TEST BANK FOR Alabama Life and Health
Insurance Exam Questions and Answers
(Verified by Expert (2025-2026)
Alabama Life & Health Insurance Practice
Exam (Original-1-200)
1. Which type of life insurance provides coverage for a
specific period and pays only if death occurs during that
term?
A. Whole life
B. Term life
C. Universal life
D. Variable life
,Answer: B
Explanation: Term life insurance provides temporary
coverage for a defined period, such as 10, 20, or 30 years.
2. Which provision allows a policyholder to cancel a new
insurance policy and receive a full refund?
A. Grace period
B. Free-look provision
C. Nonforfeiture provision
D. Reinstatement provision
Answer: B
Explanation: The free-look provision allows the insured
to cancel a policy within a specified period after purchase
without penalty.
3. Which Alabama department regulates insurance agents
and companies?
A. Alabama Department of Commerce
B. Alabama Department of Insurance
C. Alabama Health Department
D. State Treasurer’s Office
,Answer: B
Explanation: The Alabama Department of Insurance
issues licenses and enforces insurance laws in the state.
4. What is the main purpose of underwriting in life
insurance?
A. To advertise the policy
B. To assess risk and determine eligibility and premiums
C. To process claims
D. To issue annuities
Answer: B
Explanation: Underwriting evaluates the applicant’s risk
factors to set premiums and coverage.
5. Which life insurance policy accumulates cash value
over time and provides lifelong protection?
A. Term life
B. Whole life
C. Accidental death
D. Endowment
Answer: B
, 6. Which policy provision allows a lapsed life insurance
policy to be restored?
A. Free-look provision
B. Reinstatement provision
C. Grace period
D. Nonforfeiture provision
Answer: B
7. Which of the following is considered an insurable
interest?
A. Purchasing insurance on one’s own life
B. Spouse purchasing insurance on the other spouse
C. Employer purchasing insurance on an employee with
consent
D. All of the above
Answer: D
8. Which rider provides additional coverage if the insured
dies accidentally?
A. AD&D rider
B. Waiver of premium rider
C. Accelerated benefit rider
D. Guaranteed insurability rider
Insurance Exam Questions and Answers
(Verified by Expert (2025-2026)
Alabama Life & Health Insurance Practice
Exam (Original-1-200)
1. Which type of life insurance provides coverage for a
specific period and pays only if death occurs during that
term?
A. Whole life
B. Term life
C. Universal life
D. Variable life
,Answer: B
Explanation: Term life insurance provides temporary
coverage for a defined period, such as 10, 20, or 30 years.
2. Which provision allows a policyholder to cancel a new
insurance policy and receive a full refund?
A. Grace period
B. Free-look provision
C. Nonforfeiture provision
D. Reinstatement provision
Answer: B
Explanation: The free-look provision allows the insured
to cancel a policy within a specified period after purchase
without penalty.
3. Which Alabama department regulates insurance agents
and companies?
A. Alabama Department of Commerce
B. Alabama Department of Insurance
C. Alabama Health Department
D. State Treasurer’s Office
,Answer: B
Explanation: The Alabama Department of Insurance
issues licenses and enforces insurance laws in the state.
4. What is the main purpose of underwriting in life
insurance?
A. To advertise the policy
B. To assess risk and determine eligibility and premiums
C. To process claims
D. To issue annuities
Answer: B
Explanation: Underwriting evaluates the applicant’s risk
factors to set premiums and coverage.
5. Which life insurance policy accumulates cash value
over time and provides lifelong protection?
A. Term life
B. Whole life
C. Accidental death
D. Endowment
Answer: B
, 6. Which policy provision allows a lapsed life insurance
policy to be restored?
A. Free-look provision
B. Reinstatement provision
C. Grace period
D. Nonforfeiture provision
Answer: B
7. Which of the following is considered an insurable
interest?
A. Purchasing insurance on one’s own life
B. Spouse purchasing insurance on the other spouse
C. Employer purchasing insurance on an employee with
consent
D. All of the above
Answer: D
8. Which rider provides additional coverage if the insured
dies accidentally?
A. AD&D rider
B. Waiver of premium rider
C. Accelerated benefit rider
D. Guaranteed insurability rider
