Final Exam Flashcards
1
Q
Which of these is considered a mandatory provision? A. Payment of claims B. Insurance with other insurers C. Misstatement of age D. Change of occupation
A
Payment of claims
2
Q
T has a term policy that allows him to continue the coverage after expiration of the initial policy.. What type of term coverage is this? A. Renewable B. Increasing C. Level D. Decreasing
A
Renewable
3
Q
An example of an unfair claims practice would be
A. Requesting a third-party arbitrator to resolve a disagreement
B. Failing to effectuate prompt, fair, and equitable settlement of a claim
C. Paying a claim promptly after receiving proof of loss
D. Requiring the insured to give a statement under oath
A
Failing to affect you a prompt, fair, and equitable settlement of a claim
4
Q
Which of these types of policies may not have the automatic premium loan provision attached to it? A. Modified whole life B. 20-pay life C. Decreasing term D. Endowment
A
Decreasing term
5
Q
A potential client, age 40, would like to purchase whole life policy that will accumulate cash value at a faster rate in the early years of the policy. Where did these statements made by the producer would be correct?
A. Straight life accumulates faster than limited-pay life
B. 20-pay Life accumulate cash value faster than Straight Life
C. Cash value accumulation of both 20-Pay Life & Straight Life depending on the insured’s Financial rating
D. 20- pay life and straight life accumulate cash value at the same rate
A
20-Pay Life accumulate cash value faster than straight life
6
Q
Which of these are NOT example of nonforfeiture option? A. Extended term B. Reduced paid-up C. Cash surrender D. Life income
A
Life Income
7
Q
R had to received full disability income benefits for six months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to him while he is not working at full capacity? A. Residual Disability B. Recurrent Disability C. Presumptive Disability D. Occupational Disability
A
Residual Disability
8
Q
But employee is required to pay a portion of the premium for a employer/employee group plan, the employee is covered under which? A. Joint B. Noncontributory C. Contributory D. Participating
A
Contributory
9
Q
Taking receipts of premiums and holding them for the insurance company is an example of? A. Commingling B. Misappropriation C. Theft D. Fiduciary responsibility
A
Fiduciary responsibility
10
Q
What type of insurance offers permanent life coverage with premiums that are payable for life? A. Credit life B. Renewable term life C. Whole life D. Endowment
A
Whole life
11
Q
Variable whole life insurance can be described as:
A. Both Insurance and Securities product
B. An insurance product only
C. A securities product only
D. The insurance company assumes the investment risk
A
Both Insurance and Securities product
12
Q
Which of these is NOT a characteristic of a health reimbursement arrangement (HRA)?
A. Employee funds the HRA entirely
B. Employer funds the HRA entirely
C. HRA’s can be offered with other health plans
D. HRAs allow reimbursement for eligible medical expenses
A
Employee funds the HRA entirely
13
Q
Why is an applicant signature required on a life insurance application?
A. To attest that the statements on the application are warranties
B. To attest that the statements on the application are accurate to the best of the applicants knowledge
C. To give power of attorney to the producer if needed
D. To attest that all statements on the application are guaranteed to be true
A
To attest that the statements on the application are accurate to the best of the applicants knowledge
14
Q
The provision that defines to whom the insurer will pay benefits is called: A. Entire contract B. Proof of loss C. Claim forms D. Payment of claims
A
Payment of claims
15
Q
Which of these statements accurately describes the waiver of premium provision in an accident and health policy?
A. Past due premiums on a lapsed policy are waived and coverage is restored
B. The insured is paid a monthly benefit to keep insurance premiums current in the event of a total disability
C. Premiums are waived after the insured has been unemployed for a specified time period
D. Premiums are waived after the insured has been totally disabled for a specified time.
A
Premiums are waived after the insured has been totally disabled for a specified time period
16
Q
And insured owns an individual disability income policy with a 30 day Elimination Period for sickness and accidents in a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the maximum amount he would receive for an approved claim? But illumination illumination
A
$1250. 3 1/2 months minus one month elimination period equals 2.5 months. 2.5 months x $500 monthly indemnity equals $1250
17
Q
What is the suicide provision designed to do?
A. Decline an applicant who is contemplating suicide
B. Safeguard the insured from an applicant who is contemplating suicide
C. Protect the insured from ever paying a claim that results from suicide
D. Allows the insure the option to pay a death benefit in the event of a suicide
A
Safeguard the insured from an applicant who is contemplating suicide
18
Q
Which of the following consists of an offer, acceptance, and consideration? A. Warranty B. Estoppel C. Contract D. Representation
A
Contract
19
Q
How long is the typical free look. For long term care insurance policies? A. 20 days B. 30 days C. 40 days D. 50 days
A
30 days
20
Q
When does a probationary period provision become effective in a health insurance contract? A. At the policy’s inception B. 30 days after the policy’s inception C. When a claim is submitted D. When a covered loss occurs
A
At the policy’s inception
21
Q
T applies for a Life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, which ever is later. Assuming that T is an acceptable risk, what is given to T? A. Binding receipt B. Conditional receipt C. Warranty receipt D. Backdated receipt
A
Conditional receipt
22
Q
In the state of Georgia, every policy owner must be offered the following? A. Double $ back guaranteed B. Free-look period C. Waiting period D. Inflation rider
A
Free-look period
23
Q
Major medical policy:
A. Pays 100% of covered expenses
B. Contain a deductible & coinsurance
C. Requires use of in-network facilities only
D. Do not contain a deductible and coinsurance
A
Contain a deductible and coinsurance
24
Q
All are true statements regarding the underwriting process, Except:
A. Signed consent from applicant must be provided in order to test for aids and HIV virus
B. Aids and HIV virus exams must be conducted in a discriminationary fashion
C. The cost of any examination is paid by insurer
D. The original application is a primary source of information used in the underwriting process
A
Aids and HIV virus exams can be conducted in a discriminatory fashion
25
```
The health insurance program which is administered by each state and funded by both the federal and state governments is called:
A. Long-term care
B. Medicaid
C. Medicare supplemental program
D. Medicare
```
Medicaid
26
```
What type of renewability guarantees premium rates and renewability?
