Alabama State Insurance Exam with
verified solutions
Which policy accumulates cash value at the fastest rate? - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔A. 10-pay life policy
|!| |!| |!|
The legal doctrine that prevents one from exercising a right of privilege is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
called - correct answer ✔Estoppel
|!| |!| |!| |!|
If the consideration clause states that the premium payment keeps the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy in force until the next premium is due plus 30 days thereafter, the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy - correct answer ✔contains a grace period.
|!| |!| |!| |!| |!| |!| |!|
If an insurance carrier decides to cancel a producer's appointment, each of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
the following is true EXCEPT: - correct answer ✔The Commissioner can
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
immediately cancel the producer's license based upon the Company's
|!| |!| |!| |!| |!| |!| |!| |!| |!|
allegation of wrong doing by the producer. |!| |!| |!| |!| |!| |!|
Under the waiver of premium provision of a life insurance policy, if a
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
disability proves total and permanent, what happens to any premiums paid
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
by the policyowner during the waiting period - correct answer ✔All
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premiums paid by the policyholder during the waiting period are typically
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
refunded.
A company chartered in Alabama would be considered what type of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance company in Ohio? - correct answer ✔Foreign
|!| |!| |!| |!| |!| |!| |!|
,The Entire Contract Provision stipulates each of the following EXCEPT: -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔Any verbal changes made by the agent are permissible if
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
in writing.
|!|
If the insurance company accepts a special class risk - correct answer ✔the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premium will be higher than for a normal risk.
|!| |!| |!| |!| |!| |!| |!| |!| |!|
The Optional Provisions of a standard Health policy address the issue of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
claims arising from "illegal occupations," "commission of felonies," and
|!| |!| |!| |!| |!| |!| |!| |!|
"use of narcotics." According to these provisions - correct answer ✔the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurer is not liable for claims arising under the conditions described in
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
these provisions. |!|
The application has two parts. Part 1 is? - correct answer ✔General
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
information about the applicant. |!| |!| |!|
All Health Insurers must pay claims as prescribed by Alabama law. Which
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
of these statements is FALSE? - correct answer ✔. Insurers may decide
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
which claim forms they will accept
|!| |!| |!| |!| |!|
Darlene dies without having paid the $500 premium on her $50,000 policy
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
that was due a week before her death. With no outstanding policy loans,
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
Darlene's beneficiary can expect to receive - correct answer ✔$49,500,
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
which is the face amount less the premium owed.
|!| |!| |!| |!| |!| |!| |!| |!|
Legally, who does an insurance agent (producer) represent? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔only the company |!| |!| |!|
, Benefits paid under an employer-paid Group Health Insurance policy are? -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔The benefits are non-taxable to the employee, but the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premiums are taxable as remuneration to the employee.
|!| |!| |!| |!| |!| |!| |!|
When a dependent child covered under the parents' major medical policy
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
reaches the limiting age, what is the provision that allows the child to
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
purchase his or her own policy without establishing insurability? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔conversion privilege |!| |!|
When Jonas died, it was discovered that he was actually six years older
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
than he had claimed when applying for an insurance policy. Upon his
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
death what will the insurance company pay? - correct answer ✔The
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
company will pay only the amount of insurance that Jonas' premiums
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
would have purchased at his correct age.
|!| |!| |!| |!| |!| |!|
If you qualify for COBRA, coverage under the group health plan - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔all of the above |!| |!| |!| |!|
The duties of the Alabama Insurance Commissioner include all of the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
following EXCEPT: - correct answer ✔. Represent the State of Alabama in
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
any legal proceedings.
|!| |!|
If Todd has been named the irrevocable beneficiary of a life insurance
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy, he - correct answer ✔cannot be replaced as beneficiary without his
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
consent
|!|
Why are insurance contracts said to be contracts of adhesion? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔One party writes the contract and the other party must accept
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
or reject the contract as written.
