LIFE INSURANCE EXAM

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined, and the cash value fell to $10,000. If the insured dies, how much will be paid out?

$50,000

Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period?

5 years

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

Annual

When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?

Application

What is the title of the chief officer of the Department of Insurance?

Commissioner

The death benefit under the Universal Life Option B

Gradually increases each year by the amount that the cash value increases

As defined by the Georgia Insurance Code, all of the following entities may have an insurable interest in the insured EXCEPT

Insurer

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

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

Under a pure life annuity, an income is payable by the company

Only for the life of the annuitant

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

Which of the following employees under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

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

When an insurer's underwriter approves coverage

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

with the policy

What is the major difference between a stock company and a mutual company?

Ownership

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Which of the following types of licensees is solely responsible for offering advice on insurance policies for a fee?

Counselor

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

An agent selling variable annuities must be registered with

FINRA

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

In a direct transfer, how is money transferred from one retirement plan to a tradition IRA?

From trustee to trustee

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

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

Policy summary

Which of the following is correct concerning the taxation of premiums in key-person life insurance policy?

Premiums are not tax deductible as a business expense

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

The duties of an agent where replacement is involved include all of the following EXCEPT

Splitting the commission with the agent who originally sold the policy being replaced

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

Which of the following would help prevent a universal life policy from lapsing?

Target premium

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

The Commissioner of Insurance is

The chief officer of the DOI

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife has income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy (aka it is taxable)

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed amount

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

Guaranteed insurability rider

Which of the following best describes annually renewable term insurance?

It is level term insurance

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

Misdemeanor

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount

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