Life insurance class exam
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named the contingent beneficiary. Five years later, S dies of natural causes and their father is killed in a scuba accident shortly afterwards. How much of the death benefits will the mother receive?
$0...T is still alive
K pays on a $20,000 20-year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefits
An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a
$25,000 individual whole life policy
In a life insurance policy, which features states that the policy will not cover certain risks? Exception Exclusion Ejection Expulsion
Exclusion
Term insurance has which of the following characteristics? Expires at the end of policy Builds cash value Has nonforfeiture options Endows at the end of the policy period
Expires at the end of policy
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may obtain on an applicant?
Fair Credit Reporting Act
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? Family Benefit policy Family Maintenance policy Family Income policy Family Survivor policy
Family Maintenance policy
Taking receipt of premiums and holding them for the insurance company is an example of
Fiduciary responsibility
In Georgia, the commissioner may be place on probation, suspended, revoke, refuse to renew, or deny a license for all the following reason EXCEPT: Forging a name to an insurance document or application Filing Bankruptcy Failing to comply with a court order imposing child support Failing to pay state income tax
Filing Bankruptcy
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?
Fixed Deferred
In the state of Georgia, every policyowner must be offered which of the following? Double money-back guaranteed Free-look period Waiting period Inflation rider
Free-look period
S, while in process of converting her group insurance to an indivdual policy, dies. what happens to the claim her beneficiary submits?
Full benefits are payable under the Master contract
Tom has qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment was terminated, 20% of the funds would be forfeited.
In regards to representation or warranties, which of these statements is TRUE? Warrenties are statements considered to be true tot he best of the applicant's belief If materials to the risk, false representaions will void policy representations are statements guaranteed to be true in every respect. If materials to the risk, false representation will NOT void a policy
If materials to the risk, false representaions will void policy
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of insured's death EXCEPT Fixed Period Interest Only Fixed Amount Life Income
Interest Only
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 wells business circumstances
It is used extensively in estate-planning as wells business circumstances
On January 8, an applicant filled out an application for a life insurance policy but did npt include the initial premium. The insurance company apprived the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?
January 26
K is looking to purchace renewable Term insurance. Which of these types of term insurance may be renewable? Increasing Decreasing Adjustable Level
Level
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
The rules and regulation of the Life and Health Insurance Guaranty Association in Georgia apply to
Life and Health Policies issued by companies authorized in Georgia
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?
Life settlement contract
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and ne the recipient of any financial benefits from the policy? Nonforfeiture Entire contract Insuring clause Owner's rights
Owner's rights
P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when
P receives the policy and pays the premium
P is the insured on a participating life policy. Which statement is true if P's premium are waived due to a disability?
P will still receive declared dividends
A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options? Paid-up Additional Insurance Accumulate at Interest Reduced Premiums Cash
Paid-up Additional Insurance
All of the following statements are true regarding a policy's Grace period EXCEPT Past due premiums 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 of the following actions is NOT possiple with a Universal Life Policy Policy's cash value may be used to pay premiums Premiums payments may be made at unscheduled times Premiums may be applied as a credit against income tax Face amount may be adjusted
Premiums may be applied as a credit against income tax
The Rules Gverning Advertisement of Life Insurance and Annuities apply to which of the following items?
Prepared sales presentation used by insurance agents
What determines the full amount of SS retirement benefits a qualified individual is entitled to receive?
Primary Insurance amount
K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? Proceeds with be paid to P's Estate Proceeds will be divided equally between K's and P's estate Proceeds will be payable to K's estate id P's dies within a specified time The courts will decide who will receive death benefits
Proceeds will be payable to K's estate id P's dies within a specified time
An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?
