ALABAMA LIFE INSURANCE
FINAL EXAM STUDY GUIDE
2025/2026 COMPLETE
QUESTIONS WITH CORRECT
DETAILED ANSWERS || 100%
GUARANTEED PASS <RECENT
VERSION>
a predetermined limit. - ANSWER Insurance is a method risk is
transferred to an insurer for consideration up to
1. spouses in each other
2. parents in their children
3. creditors in their debtors - ANSWER Which of the following would be
considered proper establishment of insurable interest in the life insurance
area?
It is called the mortality rate - ANSWER Which of the following
statements about the average number of people who die each year is true?
Equal value is not necessarily given by both parties to the contract -
ANSWER An insurance contract is an aleatory contract. This means:
Only the insurance company is bound to live up to its side of the
agreement - ANSWER A life insurance policy is a unilateral contract
because:
1. Legal purpose
2. Offer and acceptance
3. Consideration - ANSWER All of the following are elements of a
contract
Unauthorized company - ANSWER A company that has not received
permission from an Insurance Commissioner to do business in his or her
state is called a/an:
, A written or oral statement which is false - ANSWER Misrepresentation
is:
Adverse Selection - ANSWER The chance that a person who anticipates
a loss will purchase insurance is:
Assumption of risk - ANSWER Assuming a deductible with your
insurance policy is which type of risk management technique?
Morbidity tables - ANSWER In the Health-Disability area we use what
type data to produce rates?
An authorized company - ANSWER A company that is licensed to sell
insurance in a particular state is:
To have the applicant pay the initial premium at the time of application -
ANSWER he most effective way to ensure that the applicant will accept
the policy when it is issued is:
A mutual insurance company - ANSWER Which is the proper term for a
company owned by its policy owner?
Fines, imprisonment or both - ANSWER The punishment for fraud or
making false statements may include:
Always the insurer - ANSWER A producer who is acting as an agent is
representing:
consideration - ANSWER The premium paid and the statements on the
application to the insurance company is called
the policy owner must expect to suffer a loss if the insured dies. -
ANSWER In life insurance the insurable interest requirements is
generally satisfied if:
1. Statements relied upon by a second party who then suffers a loss
2. Intent to gain advantage
3. An intentional misrepresentation made by the applicant - ANSWER
Each of the following would be an element in the definition of fraud
1. in marine insurance
2. in insuring famous people
,3. in the reinsurance business - ANSWER Lloyd's of London is involved
the insured does have to accept the contract as written by the insurer so
all ambiguities will be resolved in favor of the insured. - ANSWER The
legal concept of Adhesion is a bit of a problem to insurers because.
Reduction of risk - ANSWER Living a healthy life style is an example of
which risk management technique?
A transfer of risk - ANSWER Purchasing a life policy is a good example
of:
In the state where its home office is located - ANSWER A company is
domiciled:
One promiser unilateral and one author adhesion. - ANSWER Contract
law terms unilateral and adhesion have a common element?
1.estate creation
2.survivor protection
3.estate protection - ANSWER What is the basic purpose of life insurance?
1. statements made on the on the application
2. premium
3. promise to pay if a loss occurs - ANSWER In insurance and contract
law in general the term consideration means?
the agent or producer - ANSWER Under your agency contract you are
know as?
Rebating - ANSWER Offering any inducement of valuable consideration
whatever not specified in the terms of the contract.
Licensed Alabama Producer. - ANSWER Life-Health and Disability
policies written or subjects of insurance in Alabama must be issued by
and through a:
1. Denial of an insurance license.
2. Suspension of an insurance license.
3. Revocation of an insurance license. - ANSWER A violation of the
Alabama Insurance Code may result in the following:
, Certificate of Authority. - ANSWER Insurers in Alabama authorized and
approved to do business in this state receive this in a:
Rebating - ANSWER A producer offered to give half his commission to
a client if he would buy a policy from him,this is illegal and is called?
24 hours. - ANSWER A producer who is subject to the continuing
education requirement will be required to show they have complete at
least ___ ____ of continuing education every two years.
Consultant. - ANSWER Which type of insurance person does not
actually sell insurance but sells advice about insurance?
Salaried service representatives who receive commissions - ANSWER
Alabama law exempts the following from license requirement except:
A producer - ANSWER A business entity in Alabama may be licensed as:
The uncertainty of loss - ANSWER Risk may be defined as:
prove this was both intentional and material - ANSWER A father did not
reveal that his daughter suffers from asthma on the application for a
health policy. In order to avoid paying a claim the insurer must
competent parties - ANSWER In order to be valid, a contract must be
between individuals considered legally able to enter into an agreement.
This principle is known as:
Making a formal request to the company for an insurance policy. -
ANSWER When signing the application form, the proposed insured is:
The policy, its endorsements, and any attached papers - ANSWER What
constitutes an entire insurance contract?
True - ANSWER T/F Misrepresentations on the part of an applicant as to
the health or other conditions of the applicant must be deliberate and
material for an insurer to avoid coverage.
True - ANSWER T/F Misrepresentation is a deliberate false
representation on the part of the agent or insurer as to the terms and
conditions of the policy its terms and benefits.
