Georgia life insurance practice test
20 questions from our 592-question Georgia bank, spread across the outline. Tap an answer to see the explanation and its source.
1 / 20 · Types of Policies
A client asks why return-of-premium term costs more than ordinary level term for the same face amount and period. What is the correct explanation?
Answer and explanation
Answer: D. Return-of-premium term promises to refund the premiums paid if the insured survives the term. That living benefit must be funded in addition to the mortality cost, which is why its premium exceeds plain level term.Source: NAIC Life Insurance Buyer's Guide — Term insurance: return of premium feature and its cost
2 / 20 · Types of Policies
What does consumer guidance say happens to the premium when a term policy is renewed?
Answer and explanation
Answer: B. The NAIC Life Insurance Buyer's Guide states that most term coverage can be renewed at the end of the term even if health has changed, and that if a term policy is renewed the new premiums are higher. The guide also advises asking what the premiums will be before renewing and whether the right to renew is lost at a stated age.Source: NAIC — Life Insurance Buyer's Guide — Buyer's Guide page 5, Renewable term
3 / 20 · Types of Policies
A policyowner surrenders a 20-year return-of-premium term policy in year 5 and expects the full end-of-term refund. What is the best response?
Answer and explanation
Answer: A. The return-of-premium feature is tied to surviving the specified term and the policy's own conditions. Early surrender does not automatically create the full end-of-term refund.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What is a Return of Premium feature? — survive the specified term
4 / 20 · Types of Policies
An insured outlives a return-of-premium term policy, and no death benefit was paid. What feature may then apply according to the contract?
Answer and explanation
Answer: B. Return-of-premium term may refund part or all of the premiums when the insured outlives the term and no death benefit was paid. It does not automatically buy securities, annuitize the face amount, or provide free permanent insurance.Source: NAIC — Life Insurance — Term Life Insurance > Return of Premium (ROP)
5 / 20 · Types of Policies
An insured’s health deteriorates during a renewable term policy. At the end of the term, which feature is most valuable?
Answer and explanation
Answer: A. Renewable term permits continuation at the end of the term without new evidence of insurability, subject to the contract and continued premiums. It does not create cash value, index ownership, or automatic annuity conversion.Source: NAIC — Life Insurance — Term Life Insurance > Renewable term insurance
6 / 20 · Types of Policies
What key feature distinguishes a variable annuity from a fixed annuity?
Answer and explanation
Answer: B. Variable annuities invest in separate account subaccounts where value fluctuates with market performance, placing investment risk on the owner.Source: SEC Investor Bulletin — Variable Annuities — PDF page 2, Separate Accounts
7 / 20 · Types of Policies
Under a fixed indexed annuity’s basic index-crediting structure, what interest is added for an index term with a negative result?
Answer and explanation
Answer: D. The NAIC guide explains that when the index result is negative, zero interest is added and contract value does not decline from that index result so long as no withdrawal changes the outcome. The owner is not directly charged the full index loss, and prior returns or beneficiary choices do not set the credit.Source: NAIC — Buyer’s Guide for Deferred Annuities — Guide page 4, Fixed Indexed Annuities
8 / 20 · Types of Policies
A deferred annuity stops building value for future income and begins making scheduled income payments. Which phase has begun?
Answer and explanation
Answer: D. The payout phase begins when the annuity starts making income payments. During the accumulation phase, value changes before payouts begin; the other choices are not the two fundamental annuity phases described in the guide.Source: NAIC — Buyer’s Guide for Deferred Annuities — Guide page 1, How Deferred Annuities Are Alike — accumulation period and payout period
9 / 20 · Policy Riders, Provisions, Options, and Exclusions
If a policy contains a valid underwriting-based hazardous occupation exclusion and the insured dies from that excluded hazard, what must the insurer refund at minimum?
Answer and explanation
Answer: D. For an excluded death, Compact standards require at least a refund of adjusted gross premiums or cash surrender value.Source: IIPRC Term Life Standards — § 3.J. Exclusions
10 / 20 · Policy Riders, Provisions, Options, and Exclusions
An owner adds a spouse term rider to a base whole life policy. How is coverage structured for the spouse?
Answer and explanation
Answer: D. Spouse term riders provide temporary term insurance on the primary insured's spouse attached to the base contract.Source: NAIC Life Insurance Guide — PDF page 6, Family Riders
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11 / 20 · Policy Riders, Provisions, Options, and Exclusions
Under the entire contract provision, what elements constitute the legal agreement between the owner and insurer?
Answer and explanation
Answer: C. The entire contract provision mandates that the policy, attached riders, and copy of the application form the full agreement.Source: IIPRC Compact Standards / TIC § 1101.003 — § 3.I. Entire Contract
12 / 20 · Policy Riders, Provisions, Options, and Exclusions
A flexible-premium policyowner pays the illustrated planned premium, but policy value later becomes insufficient for the monthly deduction. Which conclusion is most accurate?
