Alabama Life & Health Insurance State Exam questions verified with 100% correct answers, Exams of Public Health

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Alabama Life & Health Insurance State

Exam

1. Which of the following statements about key employee life insurance is true? ANS The business is always the owner and beneficiary of key employee insurance.
2. COBRA and HIPPA both address portability. What is the difference between them? ANS COBRA provides a coverage bridge, HIPPA addresses coverages under plans for new entrants.
3. The settlement option under which the principal never decreases unless the beneficiary makes withdrawals is the ANS interest only options, fixed period, life income option 4.Mr. and Mrs. Carter receive annuity payments. Mr. Carter dies, but Mrs. Carter continues to receive payments for the rest of her life. The Carters have a ANS joint and survivor life annuity
4. The primary components in premium calculations include each of the fol- lowing EXCEPT ANS profit margins

6. Which of the following characteristics apply to Medicare Supplements Poli- cies (MSPs)? ANS All of the above 7.What is the definition of Risk? ANS uncertainty or chance of loss
7. The Suicide Clause has what effect? ANS It excludes suicide during the first two years
8. For weekly premium disability policies in Alabama, there must be a grace period of ANS 7 days 10.An individual insurance producer who allows his or her license to lapse may, within a period of months from the due date of the renewal fee, reinstate the same license without having to complete the prelicensing course of pass a written exam. ANS 12 11.To sell a variable life insurance policy, an insurance producer must ANS all of the above 12.Each of the following statements is true about disclosures EXCEPT ANS The company must keep a copy of the Buyer's Guide and Policy Summary for at least 5 years

18.The "entire contract" law in Alabama says ANS The policy and the application (or a summary of the application) constitute the entire contract 19.If you surrender your policy early or simply stop paying premiums, you still own the equity you have built. You can choose to ANS Get a check for the remaining cash values. 20.In noncontributory group insurance plans, what percentage of eligible employees must be covered by the plan? ANS 100% 21.According to Required Health Policy Provisions, the insured is prevented from filing suit against the insurer for at least ANS 60 days and not longer than three years from the date of proof of loss 22.The type of health insurance policy most likely used to cover all students attending a large university is ANS a blanket policy 23.If administrative action is taken against you, or you are criminally prosecut- ed in another jurisdiction, you have how long to submit notice to the Alabama Commissioner? ANS 30 days

24. An applicant for insurance may pay the initial premium and receive a document from the agent including that if the policy is insured as requested, coverage begins on the date of the document. What is this document called?- ANS Conditional receipt 25.Under the waiver of premium provision of a life insurance policy, if a dis- ability proves total and permanent, what happens to any premium paid by the policy owner during the waiting period? ANS All premiums paid by the policyholder during the waiting period are typically refunded 26.Billy is the owner of a life insurance policy and has chosen a policy set- tlement option under which the company will pay the beneficiary (his widow) an income each month for as long as she lives. Payment stops at her death. Which settlement option has Billy selected? ANS Life income option 27.A company chartered in Alabama would be considered what type of insur- ance company in Ohio? ANS Foreign 28.A man with an Accidental Death & Dismemberment (AD&D) policy having a Principal Sum of $100,000 and a Capital Sum of $50,000 loses a leg due to a blood clot which was not due to an accident. The policy will pay ANS $ 29.If you have not met the Continuing Education requirement

31.If an insured under a Major Medical insurance policy with a $200 deductible and an 80% coinsurance clause incurred the following covered expenses ANS Hospital room and board $2,000; Surgeon's fee $1,500. How much would the policy pay? ANS $2,640 (2,000 + 1,500 = 3,500 - 200 = 3.300 x .80) 32.A contract requires an Offer and Acceptance. What constitutes a valid offer? ANS An application and premium payment submitted to the company or one of its agents. 33.The Convertibility Option offers what major advantage to the insured? ANS In- surability is not a factor 34.A defined contribution plan ANS promises a specified payment to the plan by the employer 35.Which of the following are true regarding Medicare Prescription Drug Coverage (Part D)? ANS all of the above 36.Insurance policies issued by companies which are owned by stockholders and do not pay policy dividends are known as ANS non-participating policies 37.A certificate of insurance ANS is issued to each individual covered by the group life insurance 38.Withholding of facts that should be included in an application for insur- ance is called ANS concealment

39. The Entire Contract Provision stipulates each of the following EXCEPT ANS - Any verbal changes made by the agent are permissible if in writing 40.Under which of the following circumstances will the payor

rider waive premiums and allow a life insurance policy to remain in force? ANS if the policy owner dies or becomes disabled prior to the insured reaching either age 21 or 25 41.If the insurance company accepts a special class risk ANS the premium will be higher than for a normal risk 42.An entities chance of loss is determined by reviewing loss experience for large numbers of entities with similar risk characteristics. This predictability of loss relies upon what principle? ANS The Law of Large Numbers 43.Oliver has a life insurance policy with a $50,000 death benefit. At his death, there is a $5000 policy loan outstanding. Which of the following statement is CORRECT? ANS The insurer will subtract the amount of the loan and pay $45,000 to the beneficiary

provision? ANS Al- lows the insured to look over the issued policy for a specific number of days and return it for a premium refund if desired. 52.The Grace Period has what effect? ANS An extension of time to pay a late premium 53.If you suffer a loss linked directly to your use of intoxicants or non-pre- scribed narcotics, what is the effect? ANS Your claim may be denied by the carrier 54.A straight life annuity provides which of the following? ANS A periodic income to the annuitant for life 55.Which of the following statements describes the aviation exclusion? ANS It limits or excludes coverages when the insured is participating in only certain kinds of air travel 56.An immediate annuity with quarterly payments will begin making pay- ments ANS 3 months after the annuity is purchased

