Georgia Life and Health Mock Exam

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? 1. $2,000 2. $1,760 3. $1, 600 $ 400

$1,600 ($2,200-$200 deductible x 80%)

In Georgia, an insurance company must do which of the following to terminate an agent's appointment? 1. 30 2. 45 3. 60 4. 90

1. 30

A domestic insurance company MUST be examined by the Commissioner every ____ years. 1. 5 2. 4 3. 3 4. 2

1. 5 years

When can a policy owner change a [revocable] beneficiary? 1. Anytime 2. After the consent of the current beneficiary 3. Never 4. Only if primary beneficiary dies

1. Anytime (revocable mean anytime without notifying or getting permission from the beneficiary)

What is the initial source of underwriting for an insurance policy? 1. Application containing statements from the insured 2. MIB report 3. Credit report 4. Medical exam

1. Application containing statements from the insured

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the person assistant? 1. Disability Income 2. Major Medical 3. Key Employee 4. Business Overhead Expense

1. Disability Income (would pay monthly benefits)

Which of the following provisions specifies how long a policy owner's health coverage will remain in effect if the policyowner does not pay the premium [when it is due]? 1. Grace period 2. Consideration 3. Waiver of Premium 4. Reinstatement

1. Grace period

In a Life insurance [contract], an [insurance company's promise] to pay stated benefits is called the: 1. Insuring clause 2. Consideration clause 3. Entire Contract 4. Owner's right

1. Insuring clause

What is the reason for the establishment of Rules Governing Life Insurance and Annuity Replacements? 1. Lessen the chance for misrepresentation and incomplete disclosure 2. Regulate insurance rates 3. Protect the interests of the insurer 4. Protect the interests of the beneficiary

1. Lessen the chance for misrepresentation and incomplete disclosure

Generally, how long is a benefit period for a Major Medical Expense Plan? 1. One year 2. Two year 3. Three year 4. Four year

1. One year

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? 1. The insurer will rescind the policy, deny the claim, and recover all payments made 2. Due to the policy not being post-claim underwritten, the insurer must continue to pay this claim 3. Claim will be rejected because of this criminal act, but no recovery of payments will be made 4. Claim will be denied but the policy will remain on force without further premium payments due to the insured's total disability

1. The insurer will rescind, dent the claim, and recover all payments made

What is the basic function of an annuity? 1. The systematic liquidation of accumulated funds 2. The guarantee f a specific sum of money to a designed beneficiary upon the death of the insured 3. The protection against loss of income due to partial or total disability 4. The accumulation of funds to pay for life insurance premiums during retirement years

1. The systematic liquidation of accumulated funds

An employee of 20 years recently [retired] at age 59 1/2. This employee's group life contract can be: 1. converted to an individual permanent policy at an individual rate 2. converted to an individual permanent policy at a group rate 3. continued at an individual rate 4. continued at a group rate

1. converted to an individual permanent policy at an individual rate

Health insurance [benefits NOT covered] due to an act of war are: 1. excluded by the insurer in the contract provisions 2. assigned to a reinsurer 3. given a longer probationary period 4. charged a higher premium

1. excluded by the insurer in the contract provisions

Under an individual Health Insurance policy, the Time Limit of Certain Defenses provision states that non fraudulent misstatements first become incontestable two years 1. from the date that the policy was issued 2. from the date that the application was signed 3. from the date initial premium was collected 4. from the date of the sales appointment

1. from the date that the policy was issued

The premiums paid by an employer for his employee's group life insurance are usually considered to be: 1. tax-deductible to the employer 2. partially deductible to the employee 3. tax-deductible to the employee 4. taxable income to the employee

1. tax-deductible to the employer (deductible to the business)

The option that provided an additional death benefit for a limited amount of time at the lowest possible cost is called a(n): 1. Term rider 2. Accidental Death and Dismemberment rider (AD&D) 3. Family rider 4. Annuity

