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Alabama Life and Health Insurance Final Exam questions verified with 100% correct answers 1. Under a health maintenance organization HMO service providers are paid a fixed monthly fee for each member. This concept is called ANS Capitation 2. When can a lapsed life insurance policy usually be reinstated ANS Within three to five years of the policy lapsing 3. All of these statements concerning the coordination of benefits are true ex- cept ANS The secondary insurance does not pay benefits. Which means the secondary insurer does pay benefits 4. The period of time during which a surviving spouse does not qualify for Social Security survivor or retirement benefits is called ANS The blackout period 5. Peggy surrenders a permanent life policy with a cash value of $15,000 and then outstanding policy loan of $5,000. If she chooses the reduced paid-up option what will be the result? ANS A paid up permanent policy purchased with $10,000
Typology: Exams
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1.Under a health maintenance organization HMO service providers are paid a fixed monthly fee for each member. This concept is called ANS Capitation 2.When can a lapsed life insurance policy usually be reinstated ANS Within three to five years of the policy lapsing 3.All of these statements concerning the coordination of benefits are true ex- cept ANS The secondary insurance does not pay benefits. Which means the secondary insurer does pay benefits 4.The period of time during which a surviving spouse does not qualify for Social Security survivor or retirement benefits is called ANS The blackout period 5.Peggy surrenders a permanent life policy with a cash value of $15,000 and then outstanding policy loan of $5,000. If she chooses the reduced paid-up option what will be the result?
2 / 29 ANS A paid up permanent policy purchased with $10, 6.Total disability can be defined as the insureds inability to perform the occupation for which he or she is reasonably qualified by education training or experience for disability income insurance purposes this definition is what ANS Own occupation 7.Why are insurance contracts said to be contracts of adhesion ANS The contract has been prepared by one party the insurer and the other party which is the insured must accept the contract as written
3 / 29 11.Which type of Term policy allows the policyowner to switch to permanent insurance ANS Convertible term 12.Trent has a permanent partial disability where he is paid 50% of his previous income. Trent is covered by a ANS Residual disability benefit 13.Which of these actions could result in a lapsed policy ANS Premium was not paid during the grace period
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5 / 29 20.Amy owns a disability income policy with a non-cancelable renewal provi- sion. Which of the following is guaranteed in her policy ANS Coverage and premium rate are guaranteed as long as the premiums are paid 21.Alabama's annuity disclosure regulation ANS Requires the delivery of a buyer's guide and a Disclosure document to an annuity applicant 22.What will the insurance company pay once the stop-loss is exceeded on a major medical policy ANS 100% of covered expenses 23.Which statement accurately portrays a whole life policy ANS Endows at age 100 and paid up at a stated time 24.Individual disability income policies normally have a premium that ANS adjusts annually. The most common type of individual disability income policy is the guaran- teed renewable policy which typically adjust the premium on an annual basis
6 / 29 25.Policy dividends for life insurance are ANS Not guaranteed 26.What does disability Buy sell insurance provide ANS Lump sum benefit 27.With term insurance which of the following types of Premium Remains the Same for the entire policy period ANS Level premium 28.All students attending a large college would most likely be covered by which type of Health policy ANS Blanket policy 29.Kim has purchased a straight life annuity. What will this type of annuity provide her with ANS A periodic income for life 30.This insurance producer has allowed his license to lapse. He would like to reinstate his license without retaking a pre license course or passing a written
7 / 29 examination. To do this do Leo must reinstate the license within months from the renewal date ANS 12 months 31.Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments ANS 3 months after the annuity is bought 32.According to required provision 4 when an insured applies for reinstate- ment of a health policy and receives a conditional receipt how long does the insurer have to approve or deny ANS Within 45 days of the date of the application 33.Which of the following is not an example of insurable Interest ANS An airline ensuring the lives of its passengers is not insurable interest 34.Tina has an insurance policy with a 10-day free-look provision. Which of these statements is correct ANS Her policy can be returned for 100% refund of the premium within 10 days from the date the policy is delivered 35.An insurance company may cancel a life insurance policy under which of the following conditions ANS The outstanding policy loan exceeds the cash value of the policy 36.A policy owner with a $100,000 whole life policy has a cash value of $10,000. There is an outstanding loan of $5,000 and a past due premium of 250. If the policy owner chooses the reduced paid-up
