Alabama (Department Of Insurance) Life and Health Insurance

-pay dividends to the policy owner (upon actual mortality cost, interest earned and cost)

A participating insurance policy may do which of the following?

-pure risk

A situation in which a person can only lose or have no change represents

-residual disability

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from the total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?

-an applicant submits an application to the insurer

In insurance, an offer is usually made when

-beneficiary

Insurance policies ensure that after a loss proceeds will go to

-loss

Insurance will protect a business, person, entity from a

-blackout period

Social Security benefits are available for a surviving spouse until the youngest child reaches 16. Benefits are later resumed when the surviving spouse reaches the retirement age. What is the time period called in which during the surviving spouse does not receive benefits?

-as of the application date

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

-agents contract with the principal

What documentation grants express authority to an agent?

-principal

What is the term for the entity that an agent represents regarding contractual agreements with third parties?

-express authority

The authority granted to an agent through the agents contract is referred to as

-expenses

The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called

-transfer

When an individual purchases insurance, what risk management technique is he/she practicing?

-premiums

Which of the following terms describe the fee a person pays when wanting to be covered by insurance?

-apparent

Which of the following types of agent authority is also called (perceived authority) ?

-expense of a vacation for surviving family members

Which of the following would NOT fall into the category of cost associated with death?

-education

All of the following information about the applicant is identified in the general information section of a life insurance application EXCEPT

-consideration

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principals has the insurer violated?

-past medical history -present physical condition -occupation -habits and morals

Classifying a risk, the Home Office Underwriting Department will look at the applicants

-in favor of the insured

Courts will interpret any ambiguity in an insurance contract

-conditional

The proposed insured makes the premium payment on anew insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved . This is an example of what kind of contract?

-implied

Which authority is NOT stated in an agents contract but is required for the agent to conduct business?

-applicant

Which is a term for a person who seeks insurance from an insurer?

-exchange of unequal values

Which of the following best describes the aleatory nature of an insurance contract?

-consumer report

Which of the following includes information regarding a person's credit, character, reputation, and habits?

-admitted

Which of the following is the most precise synonym for an "authorized" insurer?

-monthly

Which of the following premium modes would result in the highest annual cost for an insurance policy?

-AM Best

Which of the following produces evaluation of insurers financial status often used by state departments of insurance?

-a debtor has an insurable interest in the life of a lender (a lender has an insurable interest in the life of a debtor is CORRECT)

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?