georgia life only

What is the reason for the establishment of Rules Governing Life Insurance and Annuity Replacements - Lessens the chance for misrepresentation and incomplete disclosure - regulate the insurance rates - protect the interest of the insurer - protect the interest of the beneficiary

- Lessens the chance for misrepresentation and incomplete disclosure

Which of these is NOT a reason for a business to buy key person life insurance? - the reduction in sales as a direct result from death of the key employee - a void in leadership if the key person were to die - the loss of company revenues while a replacement is being sought - a pension deficiency if the key employee died

- a pension deficiency if the key employee died

What document MUST accompany an application that initiates the replacement of an existing life insurance policy? - a signed statement by the applicant regarding the replacement - a signed replacement statement from the insurance company being replaced - a signed replacement statement from the replacing insurance company - a detailed comparison of existing coverage and the proposed coverage

- a signed statement by the applicant regarding the replacement

What is the requirement for a nonresident agent license applicant? - meeting a minimum sales quota in agent home state - residing in a home state for 10 years - being a licensed agent in the agent home state - passing a nonresident examination

- being a licensed agent in the agent home state

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? - beneficiary will be denied the claim - beneficiary will be denied the claim and refunded all paid premium - beneficiary will be paid the death benefit - beneficiary will be paid a partial death benefit

- beneficiary will be paid the death benefit

All the following statements regarding a tax-sheltered annuity (TSA) are true EXCEPT: - income tax derived from TSA is received income-tax free - TSA are available to public school employees - contributions to the TSA are tax deductible - interest earned by TSA is tax deferred

- income tax derived from TSA is received income-tax free

How are policyowner dividends treated in regard to income tax? - dividends are not taxable - interest on accumulations is taxed - taxed as ordinary income - taxed as capital gains

- interest on accumulations is taxed

Which of the following is NOT an unfair claim settlement practice? - failing to acknowledge and act promptly with respect to an insurance claim - compelling an insured to initiate a lawsuit by offering less on an insurance claim - failing to accept or deny a claim within reasonable time after proof of loss is submitted - needing written documentation of claim detail

- needing written documentation of claim detail

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - P cannot borrow against the policy cash value while disabled - p will have to pay income tax on the amount of premiums waived - p will receive declared dividends - p cannot assign ownership of the policy while premiums are being waived

- p will receive declared dividends

K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose? - paid up additional insurance - cash option - reduced premiums - accumulate with interest

- paid up additional insurance

Which statement is TRUE in regard to a policy loan? - past due interest payment not paid after 3 months will void the policy - past due interest on a policy loan is added to the total debt - insurance companies can send delinquent interest account to a collection agency - insurance companies can chance an interest rate based on the policyowner credit report

- past due interest on a policy loan is added to the total debt

Which statement is correct regarding the premium payment schedule for whole life policies? - premium are payable throughout the insured/lifetime coverage lasts until death of the insured - premium are payable for s set period/coverage expires at that point - premiums are payable until age 66/ coverage lasts a lifetime - a single premium is paid at time of the application coverage last until retirement

- premium are payable throughout the insured/lifetime coverage lasts until death of the insured

What benefit does the payor clause on a Juvenile Life policy provide? - allows payor to assign ownership in the event payor becomes disabled - allows payor to increase face amount without providing evidence of insurability - premiums are waived if juvenile becomes disabled - premiums are waived if payor becomes disabled

- premiums are waived if payor becomes disabled

What is the purpose of the Limit and Health insurance Guaranty Association? - enforces Geogia insurance regulation - underwrites high risk insurance applicants - protects policyowners against insolvent insurance companies - establishes underwriting guidelines for admitted insurers

- protects policyowners against insolvent insurance companies

A contract owner terminated an annuity before the income payment period begins. The owner will then receive - half of the current surrender value - the current contract surrender value - the premiums paid date - nothing

- the current contract surrender value

A level premium indicates: - the premium is fixed for a period stated in the contract, then becomes variable - the premium can only be changed with the consent of the insurer - the premium stays level until the policy renewal date - the premium is fixed for the entire duration of the contract