2. AD&D

When an insurance application is taken by a producer, which of these statements is true? 1. The applicant should have an attorney present during the application process 2. Any charges made on the application require the applicant's initials 3. Any changes made on the application can later be initialed by the producer if the applicant is unavailable 4. The producer has the discretion to ask or not ask any of the questions listed on the application

2. Any changes made on the application require the applicant's initials

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible? 1. Deferral provision 2. Carryover provision 3. Stop Loss provision 4. Corridor provision

2. Carryover provision (permits expenses incurred during the last three months of the calendar year to be carried over into the new year if needed to satisfy the deductible for the next year)

In a life insurance policy, which feature states the the policy will not cover [certain] risks? 1. Exception 2. Exclusion 3. Ejection 4. Expulsion

2. Exclusion

In the state of Georgia, every policy owner must be offered which of the following? 1. Double money-back guarantee 2. Free-look period 3. Waiting period 4. Inflation rider

2. Free-look period (gives them time to examine the policy and request a full refund for any reason)

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? 1. If the primary beneficiary is a minor at the time of the insured's death 2. If the primary beneficiary dies before the insured 3. If the insured died of accidental causes 4. If the insured died of natural causes

2. If the primary beneficiary dies before the insured

Which statement is true TRUE in regards to a policy loan? 1. Past-due interest payments not paid after 3 months will void the policy 2. Past-due interest on a policy loan is added to the total debt 3. Insurance companies can send delinquent interest accounts to a collection agency 4. Insurance companies can charge an interest rate based on the policy owner's credit report

2. Past-due interest on a policy loan is adde to the Toal debt

What is the underlying concept regarding level premiums? 1. Level premiums build cash value quicker in the early years 2. The early years are charges more than what is needed 3. The early years are charged less than what is needed 4. Level premiums can only be paid annually

2. The early years are charges more than what is needed

Which statement regarding the Change of Beneficiary provision is true? 1. The beneficiary can only be changed with the consent of the insurer 2. The policy owner can change the beneficiary 3. The insured can change the beneficiary 4. A beneficiary change is subject to underwriting procedures

2. The policyowner can change the beneficiary

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called 1. Insuring 2. Time Limit on Certain Defenses 3. Grace Period 4. Free-look

2. Time Limit on Certain Defenses

Major Medical policies typically: 1. pay 100% of covered expenses 2. contain a deductible and coinsurance 3. require use of in-network facilities only 4. do not contain a deductible and coinsurance

2. contain a deductible and coinsurance

When an insurer issues a policy that refuses to cover [certain risks], this is referred to as a(n): 1. elimination 2. exclusion 3. limitation 4. exception

2. exclusion

B receives [yearly] dividends and interest from a participating life insurance policy. Which of these should B include as [gross income] for [federal income tax] purposes? 1. interest and dividends 2. interest only 3. dividends only 4. neither interest nor dividends are taxable

2. interest only

In order for coverage on a [non-medica]l insurance application to take [effect the same day], the producer must collect a signed application and 1. a Medical Information Report 2. the initial premium 3. forward it immediately to the insurer 4. Attending Physician Statement

2. the initial premium

What is the [maximum] Social Security Disability benefit amount an insured can receive? 1. 50% of the insured's Primary Insurance Amount (PIA) 2. 75% of the insured's Primary Insurance Amount (PIA) 3. 100% of the insured's Primary Insurance Amount (PIA) 4. 100% of the insured's Primary Insurance Amount (PIA) minus any monies received from a retirement plan

3. 100% of the insured's Primary Insurance Amount (PIA)

In Georgia, an accident and sickness policy that is paid on a quarterly basis requires a grace period of: 1. 7 days 2. 10 days 3. 31 days 4. 45 days

3. 31 days (law for minimum days in GA)

Which provision prevents an insurer from changing the terms of the contract with the policy owner by referring to documents not found within the policy itself? 1. Policy Exclusion 2. Incontestable 3. Entire Contract Provision 4. Assignment

3. Entire contract provision (found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be "incorporated by reference", meaning the policy cannot refer to any outside documents as being part of the contract)