A. Optionally renewable
B. Conditionally renewable
C. Non-cancelable
D. Guaranteed renewable
```
Noncancelled
27
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:
A. Whenever an insured is unavailable to work
B. During the time and insured is confined in a hospital
C. Following an accident dull injury, but not during sickness
D. After an insured has become totally disabled as defined in a policy
After an insured has become totally disabled as defined in the policy
28
```
Insurers may request a hearing within ___ if their policy is rejected.
A. 20 days
B. 30 days
C. 60 days
D. 90 days
```
20 days
29
```
Premature IRA distributions are assessed a tax penalty of?
A. 0 %
B. 10%
C. 15%
D. 20%
```
10%
30
```
An Insurance company may Not reject a prospective insured’s life application on the basis of which of the following:
A. Hobbies
B. Weight
C. Gender
D. Medical history
```
Gender
31
Which of the following items are regulated by the rules governing advertisement of life insurance and annuities?
A. Communication making marketing and underwriting departments
B. Rate increase an ounce by insurance company via mass mailing
C. Prepared sales presentation she is by the insurance agents
D. Correspondence regarding policy loan interest rate payment
Prepared sales presentation used by insurance agents
32
```
G is an accountant who has 10 employees and is concerned about how the business would survive financially if he became disabled. The type of policy which Best addresses this concern is:
A. Business overhead expense
B. Disability income
C. Key employee life
D. Contributory
```
Business overhead expense
33
```
According to the time payment of claims provision, the insurer must pay disability income benefits no less frequently than which of the following options?
A. Annually
B. Semiannually
C. Quarterly
D. Monthly
```
Monthly
34
```
In Georgia, and insurance company must notify the commissioner within __ days to terminate an agent appointment?
A. 30
B. 45
C. 60
D. 90
```
30
35
In order to establish a health reimbursement arrangement ;(HRA), it must
A. Be offered in conjunction with other employee provided health benefits
B. Limits of benefits to prescription drugs only
C. Be established by the employer
D. Limit the amount of money the employee can contribute towards the account
Be established by the employer
36
All statements true about equity indexed life insurance, except:
A. Cash value has a minimum rate of accumulation
B. If the gain on the index goes beyond the policy’s minimum rate of return, the cash value will mirror that of the index
C. The premiums can be lowered or raise, based on investment performances
D. Tried to an equity index such as the S&P 500
C. The premiums can be lowered or raised , based on the investment performance
37
```
J purchased a disability income policy that Only J can terminate &; on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase?
A. Guaranteed renewable
B. Noncancelable
C. Optionally renewable
D. Conditionally renewable
```
Noncancelable
38
The consideration clause of an insurance contract includes:
A. The buyers guide
B. The summary of the coverage provided
C. The named beneficiaries
D. The schedule & amount of premium payments
The schedule and amount of premium payments
39
Which of the following statements about the health reimbursement arrangement (HRA) is Correct?
A. If the employee has a qualified medical leave from work, lost wages can be reimbursed
B. If the employee paid for a qualified medical expenses, the reimbursements must be tax-free
C. Any unused amounts are added to the employees gross income
D. Health insurance premiums can be reimbursed to the employee
If the employee paid for a qualified medical insurance, the reimbursement may be tax-free
40
```
Which of these actions is taken when a policy owner uses a Life Insurance policy as collateral for a bank loan?
A. Revocable assignment
B. Beneficiary change
C. Irrevocable assignment
D. Collateral assignment
```
Collateral assignment
41
```
Which of the following Best describes a short-term medical expense policy?
A. Conditionally renewable
B. Noncancelable
C. Guaranteed renewable
D. Nonrenewable
```
Nonrenewable policy
42
```
The percentage of an individual’s primary insurance amount (IPA). Determines the benefits paid in which of the following programs?
A. Social security disability income
B. Medicare supplements
C. Medicaid
D. COBRA
```
Social security disability income
43
```
K pays on a $20,000 20-Year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
A. Return of premiums paid
B. Cash value plus interest
C. $20,000 of death benefit
D. Face amount plus interest
```
$20,000 death benefit.
| If the insured dies before the endowments maturity, the policy face value is paid in a lump sum
44
```
During the application process, the agents primary responsibility is to the:
A. The commissioner
B. The applicant
C. The insurance company
D . State of Georgia
```
The insurance company! The insurer
45
```
K Failed to pay a renewal premium within the time guaranteed by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?
A. Free look
B. Reinstatement
C. Grace period
D. Consideration
```
Reinstatement
46
```
XZY Company pay the entire premium for his group health plan. The Minimum percentage of eligible employees that must be covered is:
A. 25%
B. 50%
C. 75%
D. 100%
```
100% is for non contributory group
47
Upon reaching the limiting age, a handicapped child can extend their accident and sickness insurance coverage as a dependent?
A. Only if the child is incapable of employment and chiefly depends on the policy owner
B. For up to an additional 10 years only
C. Only if physically disabled
D. If mentally disabled
Only if the child is in capable of employment and chiefly dependent on the policyowner
48
P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P’s coverage becomes effective when:
A. P receives the policy and pays the premium
B. P pass is the medical examination
C. The producer receives the policy
D. The insurance company approves the policy
P receives the policy & pays the premium
49
```
All of these are considered sources of underwriting information about an applicant, Except:
A. Inspection report
B. Credit report
C. Rating services
D. Medical information bureau
```
Rating services
| best, standard, poor
50
```
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy in annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
A. 430(b) plan
B. Deferred premium
C. Single premium
D. Period Certain
```
Single premium
Immediate annuities are purchased with a single lump sum payment and will start providing income payments within the first year
51
```
What is the maximum number of employees (earning at least $5000) that and employer can have in order to start a SIMPLE retirement plan ?
