12-GA-62 Variable Products Exam (2025/2026)
– 300 Practice Questions with Correct Answers
(100% Verified) & Rationales
1. A client asks how variable life insurance differs from a traditional whole life policy. What is the primary
distinction?
A) Variable life has higher guaranteed cash values than whole life
B) The death benefit and cash values fluctuate with the investment performance of a separate account
C) Variable life premiums are always lower than whole life premiums
D) Whole life policies cannot have loans while variable life policies can
Answer: B
Variable life insurance places policy funds in a separate account invested in securities, causing death benefits and
cash values to fluctuate with investment performance, unlike fixed whole life which provides guaranteed values
from the insurer's general account .
2. In a variable life insurance policy, what guarantees the minimum death benefit regardless of separate account
performance?
A) The policyowner's personal assets
B) The insurer's general account
C) The Securities Investor Protection Corporation (SIPC)
D) The federal government
Answer: B
Variable life policies typically guarantee a minimum death benefit from the insurer's general account regardless of
poor separate account performance, providing downside protection for beneficiaries .
3. Which best describes the "separate account" in a variable life insurance policy?
A) A savings account at a bank owned by the policyowner
B) An account that is part of the insurer's general assets, invested conservatively in bonds
C) A segregated portfolio of investments, typically stocks and bonds, held apart from the insurer's general account
D) A checking account used to pay monthly premiums
Answer: C
1|Page SUCCESS!!!
,The separate account is a distinct investment portfolio segregated from the insurer's general account, where variable
policy funds are invested to generate returns that directly affect policy values .
4. A client is comparing a variable universal life (VUL) policy to a fixed premium variable life policy. What is the
key difference?
A) Fixed premium variable life is not regulated in Georgia
B) Flexible premium variable life (VUL) allows policyowners to adjust premium payments within limits, while
fixed premium requires scheduled level payments
C) Fixed premium variable life has no death benefit guarantee
D) Flexible premium variable life cannot be sold to Georgia residents
Answer: B
Flexible premium variable life (often called variable universal life) allows policyowners to adjust premium
payments within limits, while fixed premium variable life requires scheduled level payments similar to traditional
whole life .
5. An agent is explaining separate account investment options. Which investment option is typically NOT available
within a variable life separate account?
A) Common stock funds
B) Bond funds
C) Money market funds
D) A guaranteed fixed account with no market risk
Answer: D
While variable accounts offer various investment options, a guaranteed fixed account would be located in the
insurer's general account, not the separate account, as separate accounts are defined by their market-based risk
exposure.
6. Under Georgia law, which regulatory bodies must license an agent to sell variable life insurance products?
A) The Securities and Exchange Commission (SEC) only
B) The Financial Industry Regulatory Authority (FINRA) only
C) The Georgia Commissioner of Insurance AND appropriate securities licensing (FINRA Series 6 or 7)
D) The Federal Deposit Insurance Corporation (FDIC)
Answer: C
Georgia law requires variable annuity agents to hold both a life insurance license from the Commissioner and
appropriate securities qualifications, as variable products are considered securities.
2|Page SUCCESS!!!
,7. What is the "net amount at risk" in a variable life insurance policy?
A) The total premiums paid to date
B) The difference between the death benefit and the cash value
C) The surrender charge amount
D) The investment management fee
Answer: B
The net amount at risk is the difference between the death benefit and the cash value, representing the amount the
insurer must cover beyond accumulated funds .
9. Which statement comparing traditional whole life to variable life is TRUE?
A) Traditional whole life cash values are not guaranteed
B) Traditional whole life provides guaranteed cash values from the general account, while variable life values
fluctuate with market performance
C) Variable life has no death benefit guarantee
D) Traditional whole life cannot be sold in Georgia
Answer: B
Traditional whole life provides guaranteed cash values from the insurer's general account. Variable life cash values
fluctuate with separate account investment performance .
