Final Exam - Alabama Life and Health
With Actual Answers
John has recently died and it was discovered that he was actually ten years older than
what was listed on his life insurance policy. What will the insurer pay his beneficiary? -
CORRECT ANSWER-The amount of insurance that his premiums would have
purchased at his correct age
Which of the following is considered the "automatic" Nonforfeiture Option that most
insurers will use? - CORRECT ANSWER-Extended term
Susan owns a life insurance policy that has accumulated $10,000 in cash value in which
she can no longer pay its premiums. If she elects to take the extended term option,
which of these actions would she take? - CORRECT ANSWER-Uses the $10,000 to
buy term insurance of the same face amount as her original policy
What kind of risk are amateur pilots normally classified as? - CORRECT ANSWER-
Special class risks
The monthly benefit of an Annuity Certain is determined by: - CORRECT ANSWER-The
annuitant's payout period selection
Shawn has a waiver of premium rider on his life insurance policy. He becomes disabled
for 3 years, during which the insurance company waives $3,000 in premiums. When
Shawn recovers, he must: - CORRECT ANSWER-Resume paying premiums again
Alabama's annuity disclosure regulation: - CORRECT ANSWER-Requires the delivery
of a buyer's guide and a disclosure document to an annuity's applicant
,A policyowner can collect the face amount on what type of policy? - CORRECT
ANSWER-Endowment policy
On November 10, Ozzie's Major Medical policy is reinstated. He is later injured in an
automobile accident on November 13 and immediately hospitalized. Ozzie is eligible for:
- CORRECT ANSWER-Full benefits
In Alabama, when are newborns covered under a health policy? - CORRECT
ANSWER-The moment of birth
Alabama's continuing education law states that an insurance producer must report how
many classroom hours every two years? - CORRECT ANSWER-24
Mortgage protection is typically covered with: - CORRECT ANSWER-Decreasing term
A departing employee has decided to continue his group coverage through COBRA.
Who pays the premium in this situation? - CORRECT ANSWER-Employee
Kim has purchased a straight life annuity. What will this type of annuity provide her
with? - CORRECT ANSWER-A periodic income to the annuitant for life
According to Required Provision 4, when an insured applies for reinstatement of a
health policy and receives a conditional receipt, how long does the insurer have to
approve or deny? - CORRECT ANSWER-Within 45 days of the date of application
An example of a life insurance beneficiary is a(n): - CORRECT ANSWER-Child,
spouse, or company of the insured.
A group disability income policy will: - CORRECT ANSWER-Usually pay short-term
benefits of less than 2 years in duration
, A life insurance policyowner has just exercised the policy's reduced paid-up option.
Which of these statements is true? - CORRECT ANSWER-The amount of coverage will
be much less than the original coverage
The Long Term Care Partnership program is designed to allow seniors to: - CORRECT
ANSWER-Shelter assets from the spend-down requirement of Medicaid
Rodney applies for an insurance policy and pays the first premium. The receipt given for
the first premium is called a(n): - CORRECT ANSWER-Conditional receipt
Michael has a universal life policy with an increasing death benefit option. With an initial
face amount of $50,000 and a value of $5,000, what would the actual death benefit be?
