Alabama Life and Health (Exam FX Simulation -
attempt 1) Questions and Answers
Which of the following is NOT an allowable 1035 exchange - ANSWER-A whole life
insurance policy is exchanged for a term insurance policy.
Which of the following is NOT a type of information that needs to be gathered in order to
determine the value of someone's life when using the needs approach? - ANSWER-
Estimated longevity
Which of the following would be the basic source of information used by the company in
the risk selection process? - ANSWER-Application
underwriting is a major consideration when an insured wishes to replace her current
policy for all of the following reasons EXCEPT - ANSWER-Premiums always stay the
same
What is the clause that describes the method of paying the death benefit in the event
that the insured and beneficiary are both killed in the same accident? - ANSWER-
Common Disaster Clause
The insured under a $100,000 life insurance policy with a triple indemnity rider for
accidental death was killed in a car accident. It was determined that the accident was
his fault. The triple indemnity rider in the policy specifies that the death must not be
contributed to by the insured in any manner. In this case what will the policy beneficiary
receive? - ANSWER-$100,000
How often must the Commissioner or an examiner designated by the Commissioner
examine domestic insurance companies? - ANSWER-As often as the commissioner
deems necessary, but not less frequently than once every 5 years
Which of the following provisions is mandatory for health insurance policies? -
ANSWER-Physical examination and autopsy
At what point must an outline of coverage be delivered - ANSWER-At the time of the
application or upon delivery of the policy
Attempting to determine how much insurance an individual would require based upon
their financial objectives is known as - ANSWER-Needs Approach
On its advertisement, a company claims that it has funds in its possession that are, in
fact, not available for the payment of losses or claims. What is the company guilty of? -
ANSWER-Misrepresentation
, An insured has medical insurance coverage through 2 different providers, both covering
the same expenses on an expense-incurred basis. Neither company knows in advance
that the insured has coverage through any other insurers. The insured submits a claim
to both insurers. How should the claim be handled? - ANSWER-Each insurer should
pay a proportionate share of the claim
Which is the appropriate action by the insurer if a prospective insured submitted an
incomplete application? - ANSWER-Return the application to the applicant for
completion
Disability income policies can provide coverage for a loss of income when returning to
work only part-time after recovering from total disability. What is the benefit that is
based on the insured's loss of earnings after recovery from a disability - ANSWER-
Residual disability
Jason is insured under his employers group health insurance he splits the cost of the
premiums with his employer this is an example of - ANSWER-A Contributory plan
In order to quality for conversion from a group life policy to an individual policy of the
same coverage, a person must have been insured under the group plan for how many
years? - ANSWER-5 years
Insurance policies ensure that after a loss proceeds will go to the - ANSWER-
Beneficiary
Which of the following statements is an accurate comparison between private and
government insurers? - ANSWER-Private insurers may be authorized to transact
insurance by state insurance departments.
An insured notifies the insurance company that he has become disabled. What
provision states that claims must be paid immediately upon written proof of loss? -
ANSWER-Time of payment of claims
Which of the following would an accident-only policy NOT cover? - ANSWER-Surgery to
repair a wrist damaged by tendonitis
At the time the insured purchased her life insurance policy, she added a rider that will
allow her to purchase additional insurance in the future without having to prove
insurability. This rider is called - ANSWER-
A producer licensed in Alabama must notify the Insurance Department of any change of
address in his or her residence or business address within how many days? -
ANSWER-30 days
Which of the following best describes annually renewable term insurance? - ANSWER-It
is level term insurance
attempt 1) Questions and Answers
Which of the following is NOT an allowable 1035 exchange - ANSWER-A whole life
insurance policy is exchanged for a term insurance policy.
Which of the following is NOT a type of information that needs to be gathered in order to
determine the value of someone's life when using the needs approach? - ANSWER-
Estimated longevity
Which of the following would be the basic source of information used by the company in
the risk selection process? - ANSWER-Application
underwriting is a major consideration when an insured wishes to replace her current
policy for all of the following reasons EXCEPT - ANSWER-Premiums always stay the
same
What is the clause that describes the method of paying the death benefit in the event
that the insured and beneficiary are both killed in the same accident? - ANSWER-
Common Disaster Clause
The insured under a $100,000 life insurance policy with a triple indemnity rider for
accidental death was killed in a car accident. It was determined that the accident was
his fault. The triple indemnity rider in the policy specifies that the death must not be
contributed to by the insured in any manner. In this case what will the policy beneficiary
receive? - ANSWER-$100,000
How often must the Commissioner or an examiner designated by the Commissioner
examine domestic insurance companies? - ANSWER-As often as the commissioner
deems necessary, but not less frequently than once every 5 years
Which of the following provisions is mandatory for health insurance policies? -
ANSWER-Physical examination and autopsy
At what point must an outline of coverage be delivered - ANSWER-At the time of the
application or upon delivery of the policy
Attempting to determine how much insurance an individual would require based upon
their financial objectives is known as - ANSWER-Needs Approach
On its advertisement, a company claims that it has funds in its possession that are, in
fact, not available for the payment of losses or claims. What is the company guilty of? -
ANSWER-Misrepresentation
, An insured has medical insurance coverage through 2 different providers, both covering
the same expenses on an expense-incurred basis. Neither company knows in advance
that the insured has coverage through any other insurers. The insured submits a claim
to both insurers. How should the claim be handled? - ANSWER-Each insurer should
pay a proportionate share of the claim
Which is the appropriate action by the insurer if a prospective insured submitted an
incomplete application? - ANSWER-Return the application to the applicant for
completion
Disability income policies can provide coverage for a loss of income when returning to
work only part-time after recovering from total disability. What is the benefit that is
based on the insured's loss of earnings after recovery from a disability - ANSWER-
Residual disability
Jason is insured under his employers group health insurance he splits the cost of the
premiums with his employer this is an example of - ANSWER-A Contributory plan
In order to quality for conversion from a group life policy to an individual policy of the
same coverage, a person must have been insured under the group plan for how many
years? - ANSWER-5 years
Insurance policies ensure that after a loss proceeds will go to the - ANSWER-
Beneficiary
Which of the following statements is an accurate comparison between private and
government insurers? - ANSWER-Private insurers may be authorized to transact
insurance by state insurance departments.
An insured notifies the insurance company that he has become disabled. What
provision states that claims must be paid immediately upon written proof of loss? -
ANSWER-Time of payment of claims
Which of the following would an accident-only policy NOT cover? - ANSWER-Surgery to
repair a wrist damaged by tendonitis
At the time the insured purchased her life insurance policy, she added a rider that will
allow her to purchase additional insurance in the future without having to prove
insurability. This rider is called - ANSWER-
A producer licensed in Alabama must notify the Insurance Department of any change of
address in his or her residence or business address within how many days? -
ANSWER-30 days
Which of the following best describes annually renewable term insurance? - ANSWER-It
is level term insurance
