Georgia Life & Health Insurance License, Practice Exams

The federal Gramm-Leach-Bliley Act requires financial institutions, including insurers, to:

1. Protect the privacy of customers' nonpublic personal information ✓
2. Sell insurance only through federally chartered national banks
3. Report all claims directly to the Internal Revenue Service
4. Charge identical premiums to every applicant in the country

Why: Gramm-Leach-Bliley requires privacy notices and limits on sharing nonpublic personal financial information, with an opt-out for consumers.

Under § 33-6-13(d), if an offending insurer or licensee fails to comply with the Commissioner's order to discontinue an unlawful combination within how many days after receipt, the Commissioner may immediately revoke its certificate of authority or licenses?

1. Within 60 days
2. Within 30 days ✓
3. Within 90 days
4. Within 15 days

Why: O.C.G.A. § 33-6-13(d) permits the Commissioner to immediately revoke a certificate of authority or licenses if an offending insurer or licensee fails to comply with the discontinuance order within 30 days after receipt.

Under Georgia's general insurance definitions, an insurer formed under the laws of a country other than the United States is classified as which type of insurer?

1. A foreign insurer
2. An alien insurer ✓
3. A reciprocal insurer
4. A domestic insurer

Why: O.C.G.A. § 33-3-1 defines an 'alien' insurer as an insurer formed under the laws of a country other than the United States; a 'foreign' insurer is formed under the laws of another U.S. state, and a 'domestic' insurer under the laws of Georgia.

The 'insuring clause' of a health or life policy is the part that:

1. Permits the insurer to raise premiums for the entire class of insureds
2. Lists every condition and circumstance the policy will not cover
3. Allows the policyowner to examine and return the policy for a refund
4. States the insurer's basic promise to pay benefits ✓

Why: The insuring clause (insuring agreement) sets out the insurer's fundamental promise to pay covered benefits.

Under the managed care definitions in O.C.G.A. § 33-20A-3, "emergency services" are judged by the standard of a prudent layperson possessing what level of knowledge?

1. No knowledge of medicine whatsoever
2. An average knowledge of medicine and health ✓
3. The knowledge of a licensed insurance agent
4. The specialized knowledge of an emergency physician

Why: O.C.G.A. § 33-20A-3(1) defines "emergency services" by reference to a prudent layperson possessing an average knowledge of medicine and health who could reasonably believe that failure to obtain immediate care could jeopardize health.

A whole life policyowner borrows against the cash value and does not repay it. At death, the death benefit is:

1. Paid in full, with the loan forgiven
2. Forfeited entirely because of the loan
3. Replaced by a refund of premiums
4. Reduced by the outstanding loan and interest ✓

Why: An unpaid policy loan plus interest is subtracted from the death benefit paid to the beneficiary.

An insured wants the death proceeds to provide a guaranteed monthly income to a spouse for life. The appropriate settlement option is:

1. Lump sum
2. Life income ✓
3. Fixed period
4. Interest only

Why: The life income option pays the payee a guaranteed income for life; the amount depends on the payee's life expectancy.

Where must the notice of the right to return a Georgia Medicare supplement policy be located?

1. In the outline of coverage delivered at the time of application, but not in the policy
2. Prominently printed on the first page of the policy or certificate ✓
3. On the application form, immediately above the applicant's signature line
4. On the premium notice mailed at each renewal, in type as large as the notice text

Why: O.C.G.A. § 33-43-6 requires the notice of the right to return a medsupp policy to be prominently printed on the first page of the policy or certificate.

Where an application is for an agent's or limited subagent's license, what must the application state under Code Section 33-23-8?

1. A waiver of the right to an administrative hearing
2. The projected first-year commission income
3. The kinds of insurance proposed to be transacted ✓
4. The names of all the applicant's prospective clients

Why: O.C.G.A. § 33-23-8(b) requires that an application for an agent's or limited subagent's license state the kinds of insurance proposed to be transacted.

Per O.C.G.A. § 33-38-7, with respect to one owner of multiple nongroup life insurance policies, the Association's total obligation may not exceed:

1. $500,000 in benefits
2. $1 million in benefits
3. $5 million in benefits ✓
4. $300,000 in benefits

Why: O.C.G.A. § 33-38-7(a)(12)(D) provides that the Association's total obligation for one owner of multiple nongroup life policies may not exceed $5 million in benefits.

To meet Georgia's residency qualification, an individual applicant must be a resident who resides and is present within the state for at least:

1. Three months of every year
2. Six months of every year ✓
3. Nine months of every year
4. The entire calendar year

Why: O.C.G.A. § 33-23-5(a)(1) requires that the applicant be a resident who shall reside and be present within this state for at least six months of every year, or whose principal place of business is within this state.

