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Georgia Life Insurance Pre-Licensing Exam Study Guide, Exams of Nursing

Buckinghamshire New UniversityNursing

This study guide offers a comprehensive overview of Georgia life-only pre-licensing, covering key terms, concepts, and practice questions. It explores beneficiary designations, settlement options, policy riders, misrepresentations, and the insuring agreement. The guide details various life insurance policies like universal, whole, and variable universal life, highlighting investment control and loan provisions. Contractual elements such as stoli, term life conversion periods, and the consideration clause are addressed. Designed to aid exam preparation, it provides clear explanations and examples. It also explores agent roles, authority, and the regulatory framework, including the McCarran-Ferguson Act.

Typology: Exams

2024/2025

Available from 05/25/2025

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XCEL Solutions: Georgia Life-Only Pre-Licensing | Complete
Study Guide with Key Terms, Concepts & Practice Questions
1.
If a life insurance policy names a minor as a beneficiary and no guardian is
appointed, what potential issues could arise when the insured passes
away?
The insurance company may delay the disbursement of
proceeds until a guardian is appointed.
The proceeds will automatically go to the minor's siblings.
The insurance policy will become void.
The minor will receive the proceeds immediately without any legal
issues.
2.
If an individual chooses the Life Income settlement option for their
annuity, what financial planning considerations should they keep in mind
regarding their beneficiaries?
They should plan for additional life insurance to cover potential
beneficiary needs.
They should consider that their beneficiaries will not receive any
residual funds after their death.
They should ensure that their beneficiaries are named to receive a
lump sum payment.
They should choose a settlement option that provides a
guaranteed payout to beneficiaries.
3.
Describe the significance of an irrevocable beneficiary designation in a
life insurance policy.
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Download Georgia Life Insurance Pre-Licensing Exam Study Guide and more Exams Nursing in PDF only on Docsity!

XCEL Solutions: Georgia Life-Only Pre-Licensing | Complete

Study Guide with Key Terms, Concepts & Practice Questions

  1. If a life insurance policy names a minor as a beneficiary and no guardian is appointed, what potential issues could arise when the insured passes away? The insurance company may delay the disbursement of proceeds until a guardian is appointed. The proceeds will automatically go to the minor's siblings. The insurance policy will become void. The minor will receive the proceeds immediately without any legal issues.
  2. If an individual chooses the Life Income settlement option for their annuity, what financial planning considerations should they keep in mind regarding their beneficiaries? They should plan for additional life insurance to cover potential beneficiary needs. They should consider that their beneficiaries will not receive any residual funds after their death. They should ensure that their beneficiaries are named to receive a lump sum payment. They should choose a settlement option that provides a guaranteed payout to beneficiaries.
  3. Describe the significance of an irrevocable beneficiary designation in a life insurance policy.

An irrevocable beneficiary designation is only applicable to term life insurance policies.

  1. Describe the purpose of the insuring agreement in a life insurance policy. The insuring agreement specifies the legal requirements for beneficiary designations. The insuring agreement describes the underwriting process for the policy. The insuring agreement details the premium payment schedule for the policyholder. The insuring agreement outlines the insurer's commitment to pay a specified sum to the beneficiary upon the death of the insured.
  2. The investment gains from Universal life policy go to Cash value Paying off a policy loan Dividends Death benefit
  3. Describe the characteristics of a Variable rate loan in the context of a Whole Life insurance policy. A Variable rate loan is guaranteed to decrease over time. A Variable rate loan has a constant interest rate throughout the loan period. A Variable rate loan has an interest rate that can change over time based on market conditions or the insurer's policies. A Variable rate loan is only available for Term Life policies.
  1. What is the primary feature of a Variable Universal Life policy regarding investment control? Policyowner controls where the investment will go and selects the amount of the premium payment The death benefit can vary but the policyowner has no say in the premium amount paid The investment vehicle for this type of policy is held in the insurer's general portfolio Policyowner has no say where the investment will go but can choose the premium mode
  2. What contractual element does STOLI violate? Offer/Acceptance Consideration Legal Purpose (Insurable Interest) Competent Parties
  3. What is the primary characteristic of the conversion period in Term Life Policies? It is the same in all contracts It varies according to the contract It may be altered by the policyowner It is controlled by the NAIC
  4. If a policyowner of a Variable Universal Life policy decides to increase their premium payments, what impact could this have on their investment options?
  1. If a policyholder fails to make premium payments, which element of the insurance contract is most likely to be affected? Consideration Negotiating Acceptance Offer
  2. What is the maximum period of time an insurance company may delay a life insurance loan or surrender request? It cannot be delayed 6 months 30 days 1 year
  3. What was the primary purpose of the McCarran-Ferguson Act regarding insurance regulation? To affirm that state regulation of insurance is in the public's best interest. To create a national insurance policy framework. To establish federal control over insurance policies. To eliminate state regulations on insurance.
  4. If an insured commits suicide 3 years after the effective date on his policy, how will his life insurance be paid? there will not be any payment the full face amount will be paid half of the face amount will be paid

