails to
inform the departing employee about the plans conversion option. When the former employee
is killed bungee jumping a week later: - ANSWER-The insurance company must pay the full
benefits of the policy
An immediate annuity with quarterly payments will begin making payments: - ANSWER-1
month after the annuity is purchased
An insurance producer must keep complete records pertaining to transactions under the
producer's license for at least: - ANSWER-Three years
An insurance producer who violates the Alabama long-term care insurance regulation may be
fined up to three times the amount of any commissions paid for each policy involved, or up to
_____, whichever is greater. - ANSWER-$10,000
An insured can increase the monthly benefits paid under a disability income policy by a
specified
percentage or in relation to an economic index with which of the following riders? - ANSWER-
Cost of living adjustment
nother way insurance companies are classified is on the basis of where they receive their
authority to operate, or their original charter. A company chartered in Alabama would be
considered what type of insurance company in Alabama? - ANSWER-Domestic
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: - ANSWER-The ownership clause
, A policyholder decides to pay life insurance premiums quarterly instead of annually, what is the
correct statement? - ANSWER-The total outlay of annual premium dollars will increase
A rider to a whole life policy that pays part or all of the death benefit to a terminally ill insured
before his or her death is called: - ANSWER-An accelerated benefit option
A straight life annuity pays a periodic income: - ANSWER-To two annuitants until one dies, after
which all payments cease
A term policy in which protection remains constant for the term of the policy is: - ANSWER-level
term
A term policy that allows the policyowner to switch to permanent insurance is called - ANSWER-
convertible term
A written legal agreement between two or more parties for a consideration is called a(n): -
ANSWER-contract
A 20-pay life policy would indicate what? - ANSWER-premiums are paid for 20 years
Because certain events must occur before an insurance company is obligated to pay under an
insurance contract, an insurance policy is said to be: - ANSWER-conditional
Because there is a mutual reliance of truthfulness of both parties; an insurance contract is said
to be? - ANSWER-contract of upmost good faith
Before Cranston was disabled, he was a full-time engineer earning about $70,000 annually.
Now, two years later, he is able to work part-time, earning about $25,000 annually. It is likely
that Cranston would be classified as: - ANSWER-partially disabled
Bill's Major Medical policy is reinstated on September 10. If he hit by a truck and hospital on
September 15, he will receive: - ANSWER-full benefits
Brenda names her husband as the beneficiary of the accidental death benefit in her health
policy. She
has relinquished her right to change the beneficiary designation. Brenda's husband is: -
ANSWER-an irrevocable beneficiary
Contracts must have consideration. Insurance contracts are considered to be aleatory contracts.
This means what? - ANSWER-The promise to pay claims will most likely not be equal to all
premium payments
