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Alabama Life & Health Insurance Practice Exam 2023 - 2024 (Verified) 1.Insurance is a method risk is transferred to an insurer for consideration up to ANS a predetermined limit.
2.Which of the following would be considered proper establishment of insur- able interest in the life insurance area? ANS 1. spouses in each other 2.parents in their children 3.creditors in their debtors 3.Which of the following statements about the average number of people who die each year is true? ANS It is called the mortality rate 4.An insurance contract is an aleatory contract. This means ANS Equal value is not necessarily given by both parties to the contract 5.A life insurance policy is a unilateral contract because ANS Only the insurance company is bound to live up to its side of the agreement 1 / 4 Download at gaviki.comDownload at gaviki.com
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6.All of the following are elements of a contract ANS 1. Legal purpose 2.Offer and acceptance 3.Consideration 7.A company that has not received permission from an Insurance Commis- sioner to do business in his or her state is called a/an ANS Unauthorized company 8.Misrepresentation is ANS A written or oral statement which is false 9.The chance that a person who anticipates a loss will purchase insurance is ANS Adverse Selection 10.Assuming a deductible with your insurance policy is which type of risk management technique? ANS Assumption of risk 11.In the Health-Disability area we use what type data to produce rates?ANS Mor- bidity tables 12.A company that is licensed to sell insurance in a particular state is ANS An authorized company 13.he most effective way to ensure that the applicant will accept the policy 2 / 4 Download at gaviki.comDownload at gaviki.com
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when it is issued is ANS To have the applicant pay the initial premium at the time of application 14.Which is the proper term for a company owned by its policy owner?ANS A mutual insurance company 15.The punishment for fraud or making false statements may include ANS Fines, imprisonment or both 16.A producer who is acting as an agent is representing ANS Always the insurer 17.The premium paid and the statements on the application to the insurance company is called ANS consideration 18.In life insurance the insurable interest requirements is generally satisfied if ANS the policy owner must expect to suffer a loss if the insured dies. 3 / 4 Download at gaviki.comDownload at gaviki.com
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19.Each of the following would be an element in the definition of fraud ANS 1. Statements relied upon by a second party who then suffers a loss 2.Intent to gain advantage 3.An intentional misrepresentation made by the applicant 20.Risk may be defined as ANS The uncertainty of loss 21.A father did not reveal that his daughter suffers from asthma on the application for a health policy. In order to avoid paying a claim the insurer must ANS prove this was both intentional and material 22.In order to be valid, a contract must be between individuals considered legally able to enter into an agreement. This principle is known as ANS competent parties 23.When signing the application form, the proposed insured is ANS Making a formal request to the company for an insurance policy.
24.What constitutes an entire insurance contract? ANS The policy, its endorse- ments, and any attached papers 25.T/F Misrepresentations on the part of an applicant as to the health or
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