Alabama Life Insurance exam, Exams of Nursing

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Alabama Life Insurance

Dividend options are defined as ways in which the policy owner can: correct answersreceives dividends paid on any stock held 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 answersAll of the above Which policy will have immediate cash? correct answerssingle premium The process of underwriting primarily involves what two key steps? correct answersrisk selection and pricing Sherwood has no valid will but has named his estate as the beneficiary of his life insurance policy. As a result, he can expect that the policy proceeds correct answersare distributed according to state law the disability income rider of a life insurance policy normally correct answersall of the above 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? correct answersthe insurer will subtract the amount of the loan and pay $45,000 to the beneficiary. which statement is correct? correct answersConcealment is the withholding of information that should have been provided to an insurer all of the following are requirements to receive an Alabama insurance producer license EXCEPT: correct answersAn applicant must have a diploma from an approved college or university You can withdraw money from an annuity without penalty(assuming no surrender penalty) beginning at what age? correct answers59.5 years of age

Which of the following factors determines the amount of each payment under the fixed period settlement option? correct answersall of the above 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 answersthe ownership clause A payor rider protects against death or disability of the policy owner when the insured is a minor. Once the minor reached a specified age, what typically happens? correct answersThe insured is offered the opportunity to make premium payments According to the Alabama Insurance regulations, all of the following are included as advertisements except: correct answersa birthday card sent to a policyholder by his or her agent Alabama law regulates life insurance benefits with respect to minors. What statement is FALSE? correct answers18-year olds may receive a limit of $3000 in life benefits in any one year Should an insured die while a policy is in its grace period, the amount of past-due premium is correct answersdeducted from the face amount of the policy before payment is made to the beneficiary the "entire contract" law in Alabama says correct answersthe policy and the application (or a summary of the application) consults the entire contract The Incontestable Clause has what effect on coverage? correct answersMisstatements on the application will not negate coverage if a loss occurs following the incontestable period In general, advertising would include each of the following EXCEPT: correct answersCommunication of administrative matters the authority of an insurance producer included in the agreement between the producer and the company is known as correct answersexpressed authority if you decided to start withdrawing money at the end of the Accumulation Period, your choices are each of the following EXCEPT: correct answersTax-free stream of payments at 75%

Most life insurance policies correct answerswill pay the face amount if the insured is killed while a a passenger of a regularly scheduled commercial airliner the kind of life insurance that acquires no cash value is correct answersterm life Offering to give a prospect anything of value not specified in the contract to persuade the prospect to purchase the insurance is: A) rebating. B) twisting. C) allowed. D) encouraged. correct answersrebating in the life insurance agency relationship, what party is the principal? correct answersthe insurance company an individual otherwise qualified except for having taken and passed the examination can be issued a temporary insurance producer license, which is valid for a maximum period of correct answerssix months a term policy in which the protection remains constant for the term of the policy is correct answerslevel term with the "reduce premium" dividend option, dividends will be used to correct answersapply to the next premium due a 20-pay life policy would indicate what? correct answersthe premiums are paid for 20 years the income period when a surviving spouse does not qualify for social security survivor or retirement benefits is called the correct answersblackout period

in noncontributory group insurance plans, what percentage of eligible employees must be covered by the plan? correct answers100% a company chartered in alabama would be considered what type of insurance company in ohio? correct answersforeign which life insurance nonforfeiture option provides the same amount of death protection as the original policy, but decreases the time coverage will remain in effect? correct answersextended term which of the following is a tax advantage of a qualified retirement plan? correct answersall of the above Joe, whose life insurance policy has a waiver of premium rider, becomes disabled for two years, during which time the company pays over $1,500 in premiums. Joe recovers and now must correct answersbegin paying the premiums again as they become due A policy owner decides to pay life insurance premiums quarterly instead of annually. Select the correct statement. correct answersthe total outlay of annual premium dollars will be increased what are "nonforfeiture values"? correct answerswhen a policy owner stops paying premiums on a limited pay policy, he or she is entitled to receive its face amount in cash who must meet alabamas requirements to earn 24 hours of continuing education hours every two years? correct answersa producer who only sells property and casualty insurance which of the following riders could decrease the amount of the policy death benefit if utilized? correct answersautomatic premium loan rider according to the alabama insurance regulations, when using an illustration in the sale of a life insurance policy, an insurance producer may legally do which of the following? correct answersuse an illustration which has "non-guaranteed" elements