Proceeds will go to the contingent beneficiary
All of these are considered sources of underwriting information about an applicant EXCEPT Inspection Report Credit Report Rating Service Medical Information Bureau
Rating Service
Which of these Nonforfeiture Options continue a build-up of cash value? Waiver of Premium Extended Term Reduced Paid-up Cash Surrender
Reduced Paid-up
P died five years after purchasing a life policy. While investing the claim, the insurer discovered material misrepresentations made by P during the appliation process. Which of these actions will insurer take? Beneficiary will be denied the claim Beneficiary will be denied the claim and refund all paid premiums Beneficiary will be paid the death benefit Beneficiary will be pid a partial death benefit
Beneficiary will be paid the death benefit
What percent of personal life insurance premiums is usually deductible for federal income tax purpose?
0%
In Georgia, how long is the free-look period?
10 days
Which of the following is the MINIMUM age at which an individual can sign a life insurance application?
15 years old
What year was the McCarran-Ferguson Act enacted?
1945
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for uncome tax
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 Limitedpay Life 20-Pay Life accumulates cash value faster than straight life cash value accumulation of both 20-pay life and straight life depend on the insure's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate.
20-Pay Life accumulates cash value faster than straight life
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premium protection, and be paid-up at retirement. Which of these should N purchase? 30 Pay Life Term to age 70 Universal Life Adjustable Life
30 Pay Life
The commissioner must examine each domestic innsurance company AT LEAST every
5 years
Which of the following is an example of defamation? A pamphlet listing a competitor's financial rating A brochure including and untrue statement regarding a competitor's ability to pay claims A verbal statement of a competitor's complaint ratio A truthful estimate of the dividends
A brochure including and untrue statement regarding a competitor's ability to pay claims
Which of the following annuities pays benefits based on units rather than specific dollar amounts?
A deferred annuity
Which of these is an element of a variable Life Policy? A fixed, level premium Insurer assumes the investment risk No investment risk to the policyowner Rate and returns are guaranteed
A fixed, level premium
Which of the following statements about noncontributory employee group life insurance is FALSE? A minimum number of employees is required to participate All eligible employees must be covered No evidence of insurability required Must have conversion rights
A minimum number of employees is required to participate
Which of the following individuals MUST be licensed as an agent? A salaried officer of an insurer A person who provides information or advice for the purpose of reducing loss A person who places insurance on behalf of anyone seeking insurance A person who gives incidental insurance advice in the normal course of business other than insurance consulting
A person who places insurance on behalf of anyone seeking insurance
All the following are considered to be typical characteristics describing the nature of an insurance contract EXCEPT? Bilateral Unilateral Aleatory Adhesion
Bilateral
Which one of the following transaction would be considered a Life Insurance policy replacement? Cash surrender and existing whole life policy and investing the proceeds in mutual funds Canceling an existing whole life policy and purchasing a long term care policy Converting existing term coverage to a whole life policy Cash surrender an existing whole life policy and purchasing a new whole life policy
Cash surrender an existing whole life policy and purchasing a new whole life policy
A whole life insurance policy endows when the Premium paid equals the death benefit Death proceeds are paid Cash value equals the death benefit Cash value plus dividends equal the death benefit
Cash value equals the death benefit
Which rider provides coverage for a child under a parent's life insurance policy?
Child term rider
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
Which of these actions is taken when a policyowner uses a Life insurance policy as collateral for a bank loan?
Collateral assignment
A key employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy still in force and unchanged, where would the death proceeds be directed?
Company X
Insurance contracts are known as __________ because certain future conditions or acts must occur before any claim can be paid. Consideration Unilateral Aleatory Conditional
Conditional
Which of the following consist of an offer, acceptance, and consideration? Warranty Estoppel Contract Representation
Contract
If the employees share in the cost of insurance, what type of insurance plan would a corporation have?
Contributory
What type of insurance plan involves employees sharing the cost?
Contributory plan
What group term life features permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
Conversion
What kind of Life insurance starts out as temporary cverage but can be modified to permanent coverage without evidence of insurability? Endowment policy Limited-Pay Whole life Convertible Term Decreasing Term
Convertible Term
Which statement regarding the Misstatement of Age provision is considered to be true? Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered requires that a new policy must be applied for if a misstaatement of age is found on the current policy Misstatement of Age provision is valid only during the contestable period Insurer may viod the policy if a misstatement of age is discovered.