- the premium is fixed for the entire duration of the contract

The advantage of reinstating an original life policy is: - the premiums are based on the current age of the insured - the premiums are based on a younger age - the interest charged on policy loans will be lowered - a new incontestable period will begin

- the premiums are based on a younger age

The reason for backdating a policy is: - to avoid being considered a substandard risk due to a recent cancer diagnosis - to obtain a premium rate based on earlier age - to decrease the face amount - to decrease the contestable period

- to obtain a premium rate based on earlier age

The free-look provision beings : - upon the date of the sales presentation - upon receipt of the policy by the producer - upon receipt of the policy by the policyowner - upon the completion of the application

- upon receipt of the policy by the policyowner

After initially issued, a temporary license is valid for - 3 months - 4 months - 5 months - 6 months

6 months

What is being delivered during a policy delivery? - a binding receipt to the proposed insured - insurance contract to the proposed insured - application and initial premium to the insurer - policy summary sheet and disclosure material to the proposed insured

Insurance contract to the proposed insured

What does the insuring agreement in a Life insurance contract establish? - an insurers basic promise - an insurance policy grace period - an insurer required reserve amount - the obligations of the beneficiary

an insurers basic promise

When can a policyowner change a revocable beneficiary? - anytime - after the consent of the current beneficiary - never - only is the primary beneficiary dies

anytime

Any changes made on an insurance application requires the initials of whom? - insured - agent - applicant - beneficiary

applicant

The purpose of the Rules governing advertisement of life insurance and annuities is to - set advertisement rates for insurers - assure full disclosure to the public of all material and relevant information - help drive sales quotas for insurers - provide a potential client with all consumer rating for the insurer

assure full disclosure to the public of all material and relevant information

The automatic premium loan provision is designed to: - provide a source of revenue to the insurance company - avoid a policy lapse - allow a policyowner to request a policy loan - allow a policyowner to take out additional coverage without evidence of insurability

avoid a policy lapse

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - modification - conversion - exchange - adjustable

conversion

The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy - decreasing - universal - variable - level

decreasing

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? - level term policy - whole life policy - limited pay policy - decreasing term policy

decreasing term policy

Additional coverage can be added to a whole life policy by adding - payor rider - accelerated benefit rider - decreasing term rider - automatic premium loan rider

decreasing term rider

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy - nonforfeiture - entire contract - insuring clause - owners right

owners right

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee? - distribution is subject to capital gains tax - distribution is subject to ordinary income tax - distribution is subject to a tax penalty - distribution is subject to federal income tax withholding

distribution is subject to federal income tax withholding

Which of these statement about a guaranteed insurability option rider is NOT TRUE? - coverage con be added a specific event such as marriage or having a child - evidence of insurability is not required when the option is exercised - evidence of insurability is required when the option exercised - coverage con be added at specific ages

evidence of insurability is required when the option is exercised

An example of unfair claims practice would be - requesting a third party arbitrator to resolve disagreement - failing to effectuate prompt, fair, equitable settlement of claim - paying a claim promptly after receiving proof of loss - requiring the insured to give a statement under oath

failing to effectuate prompt, fair, equitable settlement of claim

The act of an insurance company publishing misleading information about its policy provisions is called - coercion - false advertising - twisting - intimidation

false advertising

The payment on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? - immediate fixed - quarterly flexible - flexible installment deferred - adjustable deferred

flexible installment deferred

An insured is past due on his life insurance premium, but is still within the grace period. What will the beneficiary receive if the insured dies during this grace period? - refund of all premiums, plus interest - refund of all premium paid - full face amount any past due premiums - full face amount

full face amount any past due premiums

Prior to a hearing that could potentially revoke an agents license, what is required by the commissioner? - giving oral notice to the agent - giving written notice to the agent - giving both oral and written notice to the appointing insurer - giving oral notice to the appointing insurer

giving written notice to the agent

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n): - flexible premium deferred annuity - variable annuity - immediate annuity - straight life annuity

