ALABAMA INSURANCE TEST WITH VERIFIED
ANSWERS
Which welfare program provides assistance to the needy? - correct answer
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✔Medicaid
|!|
Barbara has the right to change the beneficiary designation on her life
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance policy. Barbara's beneficiary is a(n): - correct answer ✔revocable
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
beneficiary
Within how many calendar days must all clean electronic health insurance
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
claims be paid in Alabama? - correct answer ✔30
|!| |!| |!| |!| |!| |!| |!| |!|
Which type of term policy allows the policyowner to switch to permanent
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance? - correct answer ✔Convertible term
|!| |!| |!| |!| |!|
What does renewable term guarantee? - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔two years |!|
Which of the following statements concerning a life insurance policy is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
TRUE? - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔settlement options |!|
The withholding of facts in an insurance application is called: - correct
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answer ✔concealment |!|
A licensed Alabama insurance producer would NOT be disciplined by the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
Commissioner of Insurance for: - correct answer ✔being convicted of a
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
misdemeanor
The option to convert term life insurance to a permanent form of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
coverage can normally be executed: - correct answer ✔without proof of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurability
Which type of life insurance rider allows a policyowner to increase the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
level of coverage to keep up with inflation? - correct answer ✔cost of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
living rider |!|
What is the minimum age requirement for a minor in Alabama to
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
purchase a life insurance policy? - correct answer ✔15
|!| |!| |!| |!| |!| |!| |!| |!|
Which of the following best describes a Health Maintenance Organization
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
(HMO)? - correct answer ✔Provides full medical services that stress
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
preventative medicine |!|
, Medicare Advantage (Medicare Part C) allows the utilization of benefits
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
through a(n): - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔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): -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔noncancellable policy
|!| |!| |!| |!|
Benefits under a health insurance policy may (with the insured's written
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
request) be payable to: - correct answer ✔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? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔90 |!|
Which of these statements regarding an insurance application is true? -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔A representation is valid as long as it is true
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
An insurance company licensed to solicit insurance in a specific state is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
called: - correct answer ✔an admitted company
|!| |!| |!| |!| |!| |!|
John purchases insurance because he expects to experience a loss. This is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
known as: - correct answer ✔adverse selection
|!| |!| |!| |!| |!| |!|
ANSWERS
Which welfare program provides assistance to the needy? - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔Medicaid
|!|
Barbara has the right to change the beneficiary designation on her life
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance policy. Barbara's beneficiary is a(n): - correct answer ✔revocable
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
beneficiary
Within how many calendar days must all clean electronic health insurance
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
claims be paid in Alabama? - correct answer ✔30
|!| |!| |!| |!| |!| |!| |!| |!|
Which type of term policy allows the policyowner to switch to permanent
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurance? - correct answer ✔Convertible term
|!| |!| |!| |!| |!|
What does renewable term guarantee? - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔two years |!|
Which of the following statements concerning a life insurance policy is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
TRUE? - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔settlement options |!|
The withholding of facts in an insurance application is called: - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔concealment |!|
A licensed Alabama insurance producer would NOT be disciplined by the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
Commissioner of Insurance for: - correct answer ✔being convicted of a
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
misdemeanor
The option to convert term life insurance to a permanent form of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
coverage can normally be executed: - correct answer ✔without proof of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
insurability
Which type of life insurance rider allows a policyowner to increase the
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
level of coverage to keep up with inflation? - correct answer ✔cost of
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
living rider |!|
What is the minimum age requirement for a minor in Alabama to
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
purchase a life insurance policy? - correct answer ✔15
|!| |!| |!| |!| |!| |!| |!| |!|
Which of the following best describes a Health Maintenance Organization
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
(HMO)? - correct answer ✔Provides full medical services that stress
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
preventative medicine |!|
, Medicare Advantage (Medicare Part C) allows the utilization of benefits
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
through a(n): - correct answer ✔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: - correct answer
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
✔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): -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔noncancellable policy
|!| |!| |!| |!|
Benefits under a health insurance policy may (with the insured's written
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
request) be payable to: - correct answer ✔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? - correct
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
answer ✔90 |!|
Which of these statements regarding an insurance application is true? -
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
correct answer ✔A representation is valid as long as it is true
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
An insurance company licensed to solicit insurance in a specific state is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
called: - correct answer ✔an admitted company
|!| |!| |!| |!| |!| |!|
John purchases insurance because he expects to experience a loss. This is
|!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!| |!|
known as: - correct answer ✔adverse selection
|!| |!| |!| |!| |!| |!|