57.This rider can be attached to a permanent life insurance policy to add more coverage for a limited time. ANS term rider 58.You must notify the Company of a health insurance claim within how many days (or as soon thereafter as reasonable possible)? ANS 20 days 59.Which of these is NOT a feature of Health Savings Accounts? ANS The accounts earn no interest 60.Regardless of where the insurance company was chartered, in order to operate in Alabama, which statement is most accurate? ANS All companies doing business in Alabama must comply with Alabama Code 61."Community Rating" generally means the insurer charges ANS the same rate for everyone in a geographic area 62.Bill's Major Medical policy is reinstated on September 10. If he is hit by a truck and hospitalized on September 15, he will receive ANS full benefits 63.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? ANS cost of living adjustment 64.The life and health insurance marketing system utilizing producers that represent multiple insurance companies at the same time, are compensated on a commission basis, and own their own "book of business" is the ANS indepen- dent agency system

producer's license based upon the Company's allegation of wrong doing by the producer 72.If Louise allows her whole life policy to lapse, which nonforfeiture option should she elect to obtain the most life insurance protection? ANS Extended term option 73.An Attending Physician's Statement is used to do what? ANS Obtain detailed information regarding a specific medical condition 74.The income period when a surviving spouse does not qualify for Social Security survivor or retirement benefits is called the ANS Blackout Period 75.The "elimination period" refers to ANS the time period after a disability starts and before the insured may begin receiving disability income benefits 76.A life insurance company may pay a death claim for less than the face amount of a policy under which of the following conditions? ANS All of the above 77.Which part of Medicare requires premium payment by most eligible partic- ipants? ANS Part B, supplementary medical insurance

78. In a decreasing term policy which of the following decreases each year?- ANS The face amount 79.What are the two major approaches to defining "totally disabled" for Dis- ability Income insurance? ANS "Your" occupation of "Any" occupation

80.A level term policy is one where ANS the premium and the protection remain constant for the term of the policy 81.All of the following are examples of insurable interest EXCEPT ANS an airline insuring the lives of its passengers 82.To receive some Social Security benefits and be considered "currently insured", an individual must have ANS at least 6 quarters of coverage 83.All of the following would likely be eligible for group life insurance EX- CEPT ANS all the uninsured residents of the Golden Years Nursing Home 84.The Accidental Death Rider pays double the face amount (or another multiple of the face) if death is caused by what? ANS Accidental cause and within 90 days of the accident

85. When an insurer cedes part of an insured's coverage to another insurance company, retaining only part of the risk for itself, the insurer is engaging in ANS reinsurance 86.The application has two parts. Part 1 is? ANS General information about the applicant

coinsurance provision, the policyholder's portion of the claim is calculated by ANS Applying the deductible first

96. Which of the following is CORRECT regarding Alabama's annuity suitabil- ity regulation? ANS all of the above are correct
97. A preferred classification would most like be given to an applicant who?- ANS Any or all of the above
98. Darlene dies without having paid the $500 premium on her $50,000 policy that was due a week before her death. With no outstanding policy loans, Darlene's beneficiary can expect to receive ANS $49,500, which is the face amount less the premium owed
99. Which of the following is NOT a Worker's Compensation benefit? ANS Extra income benefits
100. If you misstate your age when applying for Disability Income insurance, you may suffer what consequence at claim time? ANS Your benefits will be reduced if your age if higher than stated
101. When does the 10-day Free Look begin? ANS Date of policy delivery

102. If William has a major medical plan on himself, his wife Harriet, and their son Bill, what happens when daughter Bess is born? ANS She is covered from the moment of birth even if the policy does not provide maternity benefits
103. A disability that is presumed to result from the same or a related cause of prior disability is called a ANS recurrent disability
104. A disability income policy typically covers ANS just the wage earners
105. Which of the following most specifically describes a type of policy intend- ed to cover extended residence in a nursing home? ANS Long-term care policies
106. According to the Alabama regulations concerning Long- Term Care (LTC) insurance, which of the following practices is allowed? ANS ..
107. When Jonas died, it was discovered that he was actually six years older than he had claimed when applying for an insurance policy. Upon his death what will the insurance company pay? ANS The company will pay only the amount of insurance that Jonas' premiums would have purchased at his correct age
108. Which of the following is CORRECT regarding a Health Maintenance Organization (HMO) operating in Alabama? ANS Every HMO must have a complaint system to resolve written complaints from enrollees