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Alabama Life and Health Insurance Final Exam: Multiple Choice Questions and Answers, Exams of Socialization and the Life Course

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

A comprehensive set of multiple choice questions and answers covering various aspects of alabama life and health insurance. It provides a valuable resource for students preparing for exams or professionals seeking to refresh their knowledge in this field. The questions cover topics such as health maintenance organizations (hmos), disability income insurance, life insurance policies, and annuity contracts. Particularly useful for understanding the specific regulations and requirements of alabama's insurance industry.

Typology: Exams

2024/2025

Available from 12/06/2024

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Alabama Life and Health Insurance Final Exam
1. Under a health maintenance organization HMO service providers are paid a fixed monthly
fee for each member. This concept is called ANS Capitation
2. When can a lapsed life insurance policy usually be reinstated ANS Within three to five
years of the policy lapsing
3. All of these statements concerning the coordination of benefits are true ex- cept ANS The
secondary insurance does not pay benefits. Which means the secondary insurer does pay
benefits
4. 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
5. Peggy surrenders a permanent life policy with a cash value of $15,000 and then
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
$10,000
6. Total disability can be defined as the insureds inability to perform the occupation for
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Download Alabama Life and Health Insurance Final Exam: Multiple Choice Questions and Answers and more Exams Socialization and the Life Course in PDF only on Docsity!

Alabama Life and Health Insurance Final Exam

  1. Under a health maintenance organization HMO service providers are paid a fixed monthly fee for each member. This concept is called ANS Capitation
  2. When can a lapsed life insurance policy usually be reinstated ANS Within three to five years of the policy lapsing
  3. All of these statements concerning the coordination of benefits are true ex- cept ANS The secondary insurance does not pay benefits. Which means the secondary insurer does pay benefits
  4. 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
  5. Peggy surrenders a permanent life policy with a cash value of $15,000 and then 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,
  6. Total disability can be defined as the insureds inability to perform the occupation for

which he or she is reasonably qualified by education training or experience for disability income insurance purposes this definition is what ANS Own occupation

  1. Why are insurance contracts said to be contracts of adhesion ANS The contract has been prepared by one party the insurer and the other party which is the insured must accept the contract as written
  2. Catherine is a retiring and was recently hospitalized for 10 days. Which type of insurance policy would best cover her for excess Hospital expenses- ANS Medicare supplement. A Medicare supplement policy will provide a subscriber the best coverage for excess charges
  3. What do major medical policies typically cover ANS Usual, customary, and nec- essary expenses
  4. At what point does a whole life policy pay the face amount? ANS Upon the insureds death or reaching the age of 100
  5. Which type of Term policy allows the policyowner to switch to permanent insurance ANS Convertible term
  6. Trent has a permanent partial disability where he is paid 50% of his previous
  1. The minimum grace period for a life insurance policy sold in Alabama is ANS 30 days
  2. Benefits under a health insurance policy May with the insureds written request be payable to ANS I Hospital, physician, or surgeon. The right of assignment built into most commercial Health policies allows the policyowner to assign benefit payments from the insurer directly to the healthcare provider
  3. The monthly benefit of an annuity certain is determined by ANS The annuitant's payout Period selection
  4. If insurance premiums are paid more frequently than annually the policy owner can expect to ANS Have a higher total outlay of dollars for the coverage for that year
  5. According to Alabama Law agents of a health maintenance organization HMO ANS Must be licensed as Insurance Producers and are subject to all producer licensing requirements
  6. When does adverse selection exist ANS When the risks accepted for insurance has a higher likelihood of experiencing loss than an average group
  7. Amy owns a disability income policy with a non-cancelable renewal provi- sion. Which of

the following is guaranteed in her policy ANS Coverage and premium rate are guaranteed as long as the premiums are paid

  1. Alabama's annuity disclosure regulation ANS Requires the delivery of a buyer's guide and a Disclosure document to an annuity applicant
  2. What will the insurance company pay once the stop-loss is exceeded on a major medical policy ANS 100% of covered expenses
  3. Which statement accurately portrays a whole life policy ANS Endows at age 100 and paid up at a stated time
  4. Individual disability income policies normally have a premium that ANS adjusts annually. The most common type of individual disability income policy is the guaran- teed renewable policy which typically adjust the premium on an annual basis
  5. Policy dividends for life insurance are ANS Not guaranteed
  6. What does disability Buy sell insurance provide ANS Lump sum benefit
  7. With term insurance which of the following types of Premium Remains the Same for the entire policy period ANS Level premium

examination. To do this do Leo must reinstate the license within months from the renewal date ANS 12 months

