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ALABAMA LIFE AND HEALTH INSURANCE EXAM
2026| BRAND NEW ACTUAL EXAM WITH 100%
VERIFIED QUESTIONS AND CORRECT SOLUTIONS|
GUARANTEED VALUE PACK| ACE YOUR GRADES.
Which of the following death benefits is paid out to the beneficiary
income tax free? - correct answer - Life insurance when the insured dies
while the policy is in force
Generally, which of the following Annuities is not designed to guarantee
the principal value of the policy in stable interest rate environments? -
correct answer - Variable
Variable annuities have no minimum guarantee of interest or gains, and
may lose value in a declining market.
In group insurance, the evidence of a contract between the insurer and
the employer or association is: - correct answer - The policy
The policy itself is the evidence that a contract exists, whether it is an
individual, association or group policy. In group insurance the policy is
referred to as the master policy. Individual insureds do not receive a
copy of the policy, since there is no agreement between the insureds
and the insurer.
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A non-school employer can set up a TSA plan for their employees under
which of the following IRC section? - correct answer - 503 (c)(3)
The mathematical probability table used by insurance companies to
determine loss due to sickness or injury is the: - correct answer -
Morbidity Table
Which of the following is required to sign the application for insurance? -
correct answer - Producer and applicant
A policy that pays surgical expense benefits does not schedule the
approved benefit payable for every type of surgery. Instead, surgeries
not listed are paid on the basis of a comparison to one or more types of
commonly-performed major surgeries that are scheduled. Under this
arrangement, the unscheduled surgeries are paid on the basis of: -
correct answer - Their relative value
Which of the following statements is FALSE regarding Medigap policies?
- correct answer - A Medigap policy provides the same coverage as a
Medicare policy
All of the following statements about noncancellable policies are true,
except: - correct answer - The insurer may choose not to renew the
policy, but only on the policy renewal or anniversary date
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Guaranteed Renewable means: - correct answer - Renewable with
adjustable premiums, by classification only
The grace period for an individual health insurance policy being paid on
a quarterly basis is: - correct answer - 31 days
One of your clients just reinstated his health insurance plan. When is
coverage effective for sickness and accident? - correct answer - 10 days
for sickness, and immediately for accidental injuries
The Coordination of Benefits Provision is designed to: - correct answer -
Give insureds as much coverage as possible while eliminating
overinsurance
Experience rating utilizes in determining the rate the insurer
will charge for group coverage in each year of coverage. - correct
answer - Actual loss experience of the group
The following statement is true concerning the income received from an
individually owned disability income policy: - correct answer - Premiums
paid with after tax dollars, Income benefit not taxable
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An insured with an individual LTC policy is deducting the premiums he is
paying for the plan on his income taxes. Once he begins to receive
benefits from this plan, what will be the tax consequences on this
income? - correct answer - Not taxable
The maximum liability of the Life and Disability Insurance Guaranty
Association for cash values, for any one life is: - correct answer -
$100,000
Which of the following would be considered a speculative risk? - correct
answer - The possibility the painting you bought might be a long-lost
masterpiece
A speculative risk is one in which there is a chance for either loss or
gain. Example: Gambling, Casino's, Lottery, etc. All of the other choices
describe pure risk, where there is no chance of gain, only a chance of
loss exists.
Which is the proper term for a company owned by its policy owners? -
correct answer - A mutual insurance company
A producer who is acting as an agent is representing: - correct answer -
Always the insurer
ALABAMA LIFE AND HEALTH INSURANCE EXAM
2026| BRAND NEW ACTUAL EXAM WITH 100%
VERIFIED QUESTIONS AND CORRECT SOLUTIONS|
GUARANTEED VALUE PACK| ACE YOUR GRADES.
Which of the following death benefits is paid out to the beneficiary
income tax free? - correct answer - Life insurance when the insured dies
while the policy is in force
Generally, which of the following Annuities is not designed to guarantee
the principal value of the policy in stable interest rate environments? -
correct answer - Variable
Variable annuities have no minimum guarantee of interest or gains, and
may lose value in a declining market.
In group insurance, the evidence of a contract between the insurer and
the employer or association is: - correct answer - The policy
The policy itself is the evidence that a contract exists, whether it is an
individual, association or group policy. In group insurance the policy is
referred to as the master policy. Individual insureds do not receive a
copy of the policy, since there is no agreement between the insureds
and the insurer.
, Page | 2
A non-school employer can set up a TSA plan for their employees under
which of the following IRC section? - correct answer - 503 (c)(3)
The mathematical probability table used by insurance companies to
determine loss due to sickness or injury is the: - correct answer -
Morbidity Table
Which of the following is required to sign the application for insurance? -
correct answer - Producer and applicant
A policy that pays surgical expense benefits does not schedule the
approved benefit payable for every type of surgery. Instead, surgeries
not listed are paid on the basis of a comparison to one or more types of
commonly-performed major surgeries that are scheduled. Under this
arrangement, the unscheduled surgeries are paid on the basis of: -
correct answer - Their relative value
Which of the following statements is FALSE regarding Medigap policies?
- correct answer - A Medigap policy provides the same coverage as a
Medicare policy
All of the following statements about noncancellable policies are true,
except: - correct answer - The insurer may choose not to renew the
policy, but only on the policy renewal or anniversary date
, Page | 3
Guaranteed Renewable means: - correct answer - Renewable with
adjustable premiums, by classification only
The grace period for an individual health insurance policy being paid on
a quarterly basis is: - correct answer - 31 days
One of your clients just reinstated his health insurance plan. When is
coverage effective for sickness and accident? - correct answer - 10 days
for sickness, and immediately for accidental injuries
The Coordination of Benefits Provision is designed to: - correct answer -
Give insureds as much coverage as possible while eliminating
overinsurance
Experience rating utilizes in determining the rate the insurer
will charge for group coverage in each year of coverage. - correct
answer - Actual loss experience of the group
The following statement is true concerning the income received from an
individually owned disability income policy: - correct answer - Premiums
paid with after tax dollars, Income benefit not taxable
, Page | 4
An insured with an individual LTC policy is deducting the premiums he is
paying for the plan on his income taxes. Once he begins to receive
benefits from this plan, what will be the tax consequences on this
income? - correct answer - Not taxable
The maximum liability of the Life and Disability Insurance Guaranty
Association for cash values, for any one life is: - correct answer -
$100,000
Which of the following would be considered a speculative risk? - correct
answer - The possibility the painting you bought might be a long-lost
masterpiece
A speculative risk is one in which there is a chance for either loss or
gain. Example: Gambling, Casino's, Lottery, etc. All of the other choices
describe pure risk, where there is no chance of gain, only a chance of
loss exists.
Which is the proper term for a company owned by its policy owners? -
correct answer - A mutual insurance company
A producer who is acting as an agent is representing: - correct answer -
Always the insurer
