license exam questions
A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?
60; A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within 60 days after the due date of the premium in default.
How many consecutive months of coverage must LTC insurance providers provide?
12; LTC policies provide coverage for individuals who are not longer able to live an independent lifestyle and require living assistance at home or in a nursing home home facility
A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?
15 days; A probationary period refers to the amount of time that coverage is not available for illness-related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when benefits will start being paid. In this case, the individual is considered disabled for 45 days, and the benefits will start to be paid after 30 days. So, the client will receive benefits for 15 days.
What is the maximum period of time a temporary license can be in force?
15 months; A temporary license is good for 6 months and can be renewed at 3 month intervals for a maximum of 15 months.
An insured receives an annual life insurance dividend check. Which term best describes this arrangement?
Cash option; The cash option allows an insurer to send the policyholder an annual, nontaxable dividend check.
What type of hospital policy pays a fixed amount each day that the insured is in a hospital?
Indemnity
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today; Rebating is defined as offering any inducement in the sale of insurance products that is not specified in the policy, including money, reductions in commissions, promises, and personal services. Both the offer and acceptance of a rebate are illegal.
If the Commissioner is not able to serve due to disability, resignation, or death, which of the following will happen?
The Chief Deputy Commissioner will serve as the Commissioner until the next election.
For how long are insurers required to maintain records pertaining to life insurance solicitation?
3 years; The file must contain one copy of each authorized form for a period of 3 years following the date of its last authorized use.
If an insured's cognitive impairment results in the lapse of a long-term care policy, how long from the policy lapse may the insured request reinstatement?
5 months; If a LTC policy lapses as a result of the policyowner having a cognitive impairment or loss of functional capacity, the policyowner may request reinstatement within 5 months of the lapse.
For how long is an insurance company allowed to defer policy loan requests?
6 months; Insurers writing variable life insurance policies may defer loan requests for up to 6 months. This excludes loan requests used to pay policy premiums.
A hospital indemnity policy will pay...
A benefit for each day the insured is in a hospital; Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined to the hospital.
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
Applicant; any changes made to the application must be initialed by the applicant.
An insurance producer just sold an insurance policy to his sister. What kind of business is this?
Controlled; When producers sell policies on themselves, their family, or their coworkers, this is called controlled business. Controlled business is legal as long as premiums paid on these policies do not exceed the premiums that the producer writes for other business.
A waiver of premium provision may be included with which kind of health insurance policy?
Disability income; A waiver of premium rider generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability.
In a disability policy, the probationary period refers to the time...
During which illness-related disabilities are excluded from coverage; The probationary period limits coverage on new policies for certain illness-related conditions.
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day...
Elimination period; The elimination period is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of providing coverage and eliminates the filing of many claims.
How many pints of blood will be paid for by Medicare Supplement core benefits?
First 3; Medicare supplemental policies cover costs of deductibles and coinsurance for Parts A and B. Since Medicare will not pay for the first 3 pints of blood, a Medicare Supplement plan will cover that. This is considered to be a core benefit.
Which of the following entities has the authority to make changes to an insurance policy?
Insurer's executive officer; Only an executive officer of the company, not an agent, has authority to make any changes to the policy. The insurer must have the insured's written agreement to the change.
All of the following are Nonforfeiture options EXCEPT...
Interest only; Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option.
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee; A qualified plan is approved by the IRS, which then gives both the employer and employee benefits in deductibility of contributions and tax deferral of growth.
Which is true regarding HMO coverage?
It is divided into geographic territories; HMOs offer services to those living within specific geographic boundaries that may be formed by county lines or city limits. If one lives within the boundaries, they are eligible to belong to the HMO, but if they do not live within the boundaries, they are ineligible.
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT...
Loss of one eye; The definition of a presumptive disability varies by company, but generally includes a total loss of sight, speech, hearing or the use of any two limbs.
Which of the following is true regarding Medicare Supplement policies?
Medicare Supplement policies that are advertised or marketed in this state may not contain limitations or exclusions of coverage, except those permitted by pre-existing condition clauses, that are more restrictive than Medicare. Policies may not use waivers to exclude, limit, or reduce coverage or benefits for specifically named or described pre-existing diseases or conditions.
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called...
Nonoccupational coverage; Most group disability income is nonoccupational coverage, covering insureds only off the job. The employer carries workers compensation for on the job injuries or sickness.
If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare?
Nothing; Nothing needs to be done in this case. Medicare Part A and B will automatically be effective the month you turn 65.
All of the following statements regarding continuing education requirements in this state are true EXCEPT...
Producers may repeat the same courses to meet the required CE hours for a licensing period.
A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact business in it. This is known as a...
Reciprocity agreement; A nonresident agent may receive a nonresident's license if he or she resides in a state that awards nonresident agent licenses to residents of Georgia on the same basis.
The limits of a health reimbursement account are set by...
The employer; Health Reimbursement Accounts have no statutory limit. Limits may be set by employer, and rollover at the end of the year based on employer discretion.
Which of the following statements is correct regarding a whole life policy?
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.
The paid-up addition options uses the dividend...
To purchase a smaller amount of the same type of insurance as the original policy; The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees...
To renew the policy until the insured has reached age 65; The guaranteed renewable provision is similar to the noncancellable provision, with the exception that the insurer can increase the policy premium on the policy anniversary date. As with the noncancellable policy, coverage is generally not renewable beyond the insured's age 65.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse or switch policies from one to another?
Twisting; "Twisting" is a misrepresentation that persuades an insured/owner, to his or her detriment, to cancel, lapse, or switch policies from one to another.
All of the following benefits are available under Social Security EXCEPT:
Welfare benefits
When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?
When the expenses exceed a certain percentage of the insured's adjusted gross income; In either medical expense insurance policies or long-term care insurance policies, unreimbursed medical expenses paid for the insured, the insured's spouse and dependents may be claimed as deductions if the expenses exceed a certain percentage of the insured's adjusted gross income.
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is
A nonqualified annuity plan; Nonqualified plans are a perfectly legal way for selected employees to receive certain types of benefits. Before-tax corporate dollars can be used for these plans, and they are not subject to government standards. Because of this, however, nonqualified plans contributions are not tax-deductible, unlike with qualified plans.
An agent license can be issued...
Only to individuals; Licenses can be issued only to individuals (natural persons). The term "person" includes business entities.
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability; Presumptive disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement or lack of involvement of...
Replacement; Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing whether or not replacement is involved.
The period of time immediately following a disability during which benefits are not payable is...
The elimination period; The elimination period is a waiting period, expressed in days, not dollars, imposed on the insured from the onset of disability until benefit payments commence.
