georgia life only
What is the reason for the establishment of Rules Governing Life Insurance and Annuity Replacements - Lessens the chance for misrepresentation and incomplete disclosure - regulate the insurance rates - protect the interest of the insurer - protect the interest of the beneficiary
- Lessens the chance for misrepresentation and incomplete disclosure
Which of these is NOT a reason for a business to buy key person life insurance? - the reduction in sales as a direct result from death of the key employee - a void in leadership if the key person were to die - the loss of company revenues while a replacement is being sought - a pension deficiency if the key employee died
- a pension deficiency if the key employee died
What document MUST accompany an application that initiates the replacement of an existing life insurance policy? - a signed statement by the applicant regarding the replacement - a signed replacement statement from the insurance company being replaced - a signed replacement statement from the replacing insurance company - a detailed comparison of existing coverage and the proposed coverage
- a signed statement by the applicant regarding the replacement
What is the requirement for a nonresident agent license applicant? - meeting a minimum sales quota in agent home state - residing in a home state for 10 years - being a licensed agent in the agent home state - passing a nonresident examination
- being a licensed agent in the agent home state
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? - beneficiary will be denied the claim - beneficiary will be denied the claim and refunded all paid premium - beneficiary will be paid the death benefit - beneficiary will be paid a partial death benefit
- beneficiary will be paid the death benefit
All the following statements regarding a tax-sheltered annuity (TSA) are true EXCEPT: - income tax derived from TSA is received income-tax free - TSA are available to public school employees - contributions to the TSA are tax deductible - interest earned by TSA is tax deferred
- income tax derived from TSA is received income-tax free
How are policyowner dividends treated in regard to income tax? - dividends are not taxable - interest on accumulations is taxed - taxed as ordinary income - taxed as capital gains
- interest on accumulations is taxed
Which of the following is NOT an unfair claim settlement practice? - failing to acknowledge and act promptly with respect to an insurance claim - compelling an insured to initiate a lawsuit by offering less on an insurance claim - failing to accept or deny a claim within reasonable time after proof of loss is submitted - needing written documentation of claim detail
- needing written documentation of claim detail
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - P cannot borrow against the policy cash value while disabled - p will have to pay income tax on the amount of premiums waived - p will receive declared dividends - p cannot assign ownership of the policy while premiums are being waived
- p will receive declared dividends
K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose? - paid up additional insurance - cash option - reduced premiums - accumulate with interest
- paid up additional insurance
Which statement is TRUE in regard to a policy loan? - past due interest payment not paid after 3 months will void the policy - past due interest on a policy loan is added to the total debt - insurance companies can send delinquent interest account to a collection agency - insurance companies can chance an interest rate based on the policyowner credit report
- past due interest on a policy loan is added to the total debt
Which statement is correct regarding the premium payment schedule for whole life policies? - premium are payable throughout the insured/lifetime coverage lasts until death of the insured - premium are payable for s set period/coverage expires at that point - premiums are payable until age 66/ coverage lasts a lifetime - a single premium is paid at time of the application coverage last until retirement
- premium are payable throughout the insured/lifetime coverage lasts until death of the insured
What benefit does the payor clause on a Juvenile Life policy provide? - allows payor to assign ownership in the event payor becomes disabled - allows payor to increase face amount without providing evidence of insurability - premiums are waived if juvenile becomes disabled - premiums are waived if payor becomes disabled
- premiums are waived if payor becomes disabled
What is the purpose of the Limit and Health insurance Guaranty Association? - enforces Geogia insurance regulation - underwrites high risk insurance applicants - protects policyowners against insolvent insurance companies - establishes underwriting guidelines for admitted insurers
- protects policyowners against insolvent insurance companies
A contract owner terminated an annuity before the income payment period begins. The owner will then receive - half of the current surrender value - the current contract surrender value - the premiums paid date - nothing
- the current contract surrender value
A level premium indicates: - the premium is fixed for a period stated in the contract, then becomes variable - the premium can only be changed with the consent of the insurer - the premium stays level until the policy renewal date - the premium is fixed for the entire duration of the contract
