Alabama Life & Health Cheat Sheet

General Life + Health

Not published of exam
Exam Blueprint Risk Basics Contract Law Underwriting 30 Questions

Life Insurance

Not published of exam
Life Policies Life Provisions Annuities + Retirement Life Policy Picker 55 Questions

Health Insurance

Not published of exam
Health Foundations Disability + Group Public + Limited Plans Health Coverage Picker 45 Questions

Alabama Insurance Law

Not published of exam
Alabama Licensing Alabama Conduct Alabama Process Picker Retest Rules 20 Questions

Quick Facts

Exam Combined Life + Health
Questions 150
Time 180 minutes
Pass 105 correct
Fee $75
Vendor University of Alabama
Allocation 30 / 55 / 45 / 20
Certificate Valid one year

Contract Core GE

COAL plus competent parties
C: consideration O: offer A: acceptance L: legal purpose Parties: competent

Exam Blueprint GE

General 30 questions
Life 55 questions
Health 45 questions
Alabama law 20 questions
Total 150 questions
Time 180 minutes
Passing 105 correct
Outline review August 8, 2023

Risk Basics GE

Risk Uncertainty of loss
Pure risk Loss or no loss
Speculative risk Gain or loss
Peril Direct loss cause
Hazard Raises loss chance
Risk pooling Many share losses
Large numbers Improves loss prediction
Stock insurer Owned by shareholders
Mutual insurer Owned by policyholders
Domestic insurer Formed in Alabama
Foreign insurer Formed another state
Alien insurer Formed another country
Authorized State certificate held
Unauthorized No state certificate

Contract Law GE

Offer Applicant proposes contract
Acceptance Insurer agrees
Consideration Premium plus truthful statements
Legal purpose Lawful contract objective
Competent parties Legally capable parties
Adhesion Insurer drafts terms
Aleatory Unequal value exchange
Unilateral Insurer makes promise
Conditional Duties trigger performance
Utmost good faith Full honest disclosure
Representation Applicant statement
Warranty Guaranteed statement
Concealment Withholding material fact
Material fact Affects underwriting decision

Underwriting GE

Application Primary underwriting source
Field underwriting Producer observes applicant
MIB Underwriting data exchange
Consumer report Third-party background data
Preferred risk Below-average loss chance
Standard risk Average loss chance
Substandard risk Above-average loss chance
Premium mode Payment frequency
Conditional receipt Conditional interim coverage
Insurable interest Recognized loss relationship
Adverse selection Higher risks seek coverage

Policy Spectrum LI

Term rents; whole owns; universal flexes
Term: temporary Whole: guaranteed Universal: flexible

Term vs Whole LI

Term

Temporary protection
No cash value
Lower initial premium

Whole

Permanent protection
Guaranteed cash value
Fixed premium
Temporary vs permanent

Life Policy Picker LI

Temporary protection → Term life ( No cash value )
Lifetime guarantees → Whole life ( Fixed values )
Flexible premiums → Universal life ( Interest-sensitive )
Fixed-premium subaccounts → Variable life ( Market risk )
Flexible-premium subaccounts → Variable universal ( Market risk )
Second-death estate need → Survivorship life
Two lives; first-death payout → Joint life
Future purchase right → Guaranteed insurability
Disability premium protection → Waiver rider

Life Policies LI

Term life Temporary death protection
Level term Level death benefit
Decreasing term Declining death benefit
Whole life Permanent fixed guarantees
Limited-pay whole Early premium completion
Single-premium whole One premium payment
Modified life Early reduced premiums
Graded premium Premiums rise gradually
Joint life Pays first death
Survivorship life Pays second death
Universal life Flexible premium policy
Variable life Separate-account values
Variable universal Flexible plus separate accounts
Indexed life Index-linked interest

Life and Annuity LI

Life creates; annuity liquidates
Life: death benefit Annuity: income stream

Universal vs Variable LI

Universal

Flexible premium
Interest-sensitive value
General account

Variable

Fixed premium form
Separate accounts
Owner bears risk
Flexibility vs investment control

