Alabama Life Insurance Exam | Questions & Complete Answers (A+ Grade) Which clause allows the insured to change an existing policy to any other policy of any type as long as the new policy has a higher premium, without any proof of insurability? - ANSWER - Privilege of change clause The extended term nonforfeiture option provides: - ANSWER - Paid-up term coverage equal to that of the original policy With a collateral assignment of a life policy to a creditor: - ANSWER - You assign a partial amount of the policy values to the creditor An accounting measure used to determine a contract owner's interest in the separate
account of a variable annuity before payments begin is called: - ANSWER - An
accumulation unit Group Insurance Market: A certificate of insurance is issued to whom? - ANSWER - Each individual covered by the group life insurance The principal difference between an entity purchase and a cross purchase buy-sell agreement is: - ANSWER - The identity of the policy owner (the main difference is who owns the policy) How long is the probationary period for group life insurance? - ANSWER - The probationary period is usually 90 days.What is the primary purpose of a section 303 redemption? - ANSWER - To provide liquidity to pay estate taxes and administration and funeral costs What is it called when an insurance company sells part of their risk to another insurance company? - ANSWER - Reinsurance (also, risk-sharing) The policy conditions represent the obligation of whom? - ANSWER - Both the insured and the insurer Does social insurance provide equal benefits to all citizens that contribute? - ANSWER - No. As income is re-distributed through the governmental system, insureds who put less into the system such as the poor, elderly, and those with dependents get proportionately greater benefits.
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