  1. Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments ANS 3 months after the annuity is bought
  2. According to required provision 4 when an insured applies for reinstate- ment of a health policy and receives a conditional receipt how long does the insurer have to approve or deny ANS Within 45 days of the date of the application
  3. Which of the following is not an example of insurable Interest ANS An airline ensuring the lives of its passengers is not insurable interest
  4. 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
  5. An insurance company may cancel a life insurance policy under which of the following conditions ANS The outstanding policy loan exceeds the cash value of the policy
  6. A policy owner with a $100,000 whole life policy has a cash value of $10,000.There is an outstanding loan of $5,000 and a past due premium of 250. If the policy owner chooses the reduced paid-up option and then later dies what will the beneficiary receive ANS The reduced paid-up coverage amount minus $
  7. Long-term care policies normally provide benefits for ANS Home Health Care
  8. Ed has an insurance policy with an insurance company. Before eds policy will pay a claim certain events must occur. Because of this an insurance policy is considered to be ANS conditional
  9. mortgage protection is typically covered with ANS decreasing term
  1. a retirement plan intended for a sole proprietor and his or her employees would be a ANS Keogh plan
  2. who does a disability income policy normally cover ANS wage earners
  3. 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 days
  4. what does renewable term guarantee ANS the insured's insurability
  5. a group disability income policy will ANS usually pay short-term benefits of less than 2 years in duration
  6. insurance policies issued by companies which are owned by stockholders and do not pay policy Dividends are known as ANS non-participating policies
  7. which of the following events would allow a policy owner with a guaranteed insurability rider purchase additional life insurance ANS having a child, getting married, and reaching a specified age stated in the policy

pays the premium in this situation ANS employee

  1. Albert surrenders his whole life policy 10 years after it was purchased. What can he expect ANS to pay taxes on a cash value in excess of Premium Payed. if a whole life policy is surrendered for cash 10 years after it was purchased the policy owner can expect to pay taxes on the cash value in excess of premium paid
  2. 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
  3. Medicare supplement policies marketed in Alabama ANS cannot offer benefits that simply duplicate Medicare benefits, cannot be more restrictive than Medicare, and cannot treat a loss due to injury differently than a loss due to illness
  4. which welfare program provides assistance to the needy ANS Medicaid
  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. an insurance premium can be defined as ANS Money Paid to an insurance com- pany for benefits provided in the policy
  3. Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay premiums. If she elects to take the extended term option which of these actions would she take ANS she will use the $10,000 the policy accumulated in cash value to buy term insurance of the same face amount as her original policy
  4. which of the following statements about a non-cancellable policy is false- ANS the premium can be increased over time; true statements about non-cancelable policy are ANS so long as the premiums are paid the policy cannot be changed in anyway, non- cancelable provisions are most commonly found in disability income policies, and the premium rate cannot be increased over time
  5. the agreement between a producer and an insurance company specifies The Authority given to a producer to act on behalf of the insurer is called ANS ex- pressed Authority
  6. Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a ANS conditional receipt
  7. in regards to a life insurance policy and annuity contract all statements made on the application are considered to be ANS representations
  8. representation ANS A statement made by the applicant that they consider to be true and accurate to the best of the applicants belief
  9. a cross purchase buy-sell agreement is in place for ABC company's four founding Partners. What would this agreement require if the agreement is funded with individual life
  1. an insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in ANS rebating
  2. which of the following does NOT describe a life income settlement option- ANS income is paid until the principal amount decreases to zero;
  3. life income settlement option ANS A specified income amount will be paid to the payee, a lifetime income can be paid to a second payee if the first payee dies, and a lifetime income will be paid to the payee
  4. insurance policies issued by companies which allow their policy owners to participate in the favorable experience of the company through payment of dividends are known as ANS participating policies
  5. Don and Marie married in each have a major medical plan provided by their employers. Don was born in August of 1969 and Marie was born in March of 1976. For there to dependent children, ANS Marie's plan is primary and Don's and secondary. The primary health insurance plan is the one that belongs to the parent whose birthday comes up first in the calendar year. it makes no difference to the insurance companies which parent is Older.
  6. what describes a level term policy ANS premium and don't protection remain constant for the term of the policy
  7. extended residence in a nursing home is covered by a ANS long-term care policy
  8. a long-term care insurance must be unable to perform a minimum of activities of daily living or adl's to receive benefits ANS 2
  9. the long-term care partnership program is designed to allow seniors to ANS - shelter assets from the spend down requirements of Medicaid
  10. an insurance producer must have which of the following in order to sell variable life insurance policies ANS registered with finra, license for variable life and annuities