Life Provisions LI

Policyowner Controls policy rights
Revocable beneficiary Owner may change
Irrevocable beneficiary Consent protects rights
Grace period Late premium window
Reinstatement Restore lapsed policy
Incontestability Limits later challenges
Misstatement clause Adjusts benefit
Suicide clause Early suicide exclusion
Assignment Transfers policy rights
Policy loan Borrows cash value
Automatic premium loan Cash pays premium
Cash surrender Ends policy for cash
Extended term Keeps full benefit temporarily
Reduced paid-up Smaller permanent benefit
Accelerated benefit Early death-benefit access
Viatical settlement Policy sold early

Revocable vs Irrevocable LI

Revocable

Owner may change
No beneficiary consent

Irrevocable

Rights are vested
Consent generally required
Flexible vs protected

Annuities + Retirement LI

Accumulation Value-building phase
Annuitization Income-payment phase
Fixed annuity Insurer guarantees values
Variable annuity Separate-account performance
Indexed annuity Index-linked interest
Immediate annuity Income begins soon
Deferred annuity Income begins later
Annuitant Measuring life
Owner Controls contract
Qualified plan Tax-code requirements
Nonqualified annuity After-tax contributions

Fixed vs Variable Annuity LI

Fixed

General account
Insurer bears risk
Guaranteed minimum

Variable

Separate accounts
Owner bears risk
Securities registration
Guarantee vs market risk

Life Options + Business LI

Cash dividend Paid directly
Premium reduction Offsets premium due
Accumulate at interest Insurer retains dividend
Paid-up additions Buys permanent insurance
One-year term option Buys term insurance
Lump-sum settlement One payment
Interest-only settlement Principal remains intact
Fixed-period settlement Payments for stated time
Fixed-amount settlement Stated installment amount
Life-income settlement Payments through lifetime
Accidental-death rider Adds accidental-death benefit
Waiver rider Waives premiums after disability
Guaranteed-insurability rider Future purchase without evidence
Payor-benefit rider Protects juvenile policy premiums
Key-person insurance Business protects key loss
Buy-sell funding Finances ownership transfer
Group life Master contract; certificates
OASDI Retirement, survivors, disability
OASDI funding FICA payroll taxes

Medicare Parts HE

A B C D maps coverage
A: hospital B: medical C: Advantage D: drugs

HMO vs PPO HE

HMO

Primary-care coordination
Tighter network
Referral model

PPO

Broader choice
Outside-network benefits
Higher flexibility
Control vs flexibility

Health Coverage Picker HE

Gatekeeper network → HMO
Network flexibility → PPO
HMO plus outside care → POS
Savings-compatible high deductible → HDHP + HSA
Lost earned income → Disability income
Original Medicare gaps → Medigap
Extended custodial care → Long-term care
Specified diagnosis cash → Critical illness

Health Foundations HE

Deductible Insured pays first
Coinsurance Shared percentage
Copay Fixed service amount
Out-of-pocket maximum Annual cost-sharing ceiling
Major medical Broad medical coverage
HMO Managed network care
PPO Preferred provider network
POS HMO-PPO hybrid
EPO Exclusive provider network
HDHP High deductible plan
HSA Individual tax-advantaged account
FSA Employer cafeteria-plan account
HRA Employer-funded reimbursement

Medicare vs Medicaid HE

Medicare

Federal program
Age or disability
Parts A-D

Medicaid

Federal-state program
Needs based
State administered
Eligibility differs

Uniform Health Provisions: Required vs Optional HE

[Required] Entire contract Policy plus attached papers
[Required] Time limit on defenses Limits later claim challenges
[Required] Grace period Brief late-payment protection
[Required] Reinstatement Restores lapsed coverage
[Required] Notice of claim Starts claim process
[Required] Claim forms Insurer supplies forms
[Required] Proof of loss Documents covered loss
[Required] Time of payment of claims Sets payment timing
[Required] Payment of claims Identifies proper recipient
[Required] Physical exam and autopsy Preserves limited insurer rights
[Required] Legal actions Sets lawsuit timing
[Required] Change of beneficiary Revocable unless irrevocable
[Other tested clause] Renewability Defines continuation rights
[Optional] Change of occupation Adjusts benefits to hazard
[Optional] Misstatement of age Adjusts benefits to premium
[Optional] Other insurance Coordinates duplicate coverage
[Optional] Relation of earnings Limits income overinsurance