8 / 29 option and then later dies what will the beneficiary receive ANS The reduced paid-up coverage amount minus $ 37.Long-term care policies normally provide benefits for ANS Home Health Care 38.Ed has an insurance policy with an insurance company. Before eds policy will pay a claim certain events must occur. Because of this an insurance policy is considered to be ANS conditional 39.mortgage protection is typically covered with ANS decreasing term 40.a retirement plan intended for a sole proprietor and his or her employees would be a ANS Keogh plan 41.who does a disability income policy normally cover ANS wage earners 42.Bart is injured and provides notice of a health claim to his insurer He later receives the required claims forms. Within how many days of the loss must Bart file proof of loss with the insurance company ANS 90 days 43.what does renewable term guarantee ANS the insured's insurability 44.a group disability income policy will ANS usually pay short- term benefits of less than 2 years in duration 45.insurance policies issued by companies which are owned by stockholders and do not pay policy Dividends are known as ANS
9 / 29 non-participating policies 46.which of the following events would allow a policy owner with a guaranteed insurability rider purchase additional life insurance ANS having a child, getting married, and reaching a specified age stated in the policy
10 / 29 47.at what age is an insured for life insurance considered statistically dead ANS - 100 48.what is a Certificate of Insurance ANS a certificate issued to each individual covered by the group life insurance 49.Jan is named irrevocable beneficiary of Jim's life insurance policy which of the following statements is correct ANS Jim needs Jan's permission to borrow the policies loan value 50.which of the following is an example of a nonforfeiture value ANS after a policy owner cancels their permanent policy the cash value accumulation must be made available to the policy owner. when a policy owner stops paying premiums on a permanent policy its cash value accumulation or equivalent must be made available to the policy owner 51.a life insurance beneficiary has chosen a settlement option in which the principal never decreases unless the beneficiary makes a withdrawal. This settlement option is called the ANS interest-only option 52.the Commissioner of Insurance may not do which of the following ANS change insurance laws 53.what is the applicants consideration in an insurance contract ANS premiums 54.which of the following long-term care LTC practices is permitted in Alaba- ma ANS using direct mail to Market an LTC
11 / 29 policy 55.Barbara has the right to change the beneficiary designation on her life insurance policy. Barbara's beneficiary is a ANS revocable beneficiary 56.a Life Insurance Producers agency agreement normally authorizes the licensee to do all of the following except ANS issue policies; the producer or agent cannot issue policies. but are authorized to solicit Insurance, sell insurance, and collect premiums 57.a departing employee has decided to continue his group coverage through Cobra who pays the premium in this situation ANS employee 58.Albert surrenders his whole life policy 10 years after it was purchased. What can he expect ANS to pay taxes on a cash value in excess of Premium Payed. if a whole life policy is surrendered for cash 10 years after it was purchased the policy owner can expect to pay taxes on the cash value in excess of premium paid 59.XYZ insurance company issued a new life policy to an insured that re- placed an existing policy. XYZ insurance company is considered to be the- ANS replacing insurer 60.Medicare supplement policies marketed in Alabama ANS cannot offer benefits that simply duplicate Medicare benefits, cannot be more restrictive than Medicare, and cannot treat a loss due to injury differently than a loss due to illness 61.which welfare program provides assistance to the needy ANS
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13 / 29 62.a Disability Policy in Alabama that is paid on a monthly basis is required to have a grace period of ANS 10 days 63.an insurance premium can be defined as ANS Money Paid to an insurance com- pany for benefits provided in the policy 64.Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay premiums. If she elects to take the extended term option which of these actions would she take ANS she will use the $10,000 the policy accumulated in cash value to buy term insurance of the same face amount as her original policy 65.which of the following statements about a non-cancellable policy is false- ANS the premium can be increased over time; true statements about non-cancelable policy are ANS so long as the premiums are paid the policy cannot be changed in anyway, non-cancelable provisions are most commonly found in disability income policies, and the premium rate cannot be increased over time 66.the agreement between a producer and an insurance company specifies The Authority given to a producer to act on behalf of the insurer is called ANS ex- pressed Authority 67.Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a ANS conditional receipt 68.in regards to a life insurance policy and annuity contract
