ALL ALABAMA LIFE INSURANCE
EXAM BANK QUESTIONS WITH
CORRECT DETAILED ANSWERS |
ALREADY GRADED A+<RECENT
VERSIONS> [1500 QUESTIONS]
THE REAL DEAL!!
ALABAMA LIFE INSURANCE EXAM VERSION A
An insurance policy paid a nontaxable dividend to the insured
one year, and nothing the next. From what type of insurer did
the insured purchase the policy? - ANSWER ✔✔- Mutual
A person who does not lock the doors to his or her house shows
an indifferent attitude. This person presents what type of hazard?
- ANSWER ✔✔- Morale
When agents act within the scope of their contract, their actions
will be assumed to be the acts of whom? - ANSWER ✔✔-
Insurer
1|Page
,What type of risk is insurable? - ANSWER ✔✔- Pure
Wagering on a sporting event is known as what type of risk? -
ANSWER ✔✔- Speculative
A situation in which a person can only experience a loss and no
gain presents what type of risk? - ANSWER ✔✔- Pure risk
An insurance company that is formed under the laws of another
state is known as what type of insurer? - ANSWER ✔✔-
Foreign
What are the four elements of an insurance contract? -
ANSWER ✔✔- Agreement (offer and acceptance),
consideration, competent parties, and legal purpose
When a change needs to be made on the application for
insurance, which is the best method for correcting the
information? - ANSWER ✔✔- Complete a new application or
ask the applicant to initial the correction on the original
application
2|Page
,Whom does an insurance agent represent? - ANSWER ✔✔-
Insurance company
The reduction, decrease, or disappearance of value of the person
or property insured in a policy is known as what? - ANSWER
✔✔- Loss
When does an insurance policy go into effect? - ANSWER ✔✔-
When the policy is delivered and the premium is paid
Conditions that increase the chance of a loss are known as what?
- ANSWER ✔✔- Hazards
What do individuals use to transfer their risk of loss to a larger
group? - ANSWER ✔✔- Insurance
The requirement that agents must account for and promptly
remit all insurance funds collected is knows as what type of
agent responsibility? - ANSWER ✔✔- Fiduciary
According to the Law of Agency, a principal is represented by
whom? - ANSWER ✔✔- Agent or producer
3|Page
, An insurance company is domiciled in California and transacts
insurance in Nevada. What is this insurer's classification in
Nevada? - ANSWER ✔✔- Foreign
In forming an insurance contract, when does an acceptance
usually occur? - ANSWER ✔✔- When the insurer approves a
prepaid application
What is the best way to handle incomplete insurance
applications? - ANSWER ✔✔- Return the application to the
applicant for completion
What are the three types of hazards? - ANSWER ✔✔- Physical,
moral and morale
What entities make up the Medical Information Bureau? -
ANSWER ✔✔- Insurers
What document is required for an insurance company to transact
insurance? - ANSWER ✔✔- Certificate of Authority
What is the term for the causes of loss insured against in an
insurance policy? - ANSWER ✔✔- Peril
4|Page
EXAM BANK QUESTIONS WITH
CORRECT DETAILED ANSWERS |
ALREADY GRADED A+<RECENT
VERSIONS> [1500 QUESTIONS]
THE REAL DEAL!!
ALABAMA LIFE INSURANCE EXAM VERSION A
An insurance policy paid a nontaxable dividend to the insured
one year, and nothing the next. From what type of insurer did
the insured purchase the policy? - ANSWER ✔✔- Mutual
A person who does not lock the doors to his or her house shows
an indifferent attitude. This person presents what type of hazard?
- ANSWER ✔✔- Morale
When agents act within the scope of their contract, their actions
will be assumed to be the acts of whom? - ANSWER ✔✔-
Insurer
1|Page
,What type of risk is insurable? - ANSWER ✔✔- Pure
Wagering on a sporting event is known as what type of risk? -
ANSWER ✔✔- Speculative
A situation in which a person can only experience a loss and no
gain presents what type of risk? - ANSWER ✔✔- Pure risk
An insurance company that is formed under the laws of another
state is known as what type of insurer? - ANSWER ✔✔-
Foreign
What are the four elements of an insurance contract? -
ANSWER ✔✔- Agreement (offer and acceptance),
consideration, competent parties, and legal purpose
When a change needs to be made on the application for
insurance, which is the best method for correcting the
information? - ANSWER ✔✔- Complete a new application or
ask the applicant to initial the correction on the original
application
2|Page
,Whom does an insurance agent represent? - ANSWER ✔✔-
Insurance company
The reduction, decrease, or disappearance of value of the person
or property insured in a policy is known as what? - ANSWER
✔✔- Loss
When does an insurance policy go into effect? - ANSWER ✔✔-
When the policy is delivered and the premium is paid
Conditions that increase the chance of a loss are known as what?
- ANSWER ✔✔- Hazards
What do individuals use to transfer their risk of loss to a larger
group? - ANSWER ✔✔- Insurance
The requirement that agents must account for and promptly
remit all insurance funds collected is knows as what type of
agent responsibility? - ANSWER ✔✔- Fiduciary
According to the Law of Agency, a principal is represented by
whom? - ANSWER ✔✔- Agent or producer
3|Page
, An insurance company is domiciled in California and transacts
insurance in Nevada. What is this insurer's classification in
Nevada? - ANSWER ✔✔- Foreign
In forming an insurance contract, when does an acceptance
usually occur? - ANSWER ✔✔- When the insurer approves a
prepaid application
What is the best way to handle incomplete insurance
applications? - ANSWER ✔✔- Return the application to the
applicant for completion
What are the three types of hazards? - ANSWER ✔✔- Physical,
moral and morale
What entities make up the Medical Information Bureau? -
ANSWER ✔✔- Insurers
What document is required for an insurance company to transact
insurance? - ANSWER ✔✔- Certificate of Authority
What is the term for the causes of loss insured against in an
insurance policy? - ANSWER ✔✔- Peril
4|Page
