Alabama Life Insurance Exam questions with answers 2024

A ____________ company is one that is domiciled in another state and has Not received a license to do business in Alabama. - ANSWERS Foreign Nonamitted A 15-year mortgage - ANSWERS 15 year decreasing term A collateral assignment allows a policy owner to assign: - ANSWERS A portion of the policy provides to the assignee A cross purchase buy-see agreement is in place of ABC Company four founding partners. What would this agreement require if the agreement is funded with individual life insurance? - ANSWERS Each partner must own a policy on the others partners A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - ANSWERS Payor Provision A husband and wife are receiving annuity payments. When the husband dies, the wife still receives annuity payments for life. What kind of annuity is this? - ANSWERS Joint and survivorship life annuity A husband and wife purchase a life insurance policy that covers both of them. The policy paid nothing when the husband died. Two years later, the wife dies, and a death benefit is paid to the beneficiary. What type of policy is this? - ANSWERS Survivorship life policy A licensed Alabama insurance producer would NOT be disciplined by the commissioner of insurance for: - ANSWERS Being convicted of a misdemeanor A life insurance policy owned by a third party: - ANSWERS Is used largely in an estate planning as well as business situations A life insurance policyowner has just exercised the policy's reduced paid-up option. Which of these statements are true? - ANSWERS The amount of coverage will be less than the original coverage A life insurance producer's agency agreement normally authorizes the licensee to do all of the following, except? - ANSWERS issues policies A policy owner can collect the face amount on what type of policy? - ANSWERS Endowment policy A policyowner with a $100,000 whole life policy has a cash value of $10,000. There is an outstanding loan of $5,000 and a past-due premium of $250. If the policy owner chooses the reduced paid-up option and then later dies, what will the beneficiary receive? - ANSWERS reduced paid up coverage amounts minus $5,250 A policyowner with an automatic premium loan provision must: - ANSWERS Pay back the loan amount to keep the policy's cash value at its minimum A retirement plan intended for a sole proprietor and his/her employees would be a(n): - ANSWERS Keogh Plan A substandard or special class risk typically results in: - ANSWERS Premium that is higher than for a normal risk A waiver of premium: - ANSWERS waives the premiums when the policyowner becomes totally disabled A written agreement that involves two or more parties and considerations is: - ANSWERS A contract ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC Company and begins works for XYZ Company five years later. If this person were to die and the policy is still in force and unchanged, where would the death proceeds be directed? - ANSWERS ABC Company According to Alabama law, a minor: - ANSWERS 18 can beging receiving life insuance death benefits up to 3,000 a year Alabama's annuity disclosure regulation: - ANSWERS requires the delivery of a buyers guide and a discloser document to an annuity applicant Alabama's continuing education law states that an insurance producer must report how many classroom hours every two years? - ANSWERS 24hrs Alabama's head of the Department of Insurance does Not have the power to: - ANSWERS promulgate insurance laws Albert surrenders his Whole Life policy ten years after it was purchased. What can he expect? - ANSWERS to pay taxes on the cash value in excess of premium paid All of the following statements are true regarding a policy's Grace period, Except: - ANSWERS past due premiums are waved All of these are correct concerning group life insurance except: - ANSWERS Whole life insurance is the form of insurance typically used in group life insurance - All of these statements concerning Key Employee Life policy is true except: - ANSWERS key employee names the beneficiary An accidental death rider claim is usually paid if the insured: - ANSWERS dies within 90 days of the accident An employee of 20 years recently retired at age 59 1/2. This employee group life contract can be: - ANSWERS Converted to an individual permit policy at an individual rate An example of a life insurance beneficiary is a(n): - ANSWERS All of these An immediate annuity consists of a: - ANSWERS single premium An insurance company licensed to do business in Alabama, but incorporated in another state is called: - ANSWERS foreign company An insurance company licensed to solicit insurance in a specific state is called: - ANSWERS an admitted company An insurance company may cancel a life insurance policy under which of the following conditions? - ANSWERS that outstanding policy loan exceeds the cash value of the policy An insurance company that cedes a portion of an insured's coverage to another insurer is said to be engaged in: - ANSWERS Reinsurance An insurance contract is said to be a(n) _______ because there is a mutual reliance of truthfulness on both parties. - ANSWERS Contract of upmost good faith An insurance Premium can be defined as: - ANSWERS Money paid to an insurance company for benefits provided in the policy An insurance producer must have which of the following in order to sell variable life insurance policies? - ANSWERS All of these An insurance producer represents the: - ANSWERS the insurance company An insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in: - ANSWERS Rebating An insured should be restored to the approximate financial condition occupied before the loss occurred. This is called the: - ANSWERS Aleatory contract Ann is an employee covered by a Group Life plan through her employer. When Ann is terminated, her employer fails to inform her about the plan's conversion option two