A Georgia policyowner stops paying interest on a policy loan. Under O.C.G.A. § 33-25-3, the policy may provide that the policy terminates and becomes void only after the total indebtedness equals or exceeds the loan value AND:

1. At least 30 days' notice has been mailed to the last known address of the insured or owner and any assignee of record ✓
2. The insurer has cancelled the policy immediately upon the default and filed a notice of termination with the Commissioner within 10 days
3. The named beneficiary has consented in writing to the termination and returned the policy to the insurer for cancellation
4. The insurer has obtained an order from the superior court of the county where the policyowner resides authorizing the termination

Why: O.C.G.A. § 33-25-3 permits a policy to provide that it terminates and becomes void when total indebtedness equals or exceeds the loan value only after at least 30 days' notice has been mailed to the last known address of the insured or owner and any assignee of record.

An annuitant has an $80,000 basis and a $200,000 expected return. Of each $10,000 payment, the taxable amount is:

1. $6,000 ✓
2. $4,000
3. $10,000
4. $2,000

Why: Exclusion ratio = 80,000/200,000 = 40%; $4,000 excluded, $6,000 taxable per payment.

Credit life insurance is typically structured so that:

1. The face amount increases over the life of the underlying loan
2. Coverage continues at the same level long after the loan is repaid
3. The borrower's family receives the full original loan amount in cash
4. It is decreasing term with the creditor named as the beneficiary ✓

Why: Credit life is usually decreasing term equal to the outstanding debt, with the lender as beneficiary; it cannot exceed the loan balance.

In an indexed universal life policy, the interest credited to cash value is:

1. Determined each year solely by the policyowner's own elections
2. Based entirely on separate-account mutual fund performance and risk
3. Guaranteed at a fixed rate set for the life of the contract
4. Tied to a stated market index, subject to a cap and a guaranteed floor ✓

Why: Indexed UL credits interest linked to an external index (e.g., S&P 500) with a cap/participation rate and a guaranteed minimum floor.

Accelerated death benefits paid to a chronically ill insured are generally received income-tax-free when:

1. The benefit is paid as a single lump sum to the estate
2. The insured is under the age of fifty-nine and one half
3. Used for qualified long-term care, up to a per-diem limit ✓
4. The policy has been in force for fewer than two years

Why: For a chronically ill insured, accelerated benefits are tax-free if used for qualified LTC services, subject to a daily (per-diem) limit.

Federal telemarketing (do-not-call) rules require that insurers and producers:

1. Not call numbers listed on the national Do-Not-Call Registry ✓
2. Restrict all prospecting to postal mail, since live calls are banned
3. Place a follow-up call to every listed prospect at least once each month
4. Record every sales call and file the recordings with the state insurance department

Why: Telemarketers must scrub against the national Do-Not-Call Registry and honor opt-outs.

Under § 33-6-34(5), compelling insureds or beneficiaries to file suit to recover amounts due is an unfair claims settlement practice when the insurer does what?

1. Offers substantially less than the amounts ultimately recovered in suits brought by them ✓
2. Requests an examination under oath that the policy expressly permits
3. Denies the claim in writing and identifies the policy provision relied upon
4. Pays the applicable policy limit within 15 days of proof of loss

Why: O.C.G.A. § 33-6-34(5) makes it an unfair practice to compel insureds or beneficiaries to file suit by offering substantially less than the amounts ultimately recovered in suits brought by them.

Which settlement option pays the beneficiary an income that cannot be outlived?

1. Fixed period
2. Interest only
3. Fixed amount
4. Life income ✓

Why: A life income settlement option pays for the beneficiary's lifetime, regardless of how long they live.

The 'actively-at-work' provision in a group plan requires that, for coverage to take effect, the employee must:

1. Be performing their normal job duties on the effective date ✓
2. Pass an individual paramedical examination before enrollment
3. Have completed at least ten years of continuous service first
4. Waive all rights to convert the coverage in the future

Why: The actively-at-work provision conditions coverage on the employee being at work (not home ill) on the date it would otherwise begin.

During the free-look period, a life insurance policyowner has the right to:

1. Borrow the entire cash value with no interest ever charged
2. Switch insurers while keeping the original issue-age rates
3. Increase the death benefit without any further underwriting
4. Return the policy and receive a refund of the premium paid ✓

Why: The free-look (right to examine) period lets the owner return the policy for a full refund of premium within the stated number of days after delivery.

A graded-premium whole life policy charges premiums that:

1. Are invested in equity sub-accounts chosen by the policyowner each year
2. Decrease every year until the coverage is fully paid up
3. Start low and increase for a period, then level off ✓
4. Stay exactly the same for the entire life of the policy

Why: Graded-premium whole life begins with low premiums that rise over an initial period before leveling, easing early affordability.

