2025 ESCAPE TO MEXICO

money paid to an insurance company for benefits provided in the policy

An insurance premium can be defined as:

revocable beneficiary

Barbara has the right to change the beneficiary designation on her life insurance policy. Barbara's beneficiary is a(n):

Viatical settlement agreement

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?

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

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

foreign nonadmitted

A ___ ___ company is one that is domiciled in another state and has NOT received a license to do business in Alabama.

monthly

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

being convicted of a misdemeanor

A licensed Alabama insurance producer would NOT be disciplined by the Commissioner of Insurance for:

settlement options

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:

24

Alabama's continuing education law states that an insurance producer must report how many classroom hours every two years?

a foreign company

An insurance company licensed to do business in Alabama, but incorporated in another state, is called:

conditional

Ed has an insurance policy with an insurance company. Before Ed's policy will pay a claim, certain events must occur. Because of this, an insurance policy is considered to be:

Keogh Plan

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

representations

In regards to a life insurance policy or an annuity contract, all statements made on the application are considered to be:

an admitted company

An insurance company licensed to solicit insurance in a specific state is called:

implied authority

Pat the producer just sold an insurance policy to a client, explaining that he has authority to issue the policy. Pat was not specifically granted this power from the insurance company. Pat is exercising:

expressed authority

The agreement between a producer and the insurance company specifies the authority given to a producer to act on behalf of the insurer. This is called:

insurance company

An insurance producer represents the:

a premium that is HIGHER than for a normal risk

A substandard or special class risk typically results in:

doctrine of reasonable expectations

The exclusions and conditions in an insurance contract are required to be conspicuous, plain, and clearly stated. There should be no surprise when an insurance company denies a claim for a hidden clause. This is called the:

rebating

An insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in:

annuity

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

conditional receipt

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

conditional receipt

concealment

The withholding of facts in an insurance application is called:

Substandard

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

Special Class Risks

What kind of risk are amateur pilots normally classified as?

premiums

What is the applicant's consideration in an insurance contract?

3 years

How long must a producer keep complete records pertaining to his/her insurance transactions?

Education level

Which of the following is NOT a factor typically used by insurers to classify risk?

The employee's right to the employer's contributions in a retirement plan if employment terminates prior to retirement

What is vesting?

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

Which of these is NOT a reason the insurance application is important?

The Blackout Period

The period of time during which a surviving spouse does not qualify for Social Security survivor or retirement benefits is called:

a domestic company

In Alabama, an insurance company incorporated and licensed to do business in this state is called:

three times the amount of the commissions paid

In Alabama, an insurer who violates state laws for the payment of insurance commissions may be fined up to:

The withholding of information that should have been provided to an insurer is called concealment

Which of the following is a true statement?

All of the above

Which of these statements is true regarding the Medical Information Bureau (MIB)?

Survivorship life policy

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?

age 18 can begin receiving life insurance death benefits of up to $3,000 per year

According to Alabama law, a minor:

endowment policy

A policyowner can collect the face amount on what type of policy?

Changes on the application must be consented to in writing

In regards to insurance applications, which of the following statements is true?

12

Julio, the insurance producer, has allowed his license to lapse. He would like to reinstate his license without retaking a prelicense course or passing a written examination. To do this, Julio must reinstate the license within ___ months from the renewal date.

requires the delivery of a buyer's guide and a disclosure document to an annuity applicant

Alabama's annuity disclosure regulation:

2 years

If an insured commits suicide, a life insurance policy's face amount will be paid only after the policy has been in force for at least:

A representation is valid as long as it is true

Which of these statements regarding an insurance application is true?

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

Albert surrenders his Whole Life policy ten years after it was purchased. What can he expect?

License for variable life and annuities contracts

A valid insurance license

Registered with FINRA

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

insurance company

Who does the insurance agent legally represent?

credit life insurance

Replacement regulation in Alabama does NOT apply to:

100

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

5

Under Alabama's annuity disclosure regulation, the disclosures must be mailed to the applicant within __ business days if the application is taken over the telephone.

