ALABAMA LIFE INSURANCE STUDY
GUIDE 2026 COMPLETE QUESTIONS
AND VERIFIED ANSWERS
◉ the option to convert term life insurance to a permanent form of
coverage can normally be executed. Answer: without proof of
insurability
◉ with term life insurance, which of the following types of premium
remains the same for the entire policy period?. Answer: level premium
◉ mortgage protection is typically covered with:. Answer: decreasing
term
◉ with renewable term insurance. Answer: the premium increases at
renewal
◉ paula has an insurance policy that has a guaranteed minimum cash
value, a guaranteed death benefit, fixed premiums, and grows at a rate
reflected by a selected fund index. which type of life policy fits this
description?. Answer: equity indexed life
◉ what does renewable term guarantee. Answer: The insured's
insurability
,◉ an insurance producer must have which of the following in order to
sell variable life insurance policies. Answer: registered with the FINRA,
license for variable life and annuities contracts, and a valid insurance
license.
◉ which of the following life insurance policies will build up cash value
the fastest. Answer: single premium
◉ at what age is an insured for life insurance considered statistically
"dead". Answer: 100
◉ michael has a universal life policy with an increasing death benefit
option. with the initial face amount of $50,000 and a value of $5,000,
what would the actual death benefit be?. Answer: $55,000
◉ which type of life insurance policy combines insurance protection
with an accumulation of cash value. Answer: permanent insurance
◉ tim has a universal life policy. the cash value growth in his policy is:.
Answer: interest sensitive
◉ in which of the following ways does term life insurance and whole
life insurance differ?. Answer: term life insurance does not build cash
value
,◉ which type of policy allows the policyowner to switch to permanent
insurance. Answer: convertible term
◉ which of these statements accurately portray a whole life policy.
Answer: endows at age 100 and paid up a stated time
◉ at what point does a whole life policy pay the face amount. Answer:
upon the insureds death or reaching age 100
◉ which describes a level term policy?. Answer: the premium and
protection remain constant for the term of the policy
◉ albert surrenders his whole life policy ten years after it was
purchased. what can he expect?. Answer: to pay taxes on the cash value
in excess of the premium paid
◉ a husband and wife purchases a life insurance policy that covers both
of them. the policy paid nothing when the husband died. two years later,
the wife dies and a death benefit is paid to the beneficiary. which type of
policy is this?. Answer: survivorship life policy
◉ which of the following provisions may not be adjusted in an
adjustable life policy?. Answer: the insured
◉ which of the following dividend options allows the continuation of
cash value accumulation. Answer: reduced paid-up insurance
, ◉ ron turned over all rights in his policy to an assignee. this is called.
Answer: an absolute assignment
◉ an aviation exclusion:. Answer: excludes coverage when the insured
is riding in certain kids of air travel
◉ which type of assignment transfers a portion of the policy owners
right to another party in order to secure a debt to that party?. Answer:
collateral assignment
◉ A policyowner with a $100,000 whole life policy has a cash value of
$10,000. There is an outstanding loan of $5,000 and a past-due premium
of $250. If the policyowner chooses the reduced paid-up option and then
later dies, what will the beneficiary receive?. Answer: the reduced paid-
up coverage amount minus $5,250
◉ which type of life insurance Rider allows a policy owner to increase
the level of coverage to keep up with inflation. Answer: cost of living
rider
◉ policy dividends for life insurance are. Answer: not guaranteed
◉ Rick owns $100,000 life insurance policy with a cash value of 10,000.
how much can he borrow up to. Answer: the accumulated cash value
($10,000 less interest)
GUIDE 2026 COMPLETE QUESTIONS
AND VERIFIED ANSWERS
◉ the option to convert term life insurance to a permanent form of
coverage can normally be executed. Answer: without proof of
insurability
◉ with term life insurance, which of the following types of premium
remains the same for the entire policy period?. Answer: level premium
◉ mortgage protection is typically covered with:. Answer: decreasing
term
◉ with renewable term insurance. Answer: the premium increases at
renewal
◉ paula has an insurance policy that has a guaranteed minimum cash
value, a guaranteed death benefit, fixed premiums, and grows at a rate
reflected by a selected fund index. which type of life policy fits this
description?. Answer: equity indexed life
◉ what does renewable term guarantee. Answer: The insured's
insurability
,◉ an insurance producer must have which of the following in order to
sell variable life insurance policies. Answer: registered with the FINRA,
license for variable life and annuities contracts, and a valid insurance
license.
◉ which of the following life insurance policies will build up cash value
the fastest. Answer: single premium
◉ at what age is an insured for life insurance considered statistically
"dead". Answer: 100
◉ michael has a universal life policy with an increasing death benefit
option. with the initial face amount of $50,000 and a value of $5,000,
what would the actual death benefit be?. Answer: $55,000
◉ which type of life insurance policy combines insurance protection
with an accumulation of cash value. Answer: permanent insurance
◉ tim has a universal life policy. the cash value growth in his policy is:.
Answer: interest sensitive
◉ in which of the following ways does term life insurance and whole
life insurance differ?. Answer: term life insurance does not build cash
value
,◉ which type of policy allows the policyowner to switch to permanent
insurance. Answer: convertible term
◉ which of these statements accurately portray a whole life policy.
Answer: endows at age 100 and paid up a stated time
◉ at what point does a whole life policy pay the face amount. Answer:
upon the insureds death or reaching age 100
◉ which describes a level term policy?. Answer: the premium and
protection remain constant for the term of the policy
◉ albert surrenders his whole life policy ten years after it was
purchased. what can he expect?. Answer: to pay taxes on the cash value
in excess of the premium paid
◉ a husband and wife purchases a life insurance policy that covers both
of them. the policy paid nothing when the husband died. two years later,
the wife dies and a death benefit is paid to the beneficiary. which type of
policy is this?. Answer: survivorship life policy
◉ which of the following provisions may not be adjusted in an
adjustable life policy?. Answer: the insured
◉ which of the following dividend options allows the continuation of
cash value accumulation. Answer: reduced paid-up insurance
, ◉ ron turned over all rights in his policy to an assignee. this is called.
Answer: an absolute assignment
◉ an aviation exclusion:. Answer: excludes coverage when the insured
is riding in certain kids of air travel
◉ which type of assignment transfers a portion of the policy owners
right to another party in order to secure a debt to that party?. Answer:
collateral assignment
◉ A policyowner with a $100,000 whole life policy has a cash value of
$10,000. There is an outstanding loan of $5,000 and a past-due premium
of $250. If the policyowner chooses the reduced paid-up option and then
later dies, what will the beneficiary receive?. Answer: the reduced paid-
up coverage amount minus $5,250
◉ which type of life insurance Rider allows a policy owner to increase
the level of coverage to keep up with inflation. Answer: cost of living
rider
◉ policy dividends for life insurance are. Answer: not guaranteed
◉ Rick owns $100,000 life insurance policy with a cash value of 10,000.
how much can he borrow up to. Answer: the accumulated cash value
($10,000 less interest)
