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GA Life Insurance Exam Questions with
Answers 2024
Who elects the governing body of a mutual insurance company? โ policyholders What year was the McCarran-Ferguson Act enacted? โ 1945 A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: โ a fraternal benefit society The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: โ reserves What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? โ Fair Credit Reporting Act The part of a life insurance policy guaranteed to be true is called a: โ warranty What is the consideration given by an insurer in the consideration clause of a life policy? โ promise to pay a death benefit to a named beneficiary Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called: โ representations Which of the following consists of an offer, acceptance, and consideration? โ contract Which of these require an offer, acceptance, and consideration? โ contract In regards to representation or warranties, which of these statements is TRUE? โ If material to the risk, false representation will void a policy Insurance policies are offered on a "take it or leave it" basis, which make them: โ Contracts of Adhesion A life insurance policy would be considered a wagering contract WITHOUT:
โ insurable interest Insurance policies are considered aleatory contracts because โ performance is conditioned upon a future occurance Life and health insurance policies are: โ Unilateral contracts Who makes the legally enforceable promises in a unilateral contract? โ insurance company When must insurable interest be present in order for a life insurance policy to be valid? โ when the application is made Which of these is NOT a type of agent authority โ principal When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: โ insurable interest in the proposed insured What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? โ family maintenance policy When is the face amount paid under a Joint Life and Survivor policy? โ upon the death of the insured A 15-year mortgage is best protected by what kind of life policy? โ 15-year decreasing term A term life insurance policy matures: โ upon the insured's death during the term of the policy The amount of coverage on a group credit life policy is limited to: โ the insured's total loan value Which statement is TRUE regarding a Variable Whole Life policy? โ a minimum guaranteed Death benefit is provided Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: โ limited pay life Which of the following characteristics is CORRECT about Interest Sensitive Whole Life? โ premium payments can vary
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? โ void the policy only if it is discovered during the Contestable period and is proven to be material Which of these actions is taken when a policy owner used a Life Insurance policy as collateral for a bank loan? โ collateral assignment Additional coverage can be added to a Whole Life policy by adding a(n) โ decreasing term rider M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? โ pay face amount minus the past due premium T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? โ $50, Which of the following statements is CORRECT about accelerated death benefits? โ must have a terminal illness to qualify Whose life is covered on a life insurance policy that contains a payor benefit clause? โ child Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? โ variable life Which life insurance rider typically appears on a Juvenile life insurance policy? โ payor benefit rider Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? โ decreasing term Variable Whole Life Insurance can be described as: โ both an insurance and securities product Which rider provides coverage for a child under a parent's life insurance policy? โ child term rider
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? โ automatic policy loan All of these statements concerning Settlement Options are true, EXCEPT: โ only the beneficiary may select How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? โ claims are denied under the Suicide clause of the policy The automatic premium loan provision is designed to: โ avoid policy lapse Which of these is NOT considered to be a right given to a policy owner? โ modify a provision in the insurance contract P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? โ accidental death a dismemberment clause What does the ownership clause in a life insurance policy state? โ who the policy owner is and what rights the policy owner is entitled to S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT: โ beneficiary's age J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? โ Revocable What is the underlying concept regarding level premiums? โ the early years are changed more than what is needed The Common Disaster Clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true? โ the clause provides the payment of proceeds to the insured's estate A policy owner would like to change the beneficiary on a Life insurance policy and make the changes permanent. Which type of designation would fulfill this need? โ irrevocable A level premium indicates:
Which Federal law allows an insurer to obtain an inspection report on a potential insured? โ Fair Credit Reporting Act The USA Patriot Act was enacted in: โ 2001 P is a producer who notices 5 questions on a life application were not answered. What actions should P take? โ set up a meeting with the applicant to answer the remaining questions Before a life insurance policy is issued, which of these components of the contract is required? โ applicant's signature on application A life insurance application must be signed by all these, EXCEPT: โ beneficiary A Medical Information Report (MIB) report may disclose which of the following: โ prior use of marjuana M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT: โ free-look period has expired Any changes made on an insurance application requires the initials of whom? โ applicant Which of these do NOT constitute policy delivery? โ Policy issued with a rating At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? โ at the time of application What is being delivered during a policy delivery? โ Insurance contract to the proposed insured Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: โ signed HIPAA disclosure K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
โ conditional 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? โ the date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured Which provision is NOT a requirement in a group life policy? โ accidental If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? โ contributory Under a trustee group life policy, who would be eligible for a certificate of coverage? โ employee A person who is insured within a group contract will be given a: โ certificate An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be โ converted to an individual permanent policy at an individual rate An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: โ $25,000 individual whole life policy A noncontributory group term life plan is characterized by: โ the entire cost of the plan is paid for the employer Which of the following is an important underwriting principal of group life insurance? โ everyone must be covered in the group Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? โ portion of the premiums paid for by the employer may be a tax deduction When an employee is terminated, which statement about a group term life conversion is true? โ policy proceeds will be paid if the employee dies during the conversion period Equity indexed annuities are invested in which of the following: โ S&P 500
One becomes eligible for Social Security disability benefits after having been disabled for: โ 5 months What type of reinsurance contract involves two companies automatically sharing their risk exposure? โ Treaty Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? โ 5 All of these are considered to be a benefit under Social Security, EXCEPT for: โ unemployment A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: โ mandatory income tax withholding on the transfer amount A qualified profit-sharing plan is designed to: โ allow employees to participate in the profits of the company What type of employee welfare plans are not subject to ERISA regulations? โ church plans Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made? โ the account can be rolled into the surviving spouse's IRA Which plan is intended to be used by a sole proprietor and the employees of that business? โ Keogh Plan A retirement plan that sets aside part of the company's net income for distributions to qualifies employees is called a: โ profit-sharing plan An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? โ $2, Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? โ If Tom's employment is terminated, 20% of the funds would be forfeited
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? โ 100 What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? โ 50% C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true? โ ABC is the policy owner, C is insured, and ABC is the beneficiary What is considered a valid reason for small business to insure the lives of its major shareholders? โ fund a buy-sell agreement A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? โ Company X An engineering firm that would suffer financially from the death of a project manager should purchase a: โ Key Person Life Policy The premiums paid by an employer for his employee's group life insurance are usually considered to be: โ tax-deductible to the employer
