17 Free Alabama Life & Health Practice Questions: Individual Health Policy Provisions, Group Health, Medicare, Medicaid and Limited Policies (2026)
How to Use This Set
This set covers the second half of Part III of the Alabama Life & Health outline: the uniform individual health policy provisions, group health and COBRA, Medicare and Medicaid, long-term care and limited health policies. Part III as a whole is 45 of 150 questions on the combined exam and 63 of 100 on the Health-only exam.
The theme is time limits and definitions: when a defense expires, how long you have to give notice of a claim or send proof of loss, what renewability promises, how long continuation lasts. The 17 questions come from LanePrep's Alabama L&H quiz bank. Read each answer for the reason as well as the number.
Practice Questions 1-6: Time Limits, Renewability, COBRA and Medicaid
The time limit on certain defenses, notice of claim, guaranteed renewable coverage, COBRA continuation, how Medicaid is funded and run, and the intoxicants provision.
Question 1 (Chapter 7)
A policyholder in Mobile has held an individual health insurance policy for 26 months. The insurer discovers that the policyholder made a non-fraudulent misstatement regarding a pre-existing condition on the original application. According to Alabama's 'Time Limit on Certain Defenses' provision, what action can the insurer take?
- A) The insurer may void the policy immediately.
- B) The insurer may increase the premium retroactively.
- C) The insurer can deny the claim but must keep the policy in force.
- D) The insurer cannot deny the claim or void the policy based on this misstatement.
Show answer & explanation
Answer: D
In Alabama, the 'Time Limit on Certain Defenses' provision (similar to an incontestability clause) generally limits the insurer's ability to contest a policy to two years. Since the policy has been in force for 26 months, non-fraudulent misstatements cannot be used to void the policy or deny claims.
Question 2 (Chapter 7)
After suffering a covered injury, an Alabama insured must provide a 'Notice of Claim' to the insurer. Within how many days of the loss should this notice typically be given?
- A) 10 days
- B) 15 days
- C) 90 days
- D) 20 days
Show answer & explanation
Answer: D
The 'Notice of Claim' provision requires the insured to notify the insurer of a loss within 20 days, or as soon as reasonably possible.
Question 3 (Chapter 7)
A policyholder has a 'Guaranteed Renewable' health insurance policy. Which of the following statements is TRUE regarding the insurer's rights?
- A) The insurer must renew the policy but can increase premiums by class.
- B) The insurer can cancel the policy at any time for any reason.
- C) The insurer can increase premiums for an individual based on their specific claims history.
- D) The insurer cannot increase premiums under any circumstances.
Show answer & explanation
Answer: A
In a Guaranteed Renewable policy, the insurer is required to renew the policy until a certain age (usually 65), but they reserve the right to increase premiums as long as the increase applies to an entire class of insureds, not just one individual.
Question 4 (Chapter 7)
An employee at a firm with 50 employees is terminated for reasons other than gross misconduct. Under COBRA, how long can the employee continue their group health coverage?
- A) 12 months
- B) 24 months
- C) 36 months
- D) 18 months
Show answer & explanation
Answer: D
For termination of employment or reduction in hours, COBRA allows for the continuation of group health benefits for up to 18 months. 36 months applies to other qualifying events like death of the employee or divorce.
Question 5 (Chapter 7)
Medicaid is a health care program designed for specific populations. Which statement best describes its funding and administration in Alabama?
- A) It is a needs-based program jointly funded by the federal and state governments and administered by the state.
- B) It is entirely funded by the federal government and administered by the Social Security Administration.
- C) It is a private insurance program for the elderly.
- D) It is funded solely by Alabama state income taxes.
Show answer & explanation
Answer: A
Medicaid is a federal-state partnership. It is a needs-based program for low-income individuals and families, funded by both levels of government but administered at the state level.
Question 6 (Chapter 7)
An insured has a policy with the 'Intoxicants and Narcotics' optional provision. They are injured in a car accident while driving with a blood alcohol level twice the legal limit. How will the insurer likely handle the claim?
- A) The claim will be paid in full.
- B) The insurer will pay the claim but notify the police.
- C) The insurer will pay the claim but exclude all future alcohol-related injuries.
- D) The insurer is not liable for the loss because the insured was intoxicated.
Show answer & explanation
Answer: D
The 'Intoxicants and Narcotics' optional provision allows an insurer to deny a claim if the loss occurred while the insured was under the influence of alcohol or any narcotic unless administered on the advice of a physician.
