Chapter 13 Alabama Insurance Law pertinent to Life Ins only

What is the minimum age for an individual to buy an insurance policy in Alabama? A. 14 1/2 B. 15 C. 16 D. 18

B. 15

What is the maximum amount the Alabama Life and Disability Insurance Guaranty Association will pay in benefits for one life? A. $300,000 B. $500,000 C. $10,000 D. $100,000

A. $300,000

Which of the following entities will most likely regulate an insurer's ad on local TV? A. The Guaranty Association B. The marketing department of the insurance company C. The department of Insurance D. The TV statement

B. The marketing department of the insurance company

If an application for an annuity is gathered any way other than face to face, within how many days after the insurer receives the completed application must the applicant be given a Buyer's Guide? A. 7 calendar days B. 10 calendar days C. 3 business days D. 5 business days

D. 5 business days

Which of the following is NOT true regarding minors purchasing insurance policies in this state? A. A minor has to be 18 years old in order to receive any policy statements B. Minors are allowed to purchase annuity contracts C. Benefits paid out to minors may be limited D. Minors at the age of 14 are allowed to buy their own insurance policies

D. Minors at the age of 14 are allowed to buy their own insurance policies

Using names or titles that have tendency to misrepresent the true nature of a policy is an example of what illegal practice? A. Defamation B,. Twisting C. Rebating D. False advertising

D. False advertising

All advertisements pertaining to life insurance policies are the responsibility of the A. Commissioner B. Agency that produces them C. Consumer protection agency D. Insurer

D. Insurer

When the insurer stipulates the time period for payment of claims, how soon must the insurer pay a death benefit claim after receiving the proof of death? A. 1 year B. 6 months C. 2 months D. 30 days

C. 2 months

How many days before delivery must an annuity contract be filed with, and approved by the Commissioner? A. 7 days B. 15 days C. 30 days D. 45 days

C. 30 days

Insurance policies stay in force even if the insured are overdue on premium payments. What phrase best describes this concept? A. Incontestability B. Reinstatement C. Grace period D. Participation

C. Grace period

Which of the following documents must be provided to the policyowner or applicant during policy replacement? A. Buyer's guide and policy summary B. Policy illustrations C. Notice Regarding Replacement D. Disclosure Authorization Form

C. Notice Regarding Replacement

Illustrations used in the sale of life insurance policies must contain all of the following EXCEPT A. The initial death benefit B. The insured's financial classification C. The rating classification the illustration is based on D. Dividend option election

B. The insured's financial classification

Which of the following policies would NOT have policy loans provision? A. Whole life B. Universal life C. Joint life D. Term life

D. Term life

Which rule would apply if an agent knows an applicant is going to cash in and old policy and use the funds to purchase new insurance? A. Replacement Rule B. Reinstatement Rule C. Conversion Rule D. Disclosure Rule

A. Replacement Rule

During replacement of life insurance, a replacing insurer must do which of the following? A. Designate a new producer for a replaced policy B. Send a copy of the Notice Regarding Replacement to the Department of Insurance C. Obtain a list of all life insurance policies that will be replaced D. Guarantee a replacement for each existing policy

C. Obtain a list of all life insurance policies that will be replaced

The Life Insurance Solicitation Regulation was promulgated to do the following: A. Outline prohibited practices in insurance solicitation B. Protect the insured against unfair trade practices C. Provide adequate information to consumers regarding relative cost of insurance products D. Compare coverage of policies during replacement

C. Provide adequate information to consumers regarding relative cost of insurance products

Which of the following entities was created to protect insureds against an insurer's insolvency? A. Better Business Bureau B. Fair Credit Reporting Act C. The Life and Disability Insurance Guaranty Association D. The Insurance Regulation Commission

C. The Life and Disability Insurance Guaranty Association

Who is responsible for the contents of life insurance advertising? A. Commissioner B. Dept of Insurance C. Advertising agency that prints advertising material D. The insurer

D. The insurer

According to the regulations on life insurance policy solicitation, what two documents must be presented to an applicant duriong the application process? A. Buyer's guide and a Life Insurance Cost Index B. Policy summary and the policy disclosure C. Policy disclosure and Life Insurance Cost Index D. The policy summary and the buyer's guide

D. The policy summary and the buyer's guide

How must a replacing producer respond to an applicant wishing to replace existing life insurance? A. The producer must provide the applicant with a Notice Regarding Replacement B. The producer must collect the existing policies and turn them over to the replacing insurer C. The producer must request permission of the existing insurer D. The producer has not specific duties

A. The producer must provide the applicant with a Notice Regarding Replacement

Insurance policies are incontestable if they have been in effect for at least A. 90 days B. 1 year C. 2 years D. 30 days

C. 2 years

Which of the following policies would NOT have a policy loans provision? A. Universal Life B. Joint Life C. Term Life D. Whole Life

C. Term Life

The term illustration in a life insurance policy refers to A. A representation of non-guaranteed elements of a policy B. A depiction of policy benefits and guarantees C. Pictures accompanying a policy D. Charts and graphs

A. A representation of non-guaranteed elements of a policy