Missed Questions GLES 1
The maximum penalty that may be assessed for a single nonwillful violation of the Insurance Code is
$1,000
Insurer must keep files of all advertisement used in Georgia for the minimum of how many years
4
For how long is an insurance company allowed to defer policy loan requests?
6 months
All of the following benefits are available under Social Security EXCEPT A) Wellfare benefits B) Disability benefits C) Old- age and retirement benefits D) Death benefits
A) Wellfare beenefits
As defined by the Georgia insurance Code, all of the following entities may have an insurable interest in the insured EXCEPT A) Charitable Institution B) Insurer C) A corporation in which the insured holds a large percentage of shares D) Trustee
B) Insurer - Insurer does not have insurable interest in the insured
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT A)Obtain appropriate signatures on the application for insurance B) Help prevent adverse selection C) Issues the policy that is requested D) Solicit business that will fall within the insurer's underwriting guidelines
C) Issues the policy that is requested
An insured's long -term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long term care facility only charged $100 per day. How much will the insurance company pay ?
$120 a day
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Acts?
$2,500
An insured purchased a 15 - year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. How much will the beneficiary receive from the policy ?
$200,000 - The beneficiary will most likely receive twice the face value of the policy, since the insured's fatal injuries were caused by an accident and he died within the 90 days benefit limited stipulated in most policies
An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance decline and the cash fell to $10,000. If the insured dies, how much will be paid out ?
$50,000 - The cash value of a variable life insurance policy is not guaranteed. However, even if investments devalue significantly, they cannot be lower than the initial guaranteed benefit amount
What is the maximum period of time a temporary license can be in force?
15 months - a temporary license is valid for 6 months and can be renewed at 3- month intervals for a maximum of 15 months
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained ?
3 days
For how long are insurers required to maintain records pertaining to life insurance solicitation ?
3 years
An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held?
30 days
If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change?
30 days
What is the number of credits required for fully insured status for Social Security disability benefits ?
40
Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period?
5 years
authorized insurance companies are examined by the Commissioner at least once every
5 years
The minimum number of credits required for partially insured status for Social Security disability benefits is
6 credits
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
What is the maximum allowed rate of interest on policy loans from life insurance ?
8%
The term " illustration " in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy. (The term "illustration" means a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years.)
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT A) Disputes regarding consumer report information B) Tax delinquencies C) Failure to pay off a loan D) Late payments
A) Disputes regarding consumer report information - As defined. by the Act, negative information includes information regarding a customer's deliquiencies, late payment, insolvency or any other form of default. Customer disputes are not considered negative informations, and , in fact , must be included in consumers reports
All of the following about the applicant is identified in the General information section of a life insurance application except A) Education B) Occupation C) Gender D) Age
A) Education
What is the benefit of choosing extended term as a nonforfeiture option ? A) It has the highest amount of insurance protection B) It matures at age 100 C) It cab be converted to a fixed annuity D) It allows for coverage to continuue beyond maturity date
A) It has the highest amount of insurance protection
Which of the following is NOT true regarding a Certificate of Authority A) It is issued to Group insurance participants B) It may be necessary for transacting business in a specific state C) It is equivalent to an insurance license D) It is issued by the state department of insurance
A) It is issued to Group insurance participants
Which of the following is True regarding variable annuities ? A) The annuitant assumes the risks on investment B) The funds are invested in the company's general account C) The company guarantees a minimum interest rate
A) The annuitant assumes the risks on investment - The payments that the annuitant invests into he variable annuity are invested in the insurer's separate account. The separate account under many annuities provides the annuitant with a dozen or more investment option ranging from " money market funds" to "growth stock funds" to "precious metals funds". Therefore, the annuitant assumes the risk of the investment
Which is NOT true about beneficiary designation ? A) The beneficiary must have insurable interest in the insured B) The beneficiary may be a natural person C) The policy does not have a beneficiary named in order to be valid D) Trust can be valid beneficiaries
A) The beneficiary must have insurable interest in the insured
An agent license can be issued A) only to individuals B) to individual and partnership C) any person approved by the Commissioner D) to a natural person or a corporation
A) only to individuals
what is the purpose of a suicide provision within a life insurance policy A) to protect the insurer from persons who purchase life insurance with the intention of committing suicide B) to limit the insurer's liability after the 2 year waiting period C) to protect the policyowner D) to defer the policy owner from committing suicide
A) to protect the insurer from persons who purchase life insurance with the intention of committing suicide
when a policy is replaced, replacing insurers must maintain a replacement register regarding that policy until the conclusion of the next regular examination by the Insurance Department or for A) 3 years B) 2 years C) 4 years D) 5 years
A. 3 years -When a policy is to be replaced insurers must maintain copies of the replacement notice, all required written communications, the applicant's signed statement regarding replacement and a a replacement register in their home office for at least 3 years, or until the conclusion of the next regular examination by the Insurance Department, whichever is later
Insurance policies are not drawn up through negoiations, and an insured has little to say about it provision . What contract characteristic does htis describe?