Under the Fair Credit Reporting Act (FCRA), if an insurer takes adverse action based on a consumer report, it must:

1. Destroy the consumer report and delete all records within thirty days
2. Notify the applicant and identify the reporting agency that supplied the report ✓
3. Pay the applicant a statutory penalty for the inconvenience caused
4. Automatically reverse its underwriting decision and issue the policy exactly as it was applied for

Why: FCRA requires that an applicant subject to adverse action be notified and told the source so they can request and dispute the information.

When a child is covered under both parents' health plans, the primary plan is usually determined by the:

1. Birthday rule, using the parent whose birthday is earlier in the year ✓
2. Alphabetical order of the two parents' last names on their policies
3. Age of the child at the time the particular medical expense was incurred
4. Plan that happens to charge the lower of the two monthly premiums

Why: The birthday rule makes primary the plan of the parent whose birthday falls earlier in the calendar year.

Variable universal life (VUL) insurance combines:

1. Flexible premiums with policyowner-directed separate-account investments ✓
2. Decreasing term coverage with a built-in cost-of-living adjustment
3. Group coverage that requires no individual evidence of insurability
4. A fixed level premium with a guaranteed minimum cash value at all times

Why: VUL merges universal life's premium and death-benefit flexibility with variable separate accounts; the owner bears the investment risk.

Under § 33-6-32(1), the term 'insured' means which of the following?

1. The agent of record who solicited and delivered the policy
2. Any person who presents a claim against a policyholder, including a third-party claimant seeking damages for bodily injury
3. The party named on a policy or certificate, or as defined in the contract, with legal rights to the benefits ✓
4. Only the first named insured shown on the declarations page of a commercial policy, and no other named party or certificate holder

Why: O.C.G.A. § 33-6-32(1) defines "insured" as the party named on a policy or certificate, or as defined in the contract, with legal rights to the benefits provided.

A SIMPLE IRA retirement plan is intended for:

1. Government workers not covered by Social Security, who defer pay through a 457(b) plan instead
2. Small employers, with employee salary deferrals and an employer match ✓
3. Self-employed individuals who have no employees at all other than a spouse on the payroll
4. Large corporations with thousands of unionized employees

Why: A SIMPLE IRA is for small employers (generally up to 100 employees) and combines employee salary-reduction contributions with required employer contributions.

An employee gets married, a HIPAA 'special enrollment' event. The employee may:

1. Never add a new spouse to an existing plan
2. Only enroll at the next annual open enrollment period
3. Enroll only after a 12-month waiting period
4. Enroll in the group plan outside the normal open enrollment ✓

Why: HIPAA special enrollment lets employees enroll after qualifying life events (marriage, birth, loss of other coverage) without waiting for open enrollment.

'Rebating' generally refers to:

1. Refunding the unearned premium when a policy is properly cancelled
2. Charging a higher premium to a substandard, higher-risk applicant
3. Returning a claim overpayment to the insurer after a billing error
4. Offering something of value not in the contract to induce a sale ✓

Why: Rebating is giving a prospect any inducement (such as part of the commission or a gift) not specified in the policy to persuade them to buy; it is illegal in most states.

A Georgia resident held a policy with an insurer that has been declared insolvent. Under O.C.G.A. § 33-38-7, the largest amount the Association can provide for that one life under a health benefit plan is:

1. $500,000 ✓
2. $300,000
3. $100,000
4. $250,000

Why: O.C.G.A. § 33-38-7(a)(12)(B) caps the Association's obligation with respect to one life under a health benefit plan at $500,000.

The Medicare Supplement (Medigap) open enrollment period:

1. Occurs every fall and lets enrollees switch among all Medigap plans
2. Is available only to people who also qualify for full Medicaid benefits
3. Is a one-time 30-day window that opens at the person's 70th birthday
4. Lasts six months, starting when the person is 65 and enrolled in Part B ✓

Why: During the 6-month Medigap open enrollment (beginning at 65 and enrolled in Part B), insurers must issue any plan regardless of health (guaranteed issue).

An immediate annuity is characterized by income payments that begin:

1. On the contract anniversary after the annuitant turns 59 1/2
2. Within one payment interval of purchase (generally within a year) ✓
3. After a deferral period of at least ten accumulation years
4. Once the annuitant submits satisfactory proof of insurability

Why: A single-premium immediate annuity (SPIA) starts payments within one payment period — usually within 12 months — of the lump-sum purchase.