A. 25
B. 50
C. 100
D. 250
```
100
52
Which of the following statements BEST defined do usual, customary, and reasonable (UCR) charges?
A. The maximum premium and insured can charge for their health insurance based on geography
B. The maximum amount employer can contribute to a contributory health plan
C. The maximum deductible an insured can be charged
D. The maximum amount considered eligible for reimbursement by an insurance company under a health plan
The maximum amount considered eligible for reimbursement by insurance company under a health plan
53
According to the Time Limit of certain Defenses provision in an Individual Health Insurance Policy, non-fraudulent misstatements first become incontestable?
A. Two years from the date of the policy was issued
B. Two years after the collection of the initial premium
C. Two years from the date of the first claim
D. Two years from the date the policy was delivered
Two years from the date of the policy was issued
54
```
Accident policy will most likely pay a benefit for a:
A. Self-inflicted injury
B. Critical illness
C. On-the-job accident
D. Off-the- job accident
```
Off-the- job accident
55
```
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
A. HMO
B. PPO
C. EPO
D. PlHSO
```
PPO
56
```
Which premium schedule results in the lowest cost to the policy owner?
A. Semi-annual
B. Monthly
C. Quarterly
D. Annually
```
Annually
57
An agent would be guilty of rebating by?
A. Returning a portion of a premium as an incentive to purchase insurance
B. Canceling a clients insurance policy without a cause
C. Selling direct marketing products
D. Offering temporary insurance coverage
Returning a portion of a premium as incentive to purchase insurance
58
```
A CEO’s personal assistant suffered injuries at home and as a accident, wasn’t able to work for four months. What type of policy will pay a benefit to the personal assistant?
A. Disability income
B. Major medical
C. Key employee
D. Business overhead expense
```
Disability Income
59
```
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called?
A. Reinstatement
B. Grace period
C. Automatic premium loan
D. Waiver of premium
```
Reinstatement
60
An applicant’s Medical information received from the Medical Information Bureau (MIB) maybe furnished to:
A. Agent
B. Agent spouse
C. National Association of insurance commissioners
D. Applicant’s physician
Applicant’s physician
61
```
The health insurance portability and accountability act (HIPAA) Gives privacy protection for:
A. Insolvency
B. Health information
C. Financial information
D. Overinsurance
```
Health information
62
```
Which of the following is the minimum age at which an individual can sign a life insurance application
A. 15
B. 18
C. 19
D. 21
```
15
63
```
Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insure has the right to change the premium rate for the overall risk class?
A. Conditionally renewable
B. Non-cancelable
C. Guaranteed renewable
D. Optionally renewable
```
Guaranteed Renewable
Usually has increasing premiums
64
Health insurance benefits NOT covered due to an act of war are:
A. Excluded by the insurer in the contract provisions
B. Assigned to a reinsurer
C. Given a longer probationary period
D. Charge a higher premium
Excluded by the insured in the contract provisions
65
T is covered by a accidental death and dismemberment (AD/D) policy that has an irrevocable beneficiary. What action will the insurance company take if T request a change of beneficiary?
A. Request will be accepted only if in writing by the insured
B. Change will be made only of premiums are paid current
C. Change will be made immediately
D. Request of change will be refused
Request of the change will be refused
66
```
An underwriter determines that an applicant risk should be recategorize due to a health issue. This policy may be an issued with a?
A. Delayed effective date
B. Exclusion for the medical condition
C. Extended contestable period
D. Concealment clause
```
Exclusion for the medical condition or problem
67
```
An insured’s inability to perform two or more activities of daily living may trigger which type of policy rider?
A. Waiver of premium
B. Long term care
C. Accelerated death benefits
D. Accidental
```
Long term care
| Has 2 or more daily inability that can not perform
68
```
Which of the following types of health coverage frequently used as a deductible?
A. Major medical policy
B. Basic surgical policy
C. Basic hospital policy
D. Worker’s compensation
```
Major medical policy
69
```
After initially issued, a temporary license is valid for:
A. 3 months
B. 4 months
C. 5 months
D. 6 months
```
6 months!
70
A domestic insurance company in Georgia is considered a company that?
A. Only sells to Georgia residence
B. Exclusively does business in Georgia
C. Incorporate & formed in Georgia
D. Is licensed to issue direct mail-order coverage
Is incorporated and formed in Georgia
71
```
The sections of an insurance contract which limit coverage are called:
A. Waivers
B. Riders
C. Exclusions
D. Limitations
```
Exclusions
72
```
The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called:
A. Probation period
B. Grace period
C. Waiver of premium
D. Illumination period
```
Waiver of premium!
73
```
A whole life insurance policy owner does not wish to continue making premium payments. Which of the following enables the policy owner to sell the policy for more than its cash value?
A. Cash surrender
B. Life settlement contract
C. Buy-sell arrangement
D. 1031 exchange
```
Life settlement contract
74
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 the grace period?
A. Refund of all the premiums payed, plus interest
B. Refund of all the premiums paid
C. Full face amount minus any past due premiums
D. Full face amount
Full Face amount minus any past due premiums
75
```
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should he purchase?
A. Family benefit policy
B. Family maintenance policy
C. Family income policy
D. Family survivor policy
```
Family maintenance policy.
It pays a monthly income from the date of the death of the insured to the end of the preselected period. And face amount a policy is payable at a pre-selected.
76
What action will insurer (Insurance Co) take if an investment payment on a policy loan is not made on time?
A. Cancel the policy if not paid within the grace.
B. Automatically add the amount of interest due to the loan balance
C. Subtract from any dividends owed
D. Disallow any further loans
Automatically add the amount of interest due to the loan balance
77
C is a key employee at ABC Inc. If a Key Employee Life insurance is purchased on her, which of these statements would be true?