Coinsurance vs Copay HE

Coinsurance

Percentage share
Varies with charge

Copay

Fixed amount
Service based
Percent vs dollars

Disability + Group HE

Disability income Replaces earned income
Elimination period Benefits waiting period
Benefit period Maximum payment duration
Own occupation Cannot perform own work
Any occupation Cannot perform suitable work
Residual disability Partial income loss
Recurrent disability Related disability returns
Waiver of premium Premium waived during disability
Group health Master contract coverage
COBRA Temporary group continuation
Coordination of benefits Orders multiple plans
AD&D Accidental loss benefit

Public + Limited Plans HE

Medicare Part A Hospital coverage
Medicare Part B Medical coverage
Medicare Part C Medicare Advantage
Medicare Part D Prescription coverage
Medicaid Needs-based public coverage
Medigap Original Medicare gaps
Long-term care Extended care services
Critical illness Specified-diagnosis benefit
Hospital indemnity Fixed hospital benefit
Dread disease Named-disease coverage
Dental Oral-care benefits
Vision Eye-care benefits

Retest Clock AL

Two fails ninety; four fails 180
After two: 90 days After four: 180 days Related lines share waits

Authorized vs Unauthorized AL

Authorized

Certificate held
ALDOI supervised
Potential statutory protection

Unauthorized

No certificate
Limited lawful placement
No guaranty protection
Admitted vs nonadmitted

Alabama Process Picker AL

Need current allocation → ALDOI outline
Register combined exam → University of Alabama
Pass combined exam → Score 105+
Apply producer license → NIPR
Two failed attempts → Wait 90 days
Four failed attempts → Wait 180 days
Lapsed under twelve months → Online reinstatement
Lapsed over twelve months → Retake exam

Alabama Licensing AL

ALDOI State insurance regulator
Certificate of authority Authorizes insurer
Producer license Authorizes insurance activity
Appointment Insurer authorizes producer
Prelicense requirement Removed January 2024
Exam certificate Valid one year
Exam-pending temporary Maximum six months
NIPR Online license application
Citizenship proof Due within ten days
Address change Report within 30 days
Standard producer CE 24 hours biennially
Standard ethics CE Three hours included

Misrepresentation vs Twisting AL

Misrepresentation

False policy claim
Any sales context

Twisting

Misleading comparison
Induces replacement
Broad falsehood vs replacement

Alabama Conduct AL

Misrepresentation False policy statement
Twisting Misleading replacement inducement
Rebating Unstated sales inducement
Defamation False malicious statement
Boycott Restrictive concerted action
Coercion Pressure distorts choice
Unfair discrimination Unequal same-risk treatment
False advertising Deceptive public claim
Replacement New policy displaces old
Annuity suitability Recommendation fits consumer
Illustration Shows policy values
Guaranty association Insolvency protection backstop
Unauthorized insurer No guaranty protection
Domestic abuse protection Limits discriminatory actions

Common Traps

Education vs examination

Prelicense mandate removed ≠ Producer exam still required

Counts vs percentages

ALDOI publishes counts ≠ Percentages require calculation

Certificate vs license

Exam certificate lasts one year ≠ License requires application

Life vs annuity

Life protects death risk ≠ Annuity protects longevity risk

Owner vs insured

Owner controls rights ≠ Insured supplies mortality risk

Deductible vs elimination

Deductible is money ≠ Elimination is time

Guaranty vs sales pitch

Covers eligible insolvency claims ≠ Never use as inducement

Combined vs separate retakes

Combined failures block all three ≠ Single-line failures block combined

Last Minute

1. Allocation: 30 / 55 / 45 / 20
2. Pass = 105 of 150
3. Time = 180 minutes
4. Term temporary; whole permanent
5. Universal flexible; variable market risk
6. Life creates; annuity liquidates
7. Deductible dollars; elimination time
8. Medicare eligibility; Medicaid financial need
9. Prelicense education not required
10. Exam certificate valid one year
11. Two failures trigger 90 days
12. Four failures trigger 180 days
13. NIPR handles license application
14. ALDOI outline controls allocation