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ALABAMA LIFE AND HEALTH INSURANCE EXAM
Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing 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?
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