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Practice Questions 7-12: Beneficiaries, Renewability, Medicare Benefit Periods and Limited Policies
Changing an irrevocable beneficiary, conditionally renewable policies, Medicare Part A benefit periods, levels of long-term care, travel accident coverage and a second look at time limits on defenses.
Question 7 (Chapter 7)
An Alabama policyholder named Sarah wants to change the beneficiary on her health policy. However, she previously designated her husband as an 'irrevocable' beneficiary. What is required for Sarah to make this change?
- A) A written request from Sarah alone is sufficient.
- B) Sarah must wait until the policy anniversary date.
- C) The written consent of the husband is required.
- D) The beneficiary cannot be changed under any circumstances once labeled irrevocable.
Show answer & explanation
Answer: C
If a beneficiary is designated as 'irrevocable,' the policyholder cannot change the beneficiary or exercise certain ownership rights (like assigning the policy) without the written consent of that beneficiary.
Question 8 (Chapter 7)
A policyholder has a 'Conditionally Renewable' health policy. The insurer decides to terminate the coverage because the insured has reached age 65. Is this allowed?
- A) No, the insurer can only cancel if the insured stops paying premiums.
- B) No, the insurer must get permission from the Alabama Department of Insurance to cancel.
- C) Yes, but only if the insured has filed more than three claims in one year.
- D) Yes, because reaching a specific age is a valid condition defined in the policy.
Show answer & explanation
Answer: D
A 'Conditionally Renewable' policy allows the insurer to terminate coverage or change premiums based on specific conditions defined in the contract (such as reaching a certain age or retiring), but not based on the insured's health status.
Question 9 (Chapter 7)
An Alabama senior is hospitalized for 10 days, discharged, and then re-admitted for the same condition 45 days later. Under Medicare Part A, how many 'Benefit Periods' has this senior entered?
- A) Two
- B) Three
- C) One
- D) None, Part A does not use benefit periods.
Show answer & explanation
Answer: C
A Medicare Part A benefit period begins the day the patient enters the hospital and ends when the patient has been out of the hospital or skilled nursing facility for 60 consecutive days. Since the re-admission occurred only 45 days later, it is still part of the first benefit period.
Question 10 (Chapter 7)
A Long-Term Care (LTC) policyholder requires 'Intermediate Care.' Which of the following best describes this level of care?
- A) Occasional nursing or rehabilitative care provided by medical personnel.
- B) 24-hour nursing care under the supervision of a physician.
- C) Assistance with activities of daily living provided by non-medical staff.
- D) Care provided exclusively in the patient's own home by family members.
Show answer & explanation
Answer: A
Intermediate care is occasional (not 24-hour) nursing or rehabilitative care provided by skilled medical personnel for stable conditions. Skilled care is 24-hour, and Custodial care is non-medical assistance with ADLs.
Question 11 (Chapter 7)
A 'Travel Accident' policy is a type of limited policy. Under what circumstances would it typically pay a benefit?
- A) If the insured gets sick while on vacation.
- B) If the insured's luggage is lost at an airport.
- C) Only if the death or injury occurs while the insured is a passenger on a common carrier.
- D) If the insured has an accident in their personal vehicle while driving to Florida.
Show answer & explanation
Answer: C
Travel Accident insurance is a limited policy that covers accidental death or injury only while the insured is traveling, usually as a passenger on a common carrier (like a commercial airline, bus, or train).
Question 12 (Chapter 7)
An Alabama insured has held a disability policy for three years. The insurer discovers the insured unintentionally failed to disclose a minor back injury on the original application. Under the 'Time Limit on Certain Defenses' provision, what can the insurer do?
- A) Void the policy immediately due to material misrepresentation.
- B) Deny any future claims related to the back injury.
- C) Nothing, because the two-year limit for contesting non-fraudulent misstatements has passed.
- D) Increase the premium retroactively to the date of inception.
Show answer & explanation
Answer: C
This provision states that after two years from the date of issue, no misstatements (except fraudulent ones) made by the applicant shall be used to void the policy or deny a claim for loss incurred or disability starting after the expiration of such two-year period.
Practice Questions 13-17: Proof of Loss, Earnings, Medicare Part B and Specified Disease
Mandatory claim provisions again, the relation of earnings to insurance, what Medicare Part B does not cover, how a specified disease policy responds, and a misstatement discovered after the contestable period.
