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Alabama Life and Health Insurance Exam FX Simulation, Exams of Community Health

Henderson State University (HSU)Community Health

Alabama Life and Health Insurance Exam FX Simulation 1. Which of the following is NOT an allowable 1035 exchange ANS A whole life insurance policy is exchanged for a term insurance policy. 2. Which of the following is NOT a type of information that needs to be gatheredin order to determine the value of someone's life when using the needs approach? ANS Estimated longevity 3. Which of the following would be the basic source of information used by thecompany in the risk selection process? ANS Application 4. underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT ANS Premiums alwaysstay the same 5. What is the clause that describes the method of paying the death benefitin the event that the insured and beneficiary are both killed in the same accident? ANS Common Disaster Clause

Typology: Exams

2023/2024

Available from 09/10/2024

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Alabama Life and Health Insurance Exam FX Simulation
1. Which of the following is NOT an allowable 1035 exchange ANS A whole life
insurance policy is exchanged for a term insurance policy.
2. Which of the following is NOT a type of information that needs to be gatheredin order to
determine the value of someone's life when using the needs approach? ANS Estimated
longevity
3. Which of the following would be the basic source of information used by thecompany in the
risk selection process? ANS Application
4. underwriting is a major consideration when an insured wishes to replace her current
policy for all of the following reasons EXCEPT ANS Premiums alwaysstay the same
5. What is the clause that describes the method of paying the death benefitin the event
that the insured and beneficiary are both killed in the same accident? ANS Common
Disaster Clause
6. The insured under a $100,000 life insurance policy with a triple indemnity rider for
accidental death was killed in a car accident. It was determined thatthe accident was his
fault. The triple indemnity rider in the policy specifies that the death must not be contributed
to by the insured in any manner.In thiscase what will the policy beneficiary receive? ANS
Alabama Life and Health (Exam FX Simulation.pdf file:///C:/Users/Admin/Downloads/Alabama%20Life%20and%20Heal...
1 of 16 9/10/2024, 10:04 AM
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Alabama Life and Health Insurance Exam FX Simulation

  1. Which of the following is NOT an allowable 1035 exchange ANS A whole life insurance policy is exchanged for a term insurance policy.
  2. Which of the following is NOT a type of information that needs to be gatheredin order to determine the value of someone's life when using the needs approach? ANS Estimated longevity
  3. Which of the following would be the basic source of information used by thecompany in the risk selection process? ANS Application
  4. underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT ANS Premiums alwaysstay the same
  5. What is the clause that describes the method of paying the death benefitin the event that the insured and beneficiary are both killed in the same accident? ANS Common Disaster Clause
  6. The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined thatthe accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In thiscase what will the policy beneficiary receive? ANS

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  1. How often must the Commissioner or an examiner designated by the Com-missioner examine domestic insurance companies? ANS As often as the commis-sioner deems necessary, but not less frequently than once every 5 years
  2. Which of the following provisions is mandatory for health insurance poli-cies? ANS Physical examination and autopsy
  3. At what point must an outline of coverage be delivered ANS At the time of the application or upon delivery of the policy
  4. Attempting to determine how much insurance an individual would require based upon their financial objectives is known as ANS Needs Approach
  5. On its advertisement, a company claims that it has funds in its possessionthat are, in fact, not available for the payment of losses or claims. What is the company guilty of? ANS Misrepresentation
  6. An insured has medical insurance coverage through 2 different providers,both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any otherinsurers. The insured submits a claim to both insurers. How should the claimbe handled? ANS Each insurer should pay a proportionate share of the claim

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  1. Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What isthe benefit that is based on the insured's loss of earnings after recovery froma disability ANS Residual disability
  2. Jason is insured under his employers group health insurance he splits thecost of the premiums with his employer this is an example of ANS A Contributory plan
  3. In order to quality for conversion from a group life policy to an individualpolicy of the same coverage, a person must have been insured under the group plan for how many years? ANS 5 years
  4. Insurance policies ensure that after a loss proceeds will go to the ANS Benefi-ciary
  5. Which of the following statements is an accurate comparison between private and government insurers? ANS Private insurers may be authorized to transactinsurance by state insurance departments.
  6. An insured notifies the insurance company that he has become disabled.What provision states that claims must be paid immediately upon written proofof loss? ANS Time of payment of claims
  7. Which of the following would an accident-only policy NOT cover? ANS Surgeryto repair a wrist damaged by tendonitis

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  1. A producer licensed in Alabama must notify the Insurance Department ofany change of address in his or her residence or business address within howmany days? ANS 30 days
  2. Which of the following best describes annually renewable term insur-ance? ANS It is level term insurance
  3. If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? ANS The balance of the loan will be takenout of the death benefit
  4. A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 lifeinsurance policy to secure the loan. Which provision makes this possible? ANS -Collateral assignment??
  5. A medical insurance plan in which the health care provider is paid a regular fixed amount for providing health care to the insured and does not

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morning. The insured has also eliminated mostfatty foods from his diet. Which method of dealing with risk does this scenariodescribe? ANS Reduction

