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Alabama State Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
Which policy accumulates cash value at the fastest rate?
Ans: A. 10-pay life policy
The legal doctrine that prevents one from exercising a right of privilege is called
Ans: 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
Ans: contains a grace period.
If an insurance carrier decides to cancel a producer's appointment, each of the
following is true EXCEPT:
Ans: 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
Ans: 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?
Ans: Foreign
The Entire Contract Provision stipulates each of the following EXCEPT:
Ans: Any verbal changes made by the agent are permissible if in writing.
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If the insurance company accepts a special class risk
Ans: 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
Ans: the insurer is not liable for claims arising under the conditions described in these
provisions.
The application has two parts. Part 1 is?
Ans: General information about the applicant.
All Health Insurers must pay claims as prescribed by Alabama law. Which of
these statements is FALSE?
Ans: . 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
Ans: $49,500, which is the face amount less the premium owed.
Legally, who does an insurance agent (producer) represent?
Ans: only the company
Benefits paid under an employer-paid Group Health Insurance policy are?
Ans: 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?
Ans: 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?
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Ans: 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
Ans: all of the above
The duties of the Alabama Insurance Commissioner include all of the following
EXCEPT:
Ans: . Represent the State of Alabama in any legal proceedings.
If Todd has been named the irrevocable beneficiary of a life insurance policy,
he
Ans: cannot be replaced as beneficiary without his consent
Why are insurance contracts said to be contracts of adhesion?
Ans: One party writes the contract and the other party must accept or reject the contract as
written.
How can 'Key Employee' disability income insurance purchased by a business be
used by the business?
Ans: Both of the above.
All of the following are examples of insurable interest EXCEPT:
Ans: an airline insuring the lives of its passengers.
A beneficiary is always which of the following?
Ans: The person named to receive the sum specified in a life insurance contract when the
insured dies.
A straight life annuity provides which of the following?
Ans: A periodic income to the annuitant for life
A defined contribution plan
Ans: promises a specified payment to the plan by the employer
Click here for more: Preppass - Stuvia
Alabama State Insurance Exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
Which policy accumulates cash value at the fastest rate?
Ans: A. 10-pay life policy
The legal doctrine that prevents one from exercising a right of privilege is called
Ans: 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
Ans: contains a grace period.
If an insurance carrier decides to cancel a producer's appointment, each of the
following is true EXCEPT:
Ans: 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
Ans: 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?
Ans: Foreign
The Entire Contract Provision stipulates each of the following EXCEPT:
Ans: Any verbal changes made by the agent are permissible if in writing.
,Page | 2
Click here for more: Preppass - Stuvia
If the insurance company accepts a special class risk
Ans: 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
Ans: the insurer is not liable for claims arising under the conditions described in these
provisions.
The application has two parts. Part 1 is?
Ans: General information about the applicant.
All Health Insurers must pay claims as prescribed by Alabama law. Which of
these statements is FALSE?
Ans: . 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
Ans: $49,500, which is the face amount less the premium owed.
Legally, who does an insurance agent (producer) represent?
Ans: only the company
Benefits paid under an employer-paid Group Health Insurance policy are?
Ans: 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?
Ans: 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?
, Page | 3
Click here for more: Preppass - Stuvia
Ans: 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
Ans: all of the above
The duties of the Alabama Insurance Commissioner include all of the following
EXCEPT:
Ans: . Represent the State of Alabama in any legal proceedings.
If Todd has been named the irrevocable beneficiary of a life insurance policy,
he
Ans: cannot be replaced as beneficiary without his consent
Why are insurance contracts said to be contracts of adhesion?
Ans: One party writes the contract and the other party must accept or reject the contract as
written.
How can 'Key Employee' disability income insurance purchased by a business be
used by the business?
Ans: Both of the above.
All of the following are examples of insurable interest EXCEPT:
Ans: an airline insuring the lives of its passengers.
A beneficiary is always which of the following?
Ans: The person named to receive the sum specified in a life insurance contract when the
insured dies.
A straight life annuity provides which of the following?
Ans: A periodic income to the annuitant for life
A defined contribution plan
Ans: promises a specified payment to the plan by the employer
