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Alabama Life Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
A ____________ company is one that is domiciled in another state and has Not
received a license to do business in Alabama.
Ans: Foreign Nonamitted
A 15-year mortgage
Ans: 15 year decreasing term
A collateral assignment allows a policy owner to assign:
Ans: 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?
Ans: 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?
Ans: 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?
Ans: 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?
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Ans: Survivorship life policy
A licensed Alabama insurance producer would NOT be disciplined by the
commissioner of insurance for:
Ans: Being convicted of a misdemeanor
A life insurance policy owned by a third party:
Ans: 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?
Ans: 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?
Ans: issues policies
A policy owner can collect the face amount on what type of policy?
Ans: 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?
Ans: reduced paid up coverage amounts minus $5,250
A policyowner with an automatic premium loan provision must:
Ans: 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):
Ans: Keogh Plan
A substandard or special class risk typically results in:
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Ans: Premium that is higher than for a normal risk
A waiver of premium:
Ans: waives the premiums when the policyowner becomes totally disabled
A written agreement that involves two or more parties and considerations is:
Ans: 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?
Ans: ABC Company
According to Alabama law, a minor:
Ans: 18 can beging receiving life insuance death benefits up to 3,000 a year
Alabama's annuity disclosure regulation:
Ans: 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?
Ans: 24hrs
Alabama's head of the Department of Insurance does Not have the power to:
Ans: promulgate insurance laws
Albert surrenders his Whole Life policy ten years after it was purchased. What
can he expect?
Ans: 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:
Click here for more: Preppass - Stuvia
Alabama Life Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
A ____________ company is one that is domiciled in another state and has Not
received a license to do business in Alabama.
Ans: Foreign Nonamitted
A 15-year mortgage
Ans: 15 year decreasing term
A collateral assignment allows a policy owner to assign:
Ans: 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?
Ans: 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?
Ans: 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?
Ans: 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?
,Page | 2
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Ans: Survivorship life policy
A licensed Alabama insurance producer would NOT be disciplined by the
commissioner of insurance for:
Ans: Being convicted of a misdemeanor
A life insurance policy owned by a third party:
Ans: 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?
Ans: 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?
Ans: issues policies
A policy owner can collect the face amount on what type of policy?
Ans: 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?
Ans: reduced paid up coverage amounts minus $5,250
A policyowner with an automatic premium loan provision must:
Ans: 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):
Ans: Keogh Plan
A substandard or special class risk typically results in:
, Page | 3
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Ans: Premium that is higher than for a normal risk
A waiver of premium:
Ans: waives the premiums when the policyowner becomes totally disabled
A written agreement that involves two or more parties and considerations is:
Ans: 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?
Ans: ABC Company
According to Alabama law, a minor:
Ans: 18 can beging receiving life insuance death benefits up to 3,000 a year
Alabama's annuity disclosure regulation:
Ans: 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?
Ans: 24hrs
Alabama's head of the Department of Insurance does Not have the power to:
Ans: promulgate insurance laws
Albert surrenders his Whole Life policy ten years after it was purchased. What
can he expect?
Ans: 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:
