ALABAMA HEALTH AND LIFE
INSURANCE EXACTITUDE EXAM
SERIES
According to the Alabama Insurance Regulations, all of the following are included as advertisements
except: - correct answer ✔✔A birthday card sent to a policyowner by his or her agent
According to the Alabama Insurance regulations, when using an illustration in the sale of a life insurance
policy, an insurance producer may legally do what? - correct answer ✔✔Use an illustration which has
"non-guaranteed" elements
According to the Optional Provision of a standard Health policy dealing with the issue of "unpaid
premium", what will happen if you sustain an insured loss during the grace period? - correct answer
✔✔The claim will be paid after deducting the unpaid premium
According to the required provision 3, the minimum grace period for all policies, other than monthly or
weekly premium policies is: - correct answer ✔✔31 days
A company domiciled in another state that has received permission from the insurance commissioner to
do business in this state is called: - correct answer ✔✔Foreign admitted company
A contract requires an offer and acceptance. What constitutes a valid offer? - correct answer ✔✔An
application and a premium payment submitted to the company or one of its agents
Adverse selection will exist when: - correct answer ✔✔The group for risk of insurance is more likely than
the average group experience loss
A family medical expense policy typically covers: - correct answer ✔✔Every member of the family
,A form of welfare that provides assistance to the needy is: - correct answer ✔✔Medicaid
A health savings account: - correct answer ✔✔Works with a high deductible plan
A level term policy is one where: - correct answer ✔✔The premium and the protection remain constant
for the term of the policy
A life insurance company may pay a death claim for less than the face amount of a policy under which of
the following conditions? - correct answer ✔✔All of the above
All of the following are common characteristics of Health Maintenance Organizations EXCEPT: - correct
answer ✔✔They pioneered Nurse Practitioners
All of the following provisions of an adjustable life policy may be adjusted to meet the policyholders
changing needs except: - correct answer ✔✔The face amount of the policy
All other factors being equal, which of the following policies is the least expensive as far as the total
amount of premium paid is concerned, assuming the insured lived to be 100? - correct answer ✔✔Single
Premium
An accident policy would normally cover: - correct answer ✔✔A bullet wound suffered when an
individual is shot by a hunter who mistook the individual for a deer
An employee covered by the employers group life plan is terminated. The employer fails to inform the
departing employee about the plans conversion option. When the former employee is killed bungee
jumping a week later: - correct answer ✔✔The insurance company must pay the full benefits of the
policy
An immediate annuity with quarterly payments will begin making payments: - correct answer ✔✔1
month after the annuity is purchased
, An insurance producer must keep complete records pertaining to transactions under the producer's
license for at least: - correct answer ✔✔Three years
An insurance producer who violates the Alabama long-term care insurance regulation may be fined up
to three times the amount of any commissions paid for each policy involved, or up to , whichever
is greater. - correct answer ✔✔$10,000
An insured can increase the monthly benefits paid under a disability income policy by a specified
percentage or in relation to an economic index with which of the following riders? - correct answer
✔✔Cost of living adjustment
nother way insurance companies are classified is on the basis of where they receive their authority to
operate, or their original charter. A company chartered in Alabama would be considered what type of
insurance company in Alabama? - correct answer ✔✔Domestic
A parent who purchases a policy on the life of a minor child and wishes to retain complete control of the
policy until the child reaches age 18 may do so by means of: - correct answer ✔✔The ownership clause
A policyholder decides to pay life insurance premiums quarterly instead of annually, what is the correct
statement? - correct answer ✔✔The total outlay of annual premium dollars will increase
A rider to a whole life policy that pays part or all of the death benefit to a terminally ill insured before his
or her death is called: - correct answer ✔✔An accelerated benefit option
A straight life annuity pays a periodic income: - correct answer ✔✔To two annuitants until one dies,
after which all payments cease
A term policy in which protection remains constant for the term of the policy is: - correct answer
✔✔level term
A term policy that allows the policyowner to switch to permanent insurance is called - correct answer
✔✔convertible term
INSURANCE EXACTITUDE EXAM
SERIES
According to the Alabama Insurance Regulations, all of the following are included as advertisements
except: - correct answer ✔✔A birthday card sent to a policyowner by his or her agent
According to the Alabama Insurance regulations, when using an illustration in the sale of a life insurance
policy, an insurance producer may legally do what? - correct answer ✔✔Use an illustration which has
"non-guaranteed" elements
According to the Optional Provision of a standard Health policy dealing with the issue of "unpaid
premium", what will happen if you sustain an insured loss during the grace period? - correct answer
✔✔The claim will be paid after deducting the unpaid premium
According to the required provision 3, the minimum grace period for all policies, other than monthly or
weekly premium policies is: - correct answer ✔✔31 days
A company domiciled in another state that has received permission from the insurance commissioner to
do business in this state is called: - correct answer ✔✔Foreign admitted company
A contract requires an offer and acceptance. What constitutes a valid offer? - correct answer ✔✔An
application and a premium payment submitted to the company or one of its agents
Adverse selection will exist when: - correct answer ✔✔The group for risk of insurance is more likely than
the average group experience loss
A family medical expense policy typically covers: - correct answer ✔✔Every member of the family
,A form of welfare that provides assistance to the needy is: - correct answer ✔✔Medicaid
A health savings account: - correct answer ✔✔Works with a high deductible plan
A level term policy is one where: - correct answer ✔✔The premium and the protection remain constant
for the term of the policy
A life insurance company may pay a death claim for less than the face amount of a policy under which of
the following conditions? - correct answer ✔✔All of the above
All of the following are common characteristics of Health Maintenance Organizations EXCEPT: - correct
answer ✔✔They pioneered Nurse Practitioners
All of the following provisions of an adjustable life policy may be adjusted to meet the policyholders
changing needs except: - correct answer ✔✔The face amount of the policy
All other factors being equal, which of the following policies is the least expensive as far as the total
amount of premium paid is concerned, assuming the insured lived to be 100? - correct answer ✔✔Single
Premium
An accident policy would normally cover: - correct answer ✔✔A bullet wound suffered when an
individual is shot by a hunter who mistook the individual for a deer
An employee covered by the employers group life plan is terminated. The employer fails to inform the
departing employee about the plans conversion option. When the former employee is killed bungee
jumping a week later: - correct answer ✔✔The insurance company must pay the full benefits of the
policy
An immediate annuity with quarterly payments will begin making payments: - correct answer ✔✔1
month after the annuity is purchased
, An insurance producer must keep complete records pertaining to transactions under the producer's
license for at least: - correct answer ✔✔Three years
An insurance producer who violates the Alabama long-term care insurance regulation may be fined up
to three times the amount of any commissions paid for each policy involved, or up to , whichever
is greater. - correct answer ✔✔$10,000
An insured can increase the monthly benefits paid under a disability income policy by a specified
percentage or in relation to an economic index with which of the following riders? - correct answer
✔✔Cost of living adjustment
nother way insurance companies are classified is on the basis of where they receive their authority to
operate, or their original charter. A company chartered in Alabama would be considered what type of
insurance company in Alabama? - correct answer ✔✔Domestic
A parent who purchases a policy on the life of a minor child and wishes to retain complete control of the
policy until the child reaches age 18 may do so by means of: - correct answer ✔✔The ownership clause
A policyholder decides to pay life insurance premiums quarterly instead of annually, what is the correct
statement? - correct answer ✔✔The total outlay of annual premium dollars will increase
A rider to a whole life policy that pays part or all of the death benefit to a terminally ill insured before his
or her death is called: - correct answer ✔✔An accelerated benefit option
A straight life annuity pays a periodic income: - correct answer ✔✔To two annuitants until one dies,
after which all payments cease
A term policy in which protection remains constant for the term of the policy is: - correct answer
✔✔level term
A term policy that allows the policyowner to switch to permanent insurance is called - correct answer
✔✔convertible term
