Alabama Insurance Producer license test

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what % of a company's employees must take part in a noncontributory group life plan?

100%

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within

90 days

which concept is associated with exclusion ratio

Annuities payments

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

Applicant

in order for an insurer to legally transact insurance, it must be obtain which of the following?

Certificate of authority

when an insured makes truthful statements on the application for insurance and pas the required premium, it is known as

Consideration

Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. What is it?

Dread Disease Policy

When the insured selects that extended term nonforfeiture option, the cas value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

All the following are dividend options except:

Fixed period installments.

which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach

what is the main purpose of the seven-pay test

It determines if the insurance policy is an MEC.

which is true regarding HMO coverage?

It is divided into geographic territories

Which statement is NOT true regarding a Straight Life Policy ?

It's premium steadily decreases over time, in response to its growing cash value

under workers compensation, which of the following benefits are NOT included

Legal benefits

what is the other term for cash payment settlement option?

Lump Sum

Which of the following refers to the amount of retirement benefits a worker receives under SS based on the worker's earnings and retirement age

PIA

Who might receive dividends from a mutual insurer?

Policyholders

Which of the following is NOT among the goals of Medicare supplement application?

Presuming the applicant is eligible for Medicaid, based on the nature of the policy

certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. What policy does this discribe?

Presumptive Disability

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid

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

Residual Disability

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options

a women obtains health coverage through the Marketplace on October 1st. Two weeks later she finds out that she is 3 months pregnant.

She will be covered immediately

Workers Comp is regulated by?

State Government

which of the following is NOT the consideration in a policy?

The application given to a prospective insured.

an individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant has to submit to a medical exam. if the policy is issued what would the policy's effectiveness date be?

The date of medical exam

Who determines the eligibility and contribution limits in a HRA (Health reimbursement arrangement)

The employer determines both

the sole beneficiary of a life insurance policy dies before the insured. the policy will then go to?

The insured's estate

which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

the term 'illustration' means

a presentation of nonguaranteed elements of a policy

a universal life insurance policy is best described as

annually renewable term policy with a cash value amount

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

concealment

which of the following is NOT a cost-saving service in a medical plan?

denial of coverage

which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner?

disability buy sell

a family's income need is greatest during which period?

family income dependency

a universal life insurance policy has two types of interest rates that are called

guaranteed and current

type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

joint and survivor

In Franchise insurance, premiums are usually

lower than individual policies but higher than group

which of the following is correct concerning the taxation of premiums in a key-person policy?

premiums are not tax deductible as business expense

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

required a premium increase each renewal

which of the following is an example of peril covered in an accident and health insurance policy

sickness

The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the

spendthrift clause

1. The paid up addition option uses the dividend:

· To purchase a smaller amount of the same type of insurance

any health care insurer that offers individual, guaranteed-issue policies ma deny coverage, however in these cases the insurer cannot offer the same coverage for

180 days

Employer health plans must provide primary coverage for individuals with end-stage renal disease before medicare becomes primary care for how many months?

30 months

the provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurer is called the

Entire Contract

Which clause stipulates that life insurance premiums can be paid in advance of policy insurance?

Payment of Premium Cause

regarding long term care policies, which of the following would NOT be included in activities of daily living?

Sleeping

the insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. this is referred to as

Utmost good faith

all of the following applicants for an insurance producer license are exempt from prelicensing education requirements EXCEPT:

an applicant for a dealer's license

under which condition would an employee's group medical benefits be exempt from income tax?

an employee's group medical benefits are generally except from taxation as income

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

an individual who was previously covered by group health insurance for 6 months is eligible

which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium

automatic premium loan

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called

avoidance

Which of the following is NOT a characteristic or service of an HMO plan?

contracting with insurance companies

a key person insurance policy can pay for which of the following

cost of training a replacement

Health coverage becomes effective when the

first premium has been paid and the application has been approved

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

guaranteed

what is NOT a benefit of a POS ( point of service plan) plan?

it allows guaranteed acceptance of all applicants

which of the following is NOT true regarding a flexible spending amount

it does not have limits on contributions

An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years, what happens to the premium?

it increases because they are 5 years older and not fit into an older homogenous group.

a married couple owns a permanent policy

joint life policy

the classification small employer means any person actively engaged in a business that on at least 50% of its working days employee

no more than 50 people

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

offer the supplement policy on a guaranteed issue basis

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

optionally renewable

an insured has a life insurance policy from a participating company and receives quarterly dividends. he has instructed the company to apply the policy dividends to increase the death benefit. the dividend option that the insured has chosen is called

paid-up additions

the policy owner pays for her life insurance annually, until now she has collected a nontaxable dividend check each year. she has decided that she would rather use the dividends to help her pay her next premium. what option would let her?

reduction of premium

which rule would apply if an agent knows an applicant is going to cash in his old policy for a new insurance?

replacement rule

An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable?

spouse

a corporation is the owner and beneficiary of the key person life policy. if the corporation collects he policy benefit then

the benefit is received tax free

In AL, domestic insurance companies may be examined by the commissioner or an examiner appointed by

the commissioner

what determines the penalty for surrendering a market value adjusted annuity prematurely?

the current interest rate at the time of surrender

under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned will be paid to

the insured

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. what would be the right policy for this client?

limited pay whole life. premium payments will cease at 65 but coverage lasts until 100

shortly after a replacement transaction on a medicare supplement policy, the insured decided to cancel the policy =, but is unsure whether the free-look provision applies, the insured could find that in the

Notice regarding replacement

When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery?

a statement of good health

all of the following statements concerning dividends are true EXCEPT

dividend amounts are guaranteed in the policy

all of the following are considered to be income periods EXCEPT

income dependency period

what is another name for an administrative-services only arrangement?

third-party administrator

in an adjustable life policy all of the following can be changed by the policy owner EXCEPT

type of investment

Peril is most easily defined as

The cause of loss insured against

all of the following statements concerning workers compensation are correct EXCEPT

a worker receives benefits only if the work related injury was not their fault

all of the following are TRUE statements regarding the accumulation of interest option except

the interest is not taxable since it remains inside the insurance policy

Which of the following is NOT a characteristic of an insurable risk?

the loss must be catastrophic

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount as in the whole life policy.

What is the purpose of settlement options

they determine how death proceeds will be paid

what is another name for an administrative services only arrangment

third-party administrator


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