ALABAMA LIFE AND HEALTH INSURANCE EXAM

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ALABAMA LIFE AND HEALTH INSURANCE EXAM

Qs and Ans - Expert- Explanation - ing score -50 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: mutual

Answer:

an insurance policy paid a nontaxable dividend to the insured one year, and nothing the next. From what type of insurer did the insured purchase the policy?

Question 2: uncertainty of loss

Answer:

for the purpose of insurance, what is risk?

Question 3: when it is intentional and material

Answer:

when would a misrepresentation on an insurance application be considered fraud?

Question 4: Loss

Answer:

the reduction, decrease, or disappearance of value of the person or property insured is a policy is known as what?

Question 5: mutual company

Answer:

the type of insurance company organized to return any surplus money to its policyholders is known as what?

Question 6: Insurance

Answer:

what do individuals use to transfer their risk of loss to a larger group?

Question 7: stock company

Answer:

the insurer organized to return a profit to the stockholders is what type of insurer?Question 8: complete a new application of ask the applicant to initial the correction on the original application

Answer:

when a change needs to be made on the application for insurance, which is the best method for correcting the information?

Question 9: financial responsibility for loss

Answer:

insurance is used to transfer what to the company?

Question 10: peril

Answer:

what is the term for the causes of loss insured against an insurance policy?

Question 11: adverse selection

Answer:

when risks with higher probability of loss are seeking insurance more often than other risks, is known as what?

Question 12: speculative

Answer:

wagering on a sporting event is known as what type of risk?

Question 13: Law of Large Numbers

Answer:

what law is the foundation of the statistical prediction of loss upon which rates for insurance is calculated?

Question 14: Certificate of Authority

Answer:

a state issued document empowering an insurance company to become an admitted insurer is called what?Question 15: loss must be: due to chance, definite and measurable, statistically predictable, not catastrophic, coverage cannot be mandatory

Answer:

what are the 5 characteristics of an ideally insurable risk?

Question 16: The Fair Credit Reporting Act

Answer:

what law protects consumers from the circulation of inaccurate or obsolete information?

Question 17: underwriting

Answer:

what is the name of the process that insurance companies use to determine if an applicant is insurable?

Question 18: Certificate of Authority

Answer:

what document is required for an insurance company to transact insurance?

Question 19: when the application is submitted

Answer:

in insurance, when is the offer usually made on a contract?

Question 20: when the insurer approves a prepaid application

Answer:

in forming an insurance contract, when does an acceptance usually occur?

Question 21: Fraternal insurer

Answer:

what type of insurer is a voluntarily formed organization that provides religious organizations with a representative form of government?

Question 22: send it back to the applicant to get the signature

Answer:

if an agent fails to obtain the applicants signature on the application, what must an insurer do?

Question 23: when to policy is delivered and the premium is paid.

Answer:

when does an insurance policy go into effect?

Question 24: domestic, foreign, and alien

Answer:

Insurers are classified according to their domicile. What are the 3 types of insurers?

Question 25: return it to the applicant for completion

Answer:

what is the best way to handle incomplete insurance applications?

Question 26: pure

Answer:

what type of risk is insurable?

Question 27: Insurer

Answer:

in the agent/insurer relationship, who is considered the principal?

Question 28: Insurer

Answer:

when agents act within the scope of their contract, their actions will be assumed to be the actions of whom?