- the premium is fixed for the entire duration of the contract
The advantage of reinstating an original life policy is: - the premiums are based on the current age of the insured - the premiums are based on a younger age - the interest charged on policy loans will be lowered - a new incontestable period will begin
- the premiums are based on a younger age
The reason for backdating a policy is: - to avoid being considered a substandard risk due to a recent cancer diagnosis - to obtain a premium rate based on earlier age - to decrease the face amount - to decrease the contestable period
- to obtain a premium rate based on earlier age
The free-look provision beings : - upon the date of the sales presentation - upon receipt of the policy by the producer - upon receipt of the policy by the policyowner - upon the completion of the application
- upon receipt of the policy by the policyowner
After initially issued, a temporary license is valid for - 3 months - 4 months - 5 months - 6 months
6 months
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
Insurance contract to the proposed insured
What does the insuring agreement in a Life insurance contract establish? - an insurers basic promise - an insurance policy grace period - an insurer required reserve amount - the obligations of the beneficiary
an insurers basic promise
When can a policyowner change a revocable beneficiary? - anytime - after the consent of the current beneficiary - never - only is the primary beneficiary dies
anytime
Any changes made on an insurance application requires the initials of whom? - insured - agent - applicant - beneficiary
applicant
The purpose of the Rules governing advertisement of life insurance and annuities is to - set advertisement rates for insurers - assure full disclosure to the public of all material and relevant information - help drive sales quotas for insurers - provide a potential client with all consumer rating for the insurer
assure full disclosure to the public of all material and relevant information
The automatic premium loan provision is designed to: - provide a source of revenue to the insurance company - avoid a policy lapse - allow a policyowner to request a policy loan - allow a policyowner to take out additional coverage without evidence of insurability
avoid a policy lapse
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - modification - conversion - exchange - adjustable
conversion
The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy - decreasing - universal - variable - level
decreasing
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? - level term policy - whole life policy - limited pay policy - decreasing term policy
decreasing term policy
Additional coverage can be added to a whole life policy by adding - payor rider - accelerated benefit rider - decreasing term rider - automatic premium loan rider
decreasing term rider
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy - nonforfeiture - entire contract - insuring clause - owners right
owners right
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee? - distribution is subject to capital gains tax - distribution is subject to ordinary income tax - distribution is subject to a tax penalty - distribution is subject to federal income tax withholding
distribution is subject to federal income tax withholding
Which of these statement about a guaranteed insurability option rider is NOT TRUE? - coverage con be added a specific event 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 exercised - coverage con be added at specific ages
evidence of insurability is required when the option is exercised
An example of unfair claims practice would be - requesting a third party arbitrator to resolve disagreement - failing to effectuate prompt, fair, equitable settlement of claim - paying a claim promptly after receiving proof of loss - requiring the insured to give a statement under oath
failing to effectuate prompt, fair, equitable settlement of claim
The act of an insurance company publishing misleading information about its policy provisions is called - coercion - false advertising - twisting - intimidation
false advertising
The payment on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? - immediate fixed - quarterly flexible - flexible installment deferred - adjustable deferred
flexible installment deferred
An insured is past due on his life insurance premium, but is still within the grace period. What will the beneficiary receive if the insured dies during this grace period? - refund of all premiums, plus interest - refund of all premium paid - full face amount any past due premiums - full face amount
full face amount any past due premiums
Prior to a hearing that could potentially revoke an agents license, what is required by the commissioner? - giving oral notice to the agent - giving written notice to the agent - giving both oral and written notice to the appointing insurer - giving oral notice to the appointing insurer
giving written notice to the agent
W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n): - flexible premium deferred annuity - variable annuity - immediate annuity - straight life annuity
immediate annuity
Which of these retirement plans can be started by an employee, even if another plan is in existence? - individual retirement account (IRA) - defined plan - Keogh plan - 403(b) plan