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
K has a life 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
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
Decreasing Term
A Family Income Policy is a combination of Whole Life and... Decreasing Term insurance Level Term insurance Deposit Term insurance Increasing Term insurance
Decreasing term insurance
P is a 40 year old women and would like to purchase an annuity that 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
An immediate annuity
In Georgia, which of the following statements is CORRECT about life insurance advertisements? An insurance agency is responsible for advertisment placed by its insurance agents The commissioner of the Insurance must approve advertisement before they are used Third-Party testimonials may not be used The dividends may represented as guaranteed
An insurance agency is responsible for advertisment placed by its insurance agents
What does the insuring agreement in a life insurance contract establish?
An insurer's basic promise
When a policyowener cash surrenders a Universal Life Insurance policy in it's early years, this may be considered a red flag for a(n)
Anti-Money Laundering violation
Any changes made on an insurance application requires the initials of whom?
Applicant
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
P, age 50, purchased an annuity that P will fund with $500/ month for 15 Years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Deferred
Which of the following actions by an insurance company is considered an unfair claims settlement practice? Requiring an insured to give a statement under oath Requiring the insured to submit a proof of loss statement before paying a claim. Requesting a third-party arbitrator to resolve a disagreement with a claimant Denying an insured's claim without indicating the basis of denial under the policy
Denying an insured's claim without indicating the basis of denial under the policy
Which of the following does SS NOT provide benefits for?
Dismemberment
An employee requested that the balance of her 401K 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 federal income tax withholding
What provision in a life insurance policy states that the application is considered part of the contract? Applicatioon provision Policy Exclusions provision Entire Contract provision Incontestability provision
Entire Contract provision
Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?
Entire contract provision
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and his dependants
An insurance agent is in violation of the Rules Governing Advertisement of Life Insurance and Annuities if the agent takes chich of the following actions during a sales presentation? Ask prospects for referrals Analyzes another insurance company's policy Refers to guaranteed policy dividends compares the costs of two similar policies
Refers to guaranteed policy dividends Dividends can not be advertised as guaranteed
T is covered by an Accidental Death and Dismemberment policy hat has an irrevocable beneficiary. What action will the insurance company take if T request a change of Beneficiary?
Request of change will be refused
Agent J takes an application and the initial premium from the applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What actions should J take?
Return to the customer, collect a new check made out to insurance company, and send the new check to insurance company.
Which of the term accurately defines an underwriter's assessment of information on a life insurance application?
Risk Classifications
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an application? Geographical location Source of income Risk classification Marital status
Risk classification
What does a 401K plan generally provide its participants?
Salary-deferral contributions
P is a producer who notices 5 questions on the life application were not answered. What actions should P Take?
Set up a meeting with the applicant to answer the remaining questions
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT Signed HIPAA disclosure Signed amendment Signed statement of Good Health The required premium
Signed HIPPA disclosure
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with guaranteed income for life. What type of annuity is best suited for her situation?
Single premium
What would the medical information bureau (MIB) identify?
Testing positive for marijuana use from a previuos screening.
Which of the following factors affects the amount of monthly disability benefits payable under SS? The cause of disability The amount of benefits available from other sources The number of children dependent on the receipt The state in which the recipient lives
The amount of benefits available from other sources
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed.
Who is normally considered to be owner of a 403(b) tax-sheltered annuity?
The employee
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Variable Life Credit Life Universal Life Interest-Sensitive Whole Life
Variable Life
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? Joint Life Adjustable Life Variable Universal Life Universal Life
Variable Universal Life
The part of life insurance policy guaranteed to be true is aclled a(n)
Warranty
A return of Premium life insurance policy is a nonforfeiture option Whole life and increasing term interest-sensitive Variable life
Whole life and increasing term
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision the insurer will
adjust the death benefit to a reduced amount
L takes out a life insurance and dies 10 years later. During the claim process, the insurer discovers that L understated her age on the application. Under the Misstatement of age provision, the insurer will
adjust the death benefits to a reduced amount
The commissioner of Insurance is responsible for
administering insurance laws
Which of the following is NOT an example of an agent's breach of fiduciary duty? misappropriation of premiums conversion of premiums improper withholding of premiums allowing premiums to be submitted electronically
allowing premiums to be submitted electronically
An individual who is appointed by an insurance company to transact insurance is referred to as
an agent
Group life insurance policy are oftern written as
annually renewable term
When does a guaranteed insurability rider allow the insured to buy additional coverage?
at future dates specified in the contract with no evidence of insurability required.
