Alabama Insurance Producer license test
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
