Practice Exam missed questions

How soon from moving from one state to another must a nonresident producer file a change of address form with the Commissioner of Georgia?

30 days

Insurers must keep files of all advertisements used in Georgia for the minimum of how many years?

4 years

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public-school teachers is a

403(b) Plan (TSA).

An applicant whose license has lapsed during active military service will be granted a new license if an application is made within what time period after the lapse?

5 years

A producer whose license is revoked or whose application for a license is denied will be ineligible to reapply for any license for at least

5 years.

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

What is the maximum allowed rate of interest on policy loans from life insurance?

8%

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

Deferred

A producer must do all of the following when delivering a new policy to the insured EXCEPT

Disclose commissions earned from the sale of the policy.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer. because the policy specifies that they might be paid.

Which policy component decreases in decreasing term insurance?

Face amount

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option; allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.

Which of the following would NOT be considered a purpose of life insurance solicitation regulations in Georgia?

Help buyers choose most qualified insurance producers

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

Joint and survivor

Which of the following is TRUE regarding the premium in term policies?

The premium is level for the term of the policy.

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-day benefit limit stipulated in most policies.

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

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.

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

For how long are insurers required to maintain records pertaining to life insurance solicitation?

3 years

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

The term "illustration" in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy.

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

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 agent is acting ethically in all of the following situations EXCEPT

Always representing the insured.

Employer contributions made to a qualified plan

Are subject to vesting requirements.

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

Attained age.

Which of the following is TRUE about a class designation?

Beneficiaries are not identified by name.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

Consideration.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration; binding force in any contract is consideration

Which of the following is an example of a limited-pay life policy?

Life Paid-up at Age 65

Transacting insurance without a license in this state is considered a(n)

Misdemeanor.

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income; Unlike the Waiver of Premium rider, it also allows the insured to receive a weekly or monthly income during the

What is a definition of a unilateral contract?

One-sided: only one party makes an enforceable promise.

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit -The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact.

Which of the following is NOT true about a joint and survivor annuity benefit option?

Payments stop after the first death among the annuitants.

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt.

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount.

Another name for a substandard risk classification is

Rated.

When a policy is being replaced, the replacing company notifies the

Replacement company.

Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement of

Replacement.

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must

Respond to the consumer's complaint.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection.

All of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only.

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association.

If policyowners repeatedly replace policies from the same agent, this is most likely evidence that

The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation.

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

Which of the following is an example of liquidity in a life insurance contract?

The cash value available to the policyowner

Which of the following best describes the tax advantage of a qualified retirement plan?

The earnings in a qualified plan accumulate tax deferred.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Which of the following would be a lawful reason for the Commissioner to suspend a producer's license?

The producer failed to pay child support The Commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer's license for failing to comply with an administrative or court order imposing a child support obligation.

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

Which is true about a spouse term rider?

The rider is usually level term insurance.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

Which of the following is the best reason to purchase life insurance rather than an annuity?

To create an estate

What is the purpose of Life Insurance Solicitation regulation?

To help consumers compare life insurance products in regard to their relative cost

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health