ALABAMA INSURANCE TEST QUESTIONS & ANSWERS COMPLETE 2025 LATEST UPDATE. (ALREADY GRADED A+)

ALABAMA INSURANCE TEST QUESTIONS & ANSWERS COMPLETE 2025 LATEST UPDATE. (ALREADY GRADED A+) Which welfare program provides assistance to the needy? - Correct Answer - Medicaid Barbara has the right to change the beneficiary designation on her life insurance policy. Barbara's beneficiary is a(n): - Correct Answer - revocable beneficiary Within how many calendar days must all clean electronic health insurance claims be paid in Alabama? - Correct Answer - 30 Which type of term policy allows the policyowner to switch to permanent insurance? - Correct Answer - Convertible term What does renewable term guarantee? - Correct Answer - The insured's insurability If an insured commits suicide, a life insurance policy's face amount will be paid only after the policy has been in force for at least: - Correct Answer - two years Which of the following statements concerning a life insurance policy is TRUE? - Correct Answer - An issued policy can never be changed by a producer The proceeds of a life insurance policy can be paid in a form other than a lump-sum payment. These forms of payment are called: - Correct Answer - settlement options The withholding of facts in an insurance application is called: - Correct Answer - concealment A licensed Alabama insurance producer would NOT be disciplined by the Commissioner of Insurance for: - Correct Answer - being convicted of a misdemeanor The option to convert term life insurance to a permanent form of coverage can normally be executed: - Correct Answer - without proof of insurability Which type of life insurance rider allows a policyowner to increase the level of coverage to keep up with inflation? - Correct Answer - cost of living rider What is the minimum age requirement for a minor in Alabama to purchase a life insurance policy? - Correct Answer - 15 Which of the following best describes a Health Maintenance Organization (HMO)? - Ans - Provides full medical services that stress preventative medicine Medicare Advantage (Medicare Part C) allows the utilization of benefits through a(n): - Correct Answer - HMO, PPO, or traditional insurer Pat the producer just sold an insurance policy to a client, explaining that he has authority to issue the policy. Pat was not specifically granted this power from the insurance company. Pat is exercising: - Correct Answer - implied authority A disability policy that must be renewed, cannot be cancelled until age 65, and may not have an increase in premium for any reason is called a(n): - Correct Answer - noncancellable policy Benefits under a health insurance policy may (with the insured's written request) be payable to: - Correct Answer - a hospital, physician, or surgeon Bart is injured and provides notice of a health claim to his insurer. He later receives the required claims forms. Within how many days of the loss must Bart file proof of loss with the insurance company? - Correct Answer - 90 Which of these statements regarding an insurance application is true? - Correct Answer - A representation is valid as long as it is true An insurance company licensed to solicit insurance in a specific state is called: - Correct Answer - an admitted company John purchases insurance because he expects to experience a loss. This is known as: - Correct Answer - adverse selection Who would most likely own a Medicare Supplement policy? - Correct Answer - 69-year old female covered by Medicare Amy owns a disability income policy with a no cancellable renewal provision. Which of the following is guaranteed in her policy? - Correct Answer - The coverage and premium rate are guaranteed According to Required Provision 4, when an insured applies for reinstatement of a health policy and receives a conditional receipt, how long does the insurer have to approve or deny? - Correct Answer - within 45 days of the date of application Policy dividends for life insurance are: - Correct Answer - not guaranteed What is a certificate of insurance? - Correct Answer - A certificate issued to each individual covered by the group life insurance Which is NOT true regarding Medicare Supplement policies? - Correct Answer - Must include a minimum 20-day Free-Look provision In Alabama, all Health Maintenance Organizations must: - Correct Answer - have a complaint system to resolve written complaints from enrollees Rick owns a $100,000 life insurance policy with a cash value of $10,000. How much can he borrow up to? - Correct Answer - The accumulated cash value ($10,000 less interest) Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay its premiums. If she elects to take the extended term option, which of these actions would she take? - Correct Answer - Uses the $10,000 to buy term insurance of the same face amount as her original policy Jackie took out a Medicare supplement insurance policy and also has a preexisting condition. In this situation, a preexisting condition is defined as a condition for which medical advice was given or received within of the effective date of coverage. - Correct Answer - 6 months Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a(n): - Correct Answer - conditional receipt A policy owner with an automatic premium loan provision must: - Correct Answer - pay back the loan amount to keep the policy's cash value at its maximum Which of the following is NOT an example of insurable interest? - Correct Answer - An airline insuring the lives of its passengers With key employee life insurance, - Correct Answer - the company is the owner of the policy A Cross Purchase Buy-Sell Agreement is in place for ABC Company's four founding partners. What would this agreement require