only the premium will be paid back

  1. What must a policyowner obtain to change an irrevocable beneficiary designation in a life insurance policy? Permission from the agent Approval from the payor Authorization from the Commissioner of Insurance Written consent of the beneficiary
  2. Describe the conditions under which a policyowner may change the beneficiary of a life insurance policy. A policyowner may change a beneficiary at any time, but consent may be needed from an irrevocable beneficiary. Beneficiary changes are not allowed once the policy is issued. A policyowner can only change the beneficiary with the insurer's approval. The insured must approve any changes to the beneficiary.
  3. Whole life policies have a ___ premium and a ___ face amount increasing, decreasing increasing, level level, level level, increasing
  4. Which of the following is not a type of authority of an agent that a third party can expect to encounter? Expert.

they utilize this rider? They must wait until the child reaches a certain age to increase coverage. They must provide medical evidence to increase their coverage. They can only increase their coverage at the next policy renewal. They can increase their coverage without providing evidence of insurability.

  1. If a policyowner wishes to change the beneficiary of their life insurance policy but the current beneficiary is designated as irrevocable, what steps must they take? Wait until the policy expires to change the beneficiary. Notify the insurer of the intended change without needing consent. Change the beneficiary without any further steps. Obtain consent from the irrevocable beneficiary before making the change.
  2. In what way is an insurance contract unilateral? Only one party (the Insured) makes a promise that is enforceable by law Neither party may be forced to comply with policy terms Only one party (the insurer) makes a promise that is enforceable by law The insured has a choice of insurers
  3. Describe the difference between express authority and implied authority in the context of insurance agents.

Express authority is limited to specific tasks, while implied authority covers all tasks. Express authority is only verbal, while implied authority is documented in writing. Express authority is based on the agent's reputation, while implied authority is written in the contract. Express authority is explicitly granted to the agent, while implied authority is assumed based on the agent's role.

  1. What is the primary characteristic of the Life Income settlement option in an annuity? It provides a lump sum payment to the beneficiary upon the annuitant's death. It pays a specified amount to the annuitant with no residual value payable to a beneficiary. It allows for flexible withdrawal amounts during the annuitant's lifetime. It guarantees a minimum payment period regardless of the annuitant's lifespan.
  2. Describe the role of the cash value provision in a life insurance policy and how it relates to policy loans. The cash value provision specifies the beneficiary of the policy. The cash value provision allows the policyholder to borrow against the accumulated cash value of the policy. The cash value provision determines the premium payments for the policy. The cash value provision outlines the underwriting process for the policy.

Insurance policies are classified as Contracts of Adhesion because they are based on the principle of indemnity. Insurance policies are classified as Contracts of Adhesion because they allow for negotiation of terms between the insurer and the insured. Insurance policies are classified as Contracts of Adhesion because they require mutual consent from both parties before becoming effective.