Adhesion
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company ?
Aleatory - An insurance contact is an aleatory contract in that requires a relatively small amount of premium for a large risk
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory: -an aleatory contract means unequal amounts are exchanged between payments and benefits
What protects the insured from an unintentional policy lapse due to a nonpayment of premium
Automatic premium loan - automatic premium loan provision is not required,,but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of the premium
Which of the following will NOT be considered unfair discrimination by insurers ? A) Assigning different risk classification to applicants based on gender identity B) Discriminating in benefits and coverages based on the insured's habits and lifestyle C)Cancelling individual coverage based on the insured's marital status
B) Discriminating in benefits and coverages based on the insured's habits and lifestyle
At the time of insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to provide insurability. The rider is called A) Cost of living B) Guranateed insurability C) Wavier of cost of insurance D) Accelerated benefits
B) Guranteed insurability - is a rider that is included at the time of applicatin (or can be added at a later date) which allows the insured to increase the amount of insurance wihtout proving evidence of insurability
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid ? A) Consideration clause B) Insuring clause C) Beneficiary clause D) Entire contract clause
B) Insuring clause -The insuring clause states that insurer agrees to provide life insurance for the named insured which will be paid to a designated beneficiary when proof of loss is received by the insurer. It states the party to be covered by the policy and names of the beneficiary who will receive the policy proceeds in the event of the insured's death. If no beneficiary is named, the policy proceeds will be paid to the insured's estate
Which of the following is correct conering the taxation of permiums in a key- person life insurance policy ? A) Premiums are tax deductible as a business expense B) Premiums are not tax deductible as a business expense C) Premiums are taxable to the employee D) Premiums are tax deductible by the key employee
B) Premiums are not tax deductible as a business expense
All of the following are true regarding rebates EXCEPT A) Rebating can be anything of monetary value given as an inducement to purchase insurance B) Rebates are allowed if it is in the interest of the client C) Rebates are only allowed if specifically staed in the policy D) Dividends are not concered to be rebates
B) Rebates are allowed if it is in the best interest of the client Rebate is an illegal act which involves returning something of value to the client as an inducemet to buy, such as the commission.
All of the following are unfair claims Settlement practices EXCEPT A) Failing to adopt and implement reasonable standards for settling claims B) Suggesting negotiation in settling the claim C) Reusing to pay claims without conducting a reasonable investigation D) failing to acknowledge pertinent communication pertaining to a claim
B) Suggesting negotiation in settling the claim -When settling claims, negotiation can come into play
all of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT A) It is considered a nonquailifed employee benefit B) The policy is owned by the company C) The employer pays a bonus to a selected employee to fund the policy D) Any type of insurance policy may be used
B) The policy is owned by the company The employee is the owner of the policy
Which of the following is NOT an example of a business use of Life Insurance ? A) Buy -sell Funding B) Worker's Compensation C) Executive Bonuses D) Key person
B) Worker's Compensation - Workers Compensation is a benefit payable when a worker is injured by a work - related injury, regardless of fault or negligence. It is not considered a business use of insurance .