Long Term Care policies will usually pay for eligible benefits using which of the following methods? 1. Delayed 2. Fee for service 3. Expense incurred 4. Respite

3. Expense incurred

Information obtained from a [phone conversation] to the proposed insured can be found in which of these reports? 1. Agent's report 2. MIB report 3. Inspection report 4. Attending physician's report

3. Inspection report

All of these statements about Waiver of Premium provision are correct, EXCEPT: 1. A waiting period must pass before becoming eligible for benefits 2. Waiver of Premium is available on both permanent and term insurance policies 3. Insured must be eligible for Social Security disability for claim to be accepted 4. Insured must be totally disabled to qualify

3. Insured must be eligible for Social Security disability for claim to be accepted

Variable annuities may invest premiums in each the following, EXCEPT: 1. Common Stock 2. Money Market securities 3. Insurer's corporate business account 4. Junk bonds

3. Insurer's corporate business

A [policy owner] would like to [change the beneficiary] on an Accidental Death and Dismemberment (AD&D) insurance policy and make the [change permanent]. Which type of designation would full the need? 1. Revocable 2. Contingent 3. Irrevocable 4. Primary

3. Irrevocable (may not be changed without the written consent of the beneficiary)

S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the the claim. S can take legal action against the insurer beginning: 1. September 21 2. October 16 3. November 1 4. December 1

3. November 1 (The insured must wait 60 days after written proof of loss before legal action can be brought against the company)

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? 1. 10% tax penalty for early withdrawal 2. Capitol gains tax 3. Ordinary income tax and a 10% tax penalty for early withdrawal 4. Ordinary income tax

3. Ordinary income tax and a 10% tax penalty for early withdrawal

An insurance agent is in violation of the Rules Governing Advertisement of Life Insurance and Annuities if the agent takes which of the following actions during a sales presentation? 1. Asks prospects for referrals 2. Analyzes another insurance company's policy 3. Refers to guaranteed policy dividends 4. Compares the costs of two similar policies

3. Refers to guaranteed policy dividends (cannot be advertised as "guarantees")

P is a [new employee] and will be obtaining [non-contributory] group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? 1. Authorize for payroll deductions 2. Agree to a physician examination 3. Sign an enrollment card 4. Register with her state of residency

3. Sign an enrollment card

Which mode of payment is NOT used by health insurance policies? 1. Monthly premium 2. Annual premium 3. Single premium 4. Semi-annual premium

3. Single premium

Which Accident and Health policy provision addresses preexisting conditions? 1. Proof of Loss 2. Legal Actions 3. Time Limit on Certain Defenses 4. Payment of Claims

3. Time Limit on Certain Defenses (limits the period during which an insurer can deny a claim on the basis of a preexisting condition)

Y purchased $100,000 worth of permanent protection on himself and $50,000 its of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase? 1. Endowment with Extended Term 2. Endowment with a Payor Benefit 3. Whole Life policy with an Other Insured Rider 4. Family Income policy

3. Whole Life policy with an Other Insured Rider

Common exclusions to continuation of group coverage include: 1. dental care 2. other prescription drugs 3. all of the above

3. all of the above

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? 1. 10 year increments 2. at future dates specified in the contract with proof in insurability required 3.at future dates specified in the contract with no evidence of insurability required 4. at any time while policy is active

3. at first dates specified in the contract with no evidence of insurability required

What is the purpose of the U.S.A Patriot Act? 1. detect and deter fraud 2. detect and deter alien insurance companies 3. detect and deter terrorism 4. detect ad deter misrepresentations

3. detect and deter terrorism

S takes out an accident and sickness insurance policy which contains a provision that states that the [agent does not have the authority] to change the policy or waive any of its provisions. Which health [policy] provision is this? 1. legal actions 2. insurance with other insurers 3. entire contract 4. reinstatement