FINAL EXAM STUDY GUIDE
2025/2026 COMPLETE
QUESTIONS WITH CORRECT
DETAILED ANSWERS || 100%
GUARANTEED PASS <RECENT
VERSION>
a predetermined limit. - ANSWER Insurance is a method risk is
transferred to an insurer for consideration up to
1. spouses in each other
2. parents in their children
3. creditors in their debtors - ANSWER Which of the following would be
considered proper establishment of insurable interest in the life insurance
area?
It is called the mortality rate - ANSWER Which of the following
statements about the average number of people who die each year is true?
Equal value is not necessarily given by both parties to the contract -
ANSWER An insurance contract is an aleatory contract. This means:
Only the insurance company is bound to live up to its side of the
agreement - ANSWER A life insurance policy is a unilateral contract
because:
1. Legal purpose
2. Offer and acceptance
3. Consideration - ANSWER All of the following are elements of a
contract
Unauthorized company - ANSWER A company that has not received
permission from an Insurance Commissioner to do business in his or her
state is called a/an:
, A written or oral statement which is false - ANSWER Misrepresentation
is:
Adverse Selection - ANSWER The chance that a person who anticipates
a loss will purchase insurance is:
Assumption of risk - ANSWER Assuming a deductible with your
insurance policy is which type of risk management technique?
Morbidity tables - ANSWER In the Health-Disability area we use what
type data to produce rates?
An authorized company - ANSWER A company that is licensed to sell
insurance in a particular state is:
To have the applicant pay the initial premium at the time of application -
ANSWER he most effective way to ensure that the applicant will accept
the policy when it is issued is:
A mutual insurance company - ANSWER Which is the proper term for a
company owned by its policy owner?
Fines, imprisonment or both - ANSWER The punishment for fraud or
making false statements may include:
Always the insurer - ANSWER A producer who is acting as an agent is
representing:
consideration - ANSWER The premium paid and the statements on the
application to the insurance company is called
the policy owner must expect to suffer a loss if the insured dies. -
ANSWER In life insurance the insurable interest requirements is
generally satisfied if:
1. Statements relied upon by a second party who then suffers a loss
2. Intent to gain advantage
3. An intentional misrepresentation made by the applicant - ANSWER
Each of the following would be an element in the definition of fraud
1. in marine insurance
2. in insuring famous people
,3. in the reinsurance business - ANSWER Lloyd's of London is involved
the insured does have to accept the contract as written by the insurer so
all ambiguities will be resolved in favor of the insured. - ANSWER The
legal concept of Adhesion is a bit of a problem to insurers because.
Reduction of risk - ANSWER Living a healthy life style is an example of
which risk management technique?
A transfer of risk - ANSWER Purchasing a life policy is a good example
of:
In the state where its home office is located - ANSWER A company is
domiciled:
One promiser unilateral and one author adhesion. - ANSWER Contract
law terms unilateral and adhesion have a common element?
1.estate creation
2.survivor protection
3.estate protection - ANSWER What is the basic purpose of life insurance?
1. statements made on the on the application
2. premium
3. promise to pay if a loss occurs - ANSWER In insurance and contract
law in general the term consideration means?
the agent or producer - ANSWER Under your agency contract you are
know as?
Rebating - ANSWER Offering any inducement of valuable consideration
whatever not specified in the terms of the contract.
Licensed Alabama Producer. - ANSWER Life-Health and Disability
policies written or subjects of insurance in Alabama must be issued by
and through a:
1. Denial of an insurance license.
2. Suspension of an insurance license.
3. Revocation of an insurance license. - ANSWER A violation of the
Alabama Insurance Code may result in the following:
, Certificate of Authority. - ANSWER Insurers in Alabama authorized and
approved to do business in this state receive this in a:
Rebating - ANSWER A producer offered to give half his commission to
a client if he would buy a policy from him,this is illegal and is called?
24 hours. - ANSWER A producer who is subject to the continuing
education requirement will be required to show they have complete at
least ___ ____ of continuing education every two years.
Consultant. - ANSWER Which type of insurance person does not
actually sell insurance but sells advice about insurance?
Salaried service representatives who receive commissions - ANSWER
Alabama law exempts the following from license requirement except:
A producer - ANSWER A business entity in Alabama may be licensed as:
The uncertainty of loss - ANSWER Risk may be defined as:
prove this was both intentional and material - ANSWER A father did not
reveal that his daughter suffers from asthma on the application for a
health policy. In order to avoid paying a claim the insurer must
competent parties - ANSWER In order to be valid, a contract must be
between individuals considered legally able to enter into an agreement.
This principle is known as:
Making a formal request to the company for an insurance policy. -
ANSWER When signing the application form, the proposed insured is:
The policy, its endorsements, and any attached papers - ANSWER What
constitutes an entire insurance contract?
True - ANSWER T/F Misrepresentations on the part of an applicant as to
the health or other conditions of the applicant must be deliberate and
material for an insurer to avoid coverage.
True - ANSWER T/F Misrepresentation is a deliberate false
representation on the part of the agent or insurer as to the terms and
conditions of the policy its terms and benefits.
