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Alabama Life and Health Insurance Final Exam 2023 - 2024 (Verified), Exams of Socialization and the Life Course

West Chester University of Pennsylvania (WCUPA)Socialization and the Life Course

Alabama Life and Health Insurance Final Exam 2023 - 2024 (Verified) Alabama Life and Health Insurance Final Exam 2023 - 2024 (Verified) Alabama Life and Health Insurance Final Exam 2023 - 2024 (Verified)

Typology: Exams

2024/2025

Available from 04/10/2025

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Alabama Life and Health Insurance Final Exam
2023 - 2024 (Verified)
1. John has recently died and it was discovered that he was actually ten
years older than what was listed on his life insurance policy. What will the
insurer pay his beneficiary? ANS The amount of insurance that his
premiums would have purchased at his correct age
2. Which of the following is considered the "automatic" Nonforfeiture
Option that most insurers will use? ANS Extended term
3. Susan owns a life insurance policy that has accumulated $10,000 in
cash value in which she can no longer pay its premiums. If she elects to
take
the extended term option, which of these actions would she take? ANS Uses
the
$10,000 to buy term insurance of the same face amount as her original policy
4. What kind of risk are amateur pilots normally classified as? ANS Special
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Download Alabama Life and Health Insurance Final Exam 2023 - 2024 (Verified) and more Exams Socialization and the Life Course in PDF only on Docsity!

Alabama Life and Health Insurance Final Exam

2023 - 2024 (Verified)

  1. John has recently died and it was discovered that he was actually ten years older than what was listed on his life insurance policy. What will the insurer pay his beneficiary? ANS The amount of insurance that his premiums would have purchased at his correct age
  2. Which of the following is considered the "automatic" Nonforfeiture Option that most insurers will use? ANS Extended term 3. Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay its premiums. If she elects to take the extended term option, which of these actions would she take? ANS Uses the $10,000 to buy term insurance of the same face amount as her original policy
  3. What kind of risk are amateur pilots normally classified as? ANS Special

class risks

  1. The monthly benefit of an Annuity Certain is determined by ANS The annuitant's payout period selection 6. Shawn has a waiver of premium rider on his life insurance policy. He becomes disabled for 3 years, during which the insurance company waives $3,000 in premiums. When Shawn recovers, he must ANS Resume paying premiums again
  2. Alabama's annuity disclosure regulation ANS Requires the delivery of a buyer's guide and a disclosure document to an annuity's applicant
  3. A policyowner can collect the face amount on what type of policy? ANS Endow- ment policy
  4. On November 10, Ozzie's Major Medical policy is reinstated. He is later injured in an automobile accident on November 13 and immediately hospital- ized. Ozzie is eligible for ANS Full benefits
  1. An example of a life insurance beneficiary is a(n) ANS Child, spouse, or compa- ny of the insured.
  1. A group disability income policy will ANS Usually pay short-term benefits of less than 2 years in duration 18. A life insurance policyowner has just exercised the policy's reduced paid-up option. Which of these statements is true? ANS The amount of coverage will be much less than the original coverage
  2. The Long Term Care Partnership program is designed to allow seniors to ANS Shelter assets from the spend-down requirement of Medicaid
  3. Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a(n) ANS Conditional receipt
  4. Michael has a universal life policy with an increasing death benefit option. With an initial face amount of $50,000 and a value of $5,000, what would the actual death benefit be? ANS $55,
  5. An insured should be restored to the approximate financial condition occupied before the loss occurred. This is called the ANS Principle of

