Exam (elaborations)
Alabama Life Insurance Exam 2024 Questions and Answers (verified answers)
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Alabama Life Insurance Exam 2024 Questions and Answers (verified answers)
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Alabama Life Insurance Exam.pdf about:blAlabama Life Insurance Exam
1. Which clause allows the insured to change an existing policy to any otherpolicy of any
type as long as the new policy has a higher premium, without any proof of insurability?
ANS Privilege of change clause
2. The extended term nonforfeiture option provides
ANS Paid-up term coverageequal to that of the original policy
3. With a collateral assignment of a life policy to a creditor
ANS You assign a partialamount of the policy values to the creditor
4. An accounting measure used to determine a contract owner's interest in theseparate
account of a variable annuity before payments begin is called
ANS An accumulation unit
5. Group Insurance Market A certificate of insurance is issued to whom?
ANS -
Each individual covered by the group life insurance
6. The principal difference between an entity purchase and a cross purchase buy-sell
agreement is
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,Alabama Life Insurance Exam.pdf about:bl
ANS The identity of the policy owner (the main difference is whoowns the policy)
7. How long is the probationary period for group life insurance?
ANS The proba-tionary period is usually 90 days.
8. What is the primary purpose of a section 303 redemption?
ANS To provide liquidityto pay estate taxes and administration and funeral costs
9. What is it called when an insurance company sells part of their risk toanother
insurance company?
ANS Reinsurance (also, risk-sharing)
10. The policy conditions represent the obligation of whom?
ANS Both the insuredand the insurer
11. Does social insurance provide equal benefits to all citizens that con- tribute?
ANS No. As income is re-distributed through the governmental system, insuredswho put less into
the system such as the poor, elderly, and those with dependentsget proportionately greater
benefits.
12. In determining whether disability is permanent, most companies call for a waiting
period of how long?
ANS 3 to 6 months
13. What can the cash value of a permanent life insurance policy be used for?
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