immediate annuity

Which of these retirement plans can be started by an employee, even if another plan is in existence? - individual retirement account (IRA) - defined plan - Keogh plan - 403(b) plan

individual retirement account (IRA)

in a key employee life insurance policy, the third party owner can be all of the following except - applicant - owner - payor - insured

insured

B receives yearly dividends and interest from a participating life insurance policy. which of these should B include as a gross income for federal income tax purposes? - interest and dividends - interest only - dividends only - neither interest nor dividends are taxable

interest only

Credit life insurance is - issued in any amount at the discretion of the applicant - used in the event of loss of income - issued in an amount not to exceed the amount of the loan - coverage that waives the premium on a loan payment in the event of total disability

issued in an amount not to exceed the amount of the loan

What is the purpose of a policy summary? - it details the commissions earned by the agent - it guarantees a policy will be issued - it allows the consumer to compare the costs of different policies - it highlights the critical parts of the policy issued

it highlights the critical parts of the policy issued

Before an insurance company can pay commissions to an agent, the agent must be - bonded - licensed and appointed - licensed only - bonded and insured

licensed and appointed

The Accelerated Death Benefit provision in a life insurance policy is also known as a: - 1035 exchange - inter vivos gift - non-forfeiture option - living benefit

living benefit

An insured inability to perform two or more activities of daily living may trigger which type of policy rider? - waiver of premium - long term care - accelerated death benefit - accidental

long term care

which of these factors do NOT play a role in the underwriting of a life insurance policy? - avocations - credit status - marital status - occupation

marital status

A policy is allowed to pay premium more than once a year under which provision? - insuring - consideration - payor - mode of premium

mode of premium

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? - 10% tax penalty for early withdrawal - capital gains tax - ordinary tax and a 10% tax penalty for early withdrawal - ordinary income tax

ordinary tax and a 10% tax penalty for early withdrawal

All of the following statements are true regarding a policy Grace Period except: - past due payments are waived - policy loans may still be made - full coverage continues - grace period terms are stated in the policy

past due premiums are waived

Which life insurance rider typically appears on a Juvenile life insurance policy? - decreasing term rider - inflation rider - payor benefit rider - waiver of premium rider

payor benefit rider

The underwriting process involved all of these EXCEPT: - credit report - policy loan - risk classification - application

policy loan

What benefit does the payor clause on a Juvenile policy provide? - allows payor to assign ownership in the event payor becomes disabled - allows payor to increase face amount without providing evidence of insurability - premiums are waived if payoff becomes disabled - premiums are waived if the payor becomes disabled

premiums are waived if the payor becomes disabled

All of these are considered sources of underwiring information about a applicant, EXCEPT: - inspection report - credit report - rating services - medical information bureau

rating services

Typically a life insurance death benefit is paid by a lump sum payment. A ________ option is a method of distributing a life insurance policy death benefit OTHER than by a lump sum payment - settlement - dividend - conversion - aleatory

settlement

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - the date the sales appointment was made - the date of the application was submitting to the insurance company - the date of application - the date the agent delivered the policy collected the initial premium, and obtained a good health statement from the insured

the date the agent delivered the policy collected the initial premium, and obtained a good health statement from the insured

What is the underlying concept regarding level premiums? - level premiums build cash value quicker in the early years - the early years are charged more than what is needed - the early years are charged less than what is needed - level premiums can only be paid annually

the early years are charged more than what is needed

An insurance company with engages in boycott, coercion, and intimidation that results in the unreasonable restraint of trade is committing a prohibited act under Georgia insurance laws covering: - sliding - unfair trade practices - twisting - discrimination

unfair trade practices

Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors? - universal - term - graded - endowment

universal

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: - straight life - universal life - endowment - modified whole life

universal life

An ____ annuity pay benefit based on units rather than stated dollar amount - deferred - variable - immediate - unit

variable

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - universal life - variable life - fixed annuity - modified endowment contract

variable life

a life insurance policy which ensured that the premium will be paid if the insured becomes disabled has what kind of rider attached? - accelerated benefits - waiver of premium - cost of living - return of premium

waiver of premium