Alabama Life and Health Insurance EXAM Questions AND Correct Answers
$100,000 in cash value or $300,000 on one life. - ✔✔The Alabama Guaranty
Association is obligated to pay covered claims of insolvency except for workers'
compensation claims within what amounts?
$20,000 - ✔✔Health- Under the LTC partnership program, if an insured has
$80,000 in personal assets, and a LTC policy that will pay $60,000 to cover long
term care needs,Medicaid would require the insured to spend $____ on their
personal assets on care.
$3,000 plus on any additional interested earned during the annuity stage. -
✔✔If an annuitant paid $18,000 in premiums for an annuity and started
receiving benefits when the accumulation stage ended and the account was
worth $21,000 how much of the value would be subject to federal income tax?
$30,000 - ✔✔Health- John meets his elimination period for his disability policy
and receives $5,000 per month for five months.He goes back to work, but
suffers a relapse that is classified as a recurrent disability.He goes back on
disability for one more month.How much total disability benefits will John
receive?
$49,500 which is the face amount less the premium owed - ✔✔Adelaide dies
without having paid the $500 premium on her $50,000 policy that was due a
week before her death. With no outstanding policy loans, Adelaide's beneficiary
can expect to receive
$8,000 - ✔✔Dillon has a $50,000 policy with cash values of $10,000. A $2,000
loan is outstanding, as well as a past-due premium of $1,000. Dillon finds he can
,no longer make premium payments on this policy. If Dillon chooses the cash
surrender value option, he will receive
$85,000 - ✔✔If a universal life policy with the increasing death benefit option
has an initial face amount of $75,000 and a cash value of $10,000 the actual
death benefit would be
1. A business can buy a life policy to insure a key executive.
2. A business can buy a policy on an executive and name the business as
beneficiary.
3. The premiums on a Key-Person life policy are not tax deductible to the
business. - ✔✔All the following are true regarding business uses of individual
life policies
1. A fine.
2. Imprisonment.
3. Suspension or revocation of license. - ✔✔The penalty for a producer who
over charges or fails to return premiums to persons so entitled is:
1. a life license
2. a variable life license
3. a Series 6 or 7 Securities license - ✔✔A producer must hold how many
license/licenses to market a variable product?
1. A new application
2. Proof of insurability
,3. past due premiums - ✔✔Health- A Company may require all of the following
under the Reinstatement Provisions
1. A policy loan cannot be made on a policy until it has been enforce long
enough to accumulate some cash value
2. If a policy has cash value, the insurance company can refuse to lend the policy
owner money
3. The loan value of a policy cannot exceed the current cash value - ✔✔Each of
the following statements about policy loans is correct.
1. Are authorized to pay expenses associated with a terminal illness
2. Are deducted from the policy's death benefit
3. Can be used to pay expenses in a nursing home - ✔✔Amounts paid out under
the accelerated benefit rider
1. Assist in the detection and prevention of insolvencies.
2. To avoid delays in the payment of claims by insolvent insurers.
3. To provide a method of paying claims for insolvent insurers.
4. To provide a method of assessment of cost of claims due to insolvent
insurers. - ✔✔The purpose of the Alabama Insurance Guarantee Association is
to:
1. at least 12 months of consecutive coverage.
2. Cannot use hospitalization as a prerequisite to coverage.
3. Must be issued as noncancellable of guaranteed renewable and cannot be
cancelled because of age. - ✔✔Health- LTC statutory contracts requirements
include which of the following?
, 1. Be a U. S. citizen.
2. Be an Alabama resident for at least 6 months
3. Be of good moral character and not convicted of any felony.
4. Have satisfied the 40 hour pre-licensing educational requirement -
✔✔Alabama law requires an applicant for an insurance producers license to:
1. be associated with ones employment
2. have benefit levels set by the master contract
3. be term insurance - ✔✔A group life policy will generally have all the following
e
1. Cash
2. Reduced Paid-Up coverage
3. Extended Term - ✔✔If a policy is lapsed or surrendered the insured may elect
which of the following options?
1. Cash or accumulate the dividend at interest
2. Apply the dividend to reduce the premiums
3. Apply some of the additions to buy paid up additions and the rest to one-year
term coverage. - ✔✔An insured may select which of the following dividend
options should the insurer declare a dividend?