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 evidenceof insurability
avoid a policy lapse
A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of
coercion
An agent who tells claimant that their rights may be impaired if they fail to compete a release form within a given period of time could be guilty of defamation rebaating coercion discrimination
coercion
An agent who tells claimants that their rights may be impaired if they fail to complete a release within a given period of time could be guilty of
coercion
The incontestable clause allows insurer to
contest a claim during the contestable period
An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be
converted to an individual permanent policy at an indiviadual rate
Additiional coverage can be added to a Whole Life policy by adding a(n) Payor rider accelerated benefit rider decreasing term rider automatic premium loan rider
decreasing term rider
Additional coverage can be added to a Whole Life policy by adding a(n) payor rider accelerated benefit rider decreasing term rider automatic premium loan rider
decreasing term rider
What is the purpose of the U.S.A. Patriot Act?
detect and deter terrorism
The Commissioner may examine the records of an insurance company in order to
determine the solvency of the company
When an insurer issues a policy that refuses to cover certain risk, this is referred to as a(n) elimination exclusion limitation exception
exclusion
An underwriter determines that an applicant's risk should be recategorized due to health issue. This policy may be issued with a(n) delayed effective date exclusion for the medical condition extended Contestale period Concealment clause
exclusion for the medical condition
All of these are characteristics of an Adjusting Life policy EXCEPT adjustable premiums adjustable premium payment period combination of term and whole life insurance face amount can be adjusted usuing policy dividends
face amount can be adjusted usuing policy dividends
An organization that solicits insurance only among its members is known as
fraternal benefit society
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT Policy is delivered free-look period has expired Insurance company issues policy initial premium is collected
free-look period has expired
The Life and Health Insurance Guaranty Association is funded by
funded by admitted insurance companies through assessments
All of these are a prerequisite for becoming a licensed agent EXCEPT Complete a prelicensing course Resident of Georgia Be at least 18 years old graduate fom high school
graduate fom high school
Varible life products require a producer to... guarantee not more than 12% return per annum hold a Life and Health insurance license hold a Life insurance license and a Securities license be regulated solely by State Law
hold a Life insurance license and a Securities license
The type of annuity that can be purchased with one monetary deposit is called a(n) Single Deposit annuity Single Premium annuity Fixed annuity Immediate
immediate annuity
Any administration service fees charged by an insurance agent requires the written signature by a consumer
in all instances
When must insurable interest exist for a life insurance contract to be valid? Inception of the contract Throughout the entire length of the contract When the insured dies During the contestable period
inception of the contract
A 55 year old recent;y received a $30,000 distribution from a previous employer's 401K plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
income taxes plus a 10% penalty tax on $30,000
Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy? increase face amount decrease face amount increase premium-paying period decream premium payment
increase face amount
A life insurance policy would be considered a wagering contract WITHOUT insurable interest premium payment agent solicitation constructive delivery
insurable interest
When third party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have __________ .
insurable interest in the proposed insured
A policyowner's rights are limited under which beneficiary designation?
irrevocable
A warranty
is a statement gauranteed to be true
An insurer may pay commisions directly to any person for services as an agent provided the agent
is licensed and appointed
A stock insurance company is beST defined as an incorporated company that has its capital divided into shares and
is owned exclusively by its shareholders
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? it is not taxable it is tax deducted it is taxed as capital gains it is taxed as ordinary income
it is taxed as ordinary income
Risk recently died and feft behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow quilifies for the
marital deduction
Anyone who makes a fraudulent statement on an insurance application in order to obtain money benefits from an insurance company has committed an act of
misrepresentation
When funds are shifted straight from one IRA, what percentage of the tax is withheld?
