Insurance Exam
The Guaranty Fund provides coverage for the cash value under a life insurance policy up to:
$100,000
Licensees must keep copies of all records for:
5 years.
An applicant has an insurable interest in each of the following situations EXCEPT
A parent in his or her child's care provider
Which of the following statements regarding AD&D Insurance is CORRECT?
AD&D policies cover accidents only, NOT sickness
Who can alter an insurance policy?
An executive officer of the company.
Which of the following statements is true concerning the agency relationship?
An insurance broker owes a fiduciary duty to the client.
The Simultaneous Death Act applies to the simultaneous death of the Insured and the:
Beneficiary
Under Social Security, a worker that is fully insured would be eligible for each of the following benefits EXCEPT:
Hospital benefits
A Georgia Medicare Supplement policy may duplicate what percentage of the coverage provided by a Medicare policy?
None.
The Fair Credit Reporting Act prevents the Insurer from:
Obtaining a consumer investigative report without notifying the applicant.
Molly is injured in a work-related accident. Molly is considering filing a negligence lawsuit against her employer
Work Comp is Molly's sole remedy - she cannot win a lawsuit against the employer.
An Insurer may pay commissions directly to the agency rather than to the agents only if:
each person who sells insurance is a licensed agent.
Chad owns a $100,000 Life policy with a Double Indemnity Rider. He accidentally runs into a boat and is killed instantly. How much will the Insurer pay
$200,000
A client may pay a fee to an insurance agent in Georgia as long as the fee has a maximum de minimis value of:
$45
Carl owns a $250,000 Life policy with a Triple Indemnity Rider. While running a marathon he suffers a fatal heart attack. How much will the Insurer pay?
250,000
If an agent is subject to criminal arrest, the Commissioner must be notified within:
30 days.
To be fully insured under OASDI rules, one must have been employed for at least
40 quarters
Before becoming a licensed counselor, an applicant must have had how many years of insurance experience?
5
n order to qualify for AD&D coverage, the accident must directly cause death within how many days
90 Days
An employee covered under an employer group policy will receive which written document that outlines coverage and provides evidence that group coverage is in effect?
A certificate of insurance
With group insurance, the Insured receives
A certificate of insurance
Who established the MIB (which used to be called the Medical Information Bureau)?
A group of insurance companies
Under AD&D Insurance, what does the capital sum represent
A lump sum, half of the face value, paid for accidental dismemberment of a primary body part.
Paul has a Group Health plan at work. His employer pays the whole premium and Paul does not have to pay anything for the coverage. What is this type of plan called?
A noncontributory plan
John and Carol are a married couple in their early twenties. John has worked full time at the local factory for 3 years. It is his first job. John is killed in a tragic golfing accident. Carol is eligible for which of the following:
A single lump sum survivor benefit of $255.
Who sells insurance to a client and owes a fiduciary duty to an insurance company?
Agent
Offer plus acceptance equals?
Agreement.
Under an insurance policy, either the Insurer or the Insured may receive disproportionate payment under the concept of:
Aleatory
Each of the following statements regarding MIB (Medical Information Bureau) is correct EXCEPT?
An applicant's MIB report may show the amount of insurance for which the applicant previously applied.
Which of the following statements is true concerning the producer's agency relationship?
An insurance producer owes a fiduciary duty to an insurance company.
Ms. L applies for life insurance but does not make an initial premium payment. Her actions constitute
An invitation to negotiate for the purchase of life insurance
The premium mode which results in the greatest cost savings over the life of the policy is:
Annual Premium
Which of the following premium modes will result in the least total dollar outlay over the life of the policy?
Annually
Underwriting involves each of the following activities EXCEPT
Carefully investing premium dollars to achieve returns
A temporary agent may:
Continue existing business but not sell new policies.
To determine the applicant's financial standing, an underwriter would most likely use a/an
Credit report
An AD&D Rider will cover which of the following
Death while on a regularly scheduled flight
The 10-Day Free Look provision is initiated by the:
Delivery Receipt
Each of the following is a factor in calculating gross premium EXCEPT:
Dividends
Each of the following statements regarding noncontributory plans is correct EXCEPT?
Each employee must be given the right to select individual benefit levels.
Each of the following statements regarding the Fair Credit Reporting Act is true EXCEPT?
FCRA requires Insurers to notify an applicant if a Consumer Investigative Report will be used.
A conditional receipt accomplishes each of the following EXCEPT
Guarantees that the permanent policy will be issued
Amy accidentally provided false information on an application. Before the policy was issued, she notified the agent of the mistake. What is the agent's proper course of action?
Have Amy correct the mistake and initial the change.
What does a Multiple Indemnity Rider do
Increases the death benefit by a specified multiple if the death occurs as the direct result of an accident.
A risk management technique that transfers risk is:
Insurance.
An agent's appointment letter may be revoked by the
Insurer.
An applicant submits an application without the first premium payment. This constitutes a/an?
Invitation
The Law of Large Numbers
Is used to determine premiums based on historical loss figures
Each of the following statements regarding insurance is true EXCEPT
It involves the Insured paying a premium to transfer all risk to the insurance company
Which of the following statements regarding an AD&D policy is CORRECT?
It provides a death benefit, so the Insured should name a beneficiary.
Which of the following statements regarding MIB is CORRECT?
Medical information is supplied to MIB by the member insurance companies.
Molly changes her premium mode so that she makes her premium payments more frequently. Will this make her insurance more or less expensive each year?
