Practice Test Questions

The violation of a cease and desist order may results in a fine of

$10,000

If an insurer intends to sell insurance for a single class of insurance, what amount must the insured deposit into a state trust?

$100,000

The maximum penalty that may be assessed for a single non- willful violation of the Insurance Code is

$1000

What is the maximum period for a temporary license in this state?

- 6 months

Which of the following terms will be permissible in describing a life insurance policy in company advertisements?

- Variable plan

An IRA owner who is 57 years old wants to make a withdrawal from her Traditional IRA. What penalty will be imposed?

10%

When a hearing regarding an insurance matter is requested, all parties must receive an advance notice of at least

15 days

What is the minimum age for purchasing life insurance policy in Georgia?

15 years

A person who is convicted of a felony related to insurance fraud may be imprisoned for what minimum term?

2 years

How many hours of continuing education must licensees complete every renewal period on the subject of ethics?

3 hours

An insured recently discovered that the interest rate of his policy loan once again increased. Which of the following is the shortest amount of time that could have passed since the last change in the insured's interest rate?

3 months

For how long are insurers requirement to maintain records pertaining to life insurance silicitation?

3 years

For how long are insurers to maintain records pertaining to life insurance soliciation?

3 years

A producer whose license is revoked or whose applications for a license is denied will be ineligible to reapply for any license for at least

5 years

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

5 years

The minimum number of credits requirements for partially insured status of SS disability benefits is

6 credits

What is the maximum allowed rate of interest on policy loans from life insurance?

8%

If an individual licensed as an agent was employed by the Commisioner as bona fide full time employee, upon termination of employment, the individual may reinstate their license within how many days?

90 days

Which of the following is another term for an authorized insurer?

Admitted

Which of the following would be TRUE of both the fixed period / fixed amount settlement options?

Both guarantee that the principle and interest will be fully paid out

Which of the following statements concerning buy sell agreements is true?

Buy sell agreements are normally funded with a life insurance policy

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

In variable life insurance policies, all of the following assets are held in the insurance company's general account EXCEPT:

Cash surrender values

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the

Company

A legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called

Conservation

Which of the following elements of an insurance contract requires payment of premium?

Consideration

To be valid, an insurance policy must have all of the following EXCEPT

Countersignature

An employee has earned 6 quarters of coverage during the previous 13 quarter period. What status of coverage does the employee have under SS?

Currently insured

Which of the following is NOT typically excluded from life policies?

Death due to plan crash for a fare paying passenger

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

Discrimination

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income

Which of the following would NOT be considered a purpose of life insurance solicitation in Georgia?

Help buyers choose most qualified insurance producers

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insuring clause

When a beneficiary received payments consisting of both principle and interest policies, which parts are taxable as income?

Interest only

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

What is the function of the Certificate of Authority?

It allows an insurer to transact insurance in Georgia

If an insured surrenders his life insurance policy - which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lies. When the wife dies, payments stop. What settlement option did they select?

Joint annuity

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?

Medical info

An agent's license has been suspended, but he continues to transact insurance for his existing clients. This will be considered an

Misdeamor

An insurance agent visits a potential client and explains variable types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

Misrepresentation

On its advertisement, a company claims that it has funds in its possession that are, in fact not available for the payment of losses or claims. The company is guilty of

Misrepresentation

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

Mutual

An insured purchased an insurance policy 5 years. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

Mutual

An agent's license can be issued

Only to individuals

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income

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

Ownership

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

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

Premiums paid by an employer on $30,000.00 group term life insurance plan for employees

All of the following statements regarding continuing education requirements in this state are true EXCEPT

Producers may repeat the same courses to meet the required CE hours for a licensing period

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all the following EXCEPT

Purchase of a new home

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of premium

What does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

Which of the following types of annuities will generally provide the highest monthly income?

Straight life

Which is the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?

Term Insurance

Which of the following bears the investment risk in a variable life insurance policy?

The Policyowner

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data

With adjustable life, the owner can change all of the following EXCEPT

The insured

Which of the following is true regarding a joint life annuity?

The payments stop at the first death

Which of the following would NOT be considered grounds for the Commissioner to suspend an insurance producer's license?

The producer is found guilty of a misdeamor

An insured used printed advertisements for their life insurance policies in 2020. The insurer's next scheduled examination by the Insurance Department in 2023. How long must the insurer keep records of the advertisements?

Until 2023

Which of the following types of insurance policies would perform the function of cash accumulation?

Whole Life

When an insured terminates membership in the insured group, the insured can convert to what type of individual life insurance?

Whole Life without proof of insurability

To which of the following do replacement regulations apply in this state?

Whole life insurane

The two types of assignments are

absolute and collateral

Who can make a fully deductible contribution to a traditional IRA?

an individual not covered by an employer sponsored plan who has earned income

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

authorized

All of the following are requirements of eligibility of SS disability income benefits EXCEPT

being age 65

All of the following information needs to be included on an application for life insurance EXCEPT

health insurance policies in force

Guaranteeing future dividends is considered to be unfair or deceptive act known as

misrepresentation

Whenever agents submit applications to insurers,. they must also submit statements, signed by the applicant and agent, disclosing the involvement of

replacement

All of the following would be excluded from regulation on life insurance solicitation EXCEPT

term life policy

All of the following would be excluded from the regulation on life insurance solicitation EXCEPT

term life policy

All of the following statements concerning the use of life insurance as an Excecutive Bonus are correct except

the policy is owned by the company

What is the purpose of the Life Insurance Solicitation regulation?

to help consumers compare life insurance products in regard to their relative cost