Georgia Life Exam Missed Questions

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money?

An annuity - An annuity is a contract used to accumulate funds that are to be distributed at a specified time in the future as a periodic payment of accumulated funds

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause -The insuring clause states that the insurer agrees to provide life insurance for the named insured which will be paid to a designated beneficiary when proof of loss is received by the insurer. It states the party to be covered by the policy and names of the beneficiary who will received the policy proceeds in the event of the insured's death. If no beneficiary is named, the policy proceeds will be paid to the insured's estate.

Which of the following policies would be classified as a traditional level premium contract?

Straight Life -Straight whole life policies have a level guaranteed face amount and a level premium for the life of the insured.

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800 -In this scenario, the death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy

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 -A decreasing term policy's face amount decreases as the amount of debt is reduced

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination -The reinstatement provision allows the policyowner an opportunity to put a lapsed policy back in force subject to proving continued insurability. If the policyowner elects to reinstate the policy, as opposed to purchasing a new policy, the reinstated policy is restored to its original status/

All of the following are true of key person insurance except

The plan is funded by permanent insurance only -Key person coverage may be funded by any type of life insurance

Who may contribute to an HR-10 Plan?

self-employed plumber -Self-employed persons may contribute to an HR-10 Plan.

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time. -Under the fixed-period option( also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set Premium rates - the insurer sets premium rates based upon underwriting considerations

All of the following statements concerning the use of life insurance as an executive bonus are correct except

The policy is owned by the company -The policy is owned by the employee

What is the purpose of settlement options?

They determine how death proceeds will be paid -Settlement options are methods used to pay the death benefits to a beneficiary upon the insured's death, or to pay the endowment benefit if the insured lives to the endowment date.

Which of the following is NOT true of life settlements?

The seller must be terminally ill -With Life Settlements,unlike with viatical settlements, the seller does not need to be terminally ill. They usually involve life insurance policies with a face amount of $250,000 or more, "key person" coverage, corporate owned policies,representing excess coverage that is no longer needed, and could be sold for an amount greater than the current cash value.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will obtained?

3 days -Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the day the report was requested

All other factors being equal, the least expensive first-year premium payment is found in

Annually Renewable Term -Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level Term and increasing term policies, the premium also remains level for the term policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.

If a life policy allows the policyowner to maker periodic additions to the face amount at standard rates, without proving insurability, the policy includes

Guaranteed Insurability rider -The guaranteed insurability rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy -The premium does not change on the inclusion of addition children; it is based on an average number of children

Which two terms are associated directly with the premium?

Level or flexible -A level premium is one in which the premium never changes. A flexible premium is found in Universal life policies where the insured changes their premium payment.

In a life settlement contract, whom does the life settle broker represent?

Life settlement Broker is a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. Life settlement brokers represent only the policy owners.

Who makes up the Medical Information Bureau?

Insurers -the Medical information Bureau is made up of insurers so the companies can compare the information they have collected on a potential insured with information other insurers may have discovered.

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination

The insurer - During the underwriting process, an insurer may require that an applicant receive a medical examination. The insurer is responsible for the associated costs of the examination

All of the following are examples of third-party ownership of a life insurance policy EXCEPT?

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan - A collateral assignment is the transfer of some or all of the death benefits of the policy to a creditor as a security for a loan, but does not give the creditor the rights of ownership. In the event of the insured's death, the creditor would only be able to recover that portion of the policy's proceeds equal to the creditor's remaining interest in the loan.

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory -In an aleatory contract, unequal amounts are exchanged between payments and benefits. In this instance, the insured received a large benefit for a small price.

Insurance is the transfer of

risk-Insurance is the transfer of financial responsibility associated with a potential of a loss (risk) to an insurance company