A. ABC is the policy owner, C is the insured, and her husband is a beneficiary
B. ABC is the policy owner, C is the insured, and ABC is a beneficiary
C. C is the policy owner and the insured, and ABC is a beneficiary
D. C is the policy owner, the insured, and beneficiary
ABC is the policy owner, C is the insured and ABC is the beneficiary (company)
78
```
S takes out an accident and sickness insurance policy which contains a 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?
A. Legal actions
B. Insurance with other insurers
C. Entire contract
D. Reinstatement
```
Entire contract.
| States that the agent does not have the authority to change the policy or waive any of its provisions
79
```
Which of the following does Social Security Not provide benefits for?
A. Survivorship
B. Dismemberment
C. Disability
D. Retirement
```
Dismemberment
80
```
An insure must provide an insured with claims forms with in _ days after receiving a notice of loss?
A. 5
B. 10
C. 15
D. 20
```
15 maximum days
| after receiving notice of loss
81
Which statement is correct regarding the premium payment schedule for whole life policies?
A. Premiums are payable throughout the insured’s lifetime/coverage last until death of the insured.
B. Premiums are payable for a set period/coverage expires at that point
C. Premiums are payable until age 65, coverage lasts a lifetime
D. A single premium is paid at the time of application/coverage last until retirement
Premiums are payable throughout the insured’s lifetime/coverage last until death of the insured
82
```
In Georgia, long-term care policies are required to provide benefits for at least?
A. 6 months
B. 12 months
C. 18 months
D 24 months
```
12 months!
83
```
A policy of adhesion can only be modified by whom?
A. The agent
B. The applicant
C. The primary beneficiary
D. The insurance company
```
The insurance company
84
All of these are characteristics of An adjustable life policy, Except;
A. Adjustable premiums
B. Adjustable premium period
C. Combination of term and whole life insurance
D. Face amount can be adjusted using policy dividends
Face amount can be adjusted using policy dividends
85
```
Cording to the mandatory Uniform policy provision, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
A. 7 days
B. 10 days
C. 31 days
D. 60 days
```
31 days
86
```
A renewable term policy is renewable at the option of the:
A. Owner
B. Company
C. Insured
D. Assignee
```
Insured
87
```
An insurance company normally has two years to contest information provided on an accident and health application. This two-year period begins on the date that the:
A. Medical examination is given
B. Producer completes the application
C. Insurer dates the policy
D. The first premium is paid
```
Insurer dates the policy
88
An agent takes an individual Disability Income Application, collects the appropriate premium, and issues the perspective insured a conditional receipt. The next step the insurance company takes is:
A. Issue policy only when the initial premium has cleared
B. Determine if the applicant is insurable by investigating the family health history
C. Issue the policy on a standard basis
D. Determine if the applicant is and acceptable risk by completing the standard underwriting process
Determine if the applicant is an acceptable risk by completing standard underwriting procedures
89
```
S buys a $10,000 whole life policy in 2003 MPs an annual premium of $100. S dies five years later in 2008 and the insured pays beneficiary 10,500. What kind of Rider did the S include on the policy?
A. Accumulated death benefit rider
B. Return of premium rider
C. Family income rider
D. Term rider
```
Return of premium rider
90
```
Which type of insurance policy beneficiary requires his/her consent when a change of beneficiary is a tempted by the policy owner?
A. Irrevocable beneficiary
B. Primary beneficiary
C tertiary beneficiary
D. revocable beneficiary
```
Irrevocable beneficiary
91
```
Which type of insurance company allows the policy owners to elect a governing body?
A. Stock
B mixed
C. Admitted
D. Mutual
```
Mutual
92
```
P and Q are married and have three children. P is the primary beneficiary on Q’s accidental death and dismemberment policy (AD;D) and Q sister are is the contingent beneficiary. P, Q, and are all involved in a car accident and Q &; R are killed instantly. The accidental death benefits will be paid to:
A. R’s esstate
B. Q’s esstate
C. P & Q estate
D. P only
```
P’s only
| Because P survived the accident and is the primary beneficiary
93
K is an agent who takes an application for an individual life policy and except a check from the client. He’s a mess the application and the check to the insurance company, however the check was never signed by the applicant. If the application is approved when will coverage be effective?
A. The date the sales appointment was made
B. The date the application was submitted to the insurance
C. The date of application
D. The date the agent delivered the policy, collected the initial premium, and obtain a good health statement from the insured
The date the agent delivered the policy, collected the initial premium, and obtain a good health statement from the insured
94
```
An Annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to beneficiary until an amount equal to the contract value has been paid. This type of annuity is called?
A. Installment refund annuity
B. Cash refund annuity
C. Straight life annuity
D. Joint life annuity
```
Installment refund annuity
95
Which of the following statements BESt describes dental care indemnity coverage?
A. Services are reimbursed before the ensure receives the invoice
B. Services are reimbursed after insure received the invoice
C. In-network dentist always be used
D. Very limited list of providers
Services are reimbursed After insurer receives the invoice
96
When is a group accident and health policy required to provide coverage for a newborn?
A. At the moment of birth
B. When the required additional premium is paid
C. The policy owner notifies the insurance company
At the moment of birth
97
```
When a policy owner cash surrenders a Universal Life policy in its early years, this may be considered a red flag for a:
A. Federal fair credit act violation
B. Title 18 fraud violation
C. Anti-money laundering violation
D. Unfair trade practices violation
```
Anti-money laundering violation
98
Why would the Commissioner examine an insurer’s record?
A. Determine the solvency of the insurer
B. To determine Claims rate of the insure
C. To approve a rate increase by the insurer
D. Determine the AM best rating of insurer
Determine the solvency of the insurer
99
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?
A. Distribution is subject to capital gains tax
B. Distribution is subject to the original income tax
C. Distribution is subject to a tax penalty
D. Distribution is subject to the federal income tax withholding
Distribution is subject to federal income tax withholding.
