Alabama life insurance test questions with correct answers 2024

The best definition of risk? - ANSWERS Chance of loss. Producer appointed by one company on an exclusive basis is a. - ANSWERS Captive agent Predicting the likelihood of sickness or accident occurring among groups of people according to age, occupation or some other factor. - ANSWERS Morbidity tables Specialized property or liability coverage provided by a nonadmitted insurer is called: - ANSWERS Excess and surplus lines The larger the number of risks combined into one group, the less uncertainty there will be as to the amount of loss that will be incurred. - ANSWERS The law of large numbers The specific cause of a loss: - ANSWERS Peril Represents several insurance companies and owns their book of buisness. - ANSWERS Independent agent Self insurance is what type or risk management technique? - ANSWERS Retention A risk that involves both chance of loss or gain: - ANSWERS Speculative risk A person or business may use this method to transfer risk. - ANSWERS Hold-harmless agreement and insurance What characteristic of an insurable risk uses the law of large numbers? - ANSWERS Predictable loss Mathematicians who study and compile statistical data for insurance companies are called: - ANSWERS Actuaries An individuals careless actions or attitudes may be a Hazzard if a loss occurs as a result of them describes whatever type of hazard? - ANSWERS Morale Insurance company that would typically issue non-par policies? - ANSWERS Stock company An insurance company owned by its policyholders would be what type of company? - ANSWERS Mutual company A society that provides a meeting facility and administrative service to its members to underwrite and accept risks is called: - ANSWERS Lloyd's associatiom Reinsurance is negotiated separately for each insurance contract that is insured is called: - ANSWERS Facultative reinsurance. To waive an insureds premium, most companies require an individuals disability to be: - ANSWERS total and permanent If one of the named beneficiaries has died, and the deceased beneficiary's heirs receive a portion of the proceeds of the policy, this is called a: - ANSWERS *per stripes beneficiary designation . Which of the following is the most accurate description of the accumulation at interest life insurance dividend option? - ANSWERS *Dividends accumulate with interest paid on them at a rate specified in the contract. In which of the following circumstances would the accidental death benefit not apply? - ANSWERS *Death caused by riot or insurrection What is the name of the plan that caps the amount of group life insurance coverage at $50,000 to provide life insurance benefits on a tax favored basis? - ANSWERS Group carve out plans An insurance marketing method that does not involve producers is: - ANSWERS Direct response marketing Separate accounts are used with which policy? - ANSWERS Variable whole life A variable whole life policy offers: - ANSWERS A guaranteed minimum death benifit An adjustable life policy allows all of the following: - ANSWERS *Change the period of protection *Increase or decrease the face amount *Raise or lower the premium amount Which policy can be changed from a non-accumulating cash value policy to a policy that does accumulate cash value? - ANSWERS A convertible term policy What type of policy pays nothing when the first insured dies, but later pays a death benefit when the second insured dies? - ANSWERS Survivorship life policy Insurers may limit the period of time that an insured can exercise the conversion privilege on a convertible term policy. This conversion period: - ANSWERS Varies among the different insurance companies