board, $2,500 surgeon's fee. What is Nick responsible for paying? ANS $1,

  1. A Long Term Care insured must be unable to perform a minimum of Activities of Daily Living (ADLs) to receive benefits. ANS 2
  2. Who would most likely own a Medicare Supplement policy? ANS 69- year old female covered by Medicare
  3. Which of these statements concerning COBRA is correct? ANS Under COBRA, dependents of employees covered by group plans have the same extension and conversion privileges available to them as the employee
  4. What does disability Buy-Sell insurance provide? ANS Lump-sum benefit
  5. The waiver of premium provision normally excludes which of the following disabling acts? ANS Injuries sustained while committing a felony, injuries sustained while serving in the military, and self-inflicted injuries
  1. After the insurance company receives a written request, an insured may have health insurance benefits paid to ANS Anyone designated by the insured
  2. Pat applies for insurance, pays the initial premium, and receives a doc- ument from the agent. This document indicates that if the policy is issued, coverage begins on the date of the document. This document is called a(n) ANS - Conditional receipt
  3. Kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. If she were to die, her benefi- ciary would continue receiving annuity payments until this amount has been reached. What type of annuity is this? ANS Refund life annuity
  4. What does renewable term guarantee? ANS The insured's insurability
  5. An accidental death rider claim is usually paid if the insured ANS Dies within 90 days of the accident
  6. Under Alabama's annuity disclosure regulation, the disclosures must be mailed to the applicant within business days if the application is taken over the telephone. ANS 5
  7. Which type of assignment transfers a portion of the policyowner's right to another party in order to secure a debt to that party? ANS Collateral assignment
  8. If an insured commits suicide, a life insurance policy's face amount will be paid only after the policy has been in force for at least ANS Two years
  1. Ann is an employee and covered by a Group Life plan through her employ- er. When Ann is terminated, her employer fails to inform her about the plan's conversion option. Two weeks later, Ann dies in an automobile accident. How will this situation be handled? ANS Full benefits must be paid by the insurer.
  2. Which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama? ANS None of these (Savings, Profit, or Deposit)
  3. Which of the following statements is NOT correct? ANS Agents are allowed to waive certain policy provisions
  4. How is the Alabama Life and Disability Insurance Guaranty Association able to pay claims for insolvent insurers? ANS Assessments against other admitted insurers in Alabama
  5. In which of the following ways does term life insurance and whole life insurance differ? ANS Term insurance does not build cash value
  6. Tim has a Universal Life policy. The cash value growth in his policy is ANS In- terest sensitive
  7. Which of the following permanent life insurance policy riders add more coverage for a limited amount of time? ANS Term rider
  8. Which of the following Long-Term Care (LTC) practices is permitted in Alabama? ANS Using direct mail to market an LTC policy
  9. Wayne is covered under a nonoccupational group health policy. He is

hurt while traveling for business and requires a lengthy hospital stay. His group health policy refuses to pay for hospital expenses because ANS This is considered a job-related accident

  1. Required Provision 3 states that the minimum grace period for all policies (except those with monthly or weekly premium modes) is ANS 31 days
  2. 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
  3. Health Maintenance Organizations (HMOs) and Preferred Provider Organi- zations (PPOs) are both considered to be ANS Managed health care systems
  4. Who is considered the individual that retains all rights, values, and options of an insurance policy? ANS The policyowner
  5. Replacement regulation in Alabama does NOT apply to ANS Credit life insur- ance
  6. Buying land with the anticipation of it going up in value is an example of ANS Speculative risk
  7. The automatic premium loan provision is NOT used in which of the follow- ing policies? ANS Increasing term policy

