XCEL ALABAMA LIFE AND HEALTH
INSURANCE EXAM 2026 COMPLETE
PRACTICE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED
EXPLANATIONS ALABAMA LIFE AND
HEALTH INSURANCE LICENSING EXAM
STUDY GUIDE GRADE A+ 2026 EDITION
Life insurance that allows you to vary your coverage as your needs change
without requiring evidence of insurability - CORRECT ANSWER -Adjustable
life policy
Universal life - CORRECT ANSWER -is a variation of whole life insurance,
characterized by considerable flexibility
In what life insurance policy do flexible gains go toward cash value? -
CORRECT ANSWER -Universal life
The life insurance that allows its policy owners to determine the amount
and frequency of premium payments which will adjust the policy face
amount? - CORRECT ANSWER -Universal life
,Basic characteristics of a______________ are flexible premiums,
flexible benefits, no minimum death benefit, and cash value with drawls. -
CORRECT ANSWER -Universal life policy
Target Premium - CORRECT ANSWER -A suggested premium in universal
life policies. It does not guarantee there will be adequate funds to maintain
the policy at any time, especially to life. It may give an indication of what
will be needed to maintain the policy.
Equity Index Universal life insurance - CORRECT ANSWER -A permanent
life insurance policy that allows policy holders to tie accumulation values to
stock market index,
Indexed universal life policies typically contain
________________________________ component along with the
indexed account option - CORRECT ANSWER -A minimum guaranteed fixed
interest rate
Modified Endowment Contracts - CORRECT ANSWER -A policy that is
overfunded according to IRS tables.
MEC's will be taxed as investment if - CORRECT ANSWER -They are
withdrawn prior to age 59 1/2, there is a 10% penalty.
Taxation only occurs when cash is distributed.
Variable whole life insurance - CORRECT ANSWER -was created to help
offset the effects on inflation on the death benefit.
,With __________________, the policies values are invested in the
insurer's SEPARATE accounts which house common stock, bond, money
market, and other securities investment options. - CORRECT ANSWER -
Variable whole life insurance
The basic characteristics of __________________ are fixed benefits, a
guaranteed death benefit which fluctuates over the minimum, and cash
values which fluctuate and are NOT guaranteed. - CORRECT ANSWER -
Variable whole life insurance
Variable universal whole life - CORRECT ANSWER -builds cash value,
combines all characteristics of a universal life and variable life
Evidence of insurability can be required for an individual covered by a
universal life policy when the death benefit is ________________ -
CORRECT ANSWER -Increased
The insurer's basic promise to pay specified benefits to a designated person
in the event of a covered loss - CORRECT ANSWER -Insuring Clause
The _____________ is the part of the health insurance policy that states
the kind of benefits provided and the circumstances under which they will
be paid. - CORRECT ANSWER -Insuring Clause
The ________________ states a policy owner must pay a premium in
exchange for the insurer's promise to pay benefits. - CORRECT ANSWER -
Consideration Clause
, If an insured died during the grace period of a life insurance policy before
paying the the required annual premium, the beneficiary will receive? -
CORRECT ANSWER -The face amount of the policy minus any required
premiums
Reinstatement - CORRECT ANSWER -permits the policy owner to re instate
a policy that has lapsed as long as the policy owner can provide proof
insurability and pays back all premiums, outstanding loans, and interest.
Most states allow reinstatement up to _____ after policy has lapsed. -
CORRECT ANSWER -3 years
To reinstate any policy, you need: - CORRECT ANSWER -A reinstatement
application, statement of good health, and all back premiums.