3. entire contract

A [domestic] insurance company in Georgia is considered a company that 1. only sells to Georgia residents 2. exclusively does business in Georgia 3. is incorporated and formed in Georgia 4. is licensed to issue direct mail-order coverage

3. is incorporated and formed in Georgia

Dividends paid from a life insurance policy are 1. guaranteed 2. taxable 3. issued by the insurer 4. issued by the Department of Insurance

3. issued by the insurer

When a person returns to work after a period of total [disability] but cannot earn as much as he or she did before the disability, this situation is called which of the following? 1. waiver of premium 2. recurring disability 3. residual disability 4. presumptive disability

3. residual disability

During the application process, the [agent's primary responsibility] is to 1. the Commissioner 2. the applicant 3. the insurance company 4. the State of Georgia

3. the insurance company

Which of the following is NOT included in the policy face? 1. Free Look provision 2. Name of the insured 3. Name of the insurer 4. Exclusions

4. Exclusions (not included; first page of an insurance policy)

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: 1. R's estate 2. Q's estate 3. P and Q's estate 4. P only

4. P only (P survived and is the primary)

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: 1. Grace period 2. Physical Examination and Autopsy 3. Entire Contract 4. Time Limit on Certain Defenses

4. Time Limit on Certain Defenses

What type of rider would be [added] to an Accident and Health policy if the policy owner wants to [ensure] the policy will continue if he/she ever becomes totally disabled? 1. Accidental Death and Dismemberment rider 2. Disability Income rider 3. Guaranteed Insurability rider 4. Waiver of Premium rider

4. Waiver of Premium rider (they would want to add it if they are already a A&H policy owner)

Insurance agents do [NOT] have a fiduciary [responsibility] to 1. insurance companies 2. insureds 3. applicants 4. another agent

4. another agent

Medicaid was designed to assist individuals who are: 1. Federal employees 2. disabled 3. in poor health 4. below a specific income limit

4. below a specific income limit

P is a Major Medical policy owner who hospitalized as a result of injuries sustained from participating in a [carjacking]. How will the insurer most likely handle the claim? 1. claim will be denied and policy terminated 2. claim will partially paid 3. claim will be paid 4. clim will be denied

4. claim will be denied

Basic Medical Expense insurance: 1. normally has a deductible and coinsurance 2. covers an illness but not an accident 3. pays for lost wages while hospitalized 4. has lower benefit limit than Major Medical insurance

4. has lower benefit limits than Major Medical insurance

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: 1. cash value that will ultimately replace the death benefit 2. nonforfeiture benefit options 3. premiums that remain fixed for the life of the policy 4. partial withdrawal features beyond a surrender charge period

4. partial withdrawal features beyond a surrender charge period

With Optionally Renewable Health policies the insurer may: 1. renew the policy only if no claims have been filed the previous year 2. renew the policy only with the insured's consent 3. review the policy whenever they please and determine whether or not to renew it 4. review the policy annually and determine whether or not to renew it

4. review the policy annually and determine whether or not to renew it

A [mutual] insurance company and a [stock] insurance company have one main [difference] between them. What is this major contrast? 1. stock company is regulated by the state where its incorporated. Mutual company is regulated by its policy owners. 2. stock company is considered an authorized insurer. Mutual company is considered an unauthorized insurer. 3. stock company is owned by its policyowners. Mutual company is owned by its shareholders. 4. stock company is owned by its shareholders. Mutual company is owned by its policyholders.

4. stock company is owned by its shareholders. Mutual company is owned by its policyholders.

A [level] premium indicates: 1. the premium is fixed for a period stated in the contract, then becomes variable 2. the premium can only be changed with the consent of the insurer 3. the premium stays level until the policy's renewal date 4. the premium is fixed for the entire duration of the contract

4. the premium is fixed for the entire duration of the contract

An example of an unfair claims settlement practice is 1. making it mandatory that proof of loss be provided for each claim 2. requiring a time limit for submitting a claim 3. paying a claim in a timely manner 4. turning down a claim without providing the basis of denial

4. turning down a claim without the basis of denial