GA Life and Health Insurance Study Guide

A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies

Proceeds will go to the contingent beneficiary

Why would the commissioner examine the records of an insurance company?

the determine the solvency of the insurer

Life insurance replacement regulation protects the interest of

the policyowner

Which of the following is considered an element of a variable life policy

underlying equity investment

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

upon satisfying the elimination period requirement

A business overhead expense policy would cover which of the following if a business owner becomes disabled?

utilities and office rent

Which of these is an element of variable life policy

a fixed, level premium

A term life rider offers the insured

additional life coverage

T cash surrenders a recently-issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red-flagged for violation of

anti-money laundering rules

When can a policyowner change a revocable beneficiary?

anytime

Medicare part C is

available to those who are enrolled in Medicare Part A and Part B

Medicaid was designed to assist individuals who are

below a specific income limit

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

Which of the following organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements

HMO (health maintenance organization)

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

High deductible health plan

T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the

beneficiary

Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness?

Probationary period

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

deferred

What is the purposed of the U.S.A patriot act

detect and deter terrorism

An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to

determine if the applicant is an acceptable risk by completing standard underwriting procedures

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

dread disease insurance

Ina life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and the recipient of any financial benefits from the policy

owners rights

A limited-pay life policy has:

premium payments limited to a specified number of years

Which of the following statements about a Guaranteed renewable health insurance policy is CORRECT?

premiums normally increase at a time of renewal

Which of the following items are regulated by the rules governing advertisement of life insurance and annuities?

prepared sales presentations used by insurance agents

Cash surrendering an existing whole life policy and purchasing a new whole life policy is referred to as a(n)

replacement

Deductibles are used in health policies to lower

overuse of medical services

in Georgia, an accident and sickness policy that is paid on a quarterly basis requires a grace period of

31 days

In Georgia, an insurance company must notify the commissioner within __ days to terminate an agent's appointment.

30

All accidents and sickness plans MUST provide coverage on newborn children for __ days

31

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

31

An insurer may normally delay the payment of a cash value loan or surrender value for up to

6 months

Which of these is NOT a reason for a business to buy key person life insurance

A pension deficiency if the key employee dies

Whole life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:

A. Cash value that will ultimately replace the death benefits B. nonforfeiture benefit options C. premiums that remain fixed for the life of the policy D. PARTIAL WITHDRAWAL FEATURES BEYOND SURRENDER CHANGE PERIOD <----

Which provision is NOT a requirement in a group life policy

Accidental

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicants initials

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

At the time of application

In order to established a health reimbursement arrangement (HRA), it MUST:

Be established by the employer

What's the requirement for a nonresident agent license applicant?

Being a licensed agent in the agent's home state

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?

Blanket accident policy

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for 6 weeks?

Business over head expense

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

Change of occupation provision

A disability income policyowner recently submitted a claim for chronic need problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck Injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

A(n) __ term life policy is normally used when covering an insured's mortgage balance

Decreasing

Which of the following statements BEST describes the intent of a coinsurance clause in a Major medical policy

Discourages over utilization of the insurance coverage

How are Roth IRA distributions normally taxed?

Distributions are received tax-free

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

Entire cash surrender value is taxable

A producer does not have the authority to change a policy or waive any of its provisions. The health provision that best describes this statement is called the

Entire contract

S takes out am accident and sickness insurance policy which contains provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Entire contract

Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?

Entire contract

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?

Establishes the needs of the individual and his dependents

How often must an insurance agent licensed be renewed in Georgia?

Every 2 Years

Which of the following is NOT included in the policy face?

Exclusions

Which of the following nonforfeiture options offers the highest death benefit

Extended term

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family maintenance policy

In Georgia, an example of an alien insurer would be one that is incorporated in

France

Which of the following health insurance policy provisions specifies the health care services a policy will provide?

Insuring clause

A policy owner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill need?

Irrevocable

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?

Legal Purpose (Insurable Interest)

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

What is the reason for the establishment of rules governing life insurance and annuity replacements?

Lessen the chance for misrepresentation and incomplete disclosure.

Which of these is NOT relevant when determining the amount of personal life instance needed?

Local unemployment rate

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?

Multiple Employer Trust

Which type of insurance company allows their policy owners to elect a governing body

Mutual

Which of the following characteristics is associated with a large group disability income policy?

No medical underwriting

C is the policyowner of a comprehensive individual major medical policy. C pays an annual premium which is due September 1. If C forgets to pay the premium and is hospitalized September 10, how will the insurer handle this claim?

Pay the claim in full minus the premium due

The benefits under a Disability Buy-Out policy are:

Payable to the company or another shareholder

Which of these do NOT constitute policy delivery?

Policy issued with a rating

All of the following statements are true regarding a policy's grace period, EXCEPT:

Policy loans may still by made

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned with the free-lock period, premium will be fully refunded

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction

A policy owner is able to choose the frequency of premium payments through what policy feature?

Premium mode

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

Premiums are waived after the insured has been totally disabled for specified time period

Which of the following Equity Indexed annuities typically invested in?

S&P 500

A prepaid application for individual disability income insurance was recently submitted to an insurer. When the insurer received the medical information bureau (MIB) report, the report showed that the applicant has suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was denied

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

She DOES need to provide evidence of insurability

The insuring clause

States the scope and limits of the coverage

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form

What type of life insurance are credit policies issued as?

Term

What is the basic function of an annuity

The systematic liquidation of accumulated funds

Which of the following statements is true about most blue cross/blue shield organizations?

They are nonprofit organizations

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

Time limit on certain defenses

Which Accident and Health policy provision addresses preexisting conditions?

Time limit on certain defenses

An insurance agent is guilty of __ if the agent misrepresents a policy to induce a policy owner to surrender an existing policy.

Twisting

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

Universal life

A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?

When the applicant receives the policy and pays the initial premium

If an individual is covered under an accidental death policy and dies, an autopsy can be performed in all these situations, except?

When the state prohibits this by law

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole life

A nonforfeiture clause gives the policyowner

guaranteed values even if the policy has lapsed

What is the initial requirement for an insured to become eligible for benefits under the waiver of premium provisions

insured must be under a physician's care

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy

In a life insurance contract, an insurance company's promise to pay stated benefits is called the

insuring clause

The accidental death and dismemberment (AD&D) provision in a life insurance policy would pay additional benefits If the insured:

is blinded in an accident

What is the purpose of a policy summery?

it highlights the critical parts of the policy issued

Dental care coverage is designed to cover the costs of all of the following EXCEPT:

loss of income

Defamation occurs when an agent makes a false statement intended to

malign another insurer

Periodic health claim payments MUST be made at least

monthly

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called

noncancellable