low oil alarm

They make both kinds so it's vehicle specific which I can't tell you. Some open to ground and can give a false reading if your ground strap to the chassis or motor has a corroded connection.

A low oil light instead of low oil pressure I would think was a sensor on the side of the pan.

 

Cat engines use oil pressure in relationship to boost pressure to figure out engine load and whether or not the oil pressure is high enough for the work load being performed at that moment. You can have 25 psi at idle and not have the warning for low oil pressure, but you can have 38 psi at 30 psi of boost at 1200 RPM and have the warning light come on. Yet have 55 psi of oil pressure at 1500 RPM with with 10 psi of boost and not have a light. Just because the gauge is reading what you consider a safe oil pressure, the ECM may not think the same if the oil pressure is low for the work being performed by the engine. I've seen guys destroy motors, because what they thought was safe and what the ECM thought was safe were two different things while they ignored the ECM and dashboard warnings.

If the low oil pressure warning is on...........more than likely you do have low oil pressure at that moment for workload of the engine. You need to make sure the oil is NOT diluted with fuel. If it is then you have to find out why it is. You either have an injector O-ring leaking fuel into the valve cover. A intake valve camshaft lobe that is worn very badly this will cause that cylinder to push fuel into the oil due to incomplete combustion. Take an oil sample and have it analyzed to determine if there is fuel present in the oil and the viscosity of the oil.