More expensive
Medicare Supplement policies:
Must provide a 30 day Free Look provision.
Which type of insurance company is owned by its policyholders
Mutual Company
Jack named his wife Nancy as the beneficiary under his life policy with their daughter Cassie as the contingent beneficiary. Jack's policy contained a Common Disaster Provision. Jack and Nancy were both in an accident. Jack died immediately and Nancy died 95 days later as a result of injuries suffered in the accident. The Insurer will pay the benefits under Jack's policy to which of the following?
Nancy
The creation of a contract requires each of the following EXCEPT?
Negotiation
The creation of a contract requires each of the following elements EXCEPT
Negotiation and notarization
Under Georgia's Guaranty Fund system, if a work comp Insurer is insolvent, claims will be covered up to a maximum of:
No Limit
Unilateral means:
Only one party to the contract makes a legally enforceable promise.
A Replacing Agent must give an Insured copies of each of the following EXCEPT:
Policy Summary for the existing policy
The purpose of the Long Term Care Insurance Partnership is to encourage people to
Preserve a portion of their personal assets and at the same time be eligible for Medicaid long term care coverage.
The time period one must be employed before becoming eligible for group Disability Income or Health Insurance is known as the:
Probationary period
Which of the following statements regarding a single employer group plan for a new business is CORRECT
Proof of insurability will not be required and the Insurer will use "community" rating.
The purpose of the Fair Credit Reporting Act is to:
Provide fair and accurate consumer credit reporting.
The purpose of the Replacement rules is to:
Provide more information for Insureds when replacing policies.
An applicant was denied insurance based on information contained in his or her credit report. The applicant may:
Receive the name and address of the consumer reporting agency from the Insurer.
Under the Fair Credit Reporting Act, the Insured is entitled to
Receive the name and address of the reporting agency from the Insurer
The Fair Credit Reporting Act:
Requires Insurers to provide the applicant with copies of all reports.
Each of the following statements regarding Social Security Retirement benefits is correct EXCEPT:
Retirement benefits will be reduced if the worker has retirement income from a company-sponsored retirement plan.
Sally wants to buy Life Insurance covering Mike. Which of the following statements is true?
Sally needs to have an insurable interest in Mike and obtain Mike's consent on the policy application.
Any action of the Commissioner may be appealed within 30 days to:
Superior Court of Fulton County.
A temporary license can be issued to the following
Surviving spouse.
Who issues a probationary license?
The Commissioner
A life insurance applicant gives consideration to the Insurer in return for?
The Insurer's promise to pay a claim.
Each of the following statements regarding the Fair Credit Reporting Act is correct EXCEPT?
The applicant must give consent before an Insurer can access any consumer reports
The Fair Credit Reporting Act entitles the applicant to review information obtained by:
The consumer reporting agency.
Jack and Nancy are both killed in a car accident. Jack has a Life policy that names Nancy as the primary beneficiary and their daughter, Cassie as the contingent beneficiary. Under the Common Disaster Clause, who will receive the death benefit if Nancy lived 5 minutes longer than Jack?
The daughter (Cassie).
The primary source of moral character information is:
The inspection report
Assume that no conditional receipt is used. If the premium has been paid and the medical exam taken, a policy's coverage becomes effective when?
The policy is physically delivered to the applicant.
Jack named Nancy as his Life policy beneficiary. Nancy dies but Jack forgot to name another beneficiary. Several years later, Jack died but Nancy was still named as beneficiary. What will happen?
The policy proceeds will be paid to Jack's estate
A contingent beneficiary will receive the death benefit only if
The primary beneficiary dies before the Insured
Which of the following is required for a worker to be eligible for disability benefits under Social Security
The worker must have fully insured status
A business insures its key executive. This is an example of?
Third Party Ownership
The fact that the Insurer makes a promise but the Insured does not make a promise relates to the concept of
Unilateral
Mr. Z submits an application with premium to his life insurance producer. The producer gives Mr. Z a conditional receipt . Prior to the time Mr. Z takes a medical examination, he is considered to be
Uninsured
Abe's insurance company issued a policy even though Abe's application was incomplete. Which legal concept will require the insurance company to provide coverage?
Waiver, also known as estoppel
The Commissioner may suspend or revoke an Agent's license for all of the following EXCEPT:
accepting a $45 fee from a client.
If only 5% of a company's employees choose insurance coverage, this presents what type of issue?
an adverse selection issue
Each of the following business entities may obtain an agent's license EXCEPT:
an unlicensed corporate officer.
The Georgia Commissioner of Insurance is:
elected.
The purpose of the Shopper's Guide provided to applicants for Long Term Care insurance is to:
familiarize the applicant with the basics of Long Term Care insurance.
Each of the following groups is eligible for group life or health insurance EXCEPT
family groups
The Commissioner may:
fine a Producer $10,000 for violating a Cease and Desist order
A Temporary License:
may be renewed a maximum of three times
The Georgia Insurance Commissioner can do each of the following EXCEPT
modify state statutes
Under the Fair Credit Reporting Act, the Producer must inform the client of the rights regarding consumer investigative reports at the time:
of application.
The purpose of the Georgia Assignment System is to:
provide health coverage for persons unable to purchase coverage in the voluntary market.
Each of the following may be a reason for denying a policy EXCEPT:
sex (gender)
Each of the following is true regarding a Stranger Originated Life Insurance (STOLI or IOLI) transaction EXCEPT:
they are used to prevent money laundering by criminals and terrorists.