Policy dividends

  1. Total disability can be defined as "the insured's inability to perform the occupation for which he/she is reasonably qualified by education, training, or experience." For disability income insurance purposes, this definition is known as ANS The "own occupation" definition
  2. 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
  3. ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC Company and begins working XYZ Company five years later. If this person were to die and the policy is still in force and unchanged, where would the death proceeds be directed? ANS ABC Company
  4. Anita is an office clerk at the time she purchases a Disability Income Policy. She later changes her career to a king crab fisherman. If she ever becomes injured on the boat, the Change of Occupation provision states that the insurer can ANS Adjust the benefits
  5. Beginning at what age can an IRA owner start making withdrawals and NOT be subjected to a tax penalty? ANS 59 1/
  6. 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
  1. Julio, the insurance provider, has allowed his license to lapse. He would like to reinstate his license without retaking a pre-license course or passing a written examination. To do this, Julio must reinstate the license within months from the renewal date. ANS 12
  2. A Long Term Care (LTC) policy has a minimum renewability level of ANS Guar- anteed renewable
  3. John purchases insurance because he expects to experience a loss. This is known as ANS Adverse selection
  4. Which of the following is NOT a factor typically used by insurers to classify risk? ANS Education level
  5. The proceeds of a life insurance policy can be paid in a form other than a lump-sum payment. These forms of payment are called ANS Settlement options
  6. The exclusions and conditions in an insurance contract are required to be conspicuous, plain, and clearly stated. There should be no surprise when an insurance company denies a claim for a hidden clause. This is called the ANS Doctrine of reasonable expectations
  7. A dependent child can receive continuation of coverage under the parents' policy for which of the following conditions? ANS Physical or mental disability.
  8. Who does the insurance agent legally represent? ANS The insurance company
  1. In Alabama, an insurer who violates state laws for the payment of in- surance commissions may be fined up to ANS Three times the amount of the commissions paid
  2. When medical expenses reach a certain dollar amount, the insured is no longer responsible for sharing the cost of expenses. The insurance company then pays 100% of the covered expenses. This major medical policy provision is called a(n) ANS Stop-loss limit
  3. An insurance company that cedes a portion of an insured's coverage to another insurer is said to be engaged in ANS Reinsurance
  4. Which of the following limits an insurance company's total exposure under a major medical policy? ANS Maximum lifetime benefit and a coinsurance provision
  5. A life insurance policy owned by a third party ANS Is used largely in estate-plan- ning as well as business situations
  6. Which welfare program provides assistance to the needy? ANS Medicaid
  7. 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
  8. Which type of life insurance rider allows a policyowner to increase the level of coverage to keep up with inflation? ANS Cost of living rider
  9. 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

  1. Medicare eligibility is typically based on ANS Age
  2. What is the minimum age requirement for a minor in Alabama to purchase a life insurance policy? ANS 15
  3. A life insurance producer's agency agreement normally authorizes the licensee to do all of the following, EXCEPT ANS Issue policies
  4. Which dividend option allows a policyowner to use his/her dividends to buy life insurance on a single premium basis ANS Paid-up additions option
  5. Insurance policies issued by companies which allow their policyowners to participate in the favorable experience of the company through payment of dividends are known as ANS Participating policies
  6. AN insurance contract is said to be a(n) because there is a mutual reliance of truthfulness on both parties. ANS Contract of utmost good faith
  7. Peggy surrenders a permanent life policy with a cash value of $15, and an 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,
  1. A disability policy in Alabama that is paid on a monthly basis is required to have a grace period of ANS 10 days
  2. Policy dividends for insurance are ANS Cannot be guaranteed
  3. Any individual who has failed two Alabama insurance licensing examina- tions must wait how long before retaking it a third time? ANS Three months
  4. 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
  5. All students attending a large college would most likely be covered by which type of health policy? ANS Blanket policy
  6. Extended residence in a nursing home is covered by a(n) ANS Long- term care policy
  7. Which of the following best describes a Health Maintenance Organization (HMO)? ANS Provides full medical services that stress preventative medicine
  8. Pat the producer just sold an insurance policy to a client, explaining that he has authority to issue the policy. Pat was not specifically granted this power from the insurance company. Pat is exercising ANS Implied authority
  1. Insurance policies issued by companies which are owned by stockhold- ers and do not pay policy dividends are known as ANS Non- participating policies
  2. A Preferred Provider Organization (PPO) contract typically uses which type of payment arrangement? ANS Negotiated fee-for-service
  3. What will the insurance company pay once the stop-loss is exceeded on a Major Medical policy? ANS 100% of covered expenses
  4. At what point does a whole life policy pay the face amount? ANS Upon the insured's death or reaching the age of 100
  5. Which of the following statements about a noncancelable policy is FALSE? ANS The premium rate CAN be increased over time
  6. The withholding of facts in an insurance application is called ANS Conceal- ment
  7. Which of the following provisions may NOT be adjusted in an adjustable life policy? ANS The insured
  8. Which type of life insurance policy combines insurance protection with an accumulation of cash value? ANS Permanent insurance
  9. An Accidental Death & Dismemberment (AD&D) policy will pay the upon the accidental loss of two of the insured's primary parts. ANS Principal sum
  10. Terry owns a 20 year life annuity certain and dies before the period of