Georgia Life Accident Sickness Exam

All accident and sickness plans MUST provide coverage on newborn children for ___ days.

31- All individual and group health plans which provide coverage to family members of the insured must provide coverage for the insured’s newborn child from the moment of birth through the 31st day. If a premium is required to continue the newborn’s coverage, it must be paid within the 31-day period.

In Georgia, an accident and sickness policy that is paid on a quarterly basis requires a grace period of

31 days

Before an insurance company can pay commissions to an agent, the agent must be

1. bonded

2. licensed only

3. bonded and insured

4. licensed and appointed

licensed and appointed

Upon reaching the limiting age, a handicapped child can extend their accident and sickness insurance coverage as a dependent

1. for up to an additional 10 years only

2. only if mentally disabled

3. only if the child is incapable of employment and chiefly dependent on the policyowner

4. only if physically disabled

only if the child is incapable of employment and chiefly dependent on the policyowner

Cash surrendering an existing whole life policy and purchasing a new whole life policy is referred to as a(n)

1. conversion

2. illegal transaction

3. replacement

4. cancellation

The correct answer is "replacement". Purchasing a new whole life insurance policy after cash surrendering an existing whole life policy is considered a Life Insurance policy replacement and is heavily regulated.

Who is a mutual insurance company owned by?

1. Its employees

2. The State of Florida

3. Its board of directors

4. Its policyholders

A mutual insurance company is owned by its policyholders.

Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?

1. Each partner owns a $500,000 policy on their own life

2. Each partner owns a $1,000,000 policy on their own life

3. Each partner owns a $1,000,000 policy on their partner's life

4. Each partner owns a $500,000 policy on their partner's life

The correct answer is "Each partner owns a $500,000 policy on their partner's life". The amount of the policy is equivalent to each partner’s share of the business. When one partner dies, the other partner receives the death benefit from the life insurance on the deceased partner, which is then used to buy the deceased partner’s ownership of the business.

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

1. Medicare Supplement

2. Indemnity

3. Long-term care

4. Medicaid

The correct answer is "Medicare Supplement". In this situation, a Medicare Supplement policy would provide the subscriber the best coverage for excess charges.

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a:

1. High-deductible health plan

2. Medicare Supplement

3. Flexible savings plan

4. Low-deductible health plan

The correct answer is "High-deductible health plan". To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.

Major Medical policies typically:

1. pay 100% of covered expenses

2. contain a deductible and coinsurance

3. do not contain a deductible and coinsurance

4. require use of in-network facilities only

Major Medical policies typically contain a deductible and coinsurance.

Traditional individual retirement annuity (IRA) distributions must start by:

1. April 1st of the year following the year the participant attains age 59 1/2

2. age 59 1/2

3. age 65

4. April 1st of the year following the year the participant attains age 73

The correct answer is "April 1st of the year following the year the participant attains age 73". Distributions from a traditional IRA must be made by April 1 following the year the participant turns age 73 or an excise tax will be assessed.

How long does an individual have to "rollover" funds from an IRA or qualified plan?

1. 90 days

2. 120 days

3. 60 days

4. No limit

The correct answer is "60 days". In IRA's and qualified plans, the time limit for rollover funds is 60 days, or the funds could be subjected to income taxes and a penalty tax.

Which parts of a life insurance policy are guaranteed to be true?

1. Rating

2. Representation

3. Warranty

4. Statement

Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

Dividends paid from a life insurance policy are

1. taxable

2. issued by the insurer

3. guaranteed

4. issued by the Department of Insurance

The correct answer is "issued by the insurer". Dividends paid from a life insurance policy are issued by the insurer.

Under a Graded Premium Whole Life policy,

1. the premium can be adjusted by the policyowner at anytime

2. the premium increases each year during the early years of the contract and remains the same after that time

3. the premium always remains the same while the death benefit increases during the early years

4. the premium decreases each year during the early years of the contract and remains the same after that time

The correct answer is "the premium increases each year during the early years of the contract and remains the same after that time". With a graded premium whole life policy, the premium increases each year during the early years of the contract (usually five years) and remains the same after that time.

A characteristic of Preferred Provider Organizations (PPOs) would be:

1. A primary care physician is required

2. Not allowed to see out-of-network physicians

3. Discounted fees for the patient

4. Physicians are paid on a capitation basis

The correct answer is "Discounted fees for the patient". Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

1. The premiums can be lowered or raised, based on investment performance

2. If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index

3. Tied to an equity index such as the S&P 500

4. Cash value has a minimum rate of accumulation

The correct answer is "The premiums can be lowered or raised, based on investment performance". Equity Indexed Life Insurance is permanent life insurance that allows policyholders to tie accumulation values to a stock market index.

