ALABAMA LIFE INSURANCE 2026
STUDY GUIDE PRACTICE
QUESTIONS DETAILED SOLUTIONS
◉ A life insurance company may pay a death claim for less than the face
amount of a policy under which of the following conditions? Answer:
All of the above
◉ Which policy will have immediate cash? Answer: single premium
◉ The process of underwriting primarily involves what two key steps?
Answer: risk selection and pricing
◉ Sherwood has no valid will but has named his estate as the
beneficiary of his life insurance policy. As a result, he can expect that
the policy proceeds Answer: are distributed according to state law
◉ the disability income rider of a life insurance policy normally
Answer: all of the above
◉ Oliver has a life insurance policy with a $50,000 death benefit. At his
death, there is a $5000 policy loan outstanding. Which of the following
statement is CORRECT? Answer: the insurer will subtract the amount of
the loan and pay $45,000 to the beneficiary.
,◉ which statement is correct? Answer: Concealment is the withholding
of information that should have been provided to an insurer
◉ all of the following are requirements to receive an Alabama insurance
producer license EXCEPT: Answer: An applicant must have a diploma
from an approved college or university
◉ You can withdraw money from an annuity without penalty(assuming
no surrender penalty) beginning at what age? Answer: 59.5 years of age
◉ Which of the following factors determines the amount of each
payment under the fixed period settlement option? Answer: all of the
above
◉ a parent who purchases a policy on the life of a minor child and
wishes to retain complete control of the policy until the child reaches
age 18 may do so by means of Answer: the ownership clause
◉ A payor rider protects against death or disability of the policy owner
when the insured is a minor. Once the minor reached a specified age,
what typically happens? Answer: The insured is offered the opportunity
to make premium payments
◉ According to the Alabama Insurance regulations, all of the following
are included as advertisements except: Answer: a birthday card sent to a
policyholder by his or her agent
, ◉ Alabama law regulates life insurance benefits with respect to minors.
What statement is FALSE? Answer: 18-year olds may receive a limit of
$3000 in life benefits in any one year
◉ Should an insured die while a policy is in its grace period, the amount
of past-due premium is Answer: deducted from the face amount of the
policy before payment is made to the beneficiary
◉ the "entire contract" law in Alabama says Answer: the policy and the
application (or a summary of the application) consults the entire contract
◉ The Incontestable Clause has what effect on coverage? Answer:
Misstatements on the application will not negate coverage if a loss
occurs following the incontestable period
◉ In general, advertising would include each of the following EXCEPT:
Answer: Communication of administrative matters
◉ the authority of an insurance producer included in the agreement
between the producer and the company is known as Answer: expressed
authority
◉ if you decided to start withdrawing money at the end of the
Accumulation Period, your choices are each of the following EXCEPT:
Answer: Tax-free stream of payments at 75%
STUDY GUIDE PRACTICE
QUESTIONS DETAILED SOLUTIONS
◉ A life insurance company may pay a death claim for less than the face
amount of a policy under which of the following conditions? Answer:
All of the above
◉ Which policy will have immediate cash? Answer: single premium
◉ The process of underwriting primarily involves what two key steps?
Answer: risk selection and pricing
◉ Sherwood has no valid will but has named his estate as the
beneficiary of his life insurance policy. As a result, he can expect that
the policy proceeds Answer: are distributed according to state law
◉ the disability income rider of a life insurance policy normally
Answer: all of the above
◉ Oliver has a life insurance policy with a $50,000 death benefit. At his
death, there is a $5000 policy loan outstanding. Which of the following
statement is CORRECT? Answer: the insurer will subtract the amount of
the loan and pay $45,000 to the beneficiary.
,◉ which statement is correct? Answer: Concealment is the withholding
of information that should have been provided to an insurer
◉ all of the following are requirements to receive an Alabama insurance
producer license EXCEPT: Answer: An applicant must have a diploma
from an approved college or university
◉ You can withdraw money from an annuity without penalty(assuming
no surrender penalty) beginning at what age? Answer: 59.5 years of age
◉ Which of the following factors determines the amount of each
payment under the fixed period settlement option? Answer: all of the
above
◉ a parent who purchases a policy on the life of a minor child and
wishes to retain complete control of the policy until the child reaches
age 18 may do so by means of Answer: the ownership clause
◉ A payor rider protects against death or disability of the policy owner
when the insured is a minor. Once the minor reached a specified age,
what typically happens? Answer: The insured is offered the opportunity
to make premium payments
◉ According to the Alabama Insurance regulations, all of the following
are included as advertisements except: Answer: a birthday card sent to a
policyholder by his or her agent
, ◉ Alabama law regulates life insurance benefits with respect to minors.
What statement is FALSE? Answer: 18-year olds may receive a limit of
$3000 in life benefits in any one year
◉ Should an insured die while a policy is in its grace period, the amount
of past-due premium is Answer: deducted from the face amount of the
policy before payment is made to the beneficiary
◉ the "entire contract" law in Alabama says Answer: the policy and the
application (or a summary of the application) consults the entire contract
◉ The Incontestable Clause has what effect on coverage? Answer:
Misstatements on the application will not negate coverage if a loss
occurs following the incontestable period
◉ In general, advertising would include each of the following EXCEPT:
Answer: Communication of administrative matters
◉ the authority of an insurance producer included in the agreement
between the producer and the company is known as Answer: expressed
authority
◉ if you decided to start withdrawing money at the end of the
Accumulation Period, your choices are each of the following EXCEPT:
Answer: Tax-free stream of payments at 75%
