ALABAMA INSURANCE TEST
QUESTIONS WITH ACCURATE
ANSWERS 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)? -
CORRECT ANSWER-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 noncancellable 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
QUESTIONS WITH ACCURATE
ANSWERS 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)? -
CORRECT ANSWER-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 noncancellable 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
