ga life, accident, disability and health insurance license final review

The death benefit under the Universal Life Option B a)Gradually increases each year by the amount that the cash value increases. b)Decreases by the amount that the cash value increases. c)Increases for the first few years of the policy, and then levels off. d)Remains level.

a)Gradually increases each year by the amount that the cash value increases. Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases.

n this state, what is the maximum fine for transacting insurance without a license?a)$500 b)$1,000 c)$5,000 d)$10,000

b)$1,000 Willfully transacting insurance without a proper license is considered a misdemeanor and is punishable by a fine not to exceed $1,000.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a)Option B b)Corridor option c)Variable option d)Option A

a)Option B Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of medical exam b)The date of policy delivery c)The date of issue d)The date of application

a)The date of medical exam If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam (whichever is later), provided that the applicant is found insurable at the rate applied for.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? a)Universal Life - Option A b)Universal Life - Option B c)Equity Indexed Universal Life d)Variable Universal Life

a)Universal Life - Option A Universal Life Option A (Level Death Benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.

All of the following statements regarding continuing education requirements in this state are true EXCEPT a)Excess hours may be carried over to the next licensing period. b)Producers may repeat the same courses to meet the required CE hours for a licensing period .c)CE hours must be completed every 2 years by the last day of the producer's birth month. d)Ethics education is required every licensing period.

b)Producers may repeat the same courses to meet the required CE hours for a licensing period. The licensees may not repeat the same CE courses in the same renewal period. All the other statements are true.

When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for a)8 years. b)10 years. c)3 years. d)5 years.

c)3 years. When a policy is to be replaced, replacing insurers must maintain copies of the replacement notice, all required written communications, the applicant's signed statement regarding replacement and a replacement register in their home office for at least 3 years, or until the conclusion of the next regular examination by the Insurance Department, whichever is later.

An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held? a)10 days b)15 days c)30 days d)45 days

c)30 days If the Commissioner finds that the request for a hearing is made in good faith, a hearing will be held within 30 days after receipt of the request.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium? a)If the father is disabled for at least a year b)If the daughter is disabled for more than 3 months c)If the daughter is disabled for any length of time d)If the father is disabled for more than 6 months

d)If the father is disabled for more than 6 months Payor benefit only pays if the owner, the father in this example, is disabled for at least 6 months.

Which of the following statements is correct regarding a whole life policy?a)Cash values are not guaranteed. b)The policy premium is based on the attained age. c)The death benefit may increase or decrease during the policy period. d)The policyowner is entitled to policy loans.

d)The policyowner is entitled to policy loans. Whole life policies offer level premium based on the issue age, guaranteed, level death benefit, cash value that is scheduled to equal the face amount at the insured's age 100, and living benefits, which include policy loans.

Which of the following terms will be permissible in describing a life insurance policy in company advertisements? a)Variable plan b)Risk-free plan c)Investment plan d)Retirement plan

a)Variable plan Any terms that imply that life insurance is an investment plan, or the terms that may lead a consumer to believe that it offers benefits not actually available are prohibited in advertisements.

A person who is convicted of a felony related to insurance fraud may be imprisoned for what minimum term? a)1 year b)2 years c)5 years d)10 years

b)2 years Insurance fraud violations are felonies punishable by imprisonment for a term of at least 2 years, but no more than 10 years, a fine of up to $10,000, or both.

The death protection component of Universal Life Insurance is always a)Decreasing Term b)Annually Renewable Term c)Whole Life d)Adjustable Life

b)Annually Renewable Term A universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance.

A tax-sheltered annuity is a special tax-favored retirement plan available to a)Certain groups depending on factors such as race, gender, and age .b)Certain groups of employees only. c)Anyone. d)Certain age groups only.

b)Certain groups of employees only. A tax-sheltered annuity is a special tax-favored retirement plan available only to certain groups of employees (nonprofit charitable, educational, religious, and other 501c(3) organizations, including all employees in public education).

Transacting insurance without a license in this state is considered a(n) a)Coercion. b)Misdemeanor. c)Felony. d)Insurance fraud.

b)Misdemeanor. In Georgia, it is illegal to transact insurance without a license for that line of authority. Any person who willfully violates this statute will be considered guilty of a misdemeanor.

Which of the following is NOT true regarding policy loans? a)A policy loan may be repaid after the policy is surrendered. b)Money borrowed from the cash value is taxable. c)Policy loans can be repaid at death. d)An insurer can charge interest on outstanding policy loans.

b)Money borrowed from the cash value is taxable. Money borrowed from the cash value is not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can charge interest on outstanding policy loans.