What characteristic makes whole life policy permanent protection A) living benefits B) coverage until death or age 100 C) Guaranteed death benefits D) Guaranteed level premium
B) coverage until death or age 100 Whole Life policies are referred to as permanent protection, since as long as the premium is paid coverage will continue for the life of the insured or till the insured's age 100
Which of the following is NOT typically excluded from life policies ? A) Self inflicted death B) Death due to war or miliatry service C) Death due to plane crash for a fare- paying passenger D) Death that occurs while a person is committing a felony
C) Death due to plane crash for a fare- paying passenger
All of the following are business uses of life insurance EXCEPT A) Funding against financial loss caused by the death of a key person B) Funding business continuation agareements C) Funding against company's general financial loss D) Compensating executives
C) Funding against company's general financial loss
An insured purchased a Life insurance policy. The agent told him that depending upon the company's investment and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an A) Annual Renewable Term B) Adjustable Life C) Interest - sensitive Whole Life D) Credit Life
C) Interest - sensitive Whole Life -b/c the cash values are generated by investment, interest rates will affect the amount of the cash value
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is incorrect? A) SEPs have a higher tax deductible contribution limit than an IRA B) Employers contributions are not included in the employers gross income C) SEPs are suitable for large companies D) SEPSs allow the employer to make annual tax deductible contribution up to 25% of an employee's earned income
C) SEPs are suitable for large companies
All of the following would be eligible to establish a Keogh retirement plan EXCEPT A) A sole proprietor of film development store with no employees B) a sole proprietor of a service station who employs four employees C) The president and employee of a family corporation D) A hair dresser who operates her business at her house
C) The president and employee of a family corporation - Keogh plans are for self employed individuals and their employees
What is the clasue that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident ?
Common disaster clause - States that when an insured and beneficiary die in a common accident , and the beneficiary dies before or withing a specific period of time after the insured, the insurer will procees as if the insred outlived the beneficary
A legally acceptable attempt by any existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called
Conversation
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy. -A convertible term policy has a provision that allows the policyowner to convert to permanent insurance.
According to the entire contract provision, what document must be made part of the insurance policy ?
Copy of the original application
What is another name for interest- sensative whole life insurance
Current assumption life
Group life insurance is a single policy written to provide coverage to members of a group. which of the following statements concerning group lie is Correct? A) Premiums are determined by age , occupation and individual underwriting B) Coverage can't be converted when an individual leaves the group C) Each member covered receives a policy D) 100% participation of members is required in non contributory plans
D) 100% participation of members is required in non contributory plans If the employers pay all of the premium, then all employees must be included
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A) An offer of employment B) An offerr to share in commissions generated by the sale C) Stocks, securitis , or bonds D) Dividends from a mutal insurer
D) Dividends from a mutal insurer
Which of the following applicants would NOT qualify for Keogh Plans? A) Someone who works for a self- employed individual B) Someone who has been employed for more than 12 months C) Someone who is over 25 years of age D) Someone how works 400 hours per year
D) Someone how works 400 hours per year - a person must have worked at least 1,000 hours per year to be eligible for a Keogh Plan
The Commissioner of Insurance is A) The president of the NAIC B) The national head of all state insurance departments C) Used as a synonym for the department of insurance D) The chief officer of the Department of Insurance
D) The chief officer of the Department of Insurance A department of Insurance has been est in GA and the Commissioner of Insurance is the chief officer of the Department . The Commissioner is elected to office for a term of 4 years. The purpose and function of the Department and the duties and powers of the Commissioner are to carry out and enforce the provisions of the Insurance Code
All of the following atre true of key person insurance EXCEPT A) The employer is the owner, payor and beneficiary of the policy B) The key employee is the insured C) There is nonlimitation on the number of key employee plans in force at any one time D) The plan iss funded by permanent insurance only
D) The plan is funded by permanent insurance only
Which of the following best defines target premium in a universal life policy ? A) The maximum amount the policy owner may pay on a policy B) The corridor of insurance C) The minimum amount to make sure the policy is annually renewable D) The recommended amount to keep the policy in force throughout its lifetime
D) The recommended amount to keep the policy in force throughout its lifetime _ the target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime
Which of the following is NOT a term for the period of time during which the annuitant or the beneficary receives income? A) Liquidation period B) Pay - out period C) Annuitization period D) Depreciation period
D). Depreciation period
Insurers must screen all marketing plans to ensure that an advertisement does NOT use as the name of any kind of an annuity any phrase that
Does not include the word "annunity" unless accompanied by other clear language indicating it is an annuity
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
Erase the incorrect answer and record the correct answer. -An agent should not use white-out, erase or obliterate any answers given to a question on an application. It could prevent an insurer from contesting the application, should it be necessary.
an insurance company has published a broachure that inaccurately portrays the advangtages of a particular insurance policy. What is this an example of ?
False advertising
Life insurance death proceeds are
Generally not taxed as income
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die most contracts stipulate that the surviving partner will recieve a reduced payment after the other dies, although some will continue to pay the same amount. There is no guarantee that all the life insurance proceeds will be paid out
A Return of Premium term life policy is written as what type of term coverage
Increasing - Return of premium (ROP) life insurance is an increasing term insurance policy that pays additional death benefit to the beneficiary equal to the amount of the premiums paid
What is the function of a Cerificate of Authority ?