- CORRECT ANSWER-$55,000
An insured should be restored to the approximate financial condition occupied before
the loss occurred. This is called the: - CORRECT ANSWER-Principle of indemnity
What percentage of eligible employees must be covered by noncontributory group
insurance plans? - CORRECT ANSWER-100%
A written agreement that involves two or more parties and consideration is: - CORRECT
ANSWER-A contract
Medicare supplement policies marketed in Alabama: - CORRECT ANSWER-Cannot
offer benefits that simply duplicate Medicare benefits, cannot be more restrictive than
Medicare, and cannot treat a loss due to injury differently than a loss due to illness
A disability policy that must be renewed, cannot be cancelled until age 65, and may not
have an increase in premium for any reason is called a(n): - CORRECT ANSWER-
Noncancelable policy
With Actual Answers
John has recently died and it was discovered that he was actually ten years older than
what was listed on his life insurance policy. What will the insurer pay his beneficiary? -
CORRECT ANSWER-The amount of insurance that his premiums would have
purchased at his correct age
Which of the following is considered the "automatic" Nonforfeiture Option that most
insurers will use? - CORRECT ANSWER-Extended term
Susan owns a life insurance policy that has accumulated $10,000 in cash value in which
she can no longer pay its premiums. If she elects to take the extended term option,
which of these actions would she take? - CORRECT ANSWER-Uses the $10,000 to
buy term insurance of the same face amount as her original policy
What kind of risk are amateur pilots normally classified as? - CORRECT ANSWER-
Special class risks
The monthly benefit of an Annuity Certain is determined by: - CORRECT ANSWER-The
annuitant's payout period selection
Shawn has a waiver of premium rider on his life insurance policy. He becomes disabled
for 3 years, during which the insurance company waives $3,000 in premiums. When
Shawn recovers, he must: - CORRECT ANSWER-Resume paying premiums again
Alabama's annuity disclosure regulation: - CORRECT ANSWER-Requires the delivery
of a buyer's guide and a disclosure document to an annuity's applicant
,A policyowner can collect the face amount on what type of policy? - CORRECT
ANSWER-Endowment policy
On November 10, Ozzie's Major Medical policy is reinstated. He is later injured in an
automobile accident on November 13 and immediately hospitalized. Ozzie is eligible for:
- CORRECT ANSWER-Full benefits
In Alabama, when are newborns covered under a health policy? - CORRECT
ANSWER-The moment of birth
Alabama's continuing education law states that an insurance producer must report how
many classroom hours every two years? - CORRECT ANSWER-24
Mortgage protection is typically covered with: - CORRECT ANSWER-Decreasing term
A departing employee has decided to continue his group coverage through COBRA.
Who pays the premium in this situation? - CORRECT ANSWER-Employee
Kim has purchased a straight life annuity. What will this type of annuity provide her
with? - CORRECT ANSWER-A periodic income to the annuitant for life
According to Required Provision 4, when an insured applies for reinstatement of a
health policy and receives a conditional receipt, how long does the insurer have to
approve or deny? - CORRECT ANSWER-Within 45 days of the date of application
An example of a life insurance beneficiary is a(n): - CORRECT ANSWER-Child,
spouse, or company of the insured.
A group disability income policy will: - CORRECT ANSWER-Usually pay short-term
benefits of less than 2 years in duration
, A life insurance policyowner has just exercised the policy's reduced paid-up option.
Which of these statements is true? - CORRECT ANSWER-The amount of coverage will
be much less than the original coverage
The Long Term Care Partnership program is designed to allow seniors to: - CORRECT
ANSWER-Shelter assets from the spend-down requirement of Medicaid
Rodney applies for an insurance policy and pays the first premium. The receipt given for
the first premium is called a(n): - CORRECT ANSWER-Conditional receipt
Michael has a universal life policy with an increasing death benefit option. With an initial
face amount of $50,000 and a value of $5,000, what would the actual death benefit be?
- CORRECT ANSWER-$55,000
An insured should be restored to the approximate financial condition occupied before
the loss occurred. This is called the: - CORRECT ANSWER-Principle of indemnity
What percentage of eligible employees must be covered by noncontributory group
insurance plans? - CORRECT ANSWER-100%
A written agreement that involves two or more parties and consideration is: - CORRECT
ANSWER-A contract
Medicare supplement policies marketed in Alabama: - CORRECT ANSWER-Cannot
offer benefits that simply duplicate Medicare benefits, cannot be more restrictive than
Medicare, and cannot treat a loss due to injury differently than a loss due to illness
A disability policy that must be renewed, cannot be cancelled until age 65, and may not
have an increase in premium for any reason is called a(n): - CORRECT ANSWER-
Noncancelable policy