  1. The validity of coverage under a life insurance policy may not be contested,except for nonpayment of premium, after the policy has been in force for at least how many years? ANS 2 years
  2. All of the following actions can be described as twisting EXCEPT ANS Explain-ing to client the advantages of permanent insurance over term and suggesting changing policies.
  3. Insurance policies are incontestable if they have been in effect for atleast ANS 2 years
  4. Which of the following entities is not an insurer but organization formed to provide insurance benefits for members of an affiliated lodge or religious organization? ANS Fraternal Benefit Society
  5. Which of the following entities will most likely regulate an insurer's adver- tisement on local tv station ANS The marketing department of the insurance company
  6. What is the major difference between a stock company and a mutualcompany? ANS Ownership

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  1. The president of a company is starting an annuity and decides that his cor-poration will be the annuitant. Which of the following statements is true? ANS The annuitant must be a natural person
  2. If a settlement option is not chosen by the beneficiary or policyowner,which option will be used? ANS Lump Sum
  3. What is the proposal used in the selling of life insurance that depicts thenon- guaranteed elements of the policy over a period of time? ANS Illustration
  4. The paid-up addition option uses the dividend ANS To purchase a smalleramount of the same type of insurance as the original policy
  5. A man bought an individual health insurance policy for himself. Which ofthe following roles does he now legally have? ANS Both subscriber and insured
  6. Medicare Part A services do NOT include which of the following? ANS Outpa-tient Hospital Treatment
  7. During replacement of life insurance, a replacing insurer must do which ofthe following? ANS Obtain a list of all life insurance policies that will be replaced
  8. annuities can be used to fund which of the following ANS Retirement Plans
  9. What universal life option has a gradually increasing cash value and a levelbenefit? ANS

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  1. Which of the following is not true of basic medical expense plans? ANS Cover-age for catastrophic medical expenses

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  1. Which provision of a life insurance policy states the insurers duty to paybenefits upon the death of the insured, and to whom the benefits will be paid? ANS Insuring clause
  2. In group insurance, what is the policy called? ANS Master Policy
  3. When would a 20-pay whole life policy endow? ANS When the insured reachesage 100
  4. All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT ANS When the employer chooses to renew the plan
  5. In a basic expense policy, after the limits of the basic policy are exhausted,the insured must pay what kind of deductible? ANS Corridor
  6. According to the entire contract provision, what document must be madepart of the insurance policy? ANS Copy of the original application
  7. In health insurance, if a doctor charges $50 more than what the insurancecompany considers usual, customary and reasonable, the extra cost ANS is not covered
  8. All of the following are correct about the required provisions of health insurance policy EXCEPT ANS A reinstated policy provides immediate coverage foran illness
  9. The requirement that agents not commingle insurance monies with theirown funds is known as ANS Fiduciary responsibility
  10. Which of the Statements below does NOT describe a Blue Cross BlueShield Plan? ANS Services are paid for at the time of use
  11. All of the following are true regarding insurance policy loans EXCEPT ANS Pol-icy loans can be made on policies that do not accumulate cash value
  12. If an insured continually uses the automatic premium loan option to paythe policy premium ANS the policy will terminate when the cash value is reduced to nothing
  13. If an IRA annuitant dies after the annuity has been paid up, what effect willthis have on the annuitant's estate? ANS The entire value of the contributions and benefits will be included

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  1. When an employee terminates coverage under a group insurance policy,coverage continues in force for ANS 31 days
  2. A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar trainingand experience in that geographic area is known as ANS Usual, customary and reasonable.
  3. what is the contract provision that allows the insurer to nonrenew healthcoverage if certain events occur? ANS conditionally renewable
  4. As deductible amounts increase premium amounts change in what way ANS - Decrease
  5. What is a penalty tax for non qualified distributions from a health savingsaccount ANS 20%
  6. Methods used to pay death benefits to a beneficiary upon the insured'sdeath ANS Settlement Options
  7. Which of the following entities was created to protect insureds against aninsurer's insolvency? ANS The Life and Disability Insurance Guaranty Association
  8. Which of the following would be least likely to be considered a legitimateneed that would be paid by insurance proceeds? ANS Vacation travel expenses
  9. An applicant signs an application for a $25,000 life insurance policy, paysthe initial premium, and receives a conditional receipt. if the applicant is killedin an automobile accident the next day, which of the following is true ANS The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy
  10. All of the following statements about Medicare Part B are correct EXCEPT- ANS It is a compulsory program
  11. Insured buys a 5 year level premium term policy with a face amount of $10000. Policy also contains renewability and convertibility options. When insured renews in

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5 years, what happens to the premium? ANS It will increase because the insured will be 5 years older than when the policy was originally issued.

  1. An insurance advertisement exaggerates the benefits of an insurance policy, due to human error at the insurer's advertising agency. Who will the Department of Insurance hold responsible for the exaggeration? ANS The insurer
  2. which of the following statements regarding the taxation of Modified En-dowment Contracts is FALSE? ANS withdrawals are not taxable
  3. Your customer doesn't mind paying a higher premium as long as he getsa life insurance product that would allow for a faster growth of the cash value.What kind of policy would you recommend? ANS An endowment policy

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  1. Which of the following statements about occupational vs nonoccupationalcoverage is true ANS Disability insurance can be written as occupational or nonoccu-pational
  2. An individual who is and continues to be a resident of Alabama, and whohas 18 months of prior continuous coverage, but is no longer able to obtain coverage, shall be eligible for health expense coverage under ANS Alabama HealthPlan
  3. All of the following benefits are available under social security except ANS - Welfare Benefits