Alabama Life and Health Insurance

a policy owner can collect the face amount on what type of policy?

endowment policy

the option to convert term life insurance to a permanent form of coverage can normally be executed

without proof of insurability

with term life insurance, which of the following types of premium remains the same for the entire policy period?

level premium

mortgage protection is typically covered with:

decreasing term

with renewable term insurance

the premium increases at renewal

paula has an insurance policy that has a guaranteed minimum cash value, a guaranteed death benefit, fixed premiums, and grows at a rate reflected by a selected fund index. which type of life policy fits this description?

equity indexed life

what does renewable term guarantee

The insured's insurability

an insurance producer must have which of the following in order to sell variable life insurance policies

registered with the FINRA, license for variable life and annuities contracts, and a valid insurance license.

which of the following life insurance policies will build up cash value the fastest

single premium

at what age is an insured for life insurance considered statistically "dead"

100

michael has a universal life policy with an increasing death benefit option. with the initial face amount of $50,000 and a value of $5,000, what would the actual death benefit be?

$55,000

which type of life insurance policy combines insurance protection with an accumulation of cash value

permanent insurance

tim has a universal life policy. the cash value growth in his policy is:

interest sensitive

in which of the following ways does term life insurance and whole life insurance differ?

term life insurance does not build cash value

which type of policy allows the policyowner to switch to permanent insurance

convertible term

which of these statements accurately portray a whole life policy

endows at age 100 and paid up a stated time

at what point does a whole life policy pay the face amount

upon the insureds death or reaching age 100

which describes a level term policy?

the premium and protection remain constant for the term of the policy

albert surrenders his whole life policy ten years after it was purchased. what can he expect?

to pay taxes on the cash value in excess of the premium paid

a husband and wife purchases a life insurance policy that covers both of them. the policy paid nothing when the husband died. two years later, the wife dies and a death benefit is paid to the beneficiary. which type of policy is this?

survivorship life policy

which of the following provisions may not be adjusted in an adjustable life policy?

the insured

which of the following dividend options allows the continuation of cash value accumulation

reduced paid-up insurance

ron turned over all rights in his policy to an assignee. this is called

an absolute assignment

an aviation exclusion:

excludes coverage when the insured is riding in certain kids of air travel

which type of assignment transfers a portion of the policy owners right to another party in order to secure a debt to that party?

collateral assignment

A policyowner 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 policyowner chooses the reduced paid-up option and then later dies, what will the beneficiary receive?

the reduced paid-up coverage amount minus $5,250

which type of life insurance Rider allows a policy owner to increase the level of coverage to keep up with inflation

cost of living rider

policy dividends for life insurance are

not guaranteed

Rick owns $100,000 life insurance policy with a cash value of 10,000. how much can he borrow up to

the accumulated cash value ($10,000 less interest)

the automatic premium loan provision is not used in which of the following policies

increasing term policy

when can a lapse life insurance policy usually be reinstated

within 3-5 years of the policy lapsing

which of the following permanent life insurance policy writers add more coverage for a limited amount of time

term rider

which of the following events would allow a policy owner with a guaranteed insurability rider purchase additional life insurance

having a child, getting married, and reaching a specific age stated in the policy

John has recently died and it was discovered that he was actually ten years older than was listed on his life insurance policy. What will the insurer pay his beneficiary?

The amount of insurance that his premiums would have purchased at his correct age

Which dividend option allows a policy owner to use his/her dividends to buy life insurance on a single premium basis?

paid-up additions option

Which of the following is NOT guaranteed by a whole life policy?

policy dividends

Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay its premiums. If she elects to take the extended term option, which of these actions would she take?

Uses the $10,000 to buy term insurance of the same face amount as her original policy

Which of the following is considered the "automatic" Nonforfeiture Option that most insurers will use?

extended term

An accidental death rider claim is usually paid if the insured

dies within 90 days of the accident

Shawn has a waiver of premium ride on his life insurance policy. He becomes disabled for 3 years, during which the insurance company waives $3,000 in premiums. When Shawn recovers, he must

resume paying premiums again

An insurance company may cancel a life insurance policy under which of the following conditions?

the outstanding policy loan exceeds the cash value of the policy

Jan is named irrevocable beneficiary of Jim's life insurance policy. Which of the following statements is correct?

Jim needs Jan's permission to borrow the policy's loan value

Carol is a life insurance policyowner who has transferred her ownership to a third party in exchange for a percentage of the death benefit. What is this called?