none
Whole life insurance policies are contractually guaranteed to provide each following EXCEPT cash value that will ultimately replace the death befit nonforfeiture benefit options premium that remain fixed for the life of the policy patial withdraw features beyond a surrender charge period
patial withdraw features beyond a surrender charge period
The purpose of the Rules Governning Life Insurance and Annuity Replacement is to
reduce the opportunity for misrepresentation and incomplete disclosure
The statement amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholder is called
reserves
Example of rebating?
returning a portion of a premium as inducement to purchace life insurance
Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life poicy on an applicant?
risk classification
A group-owned insurance company that is formed to assume the spread the liability risks of its members is know as a
risk retention group
All of the following actions are considered rebating EXCEPT sharing commissions with other licensed and appointed agent refunding part of the premium as an inducement for purchase offering special dividends offering anything of value not specified in the policy
sharing commissions with other licensed and appointed agent
An immediate annuity consist of a
single premium
The most important factor to consider when determining whether to convert term insurance at the insured's original age or the insured's attained age is the cost the health of the insured the amount of coverage being converted who will be the beneficiary
the cost
A noncontribtory group term life plan is characterized by
the entire cost of the plan is paid by the employer
Georgia's Replacement Rules applies to all of the following situations EXCEPT existing insurance is to be lapsed, forfeited, or surrendered existing insurance is converted to Reduce Paid-Up or Extended Term insurance the cash value of an existing policy is subject to extensive borrowing the existing policy is kept in force and an additional policy is purchased from the same company
the existing policy is kept in force and an additional policy is purchased from the same company
In order for coverage on a non medical insurance application to take effect the same day, the producer must collect a signed application and
the initial premium
The Considration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and the initial premium agreeing to a physical examination delivery of policy disclosure of any medical conditions
the initial premium
A temporary license is issued by the Commissioner to allow
the personal representation of a deceased agent to provide services to existing policy owners
The consideration clause of an insurance contract includes
the schedule and amount of premium payments
Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is
twisting
Insurance agent licenses normally must be renewwd every
two years
All of these are concidered to be a benefit under SS EXCEPT for survivorship unemployment disability retirement
unemployment
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Georgia insurance laws covering rebating false advertisement discrimination unfair trade practice
unfair trade practice
A term life insurance policy matures upon endowment of the contract upon death of the insured whe the cash value equals the death benefit upon the insured's death during the term of the policy
upon the insured's death during the term of the policy
Each agent who initiates an application for life insurance or annuity for replacement of an existing policy shall submit which of the following as a part of the application? A signed statement by the applicant regarding the replacement A signed replacement statement from the insurance company being replaced A detailed comparison of existing coverage and proposed coverage A signed replacement statement from replacing insurance company
A signed statement by the applicant regarding the replacement
Which provision is NOT a requirement in a group life policy?
Accidental
P is blinded in an industrial accident. Which provision of his insurance policy will pay a stated benefit amount? Accelerated Benefit provision Entire Contract Accidental Death and Dismemberment clause Consideration clause
Accidental Death and Dismemberment clause
Which of the following parties must provide an insured with proper disclosure concerning the replacement of an insurance company?
Agent
Which of the following is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
All proceeds are income tax free in the year that they are received.
What is suicide provision designed to do?
