Alabama Life Health Insurance Exam Test Bank 1 Newest

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Alabama Life & Health Insurance Exam Test Bank 1 Newest 2026-2027 Actual Exam With Complete Questions And Correct Detailed Answers (Verified Answers) |Already Graded A+

Which of the following is NOT a characteristic of life insurance as property? - ANSWER-It requires a fund portfolio manager

Characteristics:

It creates an immediate estate

It requires no physical maintenance

It may be paid for in installments

The most effective way to ensure that the applicant will accept the policy

when it is issued is: - ANSWER-To have the applicant pay the initial

premium at the time of application

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Allen purchases an estate builder (jumping juvenile) policy for his 5- year old son, Donald. Suppose that when Donald reaches age 21 his father presents him with the policy as a gift. Which of the following statements is NOT correct? - ANSWER-Donald must change the beneficiaries immediately

CORRECT:

The premium will continue to be based on his original age of 5

Donald has enjoyed protection against the problems of premature death

The face value of Donald's policy has increased by 5 times

Term insurance differs from permanent insurance in that term: -

ANSWER-Builds no cash value, pays a death benefit only

An indeterminate premium policy offers: - ANSWER-A low initial

premium with succeeding premiums based on the company's investment return, mortality and expenses

With regard to the waiver of premium rider, after the disability a

policyowner normally: - ANSWER-Need not repay the premiums paid

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In many jurisdictions, permanent policies are required to have some cash

value by the end of: - ANSWER-The Third Year

Loan values and retirement income are: - ANSWER-Called the living

benefits of life insurance

With a modified premium whole life contract, premium payments: -

ANSWER-Are lower in the early years of the contract

A variable life policy: - ANSWER-Death benefit varies to reflect the

investment results of the underlying separate account, but never falls below a guaranteed minimum

The type of policy that can be changed from one that does not

accumulate cash values to one that does is a: - ANSWER-Convertible

term policy

A limited pay life policy: - ANSWER-Requires premium payments for a

specified number of years or until a specified age is reached

Should an insured become totally and permanently disabled two months

before the cut-off date for the waiver of premium rider: - ANSWER-The

insured remains eligible for all provisions

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Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing. Later on, Wilma dies and the policy death benefit is paid

to the beneficiary. This is called a: - ANSWER-Survivorship or second-

to-die policy

A whole life policy: - ANSWER-Requires the insured to pay premiums

for life and endows at age 100

If Greg's policy on his own life has a guaranteed insurability rider, it

means that he can purchase more insurance: - ANSWER-On his own life

at certain specified ages without proof of insurability

Any extra premium charged for the waiver of premium rider: -

ANSWER-Does not apply to the policy's cash value

If a policyowner has a $100,000 policy with an accumulated cash value

of $6,000, the policyowner can borrow up to: - ANSWER-The entire

accumulated cash value of $6,000, less interest for 1 year

An insured allows a permanent policy to lapse. Unless otherwise

instructed, the insurance company: - ANSWER-Will automatically

institute the extended term option

Each of the following statements about policy loans is correct, except: -

ANSWER-Policy loans may be made on any type of policy

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