10. What is the "cost of insurance" charge in a variable life policy?
A) The investment management fee
B) The charge to cover the pure mortality risk based on the insured's attained age and net amount at risk
C) The premium tax
D) The surrender charge
Answer: B
The cost of insurance charge is the monthly deduction to cover the pure mortality risk, calculated based on the
insured's attained age and the net amount at risk .
11. In a variable life policy, who bears the investment risk on the cash value?
A) The insurer
B) The policyowner
C) The state insurance commissioner
D) The Securities and Exchange Commission
3|Page SUCCESS!!!
, Answer: B
The policyowner bears the investment risk on the cash value. If the separate account performs poorly, cash values
and potentially death benefits may decrease, subject to minimum guarantees .
12. What is an advantage of variable life insurance compared to fixed products?
A) Guaranteed minimum cash values regardless of market performance
B) Potential for higher cash value growth through equity market participation
C) Premiums that never increase
D) No surrender charges
Answer: B
Variable life insurance offers the potential for higher cash value growth than fixed products by allowing
participation in equity market returns through separate account investments .
13. What is the "assumed investment rate" (AIR) in a variable annuity contract?
A) The guaranteed minimum interest rate the insurer will pay
B) The actual rate of return earned by the separate account
C) An interest rate assumption used to calculate the initial annuity payment and subsequent payment adjustments
D) The maximum rate the separate account can earn
Answer: C
The AIR is an interest rate assumption (typically 3% to 5%) used to calculate the initial annuity payment and
subsequent payment adjustments. If the actual separate account return equals the AIR, payments remain level .
14. During the accumulation phase of a variable annuity, what is an accumulation unit?
A) A guaranteed fixed-dollar credit to the policy
B) An accounting measure representing the policyowner's share of the separate account's assets
C) A type of death benefit rider
D) The minimum guaranteed cash value
Answer: B
Accumulation units are accounting units used to track the policyowner's proportionate interest in the separate
account during the accumulation period before annuitization .
15. During the distribution (annuitization) phase of a variable annuity, what happens to annuity units?
A) They increase in number each month
4|Page SUCCESS!!!
– 300 Practice Questions with Correct Answers
(100% Verified) & Rationales
1. A client asks how variable life insurance differs from a traditional whole life policy. What is the primary
distinction?
A) Variable life has higher guaranteed cash values than whole life
B) The death benefit and cash values fluctuate with the investment performance of a separate account
C) Variable life premiums are always lower than whole life premiums
D) Whole life policies cannot have loans while variable life policies can
Answer: B
Variable life insurance places policy funds in a separate account invested in securities, causing death benefits and
cash values to fluctuate with investment performance, unlike fixed whole life which provides guaranteed values
from the insurer's general account .
2. In a variable life insurance policy, what guarantees the minimum death benefit regardless of separate account
performance?
A) The policyowner's personal assets
B) The insurer's general account
C) The Securities Investor Protection Corporation (SIPC)
D) The federal government
Answer: B
Variable life policies typically guarantee a minimum death benefit from the insurer's general account regardless of
poor separate account performance, providing downside protection for beneficiaries .
3. Which best describes the "separate account" in a variable life insurance policy?
A) A savings account at a bank owned by the policyowner
B) An account that is part of the insurer's general assets, invested conservatively in bonds
C) A segregated portfolio of investments, typically stocks and bonds, held apart from the insurer's general account
D) A checking account used to pay monthly premiums
Answer: C
1|Page SUCCESS!!!
,The separate account is a distinct investment portfolio segregated from the insurer's general account, where variable
policy funds are invested to generate returns that directly affect policy values .
4. A client is comparing a variable universal life (VUL) policy to a fixed premium variable life policy. What is the
key difference?
A) Fixed premium variable life is not regulated in Georgia
B) Flexible premium variable life (VUL) allows policyowners to adjust premium payments within limits, while
fixed premium requires scheduled level payments
C) Fixed premium variable life has no death benefit guarantee
D) Flexible premium variable life cannot be sold to Georgia residents
Answer: B
Flexible premium variable life (often called variable universal life) allows policyowners to adjust premium
payments within limits, while fixed premium variable life requires scheduled level payments similar to traditional
whole life .
