Final Exam Alabama life Insurance Questions With
Complete Solutions Graded A+
The minimum grace period for a life insurance policy sold in Alabama is:
30 days
Alabama's annuity disclosure regulation:
Requires the delivery of a buyer's guide and a disclosure document to annuity applicant
An insurer pays a large claim for medical expenses after the insured has only
made one premium payment. This is an example of an:
Aleatory contract
Which of the following is NOT guaranteed by a whole life policy?
policy dividends
Any individual who has failed two Alabama insurance licensing examinations
must wait how long before retaking it a third time?
3 months
When an estate is named beneficiary to a life insurance policy, the policy
proceeds are:
distributed according to state law
Which of the following statements concerning a life insurance policy is TRUE?
an issued policy can never be changed by a producer
Julio, the insurance producer, has allowed his license to lapse. He would like to
reinstate his licenses without retaking a pre license course or passing a written
examination. To do this, Julio must reinstate the license within ___ months from
the renewal date.
12 months
Janet is retired and looking to invest a lump-sum of money through an insurance
company. Which product would be best suited for this?
annuity
Tina has an insurance policy with a 10-day free look provision. Which of these
statements is correct?
Her policy can be returned for 100% refund of the premium within 10 days from the date
the policy is delivered
A collateral assignment allows a policy owner to assign:
A portion of the policy proceeds to the assignee
A licensed Alabama insurance producer would NOT be disciplined by the
Commissioner of Insurance for:
Being convicted of a misdemeanor
What is a defined benefit plan?
a retirement plan that promises a specified benefit to the employee at retirement
Which of these is NOT considered a form of advertisement in Alabama?
A producer sending a Christmas card to a client
Buying land with the anticipation of it going up in value is an example of:
Speculative risk
If an individual would like to sell insurance for an insurance company , he/she
must:
, A. Have passed the state exam for the lines of authority in which licensure is
sought
B. Be licensed as an insurance producer
C. Be appointed by an insurer
D. All of these
D. All of these
Paula has an insurance policy that has a guaranteed minimum cash value, a
guaranteed death benefit, fixed premiums, ad grows at a rate reflected by a
selected fund index. Which type of life policy fits this description?
Equity indexed life
Insurance policies issued by companies which are owned by stockholders and do
not pay policy dividends are known as:
non-participating policies
Albert surrenders his whole life policy ten years after it was purchased. What can
he expect?
to pay taxes on the cash value in excess of premium paid
In Alabama, an insurer who violates state laws for the payment of insurance
commissions may be fined up to:
Three times the amount off the commissions paid
All of these are correct concerning group life insurance , EXCEPT:
Whole life insurance is the form of insurance typically used in group life insurance
An insured should be restored to the approximate financial condition occupied
before the loss occurred. This is called the:
principle of indemnity
A retirement plan intended for a sole proprietor and his/her employees would be
an:
Keogh plan
John is an annuitant who has surrendered his annuity at age 55. What will he
pay?
Tax on interest earned
ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC
Company and begins working for XYZ company five years later. If this person
were to die and the policy is still in force and unchanged,, where would the death
proceeds be directed?
ABC Company
An insurance company licensed to solicit insurance in a specific state is called:
an admitted company
Which of the following is an example of a "nonforfeiture value"?
After a policy owner cancels his/her permanent policy, the cash value accumulation
must be made available to the policy owner
A retirement plan that can be started by an employee, even if another plan is in
existence, is called an
Individual retirement Account (IRA)
A life insurance policy owner has just exercised the policy's reduced paid-up
option. Which of these statements is true?
The amount of coverage will be much less than the original coverage
Complete Solutions Graded A+
The minimum grace period for a life insurance policy sold in Alabama is:
30 days
Alabama's annuity disclosure regulation:
Requires the delivery of a buyer's guide and a disclosure document to annuity applicant
An insurer pays a large claim for medical expenses after the insured has only
made one premium payment. This is an example of an:
Aleatory contract
Which of the following is NOT guaranteed by a whole life policy?
policy dividends
Any individual who has failed two Alabama insurance licensing examinations
must wait how long before retaking it a third time?
3 months
When an estate is named beneficiary to a life insurance policy, the policy
proceeds are:
distributed according to state law
Which of the following statements concerning a life insurance policy is TRUE?
an issued policy can never be changed by a producer
Julio, the insurance producer, has allowed his license to lapse. He would like to
reinstate his licenses without retaking a pre license course or passing a written
examination. To do this, Julio must reinstate the license within ___ months from
the renewal date.
12 months
Janet is retired and looking to invest a lump-sum of money through an insurance
company. Which product would be best suited for this?
annuity
Tina has an insurance policy with a 10-day free look provision. Which of these
statements is correct?
Her policy can be returned for 100% refund of the premium within 10 days from the date
the policy is delivered
A collateral assignment allows a policy owner to assign:
A portion of the policy proceeds to the assignee
A licensed Alabama insurance producer would NOT be disciplined by the
Commissioner of Insurance for:
Being convicted of a misdemeanor
What is a defined benefit plan?
a retirement plan that promises a specified benefit to the employee at retirement
Which of these is NOT considered a form of advertisement in Alabama?
A producer sending a Christmas card to a client
Buying land with the anticipation of it going up in value is an example of:
Speculative risk
If an individual would like to sell insurance for an insurance company , he/she
must:
, A. Have passed the state exam for the lines of authority in which licensure is
sought
B. Be licensed as an insurance producer
C. Be appointed by an insurer
D. All of these
D. All of these
Paula has an insurance policy that has a guaranteed minimum cash value, a
guaranteed death benefit, fixed premiums, ad grows at a rate reflected by a
selected fund index. Which type of life policy fits this description?
Equity indexed life
Insurance policies issued by companies which are owned by stockholders and do
not pay policy dividends are known as:
non-participating policies
Albert surrenders his whole life policy ten years after it was purchased. What can
he expect?
to pay taxes on the cash value in excess of premium paid
In Alabama, an insurer who violates state laws for the payment of insurance
commissions may be fined up to:
Three times the amount off the commissions paid
All of these are correct concerning group life insurance , EXCEPT:
Whole life insurance is the form of insurance typically used in group life insurance
An insured should be restored to the approximate financial condition occupied
before the loss occurred. This is called the:
principle of indemnity
A retirement plan intended for a sole proprietor and his/her employees would be
an:
Keogh plan
John is an annuitant who has surrendered his annuity at age 55. What will he
pay?
Tax on interest earned
ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC
Company and begins working for XYZ company five years later. If this person
were to die and the policy is still in force and unchanged,, where would the death
proceeds be directed?
ABC Company
An insurance company licensed to solicit insurance in a specific state is called:
an admitted company
Which of the following is an example of a "nonforfeiture value"?
After a policy owner cancels his/her permanent policy, the cash value accumulation
must be made available to the policy owner
A retirement plan that can be started by an employee, even if another plan is in
existence, is called an
Individual retirement Account (IRA)
A life insurance policy owner has just exercised the policy's reduced paid-up
option. Which of these statements is true?
The amount of coverage will be much less than the original coverage
