Alabama Health and Life Ins Exam According to the Alabama Insurance Regulations all of the following are included as advertisements except verified answer A birthday card sent to a policyowner by his or her agent According to the Alabama Insurance regulations when using an illustration in the sale of a life insurance policy an insurance producer may legally do what verified answer Use an illustration which has non guaranteed elements According to the Optional Provision of a standard Health policy dealing with the issue of unpaid premium what will happen if you sustain an insured loss during the grace period verified answer The claim will be paid after deducting the unpaid premium According to the required provision 3 the minimum grace period for all policies other than monthly or weekly premium policies is verified answer 31 days A company domiciled in another state that has received permission from the insurance commissioner to do business in this state is called verified answer Foreign admitted company A contract requires an offer and acceptance What constitutes a valid offer verified answer An application and a premium payment submitted to the company or one of its agents Adverse selection will exist when verified answer The group for risk of insurance is more likely than the average group experience loss A family medical expense policy typically covers verified answer Every member of the family A form of welfare that provides assistance to the needy is verified answer Medicaid A health savings account verified answer Works with a high deductible plan A level term policy is one where verified answer The premium and the protection remain constant for the term of the policy A life insurance company may pay a death claim for less than the face amount of a policy under which of the following conditions verified answer All of the above All of the following are common characteristics of Health Maintenance Organizations EXCEPT verified answer They pioneered Nurse Practitioners All of the following provisions of an adjustable life policy may be adjusted to meet the policyholders changing needs except verified answer The face amount of the policy All other factors being equal which of the following policies is the least expensive as far as the total amount of premium paid is concerned assuming the insured lived to be 100 verified answer Single Premium An accident policy would normally cover verified answer A bullet wound suffered when an individual is shot by a hunter who mistook the individual for a deer An employee covered by the employers group life plan is terminated The employer fails to inform the departing employee about the plans conversion option When the former employee is killed bungee jumping a week later verified answer The insurance company must pay the full benefits of the policy An immediate annuity with quarterly payments will begin making payments verified answer 1 month after the annuity is purchased An insurance producer must keep complete records pertaining to transactions under the producer s license for at least verified answer Three years An insurance producer who violates the Alabama long term care insurance regulation may be fined up to three times the amount of any commissions paid for each policy involved or up to whichever is greater verified answer 10 000 An insured can increase the monthly benefits paid under a disability income policy by a specified percentage or in relation to an economic index with which of the following riders verified answer Cost of living adjustment nother way insurance companies are classified is on the basis of where they receive their authority to operate or their original charter A company chartered in Alabama would be considered what type of insurance company in Alabama verified answer Domestic A parent who purchases a policy on the life of a minor child and wishes to retain complete control of the policy until the child reaches age 18 may do so by means of verified answer The ownership clause A policyholder decides to pay life insurance premiums quarterly instead of annually what is the correct statement verified answer The total outlay of annual premium dollars will increase A rider to a whole life policy that pays part or all of the death benefit to a terminally ill insured before his or her death is called verified answer An accelerated benefit option A straight life annuity pays a periodic income verified answer To two annuitants until one dies after which all payments cease A term policy in which protection remains constant for the term of the policy is verified answer level term A term policy that allows the policyowner to switch to permanent insurance is called verified answer convertible term A written legal agreement between two or more parties for a consideration is called a n verified answer contract A 20 pay life policy would indicate what verified answer premiums are paid for 20 years Because certain events must occur before an insurance company is obligated to pay under an insurance contract an insurance policy is said to be verified answer conditional Because there is a mutual reliance of truthfulness of both parties an insurance contract is said to be verified answer contract of upmost good faith Before Cranston was disabled he was a full time engineer earning about 70 000 annually Now two years later he is able to work part time earning about 25 000 annually It is likely that Cranston would be classified as verified answer partially disabled Bill s Major Medical policy is reinstated on September 10 If he hit by a truck and hospital on September 15 he will receive verified answer full benefits Brenda names her husband as the beneficiary of the accidental death benefit in her health policy She has relinquished her right to change the beneficiary designation Brenda s husband is verified answer an irrevocable beneficiary Contracts must have consideration Insurance contracts are considered to be aleatory contracts This means what verified answer The promise to pay claims will most likely not be equal to all premium payments Disability coverage designed to cover a disabled owner s business expenses other than income the cost of capital goods and other specified expenses is known as verified answer business overhead expense insurance Dividend options are defined as ways in which the policy owner can verified answer use or collect policy dividends Employer paid premiums for employee group health insurance are