contracts, and a valid insurance license

  1. which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama ANS none of these; not savings or profit or deposit
  2. which type of life insurance Rider allows a policy owner to increase the level of coverage to keep up with inflation ANS cost of living Rider
  3. which of the following is not guaranteed by a whole life policy ANS policy dividends
  4. the maximum amount of coverage placed on a disability income policy is based on the insureds? ANS earned income from the previous year.
  5. absolute assignment ANS the transfer is complete and irrevocable and the as- signee receives full control over policy and full rights to benefits

ANS the key employee names beneficiary; the company pays premiums and names the beneficiary, they can't employee must sign application, and the company is owner of policy

  1. a written agreement that involves two or more parties and consideration is ANS a contract
  2. Pat the producer just sold an insurance policy to a client explaining that he has the authority to issue the policy. Pat was not specifically granted this power from the insurance company. Pat is exercising ANS implied Authority. It is the unwritten Authority that is not expressly granted but which the agent is assumed to have in order to transact the business of the principal
  3. Medicare is not available to a ANS 61 year old Medicaid recipient.
  4. which of these statements is true regarding the medical information Bureau MIB ANS reports given to member companies contain information regarding the

insurability of insurance applicants, the proposed insured must give authorization before information can be given to member companies, and the MIB is a non-profit agency which aides in underwriting insurance policies

  1. Terry owns a 20 - year life annuity certain and dies before the period of 20 years has elapsed. What happens to any money left? ANS paid to the beneficiary for the rest of the certain period.
  2. contract of utmost good faith ANS because there is a mutual Reliance of truthful- ness on both parties, an insurance contract is said to be a contract of utmost good faith
  3. which provision allows a disability income policy to remain in force with- out further payments when the insured has become totally and permanently disabled? ANS waiver of premium
  4. Sean has a waiver of Premium Rider on his life insurance policy. He be- comes disabled for three years. During which the insurance company waives $3,000 in premiums. When Sean recovers he must ANS resume paying premiums again
  5. a Disability Policy that must be renewed, cannot be cancelled until age 65 and may not have an increase in premium for any reason is called a ANS non-can- cellable policy. it may not be changed in any way by the insurer up to a specified age as long as premiums are paid
  6. Mike 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,
  7. which of the following are not covered under major medical policies ANS pain and suffering;
  8. who does the insurance agent legally represent? ANS only the insurance com- pany
  9. which of these is not considered a form of advertisement in Alabama ANS -
  1. Rick owns a $100,000 life insurance policy with a cash value of $10,000. How much can he borrow up to ANS the accumulated cash value $10,000 less interest
  2. when medical expenses range I certain dollar amount the insured is no longer responsible for sharing the cost of expenses. The insurance company that pays 100% of the covered expenses. This major medical policy provision is called ANS stop loss limit
  3. with renewable term insurance ANS the premium increases at renewal
  4. an individual unable to go from warm to normal activities of daily living will trigger coverage from a policy ANS long-term care LTC
  5. 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
  6. an insurance company licensed to do business in Alabama but Incorpo- rated in another state is called ANS a foreign company
  7. the aviation exclusion ANS excludes coverage when the insured is riding in cer- tain kinds of air travel
  8. Janet is retired and looking to invest a lump sum of money through an insurance company. which product would be best suited for this? ANS annuity
  9. what kind of risk are amateur pilots classified as? ANS special class risks
  10. how are employer paid premiums for employee group health insurance normally treated for tax purposes? ANS tax deductible to the employer/ nontaxable to the employees
  11. the objective of insurance is ANS the transfer of risk
  12. Carol is a life insurance policy owner who has transferred her ownership to a third party in exchange for a percentage of the death benefit. What is this called ANS viatical settlement agreement
  13. according to Alabama Law a minor ANS age 18 can begin receiving life insurance death

benefits of up to $3,000 per year

  1. ABC company takes out a key employee policy on it CEO.The CEO leaves ABC company and begins working for 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
  2. who is considered the individual that retains All rights values and options of an insurance policy ANS the policy owner NOT the insured
  3. the waiver of premium provision normally excludes which of the following disabling Acts? ANS injuries sustained while committing a felony, injury sustained while serving in the military, and self-inflicting injuries
  4. an insurance company licensed to solicit Insurance in a specific state is called ANS an admitted company