ALABAMA HEALTH INSURANCE EXAM
CORRECT QUESTIONS & ANSWERS
Pure - ANSWER Insurance is defined as the transfer of ______________ risk to the
insurance company in consideration for a premium.
Pure Risk - ANSWER The chance of loss without any chance of gain is called
___________
Speculative Risk - ANSWER has the possibility for gain or loss and is not insurable.
Risk - ANSWER is defined as the chance of loss.
Exposure - ANSWER A condition that could result in a loss is known as
Hazard - ANSWER is something that increases the chance of loss.
Physical Hazard - ANSWER The presence of a _____________ increases the chance
of a loss occurring.
Peril - ANSWER defined as a cause of loss, such as fire.
Calculable - ANSWER To be insurable, losses must be ___________.
Law of Large Numbers - ANSWER allows insurers to predict claims more accurately.
Groups of people, not individuals - ANSWER The law of large numbers applies to
___________.
the more accurate the predictions are - ANSWER The law of large numbers applies to
groups of people, not to individuals. The more people in the group ______________.
reinsurance , catastrophic loss - ANSWER Most insurers buy_____________ to protect
themselves in the event of a_______________.
Insurance laws - ANSWER are not required to be uniform from one state to another.
Stock insurer may pay - ANSWER dividends to its shareholders (stockholders), but they
may not be guaranteed.
No - ANSWER Stock insurers pay the dividends to its shareholders (stockholders), are
they guaranteed.
attorney-in-fact - ANSWER A reciprocal insurance company is managed by an
,Reciprocal Insurers - ANSWER An unincorporated association of individuals who insure
each other is known as a
social needs, such as flood insurance and workers compensation - ANSWER The
government offers insurance primarily based upon
preventing fraud - ANSWER The government offers insurance primarily based upon
social needs and not
Foreign - ANSWER company has their home office in another state
Alien - ANSWER company has their home office in another country
Are made by the business and are not tax-deductible - ANSWER Key Person disability
income policy, premium payments
insured or the insured's estate - ANSWER Claims other than death benefits are to be
paid to the_____________, unless otherwise assigned by the insured.
unilateral - ANSWER An insurance contract is___________ in that only one of the
parties to the contract is legally bound to do anything.
If forms are not furnished, written proof of the occurrence, nature of the loss, and extent
of loss must be submitted to the - ANSWER insurer
20% tax - ANSWER If a distribution is made for a reason other than to pay for qualified
medical expenses, the amount withdrawn will be subject to an income tax and an
additional
extended nursing home care - ANSWER Medicare supplement policies (Medigap) do
not cover the cost of
Medigap plans are designed - ANSWER to fill the gap in coverage attributable to
Medicare's deductibles, copayment requirements, and benefit periods. These plans are
issued by private insurance companies.
If a person is still employed at the age of 65, he or she may choose - ANSWER to either
continue group coverage and defer Medicare until retirement, or switch to Medicare.
The purpose of a license is to primarily write - ANSWER non-controlled business
Defamation - ANSWER When producer was reviewing a potential customers coverage
written by another company the producer made several remarks that were maliciously
critical of that other insurer. The producer count be found guilty of (oral or written
remarks)
, Low maximum limits - ANSWER What policy characteristics of a Major Medical
Expense don't EXCEPT
High Maximum Limits - ANSWER Characteristics of a Major Medical Expense
Blanket Coverage - ANSWER Characteristics of a Major Medical Expense
Coinsurance - ANSWER Characteristics of a Major Medical Expense
Deductible - ANSWER Characteristics of a Major Medical Expense
Lower than individual policies, but higher than group policies - ANSWER In franchise
insurance, premiums are usually
Physical examination and autopsy - ANSWER Mandatory provision in individual health
insurance policies stating that the insurer, at its own expense, has the right and
opportunity and is
Workers Compensation - ANSWER state programs that benefits are payable when
workers suffer work-related injury regardless of fault or negligence
Only if its part of treatment for covered illness or injury - ANSWER When does Medicare
cover nursing home care?
The lending institution - ANSWER Who is the beneficiary in a credit health policy?
An insured has medical insurance coverage through 2 different provider both covering
same expense . Neither company know in advance that the insured has coverage
through any other Insurers. How claim is handled? - ANSWER Each insurer should pay
a proportionate share of the claim
Presumptive Disability - ANSWER Offers Full Benefits. Total or permanent disability due
to loss of sight, hearing, speech or 2 + limbs; benefits paid even while continuing to
work.
40 Quarters - ANSWER Under Social Security disability requirements, a worker is fully
insured on a permanent basis after having worked in a covered occupation for:
Aleatory in nature refers to: - ANSWER Exchange of unequal values
Noncancellable Policies - ANSWER Insurer cannot cancel or raise premiums beyond
amount stated in the policy
optional renewability - ANSWER The company can cancel your policy at a premium due
date for reasons given in the policy.