5. An agent is explaining separate account investment options. Which investment option is typically NOT available
within a variable life separate account?
A) Common stock funds
B) Bond funds
C) Money market funds
D) A guaranteed fixed account with no market risk
Answer: D
While variable accounts offer various investment options, a guaranteed fixed account would be located in the
insurer's general account, not the separate account, as separate accounts are defined by their market-based risk
exposure.
6. Under Georgia law, which regulatory bodies must license an agent to sell variable life insurance products?
A) The Securities and Exchange Commission (SEC) only
B) The Financial Industry Regulatory Authority (FINRA) only
C) The Georgia Commissioner of Insurance AND appropriate securities licensing (FINRA Series 6 or 7)
D) The Federal Deposit Insurance Corporation (FDIC)
Answer: C
Georgia law requires variable annuity agents to hold both a life insurance license from the Commissioner and
appropriate securities qualifications, as variable products are considered securities.
2|Page SUCCESS!!!
,7. What is the "net amount at risk" in a variable life insurance policy?
A) The total premiums paid to date
B) The difference between the death benefit and the cash value
C) The surrender charge amount
D) The investment management fee
Answer: B
The net amount at risk is the difference between the death benefit and the cash value, representing the amount the
insurer must cover beyond accumulated funds .
9. Which statement comparing traditional whole life to variable life is TRUE?
A) Traditional whole life cash values are not guaranteed
B) Traditional whole life provides guaranteed cash values from the general account, while variable life values
fluctuate with market performance
C) Variable life has no death benefit guarantee
D) Traditional whole life cannot be sold in Georgia
Answer: B
Traditional whole life provides guaranteed cash values from the insurer's general account. Variable life cash values
fluctuate with separate account investment performance .
10. What is the "cost of insurance" charge in a variable life policy?
A) The investment management fee
B) The charge to cover the pure mortality risk based on the insured's attained age and net amount at risk
C) The premium tax
D) The surrender charge
Answer: B
The cost of insurance charge is the monthly deduction to cover the pure mortality risk, calculated based on the
insured's attained age and the net amount at risk .
11. In a variable life policy, who bears the investment risk on the cash value?
A) The insurer
B) The policyowner
C) The state insurance commissioner
D) The Securities and Exchange Commission
3|Page SUCCESS!!!
, Answer: B
The policyowner bears the investment risk on the cash value. If the separate account performs poorly, cash values
and potentially death benefits may decrease, subject to minimum guarantees .
12. What is an advantage of variable life insurance compared to fixed products?
A) Guaranteed minimum cash values regardless of market performance
B) Potential for higher cash value growth through equity market participation
C) Premiums that never increase
D) No surrender charges
Answer: B
Variable life insurance offers the potential for higher cash value growth than fixed products by allowing
participation in equity market returns through separate account investments .
13. What is the "assumed investment rate" (AIR) in a variable annuity contract?
A) The guaranteed minimum interest rate the insurer will pay
B) The actual rate of return earned by the separate account
C) An interest rate assumption used to calculate the initial annuity payment and subsequent payment adjustments
D) The maximum rate the separate account can earn
Answer: C
The AIR is an interest rate assumption (typically 3% to 5%) used to calculate the initial annuity payment and
subsequent payment adjustments. If the actual separate account return equals the AIR, payments remain level .
14. During the accumulation phase of a variable annuity, what is an accumulation unit?
A) A guaranteed fixed-dollar credit to the policy
B) An accounting measure representing the policyowner's share of the separate account's assets
C) A type of death benefit rider
D) The minimum guaranteed cash value
Answer: B
Accumulation units are accounting units used to track the policyowner's proportionate interest in the separate
account during the accumulation period before annuitization .
15. During the distribution (annuitization) phase of a variable annuity, what happens to annuity units?
A) They increase in number each month
4|Page SUCCESS!!!