Plan should withhold 20% of the distribution for federal taxes on a rollover.
100
```
J let her life insurance policy lapse eight months due to non-payment. She can reestablish coverage under which of the following provisions?
A. Payor clause
B. Automatic premium loan provision
C. Reinstatement provision
D. Waiver of premium
```
Reinstatement provision
101
```
Which type of policy covers 2 lives and pays the face amount after the first one dies?
A. Group life
B. Joint life policy
C. Family income policy
D. Last survivor policy
```
Joint Life policy
102
Which of the following is an important underwriting principal of group life insurance?
A. Physical examinations are required
B. Everyone must be covered in the group
C. Employer must pay for the entire premium
D. The group must be formed for the purpose of getting affordable insurance
Everyone must be covered in the group
103
```
What must the policy owner provide to the insurer for validation that a loss has occurred?
A. Proof of coverage
B. Proof of claim
C. Proof of loss
D. Proof of payment
```
Proof of loss
104
```
Which provision prevents an insurer from changing the terms of the contract with the policy owner by referring to documents not found within the policy itself?
A. Policy exclusion
B. Incontestable
C. Entire contract provision
D. Assignment
```
Entire contract provision
105
In Georgia, which of the following statements is correct about life insurance advertisements?
A. An insurance agency is responsible for advertisements place by its insurance agents
B. The commissioner of insurance mess approved advertisements before used
C. The dividends may be represented as guaranteed
The insurance agency is responsible for advertisements agents place
106
B owns a whole life policy with a guaranteed insurability option allows him to purchase, without evidence of insurability, stated amounts of?
A. Additional term life coverage at any time
B. Additional term life coverage EP is specific intervals
C. Additional whole life coverage at any time
D. Additional whole life coverage at a specified times
Additional Whole Life coverage at specified times
107
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 involves?
A. Establishes the needs of the individual and his dependents
B. Takes into account the present value of future income earned by the breadwinner
C. Places a dollar value on the life of the individual
D. Establishes the investment risk level acceptable to the individual
Establishes the needs of the individual and his dependents
108
```
What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?
A. Primary insurance amount (PIA)
B. Total taxes paid in the FICA
C. Number of dependents
D. State of residence
```
Primary Insurance account
109
Which of the following is a characteristic of a variable annuity?
A. Underlying equity investments
B. Does not have surrender chargers
C. Does not provide a transfer ownership
D. Selling this product requires only a life license
Underlying equity investments.
| They put these in a separate account.
110
```
A policy owner is allowed to pay premiums more than once a year under what provision?
A. Insuring
B. Consideration
C. Payor
D. Mode of premium
```
Mode of premium.
| Insured permits to pay premiums more than once every year
111
```
N has a major medical policy that only pays a portion of N’s medical policy. And is responsible for paying the remaining balance. This provision is known as?
A. Assignment of benefits
B. Coinsurance
C. Indemnity
D. Co-deductible
```
Coinsurance
112
The guarantee of insurability option provides a long-term care policy owner the ability to?
A. Buy additional coverage at a later date
B. Add the insured spouse at a later date
C. Pay the same premium for life
D. Cancel the policy at any time
Buy additional coverage at a later date
113
In life insurance, the needs approach is used mostly to establish:
A. Which type of life insurance a client should apply for
B. How much life insurance a client should apply for
C. Which company a client should use when applying for life insurance
D. What the maximum amount the client can spend on life insurance
How much life insurance a client should apply for
114
Which of the following statements regarding a tax sheltered annuity (TSA) is incorrect?
A. The income from the TSA is received income tax free
B. The amount contributed is deductible from taxable income
C. The interest earnings are tax deferred
D. A tax sheltered annuity is available to employees of nonprofit organizations
The income from the TSA is received income tax free
Upon retirement, payment received by employees from the accumulated savings in tax sheltered annuities are treated as ordinary income
115
```
The ______ must provide an insured with proper disclosure concerning the replacement of an insurance policy.
A. Agent
B. Applicant
C. Underwriter
D. Commissioner Raw.
```
Agent
116
```
The individual most likely to buy a Medicare supplement policy would be a:
A. Unemployed 64-year-old female
B. 62-year-old male covered by Medicaid
C. 68-year-old male covered by Medicare
D. Uninsured 60-year-old male
```
68-year-old male covered by Medicare.
Medicare supplements are available to those covered by Medicare
117
The amount of coverage on a group credit life policy is limited to:
A. Half of the insured’s total loan value
B. The insured’s total loan value
C. 75% of the insured’s total loan value
D. $25,000
The insured’s total loan value.
118
Which of the following statements about the classification of applicants is INCORRECT?
A. Substandard applicants are never decline by underwriters
B. Substandard applicants are occasionally declined by underwriters
C. Preferred risk applicants typically have better premium rates then standard risk applicants
D. An applicant can be classified as substandard risk because of a hazardous job
Substandard applicants are never declined by underwriters.
This is false. An individual can be rated substandard for a number of reasons and can even be rejected out right.
119
```
Which of these is NOT considered to be an element of an insurance contract?
A. The offer
B. Acceptance
C. Negotiating
D. Consideration
```
Negotiating
120
```
T files a claim on his accident and health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim’s validity. The provision that limits the time period during which the company made his beauty claims validity is called:
A. Insuring
B. Time limit on certain defenses
C. Grace period
D. Free-look
```
Time limit on certain defenses or incontestability
121
```
And 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?
A. 7
B. 10
C. 20
D. 31
```
31 Days for policies that are paid for on an annual basis
122
```
T and S are named sole primary beneficiaries on a $500,000 accidental death and dismemberment policy ensuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterward. How much of the death benefit will the mother receive?
A. $1 million
B. $500,000
C. $250,000
D. $0
```
$0
The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary
123
```
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the uniform simultaneous death act?
