Final Exam - GA Life and Health

In GA, which if the following statements is CORRECT about life insurance advertisements?

*An insurance agency is responsible for advertisements placed by its insurance agents* The Commissioner of Insurance must approve advertisements before they are used Third-party testimonials may not be used The dividend MAY be represented as guaranteed

Before a life insurance policy is issued, which of these components of the contract is required?

*Applicant's signature on application* Beneficiary's signature A conditional receipt Attending Physician Statement (APS)

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

*Claim will be denied* Claim will be paid in full Claim will be partially paid Claim will be decided by an arbitrator

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Indemnity Major Medical Travel *Disability Income*

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Modified Whole Life 20-Pay Life *Decreasing Term* Endowment

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?

NAIC *GA Life and Health Insurance Guaranty Association* Department of Insurance Office of Insurance Regulation

What is an organization that solicits insurance only to its members?

Nonadmitted company Mixed company Captive society *Fraternal benefit society*

A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be

Optionally Renewable *Noncancellable* Cancellable Guaranteed Renewable

Whose life is covered on a life insurance policy that contains a payor benefit clause?

Parent Beneficiary *Child* Spouse

K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

*Daughter* Husband's estate K's estate Trust fund

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT

*HRA is entirely funded by the employee* HRA is entirely funded by the employer Reimbursement of eligible medical expenses are allowed HRA can be offered with other health plans

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT

*Income derived from the TSA is received income tax-free* TSA's are available to public school employees Contributions to the TSA are tax-deductible Interest earned by TSA is tax deferred

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called

*Noncancellable* Conditionally renewable Cancellable Guaranteed renewable

Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing insurance policy?

*Notice to existing and replacing insurers of intention to replace* A list of all policies the agent has replaced in the last 3 yrs A statement made. H the agent that NAIC guidelines have been met during the replacement process A copy of the agent's insurance license

Typically a life insurance death benefit is paid by a lump-sum payment. A(n) ____ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.

*Settlement* Dividend Conversion Aleatory

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

*She DOES need to provide evidence of insurability* She does NOT need to provide evidence of insurability She will have up to 6 months to convert to an individual policy She will be paying exactly the same premium for the individual plan as she did for the group plan

Which of the following is considered an element of a Variable Life policy?

*Underlying equity investment* Little or no risk to insured Guaranteed dividends Insurer assumes all the risky

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

7 10 20 *31*

All accident and sickness plans MUST provide coverage in newborn children for ____ days

7 10 25 *31

What is being delivered during a policy delivery?

A binding receipt to the proposed insured *Insurance contract to the proposed insured* Application and initial premium to the insurer Policy summary sheet and disclosure material to the proposed insured

P is a 40 yr old woman and would like to purchase an annuity they will provide a lifetime income stream beginning at age 60. Which of the following did she NOT buy?

A straight life deferred annuity A straight life annuity *An immediate annuity* A deferred annuity

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Accidental Death and Dismemberment rider Disability Income rider Guaranteed Insurability rider *Waiver of Premium rider*

All of these are characteristics of an Adjustable Life policy EXCEPT

Adjustable premiums Adjustable premium payment period Combination of term and whole life insurance *Face amount can be adjusted using policy dividends*

A "reimbursement policy" pays what amount of covered Long-Term Care expenses?

All expenses regardless of the policy limits *Actual covered expenses up to the daily maximum* A daily dollar amount regardless of the actual incurred expenses The usual, customary, and reasonable expenses regardless of the policy limits

Credit life insurance is typically issued with which of the following types of coverage?

Annual Renewable Term *Decreasing Term* Individual Whole Life Group Term

Which statement regarding third-party ownership of a life insurance policy is true?

Beneficiary is required to be irrevocable Policy cannot be assigned once issued It is illegal in most states *It is used extensively in estate-planning as well as business circumstances*

Long-Term Care policies will usually pay for eligible benefits using which of the following methods?

Delayed Fee for Service *Expense incurred* Respite

Which of the following are Equity Indexed annuities typically invested in?

Corporate Bonds Money Market accounts Municipal Bonds *S&P 500*

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE

Coverage can be added at specific events such as marriage or having a child Evidence of insurability is NOT required when the option is exercised *Evidence of insurability IS required when the option is exercised* Coverage can be added at specific ages

What type of insurance offers permanent life coverage with premiums that are payable for life?

Credit Life Renewable Term Life *Whole Life* Endowment

Which of the following phrases refers to the fees charged by a healthcare professional?

Deductible Coinsurance *Usual, customary, and reasonable expenses* Hospital expense

J is issued a life insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the 6th year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of life insurance policy is this?

Endowment Graded Premium Life Straight Life *Modified Premium Life*

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Entire Contract clause MIB clause Insuring clause *Consideration clause*

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Extended Term rider Cost of Living Adjustment rider *Guaranteed Insurability Option rider* Waiver of Premium rider

Which of the following is NOT included in the policy face?

Free Look provision Name of the insured Name of the insurer *Exclusions*

A sole proprietor may use this plan ONLY if the employees of this business are included

SEP Plan *Keogh Pension Plan* Individual Retirement Plan (IRA) SIMPLE Plan

Which of the following statements BEST describes dental care indemnity coverage?

Services are reimbursed before the insurer receives the invoice *Services are reimbursed AFTER insurer receives the invoice In-network dentists must always be used Very limited list of providers

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

Straight life accumulates faster than Limited-pay life *20-pay Life accumulates cash value faster than straight life* Cash value accumulation is both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate

Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?

The applicant chose an annual premium mode The applicant is suspected of making a material misrepresentation The initial premium was submitted with the application *The initial premium was NOT submitted with the application*

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Twisting Defamation *Coercion* Rebating

In regards to representations or warranties, which of these statements is TRUE?

Warranties are statements considered to be true to the best of the applicant's belief *If material to the risk, false representations will void a policy* Representations are statements guaranteed to be true in every aspect If material to the risk, false statements will NOT avoid a policy

In life insurance, the needs approach is used to mostly establish:

Which type of life insurance a client should apply for *How much life insurance a client should apply for* Which company a client should use when applying for life insurance What the maximum amount the client can spend on life insurance