The clause in a life insurance contract prohibits the insurer from
questioning the validity of the contract after a certain period of time has
lapsed is ? - CORRECT ANSWER -Incontestable Clause
Allows the insurer to adjust the policy benefits if the insured's age or sex is
misstated on the policy application? - CORRECT ANSWER -Misstatement of
age or sex
Policies that have cash value also have policy loan and withdrawal
provisions. These policies must begin to build cash value after a certain
number of years. - CORRECT ANSWER -Policy Loan Provision
INSURANCE EXAM 2026 COMPLETE
PRACTICE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED
EXPLANATIONS ALABAMA LIFE AND
HEALTH INSURANCE LICENSING EXAM
STUDY GUIDE GRADE A+ 2026 EDITION
Life insurance that allows you to vary your coverage as your needs change
without requiring evidence of insurability - CORRECT ANSWER -Adjustable
life policy
Universal life - CORRECT ANSWER -is a variation of whole life insurance,
characterized by considerable flexibility
In what life insurance policy do flexible gains go toward cash value? -
CORRECT ANSWER -Universal life
The life insurance that allows its policy owners to determine the amount
and frequency of premium payments which will adjust the policy face
amount? - CORRECT ANSWER -Universal life
,Basic characteristics of a______________ are flexible premiums,
flexible benefits, no minimum death benefit, and cash value with drawls. -
CORRECT ANSWER -Universal life policy
Target Premium - CORRECT ANSWER -A suggested premium in universal
life policies. It does not guarantee there will be adequate funds to maintain
the policy at any time, especially to life. It may give an indication of what
will be needed to maintain the policy.
Equity Index Universal life insurance - CORRECT ANSWER -A permanent
life insurance policy that allows policy holders to tie accumulation values to
stock market index,
Indexed universal life policies typically contain
________________________________ component along with the
indexed account option - CORRECT ANSWER -A minimum guaranteed fixed
interest rate
Modified Endowment Contracts - CORRECT ANSWER -A policy that is
overfunded according to IRS tables.
MEC's will be taxed as investment if - CORRECT ANSWER -They are
withdrawn prior to age 59 1/2, there is a 10% penalty.
Taxation only occurs when cash is distributed.
Variable whole life insurance - CORRECT ANSWER -was created to help
offset the effects on inflation on the death benefit.
,With __________________, the policies values are invested in the
insurer's SEPARATE accounts which house common stock, bond, money
market, and other securities investment options. - CORRECT ANSWER -
Variable whole life insurance
The basic characteristics of __________________ are fixed benefits, a
guaranteed death benefit which fluctuates over the minimum, and cash
values which fluctuate and are NOT guaranteed. - CORRECT ANSWER -
Variable whole life insurance
Variable universal whole life - CORRECT ANSWER -builds cash value,
combines all characteristics of a universal life and variable life
Evidence of insurability can be required for an individual covered by a
universal life policy when the death benefit is ________________ -
CORRECT ANSWER -Increased
The insurer's basic promise to pay specified benefits to a designated person
in the event of a covered loss - CORRECT ANSWER -Insuring Clause
The _____________ is the part of the health insurance policy that states
the kind of benefits provided and the circumstances under which they will
be paid. - CORRECT ANSWER -Insuring Clause
The ________________ states a policy owner must pay a premium in
exchange for the insurer's promise to pay benefits. - CORRECT ANSWER -
Consideration Clause
, If an insured died during the grace period of a life insurance policy before
paying the the required annual premium, the beneficiary will receive? -
CORRECT ANSWER -The face amount of the policy minus any required
premiums
Reinstatement - CORRECT ANSWER -permits the policy owner to re instate
a policy that has lapsed as long as the policy owner can provide proof
insurability and pays back all premiums, outstanding loans, and interest.
Most states allow reinstatement up to _____ after policy has lapsed. -
CORRECT ANSWER -3 years
To reinstate any policy, you need: - CORRECT ANSWER -A reinstatement
application, statement of good health, and all back premiums.
The clause in a life insurance contract prohibits the insurer from
questioning the validity of the contract after a certain period of time has
lapsed is ? - CORRECT ANSWER -Incontestable Clause
Allows the insurer to adjust the policy benefits if the insured's age or sex is
misstated on the policy application? - CORRECT ANSWER -Misstatement of
age or sex
Policies that have cash value also have policy loan and withdrawal
provisions. These policies must begin to build cash value after a certain
number of years. - CORRECT ANSWER -Policy Loan Provision
