Study Set 2

The combination of Whole Life and _________ Term insurance is referred to as a Family Income Policy

Decreasing

How are surrender charges deducted in a life policy with a rear-end loaded provision?

Deducted when the policy is discontinued

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 federal income tax withholding

Why would the commissioner examine the records of an insurance company?

To determine the solvency of the insurer

A Variable Annuity has which of the following characteristics?

Underlying equity investments

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...

Universal Life

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

Upon satisfying the elimination period requirement

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

Noncancellable

Which statement is TRUE in regards to a policy loan?

Past-due interest on a policy loan is added to the total debt

In Georgia, most life insurance policies have a contest ability period of

2 years

Q is severely disabled in an automobile accident and becomes totally disables. How many months must Q be disabled before being able to file for Social Security disability benefits?

5

Which provision is NOT a requirement in a group life policy?

Accidental

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

Georgia Life and Health Insurance Guaranty Association

K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT

K will forfeit the right to use the automatic loan provision upon reinstatement

Which of the following items are regulated by the Rules Governing Advertisement of Life Insurance and Annuities?

Prepared sales presentations used by insurance agents

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

S&P 500

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the the:

Waiting Period

The Life and Health Insurance Guaranty Association is

funded by admitted insurance companies through assessments

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's:

gross income at the time of purchase

Dividends paid from a life insurance policy are

issued by the insurer

Which type of plan normally includes hospice benefits

managed care plan

Under a Guaranteed Renewable health insurance policy, the insurer...

may cancel the policy for nonpayment only

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

none

At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a person savings account. This action would result in:

penaltyIncome tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan

Cash surrendering an existing whole life policy and purchasing a new whole life policy is referred to as a(n)

replacement