the fundamental insurance concept that an insured should not profit from a loss but should be restored in whole or in part to the approximate financial condition occupied before the loss is known as the principle of correct answersindemnity this rider can be attached to a permanent life insurance policy to add more coverage for a limited time correct answersterm rider the waiver of premium rider suspends premium payments without penalty for what situations? correct answerslong term disability a straight life annuity pays a periodic income correct answersduring the annuitants lifetime with no refund upon death the purpose for social security is correct answersto help working Americans with financial problems brought on by retirement, death and disability Factors commonly used by health insurers to classify risk include all of the following except correct answerseducation to sell a variable life insurance policy, an insurance producer must correct answersall of the above all of the following provisions of an adjustable life policy may be adjusted to meet the policyholders changing needs except: correct answersthe insured if the premium is not paid during the grace period of a Term Policy, what will occur? correct answersthe policy will lapse under a disability income rider of a life insurance policy, the benefit amount paid to an insured is based on which of the following? correct answersthe face amount of the policy the insurance company that issues a new life policy to an insured to replace an existing policy is called the correct answersreplacing insurer

mortality figures are usually developed by the analysis of statistics correct answersrelating to the deaths of millions of individuals over extended periods of time which of the following statements is true correct answerspolicy dividends cannot be guaranteed who is the chief executive officer of the alabama department of insurance? correct answersthe insurance commissioner when a policy is written so that no one may change the beneficiary, the policy has correct answersan irrevocable beneficiary which statement regarding insurance producer license appointments is TRUE? correct answersa licensed insurance producer must be licensed and appointed by the insurer to act as the insurers agent in a traditional whole life policy, cash value correct answersgrows on a tax-deferred basis The type of premium for term life insurance that remains the same throughout the policy period is correct answerslevel premium which of the following is the settlement option of a life policy that provides periodic payments of a specified amount as long as the proceeds plus interest last? correct answersfixed amount option legally, who does an insurance agent (producer) represent? correct answersonly the company which of the following describes a multiple employer trust (MET)? correct answersa legal entity that small employers may join to become eligible for group insurance what term describes a situation where a policy owner transfers a portion of his or her rights in an insurance policy to another party in order to secure a debt to that party? correct answerscollateral assignment

a company domiciled in another state that has received permission from the insurance commissioner to do business in this state is called a/an correct answersforeign admitted company insurance companies are rated by each of the following rating agencies EXCEPT: correct answersDow Jones the provision that protects the rights of the contingent beneficiary if the insured and the primary beneficiary die as the result of one accident is the correct answerscommon disaster provision for a company to escape claim payment due to false information on the application, the statements must be what? correct answerssimply untrue which statement is true concerning Renewable Term insurance? correct answersthe premium will increase at renewal 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 answersthe insurance company must pay the full benefits of the policy When a policy owner permanently turns over all rights in a policy to an assignee it is called correct answersan absolute assignment The assignment provision permits the policyholder to transfer or assign some or all of his/her rights to another party. A partial assignment is called what? correct answersCollateral assignment under which of the following circumstances will the payor rider waive premiums and allow a life insurance policy to remain in force? correct answersif the policy owner dies or becomes disabled prior to the insured reaching either age 21 or 25 your license may be refused, suspended or revoked for any of the following actions except correct answersreceiving too many unwarranted consumer complaints

why might a policy holder want to assign their policy to another party? correct answersas collateral support for a loan which of the following is not correct concerning group life insurance? correct answersgroup life insurance is mostly in the form of whole life insurance Vanessa's policy on her life names her three brothers as beneficiaries to share equally in the proceeds. If any of the brothers predeceases Vanessa, that brother's share will be passed on to his children. Vanessa's beneficiary designation is known as correct answersper stripes The employee of Ace Trucking Company must each pay a portion of the premium for their group insurance. This means they are members of a correct answerscontributory group plan If Todd has been named the irrevocable beneficiary of a life insurance policy, he correct answerscannot be replaced as beneficiary without his consent 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 answersan accelerated benefit option the current rate of interest paid to the cash value account of a universal life policy consists of correct answersthe guaranteed interest rate or the current interest whichever is higher if a proposed insured dies before the policy is issued but while in possession of a conditional receipt, the company correct answerswill pay the policy proceeds only if it would have issued the policy to the proposed insured had he or she been living Which risk classification would require payment of the most premium? correct answersRated a level term policy is one where correct answersthe premium and the protection remain constant for the term of the policy