Question 13 (Chapter 7)
An Alabama resident undergoes surgery and needs to submit 'Proof of Loss.' Under standard mandatory provisions, what is the maximum timeframe to submit this proof if it is reasonably possible to do so?
- A) 20 days
- B) 60 days
- C) 90 days
- D) One year
Show answer & explanation
Answer: C
This provision states that written proof of loss must be furnished to the insurer within 90 days after the date of such loss. If it is not reasonably possible to give proof within such time, it must be given as soon as possible, but not later than one year from the time proof is otherwise required (unless the claimant is legally incapacitated).
Question 14 (Chapter 7)
An executive in Huntsville has a disability policy with the 'Relation of Earnings to Insurance' provision. He becomes disabled, and his total monthly disability benefits from all insurers exceed his current monthly earnings. How is the benefit adjusted?
- A) The insurer pays the full benefit regardless of earnings.
- B) The insurer pays a proportionate amount of the benefit and refunds the premium for the excess coverage.
- C) The insurer denies the claim because the insured is 'over-insured'.
- D) The insurer pays the benefit but reports the excess to the Alabama Department of Revenue as taxable income.
Show answer & explanation
Answer: B
This provision allows the insurer to limit the insured's total disability benefits to their average monthly earnings for the period of two years immediately preceding the disability. The insurer must return the part of the premiums paid for the excess coverage.
Question 15 (Chapter 7)
Which of the following is NOT covered under Medicare Part B?
- A) Outpatient hospital services
- B) Long-term custodial care in a nursing home
- C) Physician and surgeon services
- D) Durable medical equipment (DME)
Show answer & explanation
Answer: B
Medicare Part B covers medical expenses, outpatient care, and home health care. It does not cover long-term custodial care; that is typically covered by Long-Term Care insurance or Medicaid (if the individual meets the needs-based criteria).
Question 16 (Chapter 7)
A consumer buys a 'Specified Disease' policy covering Cancer. If the insured is hospitalized for a heart attack, how will the policy respond?
- A) It will pay a reduced benefit.
- B) It will pay nothing, as heart attacks are not the specified disease.
- C) It will pay the full benefit if the heart attack was caused by stress from a cancer diagnosis.
- D) It will pay because Alabama law requires all limited policies to cover heart disease.
Show answer & explanation
Answer: B
Specified Disease (or Dread Disease) policies are limited benefit policies that only pay for the specific disease(s) named in the policy. They do not provide broad medical coverage.
Question 17 (Chapter 7)
An Alabama applicant for an individual health policy states on the application that they have never been treated for high blood pressure. The policy is issued. Two years and three months later, the insurer discovers medical records showing the applicant was treated for hypertension five years prior to application. The misstatement was not fraudulent. Under the mandatory 'Time Limit on Certain Defenses' provision, what is the insurer's remedy?
- A) The insurer may void the policy and deny all claims retroactively.
- B) The insurer may increase the premium to reflect the correct risk classification.
- C) The insurer has no remedy; the policy is incontestable after two years for non-fraudulent misstatements.
- D) The insurer may cancel the policy prospectively but must pay claims incurred during the first two years.
Show answer & explanation
Answer: C
The 'Time Limit on Certain Defenses' provision (Alabama's health policy incontestability clause) states that after a policy has been in force for two years (excluding any period of fraud), no misstatements made in the application can be used to void the policy or deny a claim. Since the policy has been in force for over two years and the misstatement was not fraudulent, the insurer has no remedy and must honor the contract. Option A describes the remedy available only within the first two years or for fraud. Option B is not a remedy provided by this provision. Option D is incorrect because the policy cannot be cancelled based on the application misstatement after the two-year period.
The Mistakes That Cost Marks
Patterns from the questions above that cost candidates marks on exam day:
- Mixing up the renewability labels. Guaranteed renewable, conditionally renewable and noncancellable differ in what the insurer may change or refuse.
- Confusing the claim deadlines. Notice of claim, proof of loss and the time limit on certain defenses are three separate clocks.
- Treating a limited policy as general coverage. A specified disease or travel accident policy pays only for its named event.
- Muddling Medicare parts. Part A covers hospital care in benefit periods. Part B covers medical services and has its own exclusions.
- Forgetting that Medicaid is need-based. It is a joint federal and state program, unlike Medicare.
Your Next Step
If these questions exposed a gap, listen to the matching lesson in the Alabama Life & Health course preview, then come back and rework the questions you missed. For more topics, see all of our free Alabama Life & Health practice questions.
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