A. Primary beneficiary’s estate
B. Primary beneficiary’s next of kin
C. Insured’s estate
D. Insured’s contingent beneficiary
```
Insured’s contingent beneficiary
124
What is the elimination period of an individual disability policy?
A. Time period an insured must wait before coverage begins
B. Time period a disabled person must wait before benefits are paid
C. Time. After the policy issue date in which the provisions are still contestable
D. The point in time when benefits are no longer payable
Time. A disabled person must wait before benefits are paid.
The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before the benefits are paid
125
```
Cash surrendering an existing whole life policy and purchasing a new whole life policy is referred to as a
A. Conversion
B. Illegal transaction
C. Cancellation
D. Replacement
```
Replacement
but it’s heavily regulated
126
Which of the following phrases refers to the fees charged by a healthcare professional?
A. Deductible
B. Coinsurance
C. Usual, customary, and reasonable expenses
D. Hospital expense
Usual, customary, and reasonable expenses
127
```
Which of the following statements is CORRECT about the period in which a term policy can be converted?
A. It is the same on all contracts
B. It is set by state regulation
C. It can be changed by the insured
D. It varies according to the contracts
```
It varies according to the contracts
128
Under a renewable term policy,
A. The face amount is automatically adjusted at the time of renewal
B. Evidence of insurability must be provided at each renewal
C. The renewal premium is calculated on the basis of the insured’s attained age
D. A new application must be completed at each renewal
C. The renewal premium is calculated on the basis of the insured’s attained age
129
P is a producer who notices five questions on a life application we’re not answered. What action should P take?
A. Mail incomplete application to application to be completed and returned agent
B. Send me the application as- is to the insured
C. Call the applicant & complete application over the phone
D. Set up a meeting with the applicant to answer the remaining questions.
Set up a meeting with the applicant to answer the remaining questions.
130
```
Which of the following is the reimbursement of benefits for the treatment of a beneficiary’s injuries caused by a third party?
A. Indemnity
B. Subrogation
C. Legal action
D. Consideration
```
Subrogation
| Insurer has the right to pursue a third-party because an insurance loss to the insured.
131
The purpose of the rules governing advertisement of life insurance and annuities?
A. Set advertisement rates for insurers
B. Assure full disclosure to the Public of all material the relevant information
C. Provide a potential client with all consumer ratings for the ensure
Assure full disclosure to the public of all materials & relevant information
132
Policy owners rights are limited in her which beneficiary designation?
A. Revocable
B. Contingent
C. Irrevocable
Irrevocable
133
```
Producer must notify the commissioner of address change by __days?
A. 15
B. 30
C. 45
D. 60
```
30
134
```
M has major medical insurance policy with a $200 flat deductible and 80% coinsurance clause. If M incurs $2000 and $200 claim for an eligible medical expense, how much will M receive in payments for this claim?
A. $2000
B. $1760
C . $1600
D. $ 400
```
$1600
| $2200-$200 x 80%
135
Who would be eligible for a temporary license issued in Georgia?
A. An agent visiting Georgia to write a policy
B. An agent to sell a policy from a company with which the agent is not appointed.
C. The personnel representative to see his agent to provide service to existing policyowners
D. Minor services for parent existing policy owners
The personal representative of a deceased agent to provide service to the existing policy owners
136
```
Disability elimination period is best described as:
A. Time deductible
B. Dollar deductible
C. Eligibility period
D. Probation period
```
Time deductible
137
A “reimbursement policy” Pays what amount of covered life-term care expenses?
A. All expenses regardless of the policy limits
B. Actual covered expenses up to the daily maximum
C. A daily dollar amount regardless of the actual incurred expenses
D. The usually, customary, and reasonable expenses regardless of the policy limits
Actual covered expenses up to the daily maximum
138
```
Which of the following provisions specifies how long a policyowner’s health coverage will remain in effect If The policy owner does not pay the premium when it is due?
A. Grace period
B. Consideration
C. Waiver of premium
D. Reinstatement
```
Grace period
139
Which of the following statements best describes what the legal actions provision of an Accident & Health policy requires?
A. Insured must settle a claim within 60 days after proof of loss is submitted
B. Insured must wait at least 30 days after proof of loss has been submitted before a lawsuit can be filed
C. Insured must wait at least 60 days after proof of loss has been submitted before law suite can be filed
D. Insured must settle a claim within 30 days after proof of loss is submitted
Insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed
140
```
Insured must notify an insurer of a medical claim within how many days after an accident?
A. 10
B. 20
C. 30
D. 40
```
20
141
```
Which writer provides coverage for a child under a parent’s life insurance policy?
A. Spouse term rider
B. Base rider
C. Payer benefit rider
D. Child term rider
```
Child term rider
142
Accurate definition of “controlled business”?
A. Insurance business that is written on an agents of life, property or interests
B. Insurance business obtain by an agent through coercion
C. Insurance business that has attained through false advertising
D. Insurance business that is replaced by an existing policy through misrepresentation
Insurance business that is written on the agent’s on life, property, or interests
143
Which of these is considered a true statement regarding Medicaid?
A.Funded by both state and federal governments
B. Intended to be used age 65 and older
C. Provides disability income benefits
D. Automatically receive Social Security disability benefits
Funded by Both State and federal governments
144
G purchases a $50,000 single premium, straight life annuity two years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer:
A. Does not have to make any further payments
B. Let’s continue to meet monthly payments to GSU beneficiary for the rest of their beneficiaries life.
C. Let’s make G’s beneficiary the difference between the amount paid to G and the $50,000 in a lump sum
D. Must continue to make monthly payments of G’s beneficiary until the difference in the amount paid to G & $50,000 is paid out.
does not have to make any further payments
145
```
Insurer receives proof of Loss on an acceptable medical expense claim under an Individual Health Insurance policy. Under the time of payment of claims provision, the insurer MUST Pay the benefits:
A. Immediately
B. Within a maximum of three months
C. Within a reasonable amount of time
D. At least monthly
```
Immediately!