One party writes the contract and the other party must accept the contract as written

Why are insurance contracts said to be contracts of adhesion?

Upon the insured's death or reaching the age of 100

At what point does a whole life policy pay the face amount?

a portion of the policy proceeds to the assignee

A collateral assignment allows a policyowner to assign:

A producer sending a Christmas card to a client

Which of these is NOT considered a form of advertisement in Alabama?

$55,000

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

NONE OF THESE:

Profit

Savings

Deposit

Which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama?

decreasing term

Mortgage protection is typically covered with:

The amount of coverage will be much less than the original coverage

A life insurance policyowner has just exercised the policy's reduced paid-up option. Which of these statements is true?

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

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?

Equity indexed life

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?

30

Within how many days of a written demand must the Commissioner of Insurance hold a hearing?

pay back the loan amount to keep the policy's cash value at its maximum

A policyowner with an automatic premium loan provision must:

all of these

Which statement concerning Alabama's life insurance solicitation regulations is true?

Paid to the beneficiary for the rest of the certain period

Terry owns a 20 year life annuity certain and dies before the period of 20 years has elapsed. What happens to any monies left?

the annuitant's payout period selection

The monthly benefit of an Annuity Certain is determined by:

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

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

without proof of insurability

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

waives the premiums when the policyowner becomes totally disabled

A waiver of premium:

issue policies

A life insurance producer's agency agreement normally authorizes the licensee to do all of the following, EXCEPT:

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

What is a certificate of insurance?

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

What describes a level term policy?

The insured's insurability

What does renewable term guarantee?

dies within 90 days of the accident

An accidental death rider claim is usually paid if the insured:

The insured

Which of the following provisions may NOT be adjusted in an adjustable life policy?

participating policies

Insurance policies issued by companies which allow their policyowners to participate in the favorable experience of the company through payment of dividends are known as:

non-participating policies

Insurance policies issued by companies which are owned by stockholders and do not pay policy dividends are known as:

Permanent insurance

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

general agency system

The life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are often paid an allowance to cover office expense and staffing is the:

the premium increases at renewal

With Renewable Term Insurance,

level premium

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

Each partner must own a policy on the other partners

A Cross Purchase Buy-Sell Agreement is in place for ABC Company's four founding partners. What would this agreement require if the agreement is funded with individual life insurance?

is used largely in estate-planning as well as business situations

A life insurance policy owned by a third party:

principle of indemnity

An insured should be restored to the approximate financial condition occupied before the loss occurred. This is called the:

resume paying premiums again

Shawn has a waiver of premium rider 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:

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

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?

the company is the owner of the policy

With key employee life insurance,

Uncertainty of loss

Risk is best defined as the:

the transfer of risk

The objective of insurance is:

When the risks accepted for insurance has a HIGHER likelihood of experiencing loss than an average group

When does "adverse selection" exist?

Her policy can be returned for 100% refund of the premium within 10 days from the date the policy is delivered

Tina has an insurance policy with a 10-day free look provision. Which of these statements is correct?

Within 3-5 years of the policy lapsing

When can a lapsed life insurance policy usually be reinstated?

Paid-up additions option

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

all of the above

Which of the following events would allow a policyowner with a guaranteed insurability rider purchase additional life insurance?

extended term

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

policy dividends

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

term rider

Which of the following permanent life insurance policy riders add more coverage for a limited amount of time?

Policy dividends cannot be guaranteed

Which of these is a correct statement?

Collateral assignment

Which type of assignment transfers a portion of the policyowner's right to another party in order to secure a debt to that party?

Which type of life insurance rider allows a policyowner to increase the level of coverage to keep up with inflation?

the policyowner

Who is considered the individual that retains all rights, values, and options of an insurance policy?

cost of living rider

Which type of life insurance rider allows a policyowner to increase the level of coverage to keep up with inflation?