Test Georgia

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? A)Modified Whole Life B)20-Pay Life C)Decreasing Term D)Endowment

Decreasing Term

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? A)One policy is owned and paid for by the company B)Each partner must own a policy on the other partners C)One policy is owned by the company and premiums are split equally among the partners D)Each partner owns their own individual policy

Each partner must own a policy on the other partners

Term insurance has which of the following characteristics? A)Expires at the end of the policy period B)Builds cash value C)Has nonforfeiture options D)Endows at the end of the policy period

Expires at the end of the policy period

What does the insuring agreement in a Life insurance contract establish? A)An insurer's basic promise B)The insurance policy's grace period C)An insurer's required reserve amount D)The obligations of the beneficiary

An insurer's basic promise

A policy loan is made possible by which of these life insurance policy features? A)Extended term provision B)Cash value provision C)Owner's rights provision D) Consideration clause

Cash value provision

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of? A)Twisting B) Defamation C)Coercion D)Rebating

Coercion

How are policyowner dividends treated in regards to income tax? A)Dividends are not taxable B)Interest on accumulations is taxed C)Taxed as ordinary income D)Taxed as capital gains

Interest on accumulations is taxed

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? A)Variable Life B)Adjustable Life C)Graded Premium Whole Life D)Modified Whole Life

Modified Whole Life

Which of these is NOT considered to be a right given to a policyowner? A)Surrendering the policy's cash value B)Modify a provision in the insurance contract C)Assignment of ownership D)Change the beneficiary, if revocable

Modify a provision in the insurance contract

Which of the following statements is CORRECT about accelerated death benefits? A)The full face amount is available as an accelerated benefit B)Those on Social Security disability automatically qualify for this benefit C)This provision is usually provided with an increase in premium D)Must have a terminal illness to qualify

Must have a terminal illness to qualify

K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n). life policy. A) Whole B)Universal C)Graded D)Increasing

Universal

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? A)Accelerated death benefit rider B)Return of premium rider C)Family income rider D)Term rider

Return of premium rider

What type of life insurance are credit policies issued as? A)Whole B)Variable C)Term D) Universal

Term

Which of these life insurance riders allows the applicant to have excess coverage? A)Automatic Premium Loan rider B)Waiver of Premium rider C)Guarantee Insurability rider D) Term rider

Term rider

S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be A)Straight Life B)Universal Life C)an Endowment D)Modified Whole Life

Universal life

B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will A)pay the amount of premiums paid plus interest B)pay the amount that the premium would have purchased at the correct age C)pay half of the face amount D)pay the full face amount

pay the amount that the premium would have purchased at the correct age

A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a: rollover plan 403(b) plan profit-sharing plan salary reduction plan

profit-sharing plan

A contract owner terminates an annuity before the income payment period begins. The owner will then receive A)half of the current surrender value B)the current contract surrender value C)the premiums paid to date D)nothing

the current contract surrender value