1
ALABAMA LIFE INSURANCE EXAM LATEST UPDATES -
2025/2026- ACTUAL QUESTIONS WITH VERIFIED ANSWERS
ALREADY GRADED A+ GUARANTEED SUCCESS
A situation in which a person can only experience a loss and no gain presents
what type of risk?
Pure risk
Wagering on a sporting event is known as what type of risk?
Speculative
An insurance company that is formed under the laws of another state is known as
what type of insurer?
Foreign
When agents act within the scope of their contract, their actions will be assumed
to be the acts of whom?
Insurer
What type of risk is insurable?
Pure
, 2
What are the four elements of an insurance contract?
Agreement (offer and acceptance), consideration, competent parties, and legal
purpose
When a change needs to be made on the application for insurance, which is the
best method for correcting the information?
Complete a new application or ask the applicant to initial the correction on the
original application
Whom does an insurance agent represent?
Insurance company
The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what?
Loss
When does an insurance policy go into effect?
When the policy is delivered and the premium is paid
, 3
Conditions that increase the chance of a loss are known as what?
Hazards
What do individuals use to transfer their risk of loss to a larger group?
Insurance
The requirement that agents must account for and promptly remit all insurance
funds collected is knows as what type of agent responsibility?
Fiduciary
According to the Law of Agency, a principal is represented by whom?
Agent or producer
An insurance company is domiciled in California and transacts insurance in
Nevada. What is this insurer's classification in Nevada?
Foreign
In forming an insurance contract, when does an acceptance usually occur?
, 4
When the insurer approves a prepaid application
What is the best way to handle incomplete insurance applications?
Return the application to the applicant for completion
What are the three types of hazards?
Physical, moral and morale
What entities make up the Medical Information Bureau?
Insurers
What document is required for an insurance company to transact insurance?
Certificate of Authority
What is the term for the causes of loss insured against in an insurance policy?
Peril
If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer?
ALABAMA LIFE INSURANCE EXAM LATEST UPDATES -
2025/2026- ACTUAL QUESTIONS WITH VERIFIED ANSWERS
ALREADY GRADED A+ GUARANTEED SUCCESS
A situation in which a person can only experience a loss and no gain presents
what type of risk?
Pure risk
Wagering on a sporting event is known as what type of risk?
Speculative
An insurance company that is formed under the laws of another state is known as
what type of insurer?
Foreign
When agents act within the scope of their contract, their actions will be assumed
to be the acts of whom?
Insurer
What type of risk is insurable?
Pure
, 2
What are the four elements of an insurance contract?
Agreement (offer and acceptance), consideration, competent parties, and legal
purpose
When a change needs to be made on the application for insurance, which is the
best method for correcting the information?
Complete a new application or ask the applicant to initial the correction on the
original application
Whom does an insurance agent represent?
Insurance company
The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what?
Loss
When does an insurance policy go into effect?
When the policy is delivered and the premium is paid
, 3
Conditions that increase the chance of a loss are known as what?
Hazards
What do individuals use to transfer their risk of loss to a larger group?
Insurance
The requirement that agents must account for and promptly remit all insurance
funds collected is knows as what type of agent responsibility?
Fiduciary
According to the Law of Agency, a principal is represented by whom?
Agent or producer
An insurance company is domiciled in California and transacts insurance in
Nevada. What is this insurer's classification in Nevada?
Foreign
In forming an insurance contract, when does an acceptance usually occur?
, 4
When the insurer approves a prepaid application
What is the best way to handle incomplete insurance applications?
Return the application to the applicant for completion
What are the three types of hazards?
Physical, moral and morale
What entities make up the Medical Information Bureau?
Insurers
What document is required for an insurance company to transact insurance?
Certificate of Authority
What is the term for the causes of loss insured against in an insurance policy?
Peril
If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer?