CORRECT QUESTIONS & ANSWERS
Pure - ANSWER Insurance is defined as the transfer of ______________ risk to the
insurance company in consideration for a premium.
Pure Risk - ANSWER The chance of loss without any chance of gain is called
___________
Speculative Risk - ANSWER has the possibility for gain or loss and is not insurable.
Risk - ANSWER is defined as the chance of loss.
Exposure - ANSWER A condition that could result in a loss is known as
Hazard - ANSWER is something that increases the chance of loss.
Physical Hazard - ANSWER The presence of a _____________ increases the chance
of a loss occurring.
Peril - ANSWER defined as a cause of loss, such as fire.
Calculable - ANSWER To be insurable, losses must be ___________.
Law of Large Numbers - ANSWER allows insurers to predict claims more accurately.
Groups of people, not individuals - ANSWER The law of large numbers applies to
___________.
the more accurate the predictions are - ANSWER The law of large numbers applies to
groups of people, not to individuals. The more people in the group ______________.
reinsurance , catastrophic loss - ANSWER Most insurers buy_____________ to protect
themselves in the event of a_______________.
Insurance laws - ANSWER are not required to be uniform from one state to another.
Stock insurer may pay - ANSWER dividends to its shareholders (stockholders), but they
may not be guaranteed.
No - ANSWER Stock insurers pay the dividends to its shareholders (stockholders), are
they guaranteed.
attorney-in-fact - ANSWER A reciprocal insurance company is managed by an
,Reciprocal Insurers - ANSWER An unincorporated association of individuals who insure
each other is known as a
social needs, such as flood insurance and workers compensation - ANSWER The
government offers insurance primarily based upon
preventing fraud - ANSWER The government offers insurance primarily based upon
social needs and not
Foreign - ANSWER company has their home office in another state
Alien - ANSWER company has their home office in another country
Are made by the business and are not tax-deductible - ANSWER Key Person disability
income policy, premium payments
insured or the insured's estate - ANSWER Claims other than death benefits are to be
paid to the_____________, unless otherwise assigned by the insured.
unilateral - ANSWER An insurance contract is___________ in that only one of the
parties to the contract is legally bound to do anything.
If forms are not furnished, written proof of the occurrence, nature of the loss, and extent
of loss must be submitted to the - ANSWER insurer
20% tax - ANSWER If a distribution is made for a reason other than to pay for qualified
medical expenses, the amount withdrawn will be subject to an income tax and an
additional
extended nursing home care - ANSWER Medicare supplement policies (Medigap) do
not cover the cost of
Medigap plans are designed - ANSWER to fill the gap in coverage attributable to
Medicare's deductibles, copayment requirements, and benefit periods. These plans are
issued by private insurance companies.
If a person is still employed at the age of 65, he or she may choose - ANSWER to either
continue group coverage and defer Medicare until retirement, or switch to Medicare.
The purpose of a license is to primarily write - ANSWER non-controlled business
Defamation - ANSWER When producer was reviewing a potential customers coverage
written by another company the producer made several remarks that were maliciously
critical of that other insurer. The producer count be found guilty of (oral or written
remarks)
, Low maximum limits - ANSWER What policy characteristics of a Major Medical
Expense don't EXCEPT
High Maximum Limits - ANSWER Characteristics of a Major Medical Expense
Blanket Coverage - ANSWER Characteristics of a Major Medical Expense
Coinsurance - ANSWER Characteristics of a Major Medical Expense
Deductible - ANSWER Characteristics of a Major Medical Expense
Lower than individual policies, but higher than group policies - ANSWER In franchise
insurance, premiums are usually
Physical examination and autopsy - ANSWER Mandatory provision in individual health
insurance policies stating that the insurer, at its own expense, has the right and
opportunity and is
Workers Compensation - ANSWER state programs that benefits are payable when
workers suffer work-related injury regardless of fault or negligence
Only if its part of treatment for covered illness or injury - ANSWER When does Medicare
cover nursing home care?
The lending institution - ANSWER Who is the beneficiary in a credit health policy?
An insured has medical insurance coverage through 2 different provider both covering
same expense . Neither company know in advance that the insured has coverage
through any other Insurers. How claim is handled? - ANSWER Each insurer should pay
a proportionate share of the claim
Presumptive Disability - ANSWER Offers Full Benefits. Total or permanent disability due
to loss of sight, hearing, speech or 2 + limbs; benefits paid even while continuing to
work.
40 Quarters - ANSWER Under Social Security disability requirements, a worker is fully
insured on a permanent basis after having worked in a covered occupation for:
Aleatory in nature refers to: - ANSWER Exchange of unequal values
Noncancellable Policies - ANSWER Insurer cannot cancel or raise premiums beyond
amount stated in the policy
optional renewability - ANSWER The company can cancel your policy at a premium due
date for reasons given in the policy.
