ALABAMA INSURANCE TEST
If an insured under a Major Medical insurance policy with a $200 deductible and
an 80% coinsurance clause incurred the following covered expenses: Hospital
room and board $2,000; Surgeon's fee $1,500. How much would the policy pay? -
ANSWERS-$2,640 (2,000 + 1,500 = 3,500 - 200 = 3,300 x .8)
In which of the following ways does term life insurance and whole life insurance
differ? - ANSWERS-Term insurance does not build cash value
A retirement plan that can be started by an employee, even if another plan is in
existence, is called a(n): - ANSWERS-Individual Retirement Account (IRA)
How frequently does a disability income policy typically pay benefits? - ANSWERS-
monthly
Which of the following is a true statement? - ANSWERS-The withholding of
information that should have been provided to an insurer is called concealment
All of these statements concerning a Key Employee Life policy is true, EXCEPT: -
ANSWERS-The key employee names the beneficiary
An insurance company that cedes a portion of an insured's coverage to another
insurer is said to be engaged in: - ANSWERS-reinsurance
,Don and Marie are married and each have a Major Medical plan provided by their
employers. Don was born in August of 1969 and Marie was born in March of
1976. For their two dependent children, - ANSWERS-Marie's plan is primary and
Don's is secondary
A retirement plan intended for a sole proprietor and his/her employees would be
a(n): - ANSWERS-Keogh Plan
Any individual who has failed two Alabama insurance licensing examinations must
wait how long before retaking it a third time? - ANSWERS-three months
Risk is best defined as the: - ANSWERS-uncertainty of loss
According to Alabama law, agents of a Health Maintenance Organization (HMO): -
ANSWERS-must be licensed as insurance producers
The maximum amount of coverage placed on a disability income policy is based
on the insured's: - ANSWERS-earned income from the previous year
All of these are correct concerning group life insurance, EXCEPT: - ANSWERS-
Whole life insurance is the form of insurance typically used in group life insurance
, Under Alabama's annuity disclosure regulation, the disclosures must be mailed to
the applicant within __ business days if the application is taken over the
telephone. - ANSWERS-5
An individual unable to perform two or more Activities of Daily Living (ADLs) will
trigger coverage from a _____ policy. - ANSWERS-Long Term Care (LTC)
An insurance producer represents the: - ANSWERS-the insurance company
Julio, the insurance producer, has allowed his license to lapse. He would like to
reinstate his license without retaking a prelicense course or passing a written
examination. To do this, Julio must reinstate the license within ___ months from
the renewal date. - ANSWERS-12
An insurance producer who offers a potential client something of value as an
incentive to purchase insurance is engaging in: - ANSWERS-rebating
Carol is a life insurance policyowner who has transferred her ownership to a third
party in exchange for a percentage of the death benefit. What is this called? -
ANSWERS-Viatical settlement agreement
In Alabama, when are newborns covered under a health policy? - ANSWERS-The
moment of birth
If an insured under a Major Medical insurance policy with a $200 deductible and
an 80% coinsurance clause incurred the following covered expenses: Hospital
room and board $2,000; Surgeon's fee $1,500. How much would the policy pay? -
ANSWERS-$2,640 (2,000 + 1,500 = 3,500 - 200 = 3,300 x .8)
In which of the following ways does term life insurance and whole life insurance
differ? - ANSWERS-Term insurance does not build cash value
A retirement plan that can be started by an employee, even if another plan is in
existence, is called a(n): - ANSWERS-Individual Retirement Account (IRA)
How frequently does a disability income policy typically pay benefits? - ANSWERS-
monthly
Which of the following is a true statement? - ANSWERS-The withholding of
information that should have been provided to an insurer is called concealment
All of these statements concerning a Key Employee Life policy is true, EXCEPT: -
ANSWERS-The key employee names the beneficiary
An insurance company that cedes a portion of an insured's coverage to another
insurer is said to be engaged in: - ANSWERS-reinsurance
,Don and Marie are married and each have a Major Medical plan provided by their
employers. Don was born in August of 1969 and Marie was born in March of
1976. For their two dependent children, - ANSWERS-Marie's plan is primary and
Don's is secondary
A retirement plan intended for a sole proprietor and his/her employees would be
a(n): - ANSWERS-Keogh Plan
Any individual who has failed two Alabama insurance licensing examinations must
wait how long before retaking it a third time? - ANSWERS-three months
Risk is best defined as the: - ANSWERS-uncertainty of loss
According to Alabama law, agents of a Health Maintenance Organization (HMO): -
ANSWERS-must be licensed as insurance producers
The maximum amount of coverage placed on a disability income policy is based
on the insured's: - ANSWERS-earned income from the previous year
All of these are correct concerning group life insurance, EXCEPT: - ANSWERS-
Whole life insurance is the form of insurance typically used in group life insurance
, Under Alabama's annuity disclosure regulation, the disclosures must be mailed to
the applicant within __ business days if the application is taken over the
telephone. - ANSWERS-5
An individual unable to perform two or more Activities of Daily Living (ADLs) will
trigger coverage from a _____ policy. - ANSWERS-Long Term Care (LTC)
An insurance producer represents the: - ANSWERS-the insurance company
Julio, the insurance producer, has allowed his license to lapse. He would like to
reinstate his license without retaking a prelicense course or passing a written
examination. To do this, Julio must reinstate the license within ___ months from
the renewal date. - ANSWERS-12
An insurance producer who offers a potential client something of value as an
incentive to purchase insurance is engaging in: - ANSWERS-rebating
Carol is a life insurance policyowner who has transferred her ownership to a third
party in exchange for a percentage of the death benefit. What is this called? -
ANSWERS-Viatical settlement agreement
In Alabama, when are newborns covered under a health policy? - ANSWERS-The
moment of birth