|!| |!| |!| |!| |!|
verified solutions
Which policy accumulates cash value at the fastest rate? - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔A. 10-pay life policy
|!| |!| |!|
The legal doctrine that prevents one from exercising a right of privilege is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
called - correct answer ✔Estoppel
|!| |!| |!| |!|
If the consideration clause states that the premium payment keeps the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy in force until the next premium is due plus 30 days thereafter, the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy - correct answer ✔contains a grace period.
|!| |!| |!| |!| |!| |!| |!|
If an insurance carrier decides to cancel a producer's appointment, each of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
the following is true EXCEPT: - correct answer ✔The Commissioner can
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
immediately cancel the producer's license based upon the Company's
|!| |!| |!| |!| |!| |!| |!| |!| |!|
allegation of wrong doing by the producer. |!| |!| |!| |!| |!| |!|
Under the waiver of premium provision of a life insurance policy, if a
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
disability proves total and permanent, what happens to any premiums paid
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
by the policyowner during the waiting period - correct answer ✔All
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premiums paid by the policyholder during the waiting period are typically
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
refunded.
A company chartered in Alabama would be considered what type of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance company in Ohio? - correct answer ✔Foreign
|!| |!| |!| |!| |!| |!| |!|
,The Entire Contract Provision stipulates each of the following EXCEPT: -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔Any verbal changes made by the agent are permissible if
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
in writing.
|!|
If the insurance company accepts a special class risk - correct answer ✔the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premium will be higher than for a normal risk.
|!| |!| |!| |!| |!| |!| |!| |!| |!|
The Optional Provisions of a standard Health policy address the issue of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
claims arising from "illegal occupations," "commission of felonies," and
|!| |!| |!| |!| |!| |!| |!| |!|
"use of narcotics." According to these provisions - correct answer ✔the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurer is not liable for claims arising under the conditions described in
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
these provisions. |!|
The application has two parts. Part 1 is? - correct answer ✔General
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
information about the applicant. |!| |!| |!|
All Health Insurers must pay claims as prescribed by Alabama law. Which
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
of these statements is FALSE? - correct answer ✔. Insurers may decide
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
which claim forms they will accept
|!| |!| |!| |!| |!|
Darlene dies without having paid the $500 premium on her $50,000 policy
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
that was due a week before her death. With no outstanding policy loans,
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
Darlene's beneficiary can expect to receive - correct answer ✔$49,500,
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
which is the face amount less the premium owed.
|!| |!| |!| |!| |!| |!| |!| |!|
Legally, who does an insurance agent (producer) represent? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔only the company |!| |!| |!|
, Benefits paid under an employer-paid Group Health Insurance policy are? -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔The benefits are non-taxable to the employee, but the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
premiums are taxable as remuneration to the employee.
|!| |!| |!| |!| |!| |!| |!|
When a dependent child covered under the parents' major medical policy
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
reaches the limiting age, what is the provision that allows the child to
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
purchase his or her own policy without establishing insurability? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔conversion privilege |!| |!|
When Jonas died, it was discovered that he was actually six years older
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
than he had claimed when applying for an insurance policy. Upon his
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
death what will the insurance company pay? - correct answer ✔The
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
company will pay only the amount of insurance that Jonas' premiums
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
would have purchased at his correct age.
|!| |!| |!| |!| |!| |!|
If you qualify for COBRA, coverage under the group health plan - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔all of the above |!| |!| |!| |!|
The duties of the Alabama Insurance Commissioner include all of the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
following EXCEPT: - correct answer ✔. Represent the State of Alabama in
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
any legal proceedings.
|!| |!|
If Todd has been named the irrevocable beneficiary of a life insurance
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
policy, he - correct answer ✔cannot be replaced as beneficiary without his
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
consent
|!|
Why are insurance contracts said to be contracts of adhesion? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔One party writes the contract and the other party must accept
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
or reject the contract as written.
|!| |!| |!| |!| |!|