  1. If an applicant for a life insurance policy mistakenly states their age on the application, which type of statement could potentially void the policy? exclusion waiver representation warranty
  2. Describe the significance of the Fair Credit Reporting Act in the context of insurance applications. The Fair Credit Reporting Act outlines the legal requirements for beneficiary designations in insurance policies. The Fair Credit Reporting Act provides guidelines for the underwriting process in insurance. The Fair Credit Reporting Act regulates insurance premium rates and payment structures. The Fair Credit Reporting Act ensures that insurance applicants are informed about investigations into their character, promoting transparency and protecting consumer rights.
  1. If an insurance company fails to inform an applicant about an investigation into their character as required by the Fair Credit Reporting Act, what potential consequences could the company face? Loss of the insurance policy's benefits Mandatory training for the underwriting staff Increased insurance premiums for the applicant Legal repercussions and penalties for non-compliance with federal law
  2. Describe the significance of 'consideration' in the context of an insurance contract. Consideration is the legal requirement for the insurer to pay claims. Consideration refers to the value exchanged between the insurer and the insured, typically in the form of premium payments for coverage. Consideration is the process of negotiating terms of the contract. Consideration is the acceptance of the insurance policy by the insured.
  3. 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? the date of application the date the sales appointment was made the date the application was submitted to the insurance company
  1. Which of the following is true regarding level premiums? Policyholders are paying less premium than is needed in the earlier years of the policy. Policyholders are paying more premium than is needed in the early years of policy Level premiums are the only premium option Level premiums can only be paid annually
  2. Which of the following statements is most correct concerning the changing of an irrevocable beneficiary? They can never be changed. They may be changed only on the anniversary date of the policy. They can be changed only with the written consent of that beneficiary. They may be changed at any time.
  3. What is the duration of income payments from a Family Income policy if the insured dies during the rider period? The duration is always 20 years. The duration is specified in the rider period. The duration is determined by the insurance company. The duration is equal to the insured's age.
  4. Which of the following statements is true regarding settlement option selection by the beneficiary? If the policy owner selected the interest-only settlement option, the beneficiary can select to have a lump sum cash payment.

If the policy owner selected the Straight Life Annuity Settlement Option, the beneficiary can select a different Life Annuity Settlement Option. The beneficiary will never be given any choice when it comes to settlement options. If the policy owner did not select a settlement option prior to policy maturity, the beneficiary can choose.

  1. Describe the significance of a level premium in a Whole Life insurance policy. A level premium means that the premium amount remains constant throughout the life of the policy, making it easier for policyholders to budget for payments. A level premium fluctuates based on the policyholder's age and health status. A level premium allows for variable payments depending on the investment performance of the policy. A level premium is only applicable to Term Life policies and not Whole Life policies.
  2. Describe how investment gains in a Universal Life Policy affect the policyholder's cash value. Investment gains are distributed as dividends to the policyholder. Investment gains in a Universal Life Policy increase the cash value, which can be accessed by the policyholder. Investment gains are used to pay off any outstanding policy loans. Investment gains are solely used to increase the death benefit of the policy.

The insurer

  1. Describe the implications of the Suicide Clause in life insurance policies. The Suicide Clause has no effect on the payout amount. The Suicide Clause only applies to Term Life policies. The Suicide Clause allows for double the payout if the insured commits suicide. The Suicide Clause typically prevents the insurer from paying the death benefit if the insured commits suicide within the specified period.
  2. Describe the significance of a participating policy in the context of life insurance. A participating policy has no impact on the policyholder's benefits. A participating policy is only available to high-risk individuals. A participating policy allows policyholders to receive dividends, which can enhance the value of their insurance coverage. A participating policy requires higher premiums than nonparticipating policies.
  3. Which one of the following best describes a "level premium" payment plan? The premium may increase or decrease over the policy's term, depending on the performance of the policy. The policyowner pays the same amount each time the premium is due for the full duration of the premium-paying period.

The policyowner does not have the choice of paying the premium on a level basis or a flexible basis. Level premiums are always used in life insurance.

  1. Why is the cost considered the most important factor when converting a term life policy to whole life insurance? The assignment of ownership determines who benefits from the policy. The nonforfeiture options provide security in case of policy lapse. The contestable period affects the validity of claims. The cost influences the affordability and financial feasibility of maintaining the policy.
  2. What type of income tax applies to accumulated interest earned on dividends from an insurance policy? Nontaxable Tax deductible Partially taxable Taxed as ordinary income
  3. If a policyowner takes out a Variable rate loan against their Whole Life policy and the interest rate increases significantly, what impact might this have on their overall loan repayment strategy? The policyowner may need to adjust their repayment strategy to account for higher interest payments. The policyowner can ignore the interest rate changes as they do not affect repayment.