It allows an insurer to transact insurance in Georgia
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate - While equality indexed annuities ern higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate
Which of the following statements is TRUE about a policy assignment ?
It transfers rights of ownership from the owner to another person The policy owner may assign a part of the policy (collateral assignment) or the entire policy (absolute assignment )
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased. - The premium will remain level during the entire level premium term policy renews at the end of the term, the premium will be based on the insured's attained age at the time of renewal
An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do ?
Join during the open enrollment period
Insurance is a contact by which one seeks to protect another from
Loss
In a settlement option is not chosen by the policy-owner or the beneficiary, which option be used ?
Lump sum - Upon the death of the insured, or endowment, the contract is designed to pay the proceeds in cash, called a lump sum,unless the recipient chooses an optional made of settlement
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual -Funds not paid out after paying cliams and other operating costs are returned tothep olicowners in the form of a dividend
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider: usually term insurance, with the right to convert to permanent insurance; useful in providing insurance for more than one family member.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is dicovered that he is actually 45 years old, and not 43 , as stated on the application. What willt the company do ?
Pay a reduced death benefit
A propective insured receives a condition receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issues the policy - the conditional receipt says that coverage will be effective either on the dateof the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk and policy is issues exactly as applied for
Who might receive dividents from a mutural insurer?
Policyholders
An insured died by suicide one year after the life insurance policy was issued. The insurer will
Refund the premium paid - If the insured dies by suicide within 2 years follwing the policy effective date, the insurer's liability is limited to a refund premium
In the Commissioner is not able to serve due to disability, resignation, or death what will happen until the next election ?
The Chief Deputy Commissioner will serve as the Commissioner until the next election
Which of the followin entitles is responsible for determining whether an advertisement might mislead or deceive a person of average education and intelligence?
The Commissioner
Upon the death of the insured, the primary beneficiary disovers that the insured chose the interest only settlement option. What does this mean ?
The beneficarry will only receive payments of the interest earned on the death benefit
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
The beneficiary - if a settlement option is not selected by the policy owner before the insured dies, then the beneficiary can choose the option
If the annuitant dies before the annuitization period starts, who will receive the annuity benefits
The beneficiary - if the annuitant dies during the accumulation period, the beneficiary receives benefits from the annuity: either the amount paid into the plan or the cash value — whichever is greater
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller. If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at death will be reduced by that amount, plus the amount of earnings lost by the insurance company in interest income.
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary. —With the key-person coverage, the business (the employer) is the applicant, owner, premium payer, and beneficiary.
When a life insurance policy was issued, the policyowner designate a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would received the death benefits?
The insured contingent beneficiary
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to to the beneficiary - The employee usually has a period of 31 days after terminating from the group in order to exercise the conversion option. During this time, the employee is still covered under the original group policy
Under an extended term nonforfeiture option, the policy cash value is convered to
The same face amount as in the whole life policy
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. -When the reduced option is written as "joint and 2/3 survivor" the surviving beneficiary receives 2/3 of what was received when both beneficiaries were alive
How are contributions to a tax sheltered annunity treated with regards to taxation ?
They are not include as income for the employee , but are taxable upon distribution
What is the purpose of settlement options ?
They determine how death proceeds will be paid
What is the purpose of Life insurance Solicitation regulation?
To help consumers compare life insurance products in regard to their relative cost
Agents who persuade insured to cancel a policy in favor of another one when it might not be in the insured's best interest are guility of..
Twisting - twisting is a misrepresentation that persuades an insured or a policyowner to their detriment, to cancel, lapse or switch polices
What term would be permissble in describing a life insurance policy in company advertisement ?
Variable plan
In which of the follow cases will the insured be able to receive the full face amount from a whole life policy
if the insured lives to age 100 - Whole life insurance provides protection fo the entire lifetime of the insured. If the insured lives to the age of 100 the company pays the face amountof the polcyowner (usually the insured)
What is the major difference between a stock and a mutual company ?
ownership - Mutual companies are owned by policyholders, while stock companies are owned by stockholders
The Federal Fair Credit Reporting Act ....
regulates consumer reports
Who is responsible for the contents of life insurance advertising ?
the insurer
