ALABAMA STATE INSURANCE EXAM
FX QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
If a producer changes his residential address who must he/she notify? - ANS This change will
need to be reported to the Commissioner.
Which of the following is NOT true regarding minors purchasing insurance policies in this state?
- ANS Minors at the age of 14 are allowed to buy their own policies.
What is the penalty for IRA distributions that are below the required minimum for the year? -
ANS 50%
All of the following are business uses of life insurance EXCEPT - ANS Funding against general
company financial loss.
Which of the following is called a "second-to-die" policy? - ANS Survivorship life
The term "fiduciary capacity" deals with a producer's - ANS Position of financial trust.
Which is NOT true about beneficiary designations? - ANS The beneficiary must have
insurable interest in the insured.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, An IRA purchased by a small employer to cover employees is known as a - ANS
All of the following applicants for an insurance producer license are exempt from prelicensing
education requirements EXCEPT - ANS An applicant for a dealer's license.
An agent accepts the premium payment 35 days after it is due, telling the insured that there
will not be a problem keeping the policy in force. This is an example of what type of agent
authority? - ANS apparant
Which of the following determines the length of time that benefits will be received under the
Fixed-Amount settlement option? - ANS Size of each installment
What is a major problem with naming a trust as the beneficiary of a life insurance policy? -
ANS They are expensive to administer.
Contracts that are prepared by one party and submitted to the other party on a take-it-or-
leave-it basis are classified as - ANS Contracts of adhesion.
All of the following statements concerning the use of life insurance as an Executive Bonus are
correct EXCEPT - ANS The policy is owned by the company.
Which of the following is considered to be a morale hazard? - ANS Driving recklessly
When transacting business in this state an insurer formed under the laws of another country is
known as a/an - ANS Alien Insurer
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of
the policy? - ANS It is reduced to the amount of what the cash value would buy as a single
premium.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
FX QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
If a producer changes his residential address who must he/she notify? - ANS This change will
need to be reported to the Commissioner.
Which of the following is NOT true regarding minors purchasing insurance policies in this state?
- ANS Minors at the age of 14 are allowed to buy their own policies.
What is the penalty for IRA distributions that are below the required minimum for the year? -
ANS 50%
All of the following are business uses of life insurance EXCEPT - ANS Funding against general
company financial loss.
Which of the following is called a "second-to-die" policy? - ANS Survivorship life
The term "fiduciary capacity" deals with a producer's - ANS Position of financial trust.
Which is NOT true about beneficiary designations? - ANS The beneficiary must have
insurable interest in the insured.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, An IRA purchased by a small employer to cover employees is known as a - ANS
All of the following applicants for an insurance producer license are exempt from prelicensing
education requirements EXCEPT - ANS An applicant for a dealer's license.
An agent accepts the premium payment 35 days after it is due, telling the insured that there
will not be a problem keeping the policy in force. This is an example of what type of agent
authority? - ANS apparant
Which of the following determines the length of time that benefits will be received under the
Fixed-Amount settlement option? - ANS Size of each installment
What is a major problem with naming a trust as the beneficiary of a life insurance policy? -
ANS They are expensive to administer.
Contracts that are prepared by one party and submitted to the other party on a take-it-or-
leave-it basis are classified as - ANS Contracts of adhesion.
All of the following statements concerning the use of life insurance as an Executive Bonus are
correct EXCEPT - ANS The policy is owned by the company.
Which of the following is considered to be a morale hazard? - ANS Driving recklessly
When transacting business in this state an insurer formed under the laws of another country is
known as a/an - ANS Alien Insurer
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of
the policy? - ANS It is reduced to the amount of what the cash value would buy as a single
premium.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
