ALABAMA INSURANCE TEST QUESTIONS
CORRECTLY ANSWERED TO PASS!!
Which welfare program provides assistance to the needy?
Medicaid
Barbara has the right to change the beneficiary designation on her life insurance
policy. Barbara's beneficiary is a(n):
revocable beneficiary
Within how many calendar days must all clean electronic health insurance claims
be paid in Alabama?
30
Which type of term policy allows the policyowner to switch to permanent
insurance?
Convertible term
What does renewable term guarantee?
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:
two years
Which of the following statements concerning a life insurance policy is TRUE?
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:
settlement options
The withholding of facts in an insurance application is called:
concealment
A licensed Alabama insurance producer would NOT be disciplined by the
Commissioner of Insurance for:
being convicted of a misdemeanor
The option to convert term life insurance to a permanent form of coverage can
normally be executed:
without proof of insurability
Which type of life insurance rider allows a policyowner to increase the level of
coverage to keep up with inflation?
cost of living rider
What is the minimum age requirement for a minor in Alabama to purchase a life
insurance policy?
15
Which of the following best describes a Health Maintenance Organization (HMO)?
Provides full medical services that stress preventative medicine
Medicare Advantage (Medicare Part C) allows the utilization of benefits through
a(n):
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:
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):
noncancellable policy
Benefits under a health insurance policy may (with the insured's written request)
be payable to:
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?
90
Which of these statements regarding an insurance application is true?
A representation is valid as long as it is true
An insurance company licensed to solicit insurance in a specific state is called:
an admitted company
John purchases insurance because he expects to experience a loss. This is
known as:
adverse selection
Who would most likely own a Medicare Supplement policy?
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?
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?
within 45 days of the date of application
Policy dividends for life insurance are:
not guaranteed
What is a certificate of insurance?
A certificate issued to each individual covered by the group life insurance
Which is NOT true regarding Medicare Supplement policies?
Must include a minimum 20-day Free-Look provision
In Alabama, all Health Maintenance Organizations must:
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?
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?
Uses the $10,000 to buy term insurance of the same face amount as her original policy
CORRECTLY ANSWERED TO PASS!!
Which welfare program provides assistance to the needy?
Medicaid
Barbara has the right to change the beneficiary designation on her life insurance
policy. Barbara's beneficiary is a(n):
revocable beneficiary
Within how many calendar days must all clean electronic health insurance claims
be paid in Alabama?
30
Which type of term policy allows the policyowner to switch to permanent
insurance?
Convertible term
What does renewable term guarantee?
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:
two years
Which of the following statements concerning a life insurance policy is TRUE?
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:
settlement options
The withholding of facts in an insurance application is called:
concealment
A licensed Alabama insurance producer would NOT be disciplined by the
Commissioner of Insurance for:
being convicted of a misdemeanor
The option to convert term life insurance to a permanent form of coverage can
normally be executed:
without proof of insurability
Which type of life insurance rider allows a policyowner to increase the level of
coverage to keep up with inflation?
cost of living rider
What is the minimum age requirement for a minor in Alabama to purchase a life
insurance policy?
15
Which of the following best describes a Health Maintenance Organization (HMO)?
Provides full medical services that stress preventative medicine
Medicare Advantage (Medicare Part C) allows the utilization of benefits through
a(n):
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:
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):
noncancellable policy
Benefits under a health insurance policy may (with the insured's written request)
be payable to:
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?
90
Which of these statements regarding an insurance application is true?
A representation is valid as long as it is true
An insurance company licensed to solicit insurance in a specific state is called:
an admitted company
John purchases insurance because he expects to experience a loss. This is
known as:
adverse selection
Who would most likely own a Medicare Supplement policy?
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?
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?
within 45 days of the date of application
Policy dividends for life insurance are:
not guaranteed
What is a certificate of insurance?
A certificate issued to each individual covered by the group life insurance
Which is NOT true regarding Medicare Supplement policies?
Must include a minimum 20-day Free-Look provision
In Alabama, all Health Maintenance Organizations must:
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?
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?
Uses the $10,000 to buy term insurance of the same face amount as her original policy