Answer and explanation
Answer: B. A planned premium is not necessarily a guarantee that coverage will last for life. Under the Compact flexible-premium standard, monthly deductions continue until value is insufficient, after which the policy is subject to a grace period and may terminate if required funding is not restored.Source: Interstate Insurance Product Regulation Commission — Individual Flexible Premium Adjustable Life Insurance Policy Standards — Scope and § 3 > K. Grace Period
13 / 20 · Policy Riders, Provisions, Options, and Exclusions
Which life policy exclusion addresses death caused by hazards of the insured's specifically identified job?
Answer and explanation
Answer: A. An occupation exclusion addresses death due to a specific occupation. Avocation concerns a recreational pursuit, while aviation and suicide exclusions address different hazards.Source: Interstate Insurance Product Regulation Commission — Individual Term Life Insurance Policy Standards — § 3.J. Exclusions (1)(b), Avocation, Aviation, Occupation, Foreign Travel and Foreign Residency
14 / 20 · Policy Riders, Provisions, Options, and Exclusions
Why does the ability to assign a life policy matter to an owner?
Answer and explanation
Answer: D. Assignment transfers rights in the contract, which is what makes a policy usable as collateral. It does not by itself shift the premium obligation, does not make the contract paid up, and cannot change who is insured, since the insured is the life the contract is written on.Source: Interstate Insurance Product Regulation Commission — Individual Term Life Insurance Policy Standards — Uniform standards, Assignment and ownership
15 / 20 · Policy Riders, Provisions, Options, and Exclusions
What do the uniform standards say about restrictions on assigning a policy?
Answer and explanation
Answer: D. The uniform standards provide that the policy shall not include restrictions on the availability of policy assignments, except where restrictions are required to satisfy applicable laws or regulations. An outright bar, a universal consent requirement, and a universal approval requirement each go beyond what the standard permits.Source: Interstate Insurance Product Regulation Commission — Individual Term Life Insurance Policy Standards — Uniform standards, Assignment
16 / 20 · Policy Riders, Provisions, Options, and Exclusions
A parent wants life proceeds reserved for a young child. Which arrangement best addresses the problem that an insurer will not pay proceeds directly to a minor?
Answer and explanation
Answer: D. The NAIC advises against naming a minor directly because insurers will not pay the minor. A carefully established trust or estate arrangement can receive and administer the funds for the child.Source: National Association of Insurance Commissioners — Life Insurance Buyer's Guide — PDF page 6, Choose a Beneficiary > minor beneficiaries
17 / 20 · Completing the Application, Underwriting, and Delivering the Policy
Besides replacement, what may an application ask about the applicant's other coverage?
Answer and explanation
Answer: C. Section 3(H) permits questions about other life insurance and annuity contracts in force and about applications pending with the company or any other company. The inquiry is not limited to one insurer, to a recent window, or to coverage the applicant plans to retain.Source: Interstate Insurance Product Regulation Commission — Individual Life Insurance Application Standards — § 3(H), Other insurance in force
18 / 20 · Completing the Application, Underwriting, and Delivering the Policy
An applicant gives an insurer a Social Security number and income information to obtain personal life coverage. How does the GLBA Privacy Rule generally classify that information?
Answer and explanation
Answer: A. The GLBA Privacy Rule protects personally identifiable financial information collected in connection with providing a financial product or service unless it is publicly available. The FTC specifically includes application information such as income and Social Security number as NPI examples.Source: Federal Trade Commission — How To Comply with the Privacy of Consumer Financial Information Rule — I. Who Is Covered > What information is covered?
19 / 20 · Completing the Application, Underwriting, and Delivering the Policy
A policy is delivered at a higher premium than illustrated because underwriting placed the insured in a different class. What should the producer do at delivery?
Answer and explanation
Answer: C. The NAIC Life Insurance Buyer's Guide frames delivery as the moment the owner should be able to answer whether premiums or values vary and what is not guaranteed, with the producer available to explain anything unclear, so a rating that changed the premium is exactly what needs explaining. Silence, unilateral reissue, and steering the client elsewhere all leave the owner without that explanation.Source: NAIC — Life Insurance Buyer's Guide — Buyer's Guide page 7, Questions to answer after reading
20 / 20 · Completing the Application, Underwriting, and Delivering the Policy
An applicant applies for preferred rates and the insurer issues a standard-rated policy instead. In contract terms, what has the insurer done?
Answer and explanation
Answer: C. Acceptance must match the offer, so issuing on different terms is a counteroffer that the applicant may accept, ordinarily by accepting delivery and paying the premium, or decline. It is not acceptance of the original offer, not an outright rejection, and not a change to a contract that does not yet exist.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Offer and acceptance
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