Viatical settlement agreement

i the insurance premiums are paid more frequently than annually, the policyowner can expect to:

have a higher total outlay of dollars for the coverage for that year

when an estate is named beneficiary to a life insurance policy, the policy proceeds are:

distributed according to state law

an example of a life insurance beneficiary is a(n)

child of the insured, spouse of the insured, and company

when the gross premium of a life insurance policy is computed, which of these factors is not included?

number of beneficiaries

which of these will not result in an increase in life insurance policy dividends?

higher reserves

the premium payment mode which results in the highest total premium is:

monthly

which of the following is true concerning the fixed period option?

the principal amount gradually decreases to zero

the proceeds of a life insurance policy can be paid in a form other than a lump-sum payment. these forms of payment are called:

settlement options

a substandard or special class risk typically results in:

A premium that is higher than for a normal risk

which of these statements is true regarding the medical information bureau (MIB)?

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 nonprofit agency which aids in underwriting insurance policies

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

inspection report

The highest premium payment would be charged to which risk classification?

substandard

Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a(n):

conditional receipt

what is the purpose of the USA Patriot Act?

detect and deter terrorism

Who is NOT required to sign a life insurance application?

beneficiary

What kind of risk are amateur pilots normally classified as?

special class risks

which of the following statements concerning a life insurance policy is true?

an issued policy can never be changed by a producer

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company.

which of these is not a reason the insurance application is important?

When attached to the policy, the application becomes part of the insurance clause.

pat applies for the insurance, pays the initial premium, and receives a document from the agent. this document indicates that is the policy is issued, coverage begins on the date of the document. this document is called a(n):

conditional receipt

which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company.

which of the following is not a factor typically used by insurers to classify risk?

education level

P has recently signed an application for insurance. The insurer MUST advise her in writing that an investigative consumer report may be conducted according to the

fair credit reporting act

Which requirement must be met for an association to be eligible for a group life plan?

group was formed for a purpose other than acquiring insurance

what group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

conversion

company XYZ offers a group Term Life insurance plan to its employees. what does each employee covered under this plan receive?

certificate of insurance

what is a certificate of insurance?

A certificate issued to each individual covered by the group life insurance

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

portion of the premiums paid for by the employer may be a tax deduction

all of these are correct concerning group life insurance, EXCEPT:

while life insurance is the form of insurance typically used in group life insurance

under a trustee group life policy, who would be eligible for a certificate of coverage?

employee

what percentage of eligible employees must be covered by noncontributory group insurance plans?

100%

Ann is an employee covered by a Group Life plan through her employer. When Ann is terminated, her employer fails to inform her about the plan's conversion option. Two weeks later Ann dies in an automobile accident. How will this situation be handled?

Full benefits must be paid by the insurer.

an employee of 20 years recently retired at age 59 1/2. this employee's group life contract can be:

converted to an individual permanent policy at an individual rate

terry owns a 20 year life annuity certain and dies before the 20 years has elaped. what happens to any monies left?

paid to the beneficiary for the rest of the certain period

kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. if she were to die, her beneficiary would continue receiving annuity payments until this amount has been reached. what type of annuity is this?

refund life annuity

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)

installment refund annuity

all of the following statements regarding a tax sheltered annuity (TSA) are true except:

income derived from the TSA is received income tax-free

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

an immediate annuity

the monthly benefit of an annuity certain is determined by:

the annuitant's payout period selection

A husband and wife are receiving annuity payments. When the husband dies, the wife still receives annuity payments for life. What kind of annuity is this?

joint and survivor life annuity

Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments?

3 months after the annuity is bought

John is an annuitant who has surrendered his annuity at age 55. What will he pay?

tax on interest earned

Kim has purchased a straight life annuity. What will this type of annuity provide her with?

a periodic income to the annuitant for life

What is Old Age and Survivors Health Insurance (OASDHI) also known as?

social security

what determines the full amount of social security retirement benefits a qualified individual is entitled to receive?

primary insurance amount (PIA)

the monthly disability benefits payable under social security is affected by which of the following factors?

amount of the benefits available from other sources

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

5

the period of time during which a surviving spouse does not qualify for social security survivor or retirement benefits is called:

the blackout period

what is defined benefit plan

a retirement plan that promises a specified benefit to the employee at retirement

a retirement plan that can be started by an employee, even if another plan is in existence, is called a(n):

individual retirement account (IRA)

in an ira, rollover contributions are

not limited by dollar amount

a retirement plan intended for a sole proprietor and his/her employees would be a(n):

keogh plan

what is vesting?

the employee's right to the employer's contributions or benefits attributable to the contributions if employment terminates prior to retirement.

janet is retired and looking to invest a lump-sum of money through an insurance company. which product would best be suited for this?

annuity

an IRA owner can start making withdrawals and not be subjected to a tax penalty beginning at what age?

59 1/2

premature IRA distributions are assessed a penalty tax of:

10%

What type of employee welfare plans are not subject to ERISA regulations?

church plans