Alabama Life & Health Insurance Exam Test Bank 1 Newest
2026-2027 Actual Exam With Complete Questions And
Correct Detailed Answers (Verified Answers) |Already
Graded A+
Which of the following is NOT a characteristic of life insurance as
property? - ANSWER-It requires a fund portfolio manager
Characteristics:
It creates an immediate estate
It requires no physical maintenance
It may be paid for in installments
The most effective way to ensure that the applicant will accept the policy
when it is issued is: - ANSWER-To have the applicant pay the initial
premium at the time of application
pg. 1
,Allen purchases an estate builder (jumping juvenile) policy for his 5-
year old son, Donald. Suppose that when Donald reaches age 21 his
father presents him with the policy as a gift. Which of the following
statements is NOT correct? - ANSWER-Donald must change the
beneficiaries immediately
CORRECT:
The premium will continue to be based on his original age of 5
Donald has enjoyed protection against the problems of premature death
The face value of Donald's policy has increased by 5 times
Term insurance differs from permanent insurance in that term: -
ANSWER-Builds no cash value, pays a death benefit only
An indeterminate premium policy offers: - ANSWER-A low initial
premium with succeeding premiums based on the company's investment
return, mortality and expenses
With regard to the waiver of premium rider, after the disability a
policyowner normally: - ANSWER-Need not repay the premiums paid
by the company during disability
pg. 2
,In many jurisdictions, permanent policies are required to have some cash
value by the end of: - ANSWER-The Third Year
Loan values and retirement income are: - ANSWER-Called the living
benefits of life insurance
With a modified premium whole life contract, premium payments: -
ANSWER-Are lower in the early years of the contract
A variable life policy: - ANSWER-Death benefit varies to reflect the
investment results of the underlying separate account, but never falls
below a guaranteed minimum
The type of policy that can be changed from one that does not
accumulate cash values to one that does is a: - ANSWER-Convertible
term policy
A limited pay life policy: - ANSWER-Requires premium payments for a
specified number of years or until a specified age is reached
Should an insured become totally and permanently disabled two months
before the cut-off date for the waiver of premium rider: - ANSWER-The
insured remains eligible for all provisions
pg. 3
, Warren and Wilma have a joint life policy. Warren dies and the policy
pays nothing. Later on, Wilma dies and the policy death benefit is paid
to the beneficiary. This is called a: - ANSWER-Survivorship or second-
to-die policy
A whole life policy: - ANSWER-Requires the insured to pay premiums
for life and endows at age 100
If Greg's policy on his own life has a guaranteed insurability rider, it
means that he can purchase more insurance: - ANSWER-On his own life
at certain specified ages without proof of insurability
Any extra premium charged for the waiver of premium rider: -
ANSWER-Does not apply to the policy's cash value
If a policyowner has a $100,000 policy with an accumulated cash value
of $6,000, the policyowner can borrow up to: - ANSWER-The entire
accumulated cash value of $6,000, less interest for 1 year
An insured allows a permanent policy to lapse. Unless otherwise
instructed, the insurance company: - ANSWER-Will automatically
institute the extended term option
Each of the following statements about policy loans is correct, except: -
ANSWER-Policy loans may be made on any type of policy
pg. 4
2026-2027 Actual Exam With Complete Questions And
Correct Detailed Answers (Verified Answers) |Already
Graded A+
Which of the following is NOT a characteristic of life insurance as
property? - ANSWER-It requires a fund portfolio manager
Characteristics:
It creates an immediate estate
It requires no physical maintenance
It may be paid for in installments
The most effective way to ensure that the applicant will accept the policy
when it is issued is: - ANSWER-To have the applicant pay the initial
premium at the time of application
pg. 1
,Allen purchases an estate builder (jumping juvenile) policy for his 5-
year old son, Donald. Suppose that when Donald reaches age 21 his
father presents him with the policy as a gift. Which of the following
statements is NOT correct? - ANSWER-Donald must change the
beneficiaries immediately
CORRECT:
The premium will continue to be based on his original age of 5
Donald has enjoyed protection against the problems of premature death
The face value of Donald's policy has increased by 5 times
Term insurance differs from permanent insurance in that term: -
ANSWER-Builds no cash value, pays a death benefit only
An indeterminate premium policy offers: - ANSWER-A low initial
premium with succeeding premiums based on the company's investment
return, mortality and expenses
With regard to the waiver of premium rider, after the disability a
policyowner normally: - ANSWER-Need not repay the premiums paid
by the company during disability
pg. 2
,In many jurisdictions, permanent policies are required to have some cash
value by the end of: - ANSWER-The Third Year
Loan values and retirement income are: - ANSWER-Called the living
benefits of life insurance
With a modified premium whole life contract, premium payments: -
ANSWER-Are lower in the early years of the contract
A variable life policy: - ANSWER-Death benefit varies to reflect the
investment results of the underlying separate account, but never falls
below a guaranteed minimum
The type of policy that can be changed from one that does not
accumulate cash values to one that does is a: - ANSWER-Convertible
term policy
A limited pay life policy: - ANSWER-Requires premium payments for a
specified number of years or until a specified age is reached
Should an insured become totally and permanently disabled two months
before the cut-off date for the waiver of premium rider: - ANSWER-The
insured remains eligible for all provisions
pg. 3
, Warren and Wilma have a joint life policy. Warren dies and the policy
pays nothing. Later on, Wilma dies and the policy death benefit is paid
to the beneficiary. This is called a: - ANSWER-Survivorship or second-
to-die policy
A whole life policy: - ANSWER-Requires the insured to pay premiums
for life and endows at age 100
If Greg's policy on his own life has a guaranteed insurability rider, it
means that he can purchase more insurance: - ANSWER-On his own life
at certain specified ages without proof of insurability
Any extra premium charged for the waiver of premium rider: -
ANSWER-Does not apply to the policy's cash value
If a policyowner has a $100,000 policy with an accumulated cash value
of $6,000, the policyowner can borrow up to: - ANSWER-The entire
accumulated cash value of $6,000, less interest for 1 year
An insured allows a permanent policy to lapse. Unless otherwise
instructed, the insurance company: - ANSWER-Will automatically
institute the extended term option
Each of the following statements about policy loans is correct, except: -
ANSWER-Policy loans may be made on any type of policy
pg. 4