individual retirement account (IRA)
in a key employee life insurance policy, the third party owner can be all of the following except - applicant - owner - payor - insured
insured
B receives yearly dividends and interest from a participating life insurance policy. which of these should B include as a gross income for federal income tax purposes? - interest and dividends - interest only - dividends only - neither interest nor dividends are taxable
interest only
Credit life insurance is - issued in any amount at the discretion of the applicant - used in the event of loss of income - issued in an amount not to exceed the amount of the loan - coverage that waives the premium on a loan payment in the event of total disability
issued in an amount not to exceed the amount of the loan
What is the purpose of a policy summary? - it details the commissions earned by the agent - it guarantees a policy will be issued - it allows the consumer to compare the costs of different policies - it highlights the critical parts of the policy issued
it highlights the critical parts of the policy issued
Before an insurance company can pay commissions to an agent, the agent must be - bonded - licensed and appointed - licensed only - bonded and insured
licensed and appointed
The Accelerated Death Benefit provision in a life insurance policy is also known as a: - 1035 exchange - inter vivos gift - non-forfeiture option - living benefit
living benefit
An insured inability to perform two or more activities of daily living may trigger which type of policy rider? - waiver of premium - long term care - accelerated death benefit - accidental
long term care
which of these factors do NOT play a role in the underwriting of a life insurance policy? - avocations - credit status - marital status - occupation
marital status
A policy is allowed to pay premium more than once a year under which provision? - insuring - consideration - payor - mode of premium
mode of premium
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? - 10% tax penalty for early withdrawal - capital gains tax - ordinary tax and a 10% tax penalty for early withdrawal - ordinary income tax
ordinary tax and a 10% tax penalty for early withdrawal
All of the following statements are true regarding a policy Grace Period except: - past due payments are waived - policy loans may still be made - full coverage continues - grace period terms are stated in the policy
past due premiums are waived
Which life insurance rider typically appears on a Juvenile life insurance policy? - decreasing term rider - inflation rider - payor benefit rider - waiver of premium rider
payor benefit rider
The underwriting process involved all of these EXCEPT: - credit report - policy loan - risk classification - application
policy loan
What benefit does the payor clause on a Juvenile policy provide? - allows payor to assign ownership in the event payor becomes disabled - allows payor to increase face amount without providing evidence of insurability - premiums are waived if payoff becomes disabled - premiums are waived if the payor becomes disabled
premiums are waived if the payor becomes disabled
All of these are considered sources of underwiring information about a applicant, EXCEPT: - inspection report - credit report - rating services - medical information bureau
rating services
Typically a life insurance death benefit is paid by a lump sum payment. A ________ option is a method of distributing a life insurance policy death benefit OTHER than by a lump sum payment - settlement - dividend - conversion - aleatory
settlement
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - the date the sales appointment was made - the date of the application was submitting to the insurance company - the date of application - the date the agent delivered the policy collected the initial premium, and obtained a good health statement from the insured
the date the agent delivered the policy collected the initial premium, and obtained a good health statement from the insured
What is the underlying concept regarding level premiums? - level premiums build cash value quicker in the early years - the early years are charged more than what is needed - the early years are charged less than what is needed - level premiums can only be paid annually
the early years are charged more than what is needed
An insurance company with engages in boycott, coercion, and intimidation that results in the unreasonable restraint of trade is committing a prohibited act under Georgia insurance laws covering: - sliding - unfair trade practices - twisting - discrimination
unfair trade practices
Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors? - universal - term - graded - endowment
universal
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be: - straight life - universal life - endowment - modified whole life
universal life
An ____ annuity pay benefit based on units rather than stated dollar amount - deferred - variable - immediate - unit
variable
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - universal life - variable life - fixed annuity - modified endowment contract
variable life
a life insurance policy which ensured that the premium will be paid if the insured becomes disabled has what kind of rider attached? - accelerated benefits - waiver of premium - cost of living - return of premium
waiver of premium