Life Insurance Study Exam- Georgia
A $10,000 Life insurance policy with a Triple Indemnity clause has been in force for three
years. The insured is injured in a train wreck and dies in a hospital five months later. The
death proceeds payable under the policy would be: - ANS-$10,000
A 45-year old customer who is seeking to supplement his retirement income at age 65 would
not buy a: - ANS-Immediate Annuity
A beneficiary designation that prevents the policy owner from making certain changes in the
policy is: - ANS-Irrevocable
A business owner with a fluctuating income who wants a life insurance policy that can be
changed to suit economic conditions should buy: - ANS-Adjustable Life
A client applied for Life insurance on October 1st. The application was approved and the
policy was issued on October 10th. It was delivered to the customer on October 18th. When
did the Free Look start? - ANS-October 18th
A client buys a $50,000 Whole Life policy on himself and wants to add $25,000 in Term
coverage for his spouse. He should add which of the following riders to his policy? -
ANS-Other Insured Rider
A client buys a Life insurance policy on July 1st and dies by suicide 6 months later. The
insurance company will: - ANS-Deny the claim, but refund the premium
A client with a participating Life insurance policy receives both interest and dividends. What
are the tax implications? - ANS-The interest is taxable, but the dividends are not
A customer buys a $25,000 Life insurance policy with a $25,000 Accidental Death Benefit
rider attached. If he dies of cancer, how much will his policy pay? - ANS-$25,000
A Life insurance policy of which the cash value is over-funded according to IRS rules is
known as: - ANS-A Modified Endowment Contract
A life insurance policy that combines term insurance protection, a flexible premium, and cash
value accumulation is: - ANS-Universal Life
A life insurance policy that covers two parties, but only pays when the last party dies is
known as: - ANS-Survivorship Life
A life insurance policy whose cash value will fluctuate depending upon the performance of a
separate account is: - ANS-Variable Life
A parent who wishes to have complete control of their son's life insurance policy until the son
reaches age 25 can do so through the use of which of the following? - ANS-Ownership
provision
A plan under which the surviving partners of a partnership agree to buy the interest of a
deceased partner is known as a: - ANS-Buy and Sell Agreement
A producer completes an application for Life insurance and sends it to the underwriter who
approves it and issues the policy. When is coverage effective: - ANS-When the producer
delivers the policy and picks up the premium
A producer sends a completed and signed application along with the check for the initial
premium to the underwriter, who notices that the applicant forgot to sign the check. When
would coverage start? - ANS-When the producer delivers the policy and picks up a signed
check along with a Statement of Continued Good Health
, A producer submits a completed and signed application to the underwriter along with the first
premium check. After checking the results of the physical exam, the underwriter issues a
'rated' policy. Which of the following will not be required: - ANS-A new completed and signed
application
A producer takes an application from a proposed insured without receiving payment of the
first premium. The insurance company issues the policy and, when the producer visits the
proposed insured to deliver it, she realizes that the health of the applicant has deteriorated
significantly since the application was taken. The producer should: - ANS-Refuse to deliver
the policy or to accept any premium offered
A prospect's statements made in the application for insurance constitute a part of which of
the following? - ANS-Consideration Clause
A rider that keeps a policy from lapsing due to non-payment of premium by borrowing from
the cash value is: - ANS-Automatic Premium Loan
Albert Metz, who has $2,000 of Group Life insurance, has just terminated his employment.
Mr. Metz has how many days in which to convert his group coverage to individual coverage?
- ANS-31
Albert Metz, who has $2,000 of Group Life insurance, has just terminated his
employment.The maximum amount that Mr. Metz will be able to convert is which of the
following? - ANS-$2,000
All of the following are a part of a Life insurance policy, EXCEPT the: - ANS-Conditional
Receipt
All of the following are considered to be owner's rights under a Life insurance policy,
EXCEPT: - ANS-Changing an irrevocable beneficiary
An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - ANS-I and II
An applicant has been denied insurance coverage because of information contained in a
consumer report. According to the Fair Credit Reporting Act, all of the following statements
are true about this situation, EXCEPT: - ANS-The applicant has the right to obtain a copy of
the consumer report directly from an insurance company that used the report
An insurable interest must exist when: - ANS-A life insurance policy is issued
An insurable interest must exist when: - ANS-Policy ownership is transferred
An insurance company will grant an advance from the cash value of a Life insurance policy
when the policy owner requests which of the following? - ANS-A policy loan
An insurance producer selling a Variable Annuity whose cash value depends on the
performance of an underlying investment account must be registered with: - ANS-The
Financial Industry Regulatory Authority (FINRA, formerly the NASD)
An insured died during the Grace Period of her Life insurance policy and had not paid the
required annual premium. The insurance company is obligated to pay which of the following
to the beneficiary? - ANS-The face amount of the policy less any earned premiums
An insured's premium for Life insurance is based mainly upon their: - ANS-Risk classification
At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains that he
can pay for the policy in several ways. One method is called 20-Pay Life, and another,
Straight Life. Tom wishes to know which plan will accumulate cash value at a faster rate in
the early years of the policy. Which of the following would be the producer's most appropriate
response? - ANS-"20-Pay Life will accumulate cash value faster."