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT:

1. The required premium

2. Signed HIPAA disclosure

3. Signed amendment

4. Signed statement of Good Health

The correct answer is "Signed HIPAA disclosure". Upon delivery of a rated life insurance policy, the Producer must obtain all of these EXCEPT a "Signed HIPAA disclosure". The HIPAA disclosure should be taken at the time of sale with the application.

How long is the typical free look period for Long Term care insurance policies?

1. 30 days

2. 20 days

3. 50 days

4. 40 days

Most Long Term Care policies require a 30-day free look period.

What kind of life insurance product covers children under their parent's policy?

1. Family Maintenance rider

2. Term rider

3. Family Income rider

4. Payor benefit

The correct answer is "A Term rider". Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.

1. 1

2. 24

3. 12

4. 6

The correct answer is "6". If a pre-existing condition waiting period applies, the policy must not exclude coverage for any pre-existing conditions that occurred more than 6 months prior to the effective date of coverage. These conditions cannot be excluded beyond 6 months after the policy is issued.

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

1. 20

2. 10

3. 5

4. 15

The correct answer is "15". Under the Claims Forms provision, an insurer must provide an insured with claim forms within a MAXIMUM of 15 days after receiving notice of a loss.

S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely

1. pay the full claim

2. pay the claim minus September and October's premium payments

3. deny the claim

4. pay half the claim

The correct answer is "deny the claim". Because S failed to pay the premium within the policy's 10-day grace period, the insurer will likely deny the claim.

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company

1. does NOT have to make any further payments

2. has the option to continue making payments based on what has already been paid out

3. MUST make full payments to the beneficiary

4. MUST make half-payments to the beneficiary

The correct answer is "does NOT have to make any further payments". With a Straight Life Annuity, the insurer does not have to make further payments after the annuitant dies.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:

1. convert to disability coverage

2. transfer their coverage to another insurer

3. continue group health benefits

4. take out an individual health policy

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to continue group health benefits

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

The correct answer is "36". Under COBRA, if an employee dies, the dependents may continue their group health coverage for up to 36 months.

In Georgia, how long is the "free look" period?

1. 10 days

2. 20 days

3. 30 days

4. 15 days

The correct answer is “10 days”. The “free look” period in Georgia is 10 days.

Which of the following is the MINIMUM age at which an individual can sign a life insurance application?

1. 15

2. 21

3. 19

4. 18

The correct answer is "15". A person 15 years or more may contract for life insurance on his/her own life, or on another person in which the minor has an insurable interest.

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?

1. Adjustable life

2. Variable universal life

3. Universal life

4. Variable life

Variable universal life. Any policy whose title includes the term "Universal" indicates that the policy has a flexible or adjustable premium. The variable nature of the product indicates that the cash savings value is invested in the stock market (e.g., mutual funds) which permits for a contract owner to decide where the equity (i.e., cash value) is to be invested.

M’s insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

1. 10 days

2. 30 days

3. 60 days

4. 45 days

The correct answer is "45 days". Health insurance will automatically be placed back in force if the insurer fails to notify an applicant within 45 days that the reinstatement application was denied.

A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be

1. Guaranteed Renewable

2. Cancellable

3. Optionally Renewable

4. Noncancellable

The correct answer is "Noncancellable." A Disability Income Policy that only the policyowner can terminate and on which the rates will never increase is a Noncancellable policy.

What type of renewability guarantees premium rates and renewability?

1. Warrantied renewable

2. Conditionally renewable

3. Optionally renewable

4. Noncancellable

. Noncancellable policies provides guaranteed renewability and premium rates.

Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires?

1. An insured must settle a claim within 30 days after Proof of Loss is submitted

2. An insured must wait at least 30 days after Proof of Loss has been submitted before a lawsuit can be filed

3. An insured must settle a claim within 60 days after Proof of Loss is submitted

4. An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed

The correct answer is "An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed". The Legal Actions provision of an Accident & Health policy requires the insured to wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed.

In Georgia, monthly-premium accident and sickness insurance policies must provide a grace period of at least

1. 31 days

2. 14 days

3. 10 days

4. 7 days

The correct answer is "10 days". In Georgia, monthly-premium health insurance policies must provide a grace period of at least 10 days.

After initially issued, a temporary license is valid for

1. 4 months

2. 3 months

3. 5 months

4. 6 months

A temporary license may be issued in this state for 6 months, renewable up to 15 months.