1. Cash withdrawals
2. Policy loans
$100,000 in cash value or $300,000 on one life. - ✔✔The Alabama Guaranty
Association is obligated to pay covered claims of insolvency except for workers'
compensation claims within what amounts?
$20,000 - ✔✔Health- Under the LTC partnership program, if an insured has
$80,000 in personal assets, and a LTC policy that will pay $60,000 to cover long
term care needs,Medicaid would require the insured to spend $____ on their
personal assets on care.
$3,000 plus on any additional interested earned during the annuity stage. -
✔✔If an annuitant paid $18,000 in premiums for an annuity and started
receiving benefits when the accumulation stage ended and the account was
worth $21,000 how much of the value would be subject to federal income tax?
$30,000 - ✔✔Health- John meets his elimination period for his disability policy
and receives $5,000 per month for five months.He goes back to work, but
suffers a relapse that is classified as a recurrent disability.He goes back on
disability for one more month.How much total disability benefits will John
receive?
$49,500 which is the face amount less the premium owed - ✔✔Adelaide dies
without having paid the $500 premium on her $50,000 policy that was due a
week before her death. With no outstanding policy loans, Adelaide's beneficiary
can expect to receive
$8,000 - ✔✔Dillon has a $50,000 policy with cash values of $10,000. A $2,000
loan is outstanding, as well as a past-due premium of $1,000. Dillon finds he can
,no longer make premium payments on this policy. If Dillon chooses the cash
surrender value option, he will receive
$85,000 - ✔✔If a universal life policy with the increasing death benefit option
has an initial face amount of $75,000 and a cash value of $10,000 the actual
death benefit would be
1. A business can buy a life policy to insure a key executive.
2. A business can buy a policy on an executive and name the business as
beneficiary.
3. The premiums on a Key-Person life policy are not tax deductible to the
business. - ✔✔All the following are true regarding business uses of individual
life policies
1. A fine.
2. Imprisonment.
3. Suspension or revocation of license. - ✔✔The penalty for a producer who
over charges or fails to return premiums to persons so entitled is:
1. a life license
2. a variable life license
3. a Series 6 or 7 Securities license - ✔✔A producer must hold how many
license/licenses to market a variable product?
1. A new application
2. Proof of insurability
,3. past due premiums - ✔✔Health- A Company may require all of the following
under the Reinstatement Provisions
1. A policy loan cannot be made on a policy until it has been enforce long
enough to accumulate some cash value
2. If a policy has cash value, the insurance company can refuse to lend the policy
owner money
3. The loan value of a policy cannot exceed the current cash value - ✔✔Each of
the following statements about policy loans is correct.
1. Are authorized to pay expenses associated with a terminal illness
2. Are deducted from the policy's death benefit
3. Can be used to pay expenses in a nursing home - ✔✔Amounts paid out under
the accelerated benefit rider
1. Assist in the detection and prevention of insolvencies.
2. To avoid delays in the payment of claims by insolvent insurers.
3. To provide a method of paying claims for insolvent insurers.
4. To provide a method of assessment of cost of claims due to insolvent
insurers. - ✔✔The purpose of the Alabama Insurance Guarantee Association is
to:
1. at least 12 months of consecutive coverage.
2. Cannot use hospitalization as a prerequisite to coverage.
3. Must be issued as noncancellable of guaranteed renewable and cannot be
cancelled because of age. - ✔✔Health- LTC statutory contracts requirements
include which of the following?
, 1. Be a U. S. citizen.
2. Be an Alabama resident for at least 6 months
3. Be of good moral character and not convicted of any felony.
4. Have satisfied the 40 hour pre-licensing educational requirement -
✔✔Alabama law requires an applicant for an insurance producers license to:
1. be associated with ones employment
2. have benefit levels set by the master contract
3. be term insurance - ✔✔A group life policy will generally have all the following
e
1. Cash
2. Reduced Paid-Up coverage
3. Extended Term - ✔✔If a policy is lapsed or surrendered the insured may elect
which of the following options?
1. Cash or accumulate the dividend at interest
2. Apply the dividend to reduce the premiums
3. Apply some of the additions to buy paid up additions and the rest to one-year
term coverage. - ✔✔An insured may select which of the following dividend
options should the insurer declare a dividend?
1. Cash withdrawals
2. Policy loans
