preamerica life licensing practice exam

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

$13,000

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

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

3 years

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

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

How long is the Commissioner's term of office?

4 years

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

4 years

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

An agent must be a resident of the state and be present in the state for at least how many months each year?

6

The minimum number of credits required for partially insured status for Social Security disability benefits is

6 credits.

How long is the waiting period for benefits to be paid in a long-term care policy or rider

90 days

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

A policy summary

An agent is acting ethically in all of the following situations EXCEPT

Always representing the insured.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

Which of the following premium payment modes will incur the lowest overall payment

Annual

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

Being age 65.

What license or licenses are required to sell variable annuities?

Both a life insurance license and a securities license

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

To legally transact insurance in this state, an insurer must obtain which of the following

Certificate of Authority

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

Producers in Georgia will be deemed to be using their license primarily to write controlled business if, during any calendar year,

Controlled business accounts for more than 25% of the agent's business

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in 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.

How is the Commissioner of Insurance selected to be the chief officer of the Department of Insurance?

Elected to office

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

What do individuals use to transfer their risk of loss to a larger group?

Insurance

Variable Whole Life insurance is based on what type of premium?

Level fixed

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

Replacement.

Which of the following statements is INCORRECT?

Replacing insurance policies for the purpose of making commissions is legal.

An insurance agent's responsibilities include all of the following EXCEPT

Represent the client.

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

Require evidence of insurability.

Which of the following is a risk classification used by underwriters for life insurance

Standard

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.

Which of the following information will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit.

The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

All of the following would be eligible to establish a Keogh retirement plan EXCEPT

The president and employee of a family corporation.

The interest earned on policy dividends is

taxable

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT

Applicant's past income.

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

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

Authorized.

What term is used for replacing insurance policies for the sole purpose of making commissions?

Churning

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the

Company.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice

False advertising

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

What required provision protects against unintentional lapse of the policy?

Grace period

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

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan).

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

Insurance is a contract by which one seeks to protect another from

Loss

What is the other term for the cash payment settlement option?

Lump sum

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

An agent commingled $500 of insurance premiums collected with new applications with his personal funds. The agent could be found guilty of a

Misdemeanor

An agent license can be issued

Only to individuals.

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

All of the following are examples of transacting insurance in Georgia EXCEPT

Placing advertisements for an insurer

All of the following are true regarding insurance policy loans EXCEPT

Policy loans can be made on policies that do not accumulate cash value.

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?

Profit sharing plan

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating.

A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n

Reciprocity agreement.

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of Premium

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal.

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration.

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called

Single premium whole life.

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.

An individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2,500.

The customer's associates, friends, and neighbors provide the report's data.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

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 insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application.

How are contributions to a tax-sheltered annuity treated with regards to taxation?

They are not included as income for the employee, but are taxable upon distribution.

What is the purpose of Life Insurance Solicitation regulation?

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

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force

Which of the following is NOT a responsibility of an insurance agent?

Underwriting the contract

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered

a felony