14 / 29 all statements made on the application are considered to be ANS representations 69.representation ANS A statement made by the applicant that they consider to be true and accurate to the best of the applicants belief 70.a cross purchase buy-sell agreement is in place for ABC company's four founding Partners. What would this agreement require if the agreement is funded with individual life insurance ANS each partner must own a policy on the other partners 71.which of the following statements is not correct ANS agents are allowed to waive certain policy provisions; changes in an insurance policy must be approved by an executive officer of the insurance company, changes in an insurance policy must be endorsed on the policy or attached in a rider, and agents are never allowed to waive policy Provisions r the correct statements 72.Jackie took out a Medicare supplement insurance policy and has a pre-ex- isting condition. In this situation a pre-existing condition is defined as a condition for which medical advice was given or received within of the effective date of coverage ANS 6 months 73.an insured owns a policy which includes a disability income Rider. the disability benefit amount paid to the insured is based on the ANS face amount of the policy
15 / 29 74.an insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in ANS rebating 75.which of the following does NOT describe a life income settlement option- ANS income is paid until the principal amount decreases to zero; 76.life income settlement option ANS A specified income amount will be paid to the payee, a lifetime income can be paid to a second payee if the first payee dies, and a lifetime income will be paid to the payee 77.insurance policies issued by companies which allow their policy owners to participate in the favorable experience of the company through payment of dividends are known as ANS participating policies 78.Don and Marie married in each have a major medical plan provided by their employers. Don was born in August of 1969 and Marie was born in March of 1976. For there to dependent children, ANS Marie's plan is primary and Don's and secondary. The primary health insurance plan is the one that belongs to the parent whose birthday comes up first in the calendar year. it makes no difference to the insurance companies which parent is Older. 79.what describes a level term policy ANS premium and don't protection remain constant for the term of the policy 80.extended residence in a nursing home is covered by a ANS
16 / 29 long-term care policy 81.a long-term care insurance must be unable to perform a minimum of activities of daily living or adl's to receive benefits ANS 2 82.the long-term care partnership program is designed to allow seniors to ANS - shelter assets from the spend down requirements of Medicaid 83.an insurance producer must have which of the following in order to sell variable life insurance policies ANS registered with finra, license for variable life and annuities contracts, and a valid insurance license 84.which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama ANS none of these; not savings or profit or deposit 85.which type of life insurance Rider allows a policy owner to increase the level of coverage to keep up with inflation ANS cost of living Rider 86.which of the following is not guaranteed by a whole life policy ANS policy dividends 87.the maximum amount of coverage placed on a disability income policy is based on the insureds? ANS earned income from the previous year. 88.absolute assignment ANS the transfer is complete and irrevocable and the as- signee receives full control over policy and
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18 / 29 89.collateral assignment ANS policy is assigned to a creditor as collateral for debt. If insured dies creditor is entitled to be reimbursed out of benefit proceeds for the amount owed 90.which type of assignment transfers a portion of the policy owners right to another party in order to secure a debt to that party? ANS collateral assignment 91.a policy owner can can collect the face amount on what type of policy? ANS en- dowment policy. an endowment policy is characterized by cash values that grow at a rapid Pace so that the policy matures or endows at a specified date that is before age 100 92.in regards to insurance applications which of the following statements is true? ANS changes on the application must be consented to in writing 93.if a long time care LTC policy in Alabama has been in effect for more than the insurer can contest any material representation on the application ANS two years. An application in LTC policy in Alabama becomes in contestable when the policy has been in effect for more than 2 years 94.which of these will not result in an increase in life insurance policy divi- dends? ANS higher Reserves because reserves are intended for benefit amounts not dividends 95.any individual who has failed 2 Alabama Insurance licensing examinations must wait how long before retaking it a third
19 / 29 time? ANS 3 months 96.the Alabama life and disability insurance Guaranty has the power to ANS loan money to an insolvent insurance company, guarantee the obligations of an insurance company, and provide money to satisfy the obligations of an insurance company 97.an insured should be restored to the approximate Financial condition occupied before the loss occurred. this is called the ANS principle of indemnity
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21 / 29 insurability of insurance applicants, the proposed insured must give authorization before information can be given to member companies, and the MIB is a non-profit agency which aides in underwriting insurance policies
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25 / 29 specific state is called ANS an admitted company