Alabama Life Insurance Exam Questions And 100% Correct
Answers |Graded A+ (2026/2027)
In a whole life insurance policy when is the cash value at its greatest? - Answer -At the end of
the policy term.
In a whole life insurance policy when is the insurance protection at its greatest? - Answer -The
insurance protection is greatest at the start of a policy. At the start, a whole life policy is all
insurance protection. The policy begins to build cash value, the cash value eventually equals the
death benefit when the policy endows. Therefore, the cash value is its greatest at the end of the
policy term.
An insured allows a permanent policy to lapse: Unless otherwise instructed, what will the
insurance company do? - Answer -The insurance company will automatically institute the
extended term option
What type of annuity guarantees to pay total income at least equal to the purchase price of the
contract? - Answer -A refund life annuity
What does a split-dollar plan do? - Answer -A split-dollar plan divides the cost of additional
insurance for an employee between that employee and the company. If death occurs while
employed, the death benefit is shared between the employer and the employee's beneficiary
A Taft-Hartley trust is established by one or more: - Answer -Labor unions or associations
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, What is the minimum requirement for currently insured status under the Social Security
system? - Answer -At least 6 credits earned in the 13 calendar quarters prior to death, disability,
or is entitled to retirement benefits
Can an annuity contract be exchanged for a life contract under section 1035 policy exchange? -
Answer -No. An annuity contract can only be exchanged for another annuity contract under IRC
section 1035 exchange rules.
If an annuitant with drawls funds from their annuity prior to age 59 1/2 what is the tax
consequence? - Answer -Tax and 10% penalty tax on the withdrawal that represents earnings
What qualifying event could initiate the accelerated benefits provision or rider of a life policy? -
Answer -A condition that is terminal (projected to die within one or two years)
What are non-financial regulatory activities known as - Answer -Market conduct
How long must an applicant who fails two examinations for the same line of authority wait to
take another examination for that line of authority? - Answer -Three months
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Answers |Graded A+ (2026/2027)
In a whole life insurance policy when is the cash value at its greatest? - Answer -At the end of
the policy term.
In a whole life insurance policy when is the insurance protection at its greatest? - Answer -The
insurance protection is greatest at the start of a policy. At the start, a whole life policy is all
insurance protection. The policy begins to build cash value, the cash value eventually equals the
death benefit when the policy endows. Therefore, the cash value is its greatest at the end of the
policy term.
An insured allows a permanent policy to lapse: Unless otherwise instructed, what will the
insurance company do? - Answer -The insurance company will automatically institute the
extended term option
What type of annuity guarantees to pay total income at least equal to the purchase price of the
contract? - Answer -A refund life annuity
What does a split-dollar plan do? - Answer -A split-dollar plan divides the cost of additional
insurance for an employee between that employee and the company. If death occurs while
employed, the death benefit is shared between the employer and the employee's beneficiary
A Taft-Hartley trust is established by one or more: - Answer -Labor unions or associations
1|Page
, What is the minimum requirement for currently insured status under the Social Security
system? - Answer -At least 6 credits earned in the 13 calendar quarters prior to death, disability,
or is entitled to retirement benefits
Can an annuity contract be exchanged for a life contract under section 1035 policy exchange? -
Answer -No. An annuity contract can only be exchanged for another annuity contract under IRC
section 1035 exchange rules.
If an annuitant with drawls funds from their annuity prior to age 59 1/2 what is the tax
consequence? - Answer -Tax and 10% penalty tax on the withdrawal that represents earnings
What qualifying event could initiate the accelerated benefits provision or rider of a life policy? -
Answer -A condition that is terminal (projected to die within one or two years)
What are non-financial regulatory activities known as - Answer -Market conduct
How long must an applicant who fails two examinations for the same line of authority wait to
take another examination for that line of authority? - Answer -Three months
2|Page