146
Which requirements must be met for an association to be eligible for a group life plan?
A. Group was formed for the purpose other than acquiring insurance
B. Group must establish a president
C. Group must have at least 10 members
D. Group was formed for the purpose of acquiring insurance
Group was formed for a purpose other than acquiring insurance.
Group life insurance can be formed just as long as they are form for a reason other than to purchase insurance
147
```
The clause identifying which losses result from an accident or sickness are insured by the policy is called:
A. Entire contract provision
B. Consideration clause
C. Benefit clause
D. Insuring clause
```
Insuring clause
148
```
Which of the following dividend options results in taxable income to the policyowner?
A. Paid up additions
B. Cash
C. Accumulation at interest
D. Reduce premium
```
Accumulation at interest
Our policy dividends are not taxable, any interest paid on them is taxable income in the year the interest is credited to policy
149
```
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
A. Split-dollar plan
B. Employee purchase plan
C. Key employee plan
D. Deferred compensation plan
```
Split-dollar plan
Arrangement where the employer and employee share in the cost of purchasing a life insurance policy, employee chooses beneficiary
150
```
In Georgia, monthly-premium accident and sickness insurance policies must provide a grace period of at least:
A. 7 days
V. 14 days
C. 10 days
D. 31 days
```
10 days
151
A “reimbursement policy” pays what amount of covered Long Term CAre expenses?
A. All expenses regardless of the policy limits
B. Actual cover expenses up to the daily maximum
C. A daily dollar amount regardless of the actual incurred expenses
D. The usual, customary, reasonably expenses regardless of the policy limits
Pays - Actually covered expenses up to the daily maximum.
152
To be eligible for Social Security disability benefits, and employee must be unable to perform;
A. Any occupation
B. His/her current occupation
C. Any occupation that reflects the employees education level
D. Any occupation that employee is qualified and willing to do
Any occupation
153
```
What is the maximum number employees (earning at least $5000) dad and employer can have an order to start a SIMPLE retirement plan?
A. 25
B. 50
C. 100
D. 250
```
100
154
When the commissioner examines and insurer’s records, who pays for the cost associated with the examination?
A. The state of Georgia
B. The insurance company being examined
C. The commissioner
D. The national Association of insurance commissioners
The insurance company being examined
155
Comprehensive major medical policy usually combined:
A. Major medical with disability income coverage
B. Basic hospital/surgery with accidental coverage
C major medical with basic hospital/surgical coverage
D. Basic/hospital/surgical with disability income coverage
Major medical with basic hospital/surgery coverage
156
When employee is terminated, which statement about group term life conversion is true?
A. Employer must convert group term life coverage into individual term life policy
B. Employee must provide evidence of insurability for conversion
C. Policy proceeds will be paid if the employee dies during the conversion.
D. Policy proceeds will Not be paid if the employee dies during the conversion.
Policy proceeds will be paid if employee dies during the conversion.
Individual must apply for coverage within 31 days after group coverage termination.
157
```
Which unfair trade practices involves an agent suggesting that an insurance policy is like a share of stock?
A. Twisting
B. Intimidation
C. Misrepresentation
D. Sliding
```
Misrepresentation
158
```
Which of the following combination plans is designed to protect and insured from an unpaid mortgage balance upon premature death?
A. Survivorship Life
B. Family plan
C. Joint life
D. Whole Life & Level Term rider
```
Joint Life
159
```
Additional coverage can be added to a whole life policy by adding;
A. Payor rider
B. Accelerated benefit rider
C. Decreasing term rider
D. Automatic premium loan rider
```
Decreasing term rider
160
A characteristic of a preferred provider organization “(PPO) would be:
A. Discounted fees for the patient
B. Not allowed to see out-of network positions
C. Positions are paid on capitalation basis
D. Primary care physician is required
Discounted fees for the patient
161
J , accidental death and dismemberment (AD&D)
policy holder, dies after injuries sustained in an accident. J’s stated age on the application five years ago was found to be under stated by 10 years. Which of the following actions will the insurance company take?
A. Insurer will pay original benefits
B. Ensure will adjust the benefits to what the premiums paid would have purchased at the insured’s actual age
C. Insurer will deny the claim and refund premiums paid
The insurer will adjust to what the premiums paid would have purchase at the insured actual age
162
The notice of claims provision requires a policy owner to:
A. Provide proof of loss to insure within a specified time
B. Notify an insurer of a claim within a specified time
C. Wait 60 days after filing a lawsuit against an insurer
Notify an insurer of a claim within a specified time
163
```
Whose life is covered on a life insurance policy that contains a payer benefit clause?
A. Parent
B. Beneficiary
C. Spouse
D. Child
```
Child
This clause is added to continue coverage in the event of a death or total disability are the individual responsible for premium payments.
164
```
A ____ Life policy offers the owner investment in products such as money market fund, long-term bonds and equities?
A. Adjustable
B. Term
C. Universal
D. Variable
```
Variable
165
Are these statements concerning Settlements options are true, except:
A. Increase proceeds can be provided through accumulation of interest
B. Rapid depletion of proceeds can be avoided
C. Proceeds can be administered by the insurance company
D. Only the beneficiary may select
Only the beneficiary may select
only Policyowner May select options
166
B is insured under individual disability income policy with a 30-day elimination period. On July 1,
he is involved in an accident and temporarily disabled. Return to work on December 1. How many months of benefits are payable?
A. 6 months
B. 4 1/2 months
C. 4 months
D. 5 months
4 months
| Due to 30-day elimation
167
S isn’t clot played by a large corporation that provides group health coverage and their dependence. If S dies, the company must follow his surviving spouse independence to continue their group health coverage for a maximum of how many months under COBRA?
A. 36 months
B. 15 months
C. 18 months
36 months
168
```
Policy loan is made possible by which of these life insurance policy features?
