Free Alaska Life practice questions

Answer: C. Within three years

Alaska requires a life policy to promise reinstatement within three years of the premium default, unless the policy was surrendered for cash, its cash value was exhausted, or any paid-up term insurance has expired. The owner must apply in writing, give evidence of insurability the insurer accepts, and pay overdue premiums with interest of no more than 6 percent a year compounded annually, plus any loan interest owed. Two years is the reinstatement window for industrial life policies, not ordinary ones like Maria's. One year and five years do not appear in the provision.

Answer: D. From 15 to 21 years of age

Alaska Stat. Sec. 21.84.025(a)(1) requires a society to specify eligibility standards for each membership class, and when it provides benefits on children's lives, the minimum age for adult membership must be set at no less than 15 and no more than 21 years of age. A range starting at 12 or 18, or one running to 25, does not match the statutory floor of 15 and ceiling of 21.

Answer: C. The director must consider them at least as favorable to a defaulting or surrendering policyholder

Alaska's standard nonforfeiture law requires a life policy to contain the listed nonforfeiture provisions, or corresponding provisions that the director considers at least as favorable to a policyholder who defaults or surrenders as the statute's minimum requirements, and that are essentially in compliance with subsection (z). The test is the director's opinion of how favorable the provisions are to the policyholder. The section does not make an owner's signed acceptance, an actuary's certification, or a waiting period after filing the measure of whether substitute wording is allowed.

Answer: B. At least five years, organized by the replacing insurer that sent them

Under Alaska's replacement regulation, the existing insurer must keep the notifications it gets from replacing insurers for at least five years, indexed by the replacing insurer, and must give copies to the director when the director asks for them. A two-year period organized by policy owner misstates both the length and the indexing method. A period that ends with the new contract's free look is wrong because the regulation sets a minimum of five years. A ten-year period with yearly copies to the director is wrong on the length and on the trigger: copies go to the director upon request, not on an annual schedule.

Answer: C. A group life insurance policy issued to an employer

Alaska Stat. Sec. 21.45.020(a) applies the standard provisions of AS 21.45.030 through 21.45.150 to life insurance policies delivered or issued for delivery in Alaska, other than group policies and pure endowments. A group policy issued to an employer is therefore outside the requirement. An individual whole life policy is squarely within it. Neither industrial policies nor term policies appear among the section's exclusions, so both remain subject to the provisions that apply to them.

Answer: A. Pay the death benefit, and it may deduct the overdue premium from the proceeds

Alaska Stat. Sec. 21.45.030 requires a grace period of 30 days, or at the insurer's option one month of at least 30 days, for each premium after the first, and the policy remains in full force during it. June 18 falls within that period, so the policy was in force at death. When a claim arises during the grace period, the statute lets the insurer subtract the premium due from the policy proceeds. Coverage therefore did not end on June 1, a refund of premiums is not the remedy, and the insurer is not required to absorb the unpaid premium.

Answer: A. $100,000

Alaska Stat. Sec. 21.79.025(a)(2)(B)(i) sets a $100,000 limit, including any net cash surrender and withdrawal values, for health coverage that falls outside those three categories. $300,000 is the separate limit for disability income and long-term care insurance, $500,000 is the limit for health benefit plans, and $250,000 is the limit the same section applies to the present value of annuity benefits, not to health coverage.

Answer: C. No vested interest until the certificate is due and payable

Alaska Stat. Sec. 21.84.230(a) requires a society to provide that a beneficiary cannot have or obtain a vested interest in a certificate's proceeds until the certificate becomes due and payable under the benefit contract. While the member is alive and the certificate is in force, the nephew therefore holds no vested interest. The same subsection gives the owner the right to change beneficiaries at any time under the society's laws or rules unless she waives it in writing, so his consent is not needed. Recording the designation does not create a vested interest, and the subsection says nothing about a guaranteed share of half the proceeds.

Answer: D. $100,000

Under Alaska Stat. Sec. 21.79.025(a)(2)(A), for any one life the association's liability for life insurance is limited to $300,000 in death benefits, with a lower sublimit of $100,000 for net cash surrender and net cash withdrawal values. The $180,000 cash value exceeds that sublimit, so $100,000 is the most. $300,000 is the death benefit cap, not the cash value cap; $250,000 is the policy's death benefit, which does not measure a surrender; and $180,000 is the contract's own figure, which is higher than the statutory limit.

Answer: A. At least 7 and no more than 11

Alaska Stat. Sec. 21.79.050(a) provides for a board of not fewer than seven and not more than 11 representatives of member insurers. Member insurers select those board members, subject to the director's approval, so the board is not a fixed nine named by the director; separately, the director may appoint two individuals to represent the public. The other ranges do not match the statute.