Allows the insurer the option to pay a death benefit in the event of suicide
The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due
Amount of premium payments and when they are due
A long term care rider in a life insurance policy may trigger a benefit in the event of which of the following? Critical illness Terminal illness Inability of the insured to perform more than 2 activities of dailey living (ADL's) Double the face amount should the insured be confined to a nursing home
Inability of the insured to perform more than 2 activities of dailey living (ADL's)
At the age of 45, an individual withdraws $50,000 from his qualified Profit Sharing plan and then deposits this amount into pesonal saving account. This action would result in
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
A renewable Term Policy is renewable at the option of the... Owner Company Insured Assignee
Insured
In a key employee life insurance policy, the third party owner can be all the followinf EXCEPT? Applicant Owner Payor Insured
Insured
All of these statements about the waiver of premium provision are correct EXCEPT A waiting period must pass before becoming eligible for benefits Waiver of the premium is available on both permanent and term insurance policies Insured must be eligible for SS Disability for claim to be accepted Insured must be totally disabled to qualify
Insured must be eligible for SS disablity for claim to be accepted.
M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain $70,000 throughout the life of the policy. The type of policy that M has purchased is
Modified Premium Life
Which of the following statements is Correct about accelerated death benefits? The full face amount is available as an accelerated benefit Those on Social Security disability automatically qualify for this benefit This provision is usually provide with an increase in premium Must have a terminal illness to qualify
Must have a terminal illness to qualify
T took out a $50,000 life insurance policy with an Accident Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
Nothing
Which of the following documents must an agent submit to the replacing insuance company during the replacement of an existing life insurance policy?
Notice to existing and replacing insurers of intention to replace.
In Georgia, an insurance company must do which of the following to terminate an agent's appointment?
Notify the Commissioner with in 30 days
What benefit does the Payor clause on aJuvenile Life policy provide?
Premiums are waived if the payor become disabled.
M had an annual life insurance premium payment due January 1. She died January 10 with out making the premium payment. What action did the insurer take?
Pay face amount and minus the past due premium.
Which of these statements concerning an individual Sraight Life annuity is accurate? Life expectancy of the annuitant is not a factor The payments are received tax-free Only available to employees of nonprififchaitables, education, and religious organizations Payments are made to an annuitant for life
Payments are made to an annuitant for life
Which of the following provisions guarantees that premiums will be waived if a juvinile Life insurance policy owner becomes disabled? Family Maintenance clause Payor clause Assignment provision Automatic Premium Loan provision
Payor clause
The underwriting process involves all of these EXCEPT for Credit Report Policy Loan Risk Classification Application
Policy Loan
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the gauranteed cash value is called the Policy Loan provision Automatic Premium Loan provision Accelerated Benefits provision Consideration clause
Policy Loan provision
On a life insurance policy, who is qualified to change the beneficiary designation?
Policyowner
A policyowner is able to choose the frequency of premium payments through what policy features?
Premium mode
D was actively serving iin the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole Life policy contains a War Exclusion clause. How much will D's beneficiary's receive?
The full death benefit. $100,000 face value
Which of the following statement regarding a Tax Sheltered Annuity (TSA) is INCORRECT? The income from the TSA is received income tax-free The amount contributed is deducted from taxable income The interest earning are tax deferred A tax-sheltered annuity is available to employees of non-profit organization
The income from the TSA is received income tax-free
A policy of adhesion can only be modified by whom?
The insurance company
Which of the following statements is a purpose of the Rules Governing Advertiisement of Life Insurance and Annuities? To provide an easy to read summary of the insurance advertising laguage for consumers To assure full disclosure to the public of all materials and relevant information To provide consumers with a comparison of the claim experience of Georgia insurance company To persuade consumers to purchase specific types of insurance
To assure full disclosure to the public of all materials and relevant information
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
Treaty, each party automatically accepts specific percentagesof the insur's business.
Life and health insurance policies are ______________.
Unilateral contracts
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?
Variable
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a select of investment options? Modified Whole Life Variable Life Adjustable Life Universal Life
Variable Life
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When producer delivers policy and collects initial premium
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
When is the face amount of a whole life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first.
Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the risk
both an insurance and securities product
Variable whole Life Insurance can be described as
both an insurance and securities product
Using an existing life insurance policy's cash value to purchase another policy with the same insurer for the sole purpose of earning additional commissions is called
churning
Who elects the governing body of a mutual insurance company?
policyholders
Consumer reports requested by an underwriter during the aplication process of a life insurance policy can be used to determine
probability of making a timely premium payment