A $10,000 Life insurance policy with a Triple Indemnity clause has been in force for three
years. The insured is injured in a train wreck and dies in a hospital five months later. The
death proceeds payable under the policy would be: - ANS-$10,000
A 45-year old customer who is seeking to supplement his retirement income at age 65 would
not buy a: - ANS-Immediate Annuity
A beneficiary designation that prevents the policy owner from making certain changes in the
policy is: - ANS-Irrevocable
A business owner with a fluctuating income who wants a life insurance policy that can be
changed to suit economic conditions should buy: - ANS-Adjustable Life
A client applied for Life insurance on October 1st. The application was approved and the
policy was issued on October 10th. It was delivered to the customer on October 18th. When
did the Free Look start? - ANS-October 18th
A client buys a $50,000 Whole Life policy on himself and wants to add $25,000 in Term
coverage for his spouse. He should add which of the following riders to his policy? -
ANS-Other Insured Rider
A client buys a Life insurance policy on July 1st and dies by suicide 6 months later. The
insurance company will: - ANS-Deny the claim, but refund the premium
A client with a participating Life insurance policy receives both interest and dividends. What
are the tax implications? - ANS-The interest is taxable, but the dividends are not
A customer buys a $25,000 Life insurance policy with a $25,000 Accidental Death Benefit
rider attached. If he dies of cancer, how much will his policy pay? - ANS-$25,000
A Life insurance policy of which the cash value is over-funded according to IRS rules is
known as: - ANS-A Modified Endowment Contract
A life insurance policy that combines term insurance protection, a flexible premium, and cash
value accumulation is: - ANS-Universal Life
A life insurance policy that covers two parties, but only pays when the last party dies is
known as: - ANS-Survivorship Life
A life insurance policy whose cash value will fluctuate depending upon the performance of a
separate account is: - ANS-Variable Life
A parent who wishes to have complete control of their son's life insurance policy until the son
reaches age 25 can do so through the use of which of the following? - ANS-Ownership
provision
A plan under which the surviving partners of a partnership agree to buy the interest of a
deceased partner is known as a: - ANS-Buy and Sell Agreement
A producer completes an application for Life insurance and sends it to the underwriter who
approves it and issues the policy. When is coverage effective: - ANS-When the producer
delivers the policy and picks up the premium
A producer sends a completed and signed application along with the check for the initial
premium to the underwriter, who notices that the applicant forgot to sign the check. When
would coverage start? - ANS-When the producer delivers the policy and picks up a signed
check along with a Statement of Continued Good Health
, A producer submits a completed and signed application to the underwriter along with the first
premium check. After checking the results of the physical exam, the underwriter issues a
'rated' policy. Which of the following will not be required: - ANS-A new completed and signed
application
A producer takes an application from a proposed insured without receiving payment of the
first premium. The insurance company issues the policy and, when the producer visits the
proposed insured to deliver it, she realizes that the health of the applicant has deteriorated
significantly since the application was taken. The producer should: - ANS-Refuse to deliver
the policy or to accept any premium offered
A prospect's statements made in the application for insurance constitute a part of which of
the following? - ANS-Consideration Clause
A rider that keeps a policy from lapsing due to non-payment of premium by borrowing from
the cash value is: - ANS-Automatic Premium Loan
Albert Metz, who has $2,000 of Group Life insurance, has just terminated his employment.
Mr. Metz has how many days in which to convert his group coverage to individual coverage?
- ANS-31
Albert Metz, who has $2,000 of Group Life insurance, has just terminated his
employment.The maximum amount that Mr. Metz will be able to convert is which of the
following? - ANS-$2,000
All of the following are a part of a Life insurance policy, EXCEPT the: - ANS-Conditional
Receipt
All of the following are considered to be owner's rights under a Life insurance policy,
EXCEPT: - ANS-Changing an irrevocable beneficiary
An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - ANS-I and II
An applicant has been denied insurance coverage because of information contained in a
consumer report. According to the Fair Credit Reporting Act, all of the following statements
are true about this situation, EXCEPT: - ANS-The applicant has the right to obtain a copy of
the consumer report directly from an insurance company that used the report
An insurable interest must exist when: - ANS-A life insurance policy is issued
An insurable interest must exist when: - ANS-Policy ownership is transferred
An insurance company will grant an advance from the cash value of a Life insurance policy
when the policy owner requests which of the following? - ANS-A policy loan
An insurance producer selling a Variable Annuity whose cash value depends on the
performance of an underlying investment account must be registered with: - ANS-The
Financial Industry Regulatory Authority (FINRA, formerly the NASD)
An insured died during the Grace Period of her Life insurance policy and had not paid the
required annual premium. The insurance company is obligated to pay which of the following
to the beneficiary? - ANS-The face amount of the policy less any earned premiums
An insured's premium for Life insurance is based mainly upon their: - ANS-Risk classification
At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains that he
can pay for the policy in several ways. One method is called 20-Pay Life, and another,
Straight Life. Tom wishes to know which plan will accumulate cash value at a faster rate in
the early years of the policy. Which of the following would be the producer's most appropriate
response? - ANS-"20-Pay Life will accumulate cash value faster."