A. Extended term provision
B. Cash value provision
C. Owners rights provision
D. Consideration clause
```
Cash value provision
169
What type of life policy covers two people and pays upon the death of the last insured?
A. Survivorship
B. Adjustable
C. Joint
Survivorship
170
Which of these are regulated by the Rules Governing advertisement of life insurance and annuities?
A Communication between marketing and underwriting department
B. Rate increase announced by insurance company via mass mailing
C. Prepared sales presentations used by insurance agents
Prepared sales presentations used by insurance agents
171
Which policy is characterized by flexible premium & death benefit and allows the policy owner control the investment aspect of the plan?
A. Variable life
B. Universal life
C. Variable universal life
Variable universal life
Universal has flexible or adjustable premiums.
Variable indicates it has cash savings invested in stock or funds
172
Which health insurance policy provision specifies the healthcare services a policy will provide?
A. Insuring clause
B. Usury, customary and reasonable clause
C. Consideration clause
Insuring clause
173
An insurance company Which engages in boycott, coercion, intimidation that results in unreasonable restraint of trade is committing a prohibited act under Georgia insurance laws:
A. Twisting
B. Discrimination
C. Unfair trade practices
Unfair trade practices
174
Which statement regarding third-party ownership of a life insurance policy is true?
A. Beneficiary is required to be irrevocable
B. Policy cannot be assigned once issued
C. It is illegal in most states
It is used extensively in estate-planning as well as business circumstances
It is used extensively in estate- planning and business circumstances
175
Assignment of benefits of a health policy:
A. Transfers payments to someone other than the policy owner
B. Is allowed only on policy dates after 1992
C. Transfer rights from the company to the policyholder
Transfer his payments to someone other than the policy owner
176
Which statement is true regarding a minor beneficiary?
A. Normally, the death proceeds are required to be held in trust until beneficiary reaches age 21
B. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
C. Minor must pay off debts of insurance to state before receiving proceeds
Normally, a guardian is required to be appointed in the beneficiary clause of contract
177
Guarantee of Insurability option provides a long-term care policy owner the ability to:
A. Buy additional coverage at a later date
B. Add the insured’s spouse at a later date
C. Pay the same premium for life
D. Cancel the policy at anytime
Buy additional coverage at a later date (future option)
178
```
All of the following are limited benefit plans, Except?
A. Life insurance policies
B. Cancer policies
C. Dental policy
D. Critical illness policy’s
```
Life insurance policy
179
```
USA patriot act was in acted in:
A. 2001
B. 2000
C. 2002
D. 2004
```
2001
180
The Life & Health Insurance Guaranty Association is:
A. Entity that assist in underwriting large insurance companies
B. Funded by the state government
C. Funded by admitted insurance companies through assessment
Funded by admitted insurance company through assessment
& will pay claims if it becomes insolvent
181
```
Which mode of payment is Not used by a health insurance policies?
A. Monthly premium
B. Annual premium
C. Single premium
D. Semi-annual premium
```
Single premium
182
Who owns a stock company?
A. Stockholders
B. Policyowners
C. Board of directors
It’s stockholders
183
Blanket health policies vs Group insurance:
A. Blanket health policies do not issue certificates
B. Group health policies do not issue certificates
Blanket health policies do not issued certificates
& May cover airline or bus company passengers
184
The insuring clause;
A. Specifics the additional time given to pay past due premiums
B. States the scopes & limits of coverage
C. States the amount of premiums to be collected
D. Prohibits the insurer from suing the insurer for at least 60 days after filing written proof of loss
States the scope and limits of coverage
185
```
What is the primary factor that determines the benefits paid under a disability income policy?
A. Education level
B. Wages
C. Age
D. Type of occupation
```
Type of occupation
186
Which action will an insurance company most likely Not take if an applicant, who has diabetes, applies for a disability income policy?
A. Issue the policy with a diabetes exclusion
B. Issue the policy with the rating
C. Declined applicant
D. Issue the policy with an altered time of payment of claims provision
Issue the policy with an altered time of payment of claims provision
187
In Georgia, “free look” period Is:
A. 10 days
B 15 days
C. 30 days
10 days
188
What is being delivered during a policy delivery?
A. Binding receipt to the proposed insurer
B. Application and initial premium to the insurer
C. Policy summary sheet and disclosed material to the proposed insured
B. Insurance contract to the proposed insured
Insurance contract to the proposed insured
189
Time limit of certain defenses provision in an individual health insurance policy, non-fraudulent misstatements first become incontestable :
A. Two years from the date the policy was issued
B. Two years after a collection of initial premium
Two years from the date of the policy was issued
190
K is an agent who has induced an insurer through misrepresentation to surrender an existing insurance policy. What is K guilty of?
A. Coercion
B. Twisting
C. Rebating
Twisting
191
Policy owner dividends are treated in regards to income tax?
A. Taxed as ordinary income
B. Taxed capital gains
C. Interest on accumulations is taxed
Interest on accumulations is taxed
If the dividends exceed the total premium payment for the insurance policy, the excess dividends are considered taxable income
192
When Misrepresentation on a life insurance policy is discovered, what action may an insurance company take?
A. Void the policy if found during the contestable period
B. Void the policy, no matter when it is discovered
C. Void the policy only if it’s discovered during the Contestable period And proven to be material
Void the policy only if it is discovered during the contestable & proven to be material
193
Medicare part C is:
A. Original part a and B Medicare
B. Available to those who are rolled in Medicare part A and part B
Available to those who are enrolled in Medicare part A and part B
194
What is considered to be a characteristic of an immediate annuity (lump sum contribution) ?
A. Benefits payments start within 1 payment of purchase
B. Benefits start within five years of initial purchase
Benefit payments start within one payment period of purchase
195
Which life insurance rider allows the applicant to have excessive coverage?
A. Waiver of premium rider
B. Guaranteed insurability rider
C. Term rider
Term rider
