Final exam Alabama life insurance Latest Update 2024-2025 100 Questions and 100% Verified Correct Answers Guaranteed A+
A ___ ___ company is one that is domiciled in another state and has NOT received a
license to do business in Alabama. - CORRECT ANSWER: Foreign non admitted
A collateral assignment allows a policy owner to assign: - CORRECT ANSWER: A portion of the policy proceeds to the assignee
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? - CORRECT ANSWER: Each partner must own a policy on the other
partners
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? - CORRECT
ANSWER: joint and survivor life annuity
A husband and wife purchase 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? - CORRECT ANSWER: Survivorship life policy
A licensed Alabama insurance producer would NOT be disciplined by the Commissioner of Insurance for: - CORRECT ANSWER: Being convicted of a misdemeanor
A life insurance beneficiary has chosen a settlement option in which the principal never decreases unless the beneficiary makes a withdrawal. This settlement option is called the: - CORRECT ANSWER: Interest only option
A life insurance policy owner has just exercised the policy's reduced paid-up option.Which of these statements is true? - CORRECT ANSWER: The amount of coverage will be much less than the original coverage
A life insurance producer's agency agreement normally authorizes the license to do all of the following, EXCEPT: - CORRECT ANSWER: Issue policies
A policy owner 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 policy owner chooses the reduced paid- up option and then later dies, what will the beneficiary
receive? - CORRECT ANSWER: The reduced paid-up coverage amount minus $5,250
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A policy owner with an automatic premium loan provision must: - CORRECT ANSWER: pay back the loan amount to keep the policy's cash value at its maximum
A retirement plan intended for a sole proprietor and his/her employees would be an: -
CORRECT ANSWER: Keogh plan
A retirement plan that can be started by an employee, even if another plan is in
existence, is called an - CORRECT ANSWER: Individual retirement Account (IRA)
A substandard or special class risk typically results in: - CORRECT ANSWER: A premium that is higher than for a normal risk
A written agreement that involves two or more parties and consideration is: - CORRECT
ANSWER: A contract
ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC Company and begins working for XYZ company five years later. If this person were to die and the policy is still in force and unchanged,, where would the death proceeds be
directed? - CORRECT ANSWER: ABC Company
Alabama's annuity disclosure regulation: - CORRECT ANSWER: Requires the delivery of a buyer's guide and a disclosure document to annuity applicant
Albert surrenders his whole life policy ten years after it was purchased. What can he
expect? - CORRECT ANSWER: to pay taxes on the cash value in excess of premium
paid
All of these are correct concerning group life insurance , EXCEPT: - CORRECT
ANSWER: Whole life insurance is the form of insurance typically used in group life insurance
All of these statements concerning a Key Employee Life policy is true, EXCEPT:
- The company pays the premiums and names the beneficiary
- The key employee must sign the application
- The key employee names the beneficiary
D. The company is the owner of the policy - CORRECT ANSWER: The key employee
names the beneficiary
An insurance company licensed to do business in Alabama, but incorporated in another state, is called: - CORRECT ANSWER: foreign company
An insurance company licensed to solicit insurance in a specific state is called: -
CORRECT ANSWER: an admitted company
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