Six months ago Pedro fell down a flight of stairs at home, resulting in complete paralysis, from which he is not expected to recover. Forty-nine year old Pedro will probably be able to collect disability benefits from correct answersSocial Security Which of the following could be the beneficiary of a life insurance policy? correct answersall of the above are correct The State's Nonforfeiture Law is supported by? correct answersNonforfeiture clause Cran dies before his annuity has paid out an amount as least equal to the purchase price (the principal) of the annuity, so Cran's beneficiary continues to receive annuity payments until the amount has been reached. This type of annuity as a correct answers Interest sensitive whole life is also called correct answerscurrent assumption whole life The Entire Contract Provision stipulates each of the following except correct answersany verbal changes made by the agent are permissible if in writing the insurance policy is a unilateral promise to pay. This means what? correct answersThe company promises to pay claims. That promise is legally enforceable. Harvey has a life insurance policy with a guaranteed insurability rider. Which of the following events would enable Harvey to purchase additional insurance under this rider? correct answersAny of the above In order to keep life insurance from being a speculative investment, what condition must exist between the subject of the policy and the applicant of the policy? correct answersNothing. Anyone can insure the life of anyone else Whole Life is a combination of death benefit and what additional feature? correct answersaccumulating cash values 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 correct answersreinsurance

Paid-up Additions act as default if the Policyholder doesn't indicate an option. Paid-Up Additions are correct answerssingle payment premiums which purchase additional amounts of insurance which add to the face amount The Alabama Life and Disability Insurance Guaranty Association covers the contractual obligations of an insolvent life and disability insurer, but its aggregate liability for cash values shall not exceed correct answers$100, the fixed period (fixed time) option provides that the principal amount correct answersis never decreased the life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are aoften paid an allowance to cover office expenses and staffing is the correct answersindependent agency system someone who is a preferred risk correct answerswill likely pay a lower premium than someone who is not a whole life policy pays the face amount correct answerswhen the insured dies or reaches age 100 An Annuity Disclosure Document must outline all of the following except correct answersapplicant- specific personal information including SSN & DOB Which of the following statements about key employee life insurance is true? correct answersThe company owns the insurance on the key employee Most life insurance policies lapse after a grace period of correct answers30 days Which life policy offers permanent protection and a premium that gradually increases during the early years of the contract? correct answersGraded Premium Whole Life In a decreasing term policy which of the following decreases each year? correct answersthe face amount

what is the application offering as consideration? correct answersstatements on the application and premium payment when the reduced paid-up policy option is exercised correct answersthe amount of coverage will be less than the original policy what is the definition of risk? correct answersthe uncertainty or chance of loss a term policy that allows the policy owner to switch to permanent insurance is called correct answersconvertible term insurance policies are said to be conditional contracts. This means what? correct answersfailure of the insured to comply with the conditions can allow the company to avoid claim payment establishing how much coverage is needed might entail the use of what system? correct answersFinancial Needs System a contract requires an Offer and Acceptance. What constitutes a valid offer? correct answersan application and premium payment submitted to the company or one of its agents the renewability option offers what major advantage to the insured? correct answerscoverage is convertible to another type of protection insurance policies issued by companies which allow their policy owners to participate in the favorable experience of the company through the payment of dividends are known as correct answersparticipating policies When Jonas died, it was discovered that he was actually 6 years older than he had claimed when applying for an insurance policy. As a result of this discovery, the insurance company correct answersthe company will pay only the amount of insurance that Jonas' premiums would have purchased at his correct age

Because there is a mutual reliance of truthfulness on both parties, an Insurance contract is said to be correct answerscontract of utmost good faith An insurance producer must keep complete records pertaining to transactions under the producer's license for at least correct answersthree years Shirley can no longer pay the premium on her policy which has accumulated $11,100 in cash value. Which of the following would indicate that Shirley has elected the extended term option? correct answersShe uses the $11,100 to buy term insurance of the same face amount as her original policy an immediate annuity with quarterly payments will begin making payments correct answers3 months after the annuity is purchased the duties of the Alabama Insurance Commissioner include all of the following EXCEPT correct answersoperate the department of insurance all other factors being equal, which of the following policies is the least expensive as far as the total amount of premiums paid is concerned, assuming the insured lived to be 100 years old? correct answerssingle premium the company will normally pay the face amount of the policy to the beneficiary of an insured who commits suicide only after the policy has been in effect for a minimum of correct answerstwo years under the law, the Alabama Life and Disability Insurance Guaranty Association has the power and duty to do which of the following correct answersall of the above "adverse selection" will exist when correct answersthe group of risks accepted for insurance is more likely than the average group to experience loss If the consideration clause states that the premium payment keeps the policy in force until the next premium is due plus 30 days thereafter, the policy correct answerscontains a grace period

if the insured is still alive at the end of the Whole Life policy period, what happens? correct answersthe policy face is payable