Under Georgia law, what entity is created to head the Department of Insurance and exercise the duties and powers vested by Title 33?

1. The Superintendent of Markets
2. The Insurance Advisory Board
3. The Director of Consumer Affairs
4. The Commissioner of Insurance ✓

Why: O.C.G.A. § 33-2-1 creates the Department of Insurance and provides that its chief officer is the Commissioner of Insurance, whose duties and powers are those vested by Title 33.

A structured settlement annuity is typically used to:

1. Provide an employer's executives with deferred bonuses
2. Fund a child's college education through a trust
3. Replace a key employee who has died
4. Pay periodic settlement amounts from a legal claim over time ✓

Why: A structured settlement funds court/insurance settlement payments as periodic income; amounts for physical-injury claims are generally tax-free.

The key distinction between an agent and a broker is that an agent:

1. May write only one line of insurance, while a broker may write several
2. Represents the applicant's interests, while a broker is the insurer's appointed representative
3. Is paid a salary only, while a broker earns commission on placed coverage
4. Legally represents the insurer, while a broker represents the client ✓

Why: An agent is the insurer's legal representative (acting under an agency contract); a broker represents the insurance buyer in seeking coverage.

A policyowner stops paying premiums but wants to keep some permanent coverage with no further premiums due. The best nonforfeiture option is:

1. Automatic premium loan
2. Reduced paid-up insurance ✓
3. Cash surrender value
4. Extended term insurance

Why: Reduced paid-up uses the cash value to buy a smaller, fully paid-up permanent policy — permanent coverage with no further premiums.

Under the Georgia individual A&S legal-action provision, no action to recover on the policy may be brought before how many days after written proof of loss is furnished?

1. 60 days ✓
2. 30 days
3. 90 days
4. 20 days

Why: O.C.G.A. § 33-29-3(11) provides that no action to recover on the policy may be brought before 60 days after written proof of loss is furnished.

Under O.C.G.A. § 33-29-9, if an insured elects a product, benefit, or deductible change during the required notice period after a renewal premium increase, the insured shall not be subject to:

1. Any change in the grace period, which is cut from 31 days to 10 days
2. Any reduction of the policy's lifetime maximum benefit below $1 million
3. Any premium increase at all for the next two policy years after the change
4. Any new preexisting conditions exclusion that did not apply to the original coverage ✓

Why: O.C.G.A. § 33-29-9(b) provides that if such a change is elected during the 60 day period after notice of renewal premium increase but before the renewal date, the insured shall not be subject to any new preexisting conditions exclusion that did not apply to the original coverage.

It is generally illegal to sell a Medicare Supplement (Medigap) policy to someone who is:

1. Within six months of turning age 65
2. Covered by a former employer's retiree plan
3. Already enrolled in a Medicare Advantage plan ✓
4. Receiving Social Security retirement benefits

Why: Selling a Medigap policy to a Medicare Advantage enrollee is prohibited as duplicative coverage (Medigap works only with Original Medicare).

Under a conditional receipt given with a life application and the initial premium, coverage takes effect:

1. Only after the policy has been in force a full year
2. As of the application/exam date if the applicant is insurable ✓
3. Only when the issued policy is physically delivered
4. At whatever future date the soliciting agent approves it

Why: A conditional receipt provides coverage retroactive to the application/exam date if the applicant proves insurable, provided premium accompanied the application.

An inflation protection rider on a long-term care policy:

1. Reduces the annual premium in any year the consumer price index falls, tracking deflation
2. Refunds a share of the premium in any year the cost of nursing home care rises sharply
3. Shortens the elimination period by 10 days on every policy anniversary after age 75
4. Increases the daily benefit amount over time to offset rising care costs ✓

Why: Inflation protection raises the benefit (simple or compound) over the years so the coverage keeps pace with the rising cost of care.

Under a group AD&D plan, the 'capital sum' is the amount paid for:

1. Voluntary surrender of the certificate for its accumulated cash value
2. A covered dismemberment, such as loss of a hand, foot, or sight ✓
3. Any illness-related hospital stay that lasts longer than one week
4. The accidental death of the insured employee while actively at work

Why: The capital sum is a stated percentage of the principal sum, paid for a covered dismemberment (e.g., loss of a limb or sight); the principal sum is paid for accidental death.

An endowment policy is distinguished by the fact that it:

1. Pays the face amount at a set maturity date if the insured is still living ✓
2. Decreases its face amount steadily over the policy's term
3. Provides only temporary coverage that expires with no value
4. Invests the entire premium in the insurer's separate investment accounts chosen by the owner

Why: An endowment pays the face amount either at the insured's death or upon reaching the maturity date while living; modern tax rules limit their use.

Under O.C.G.A. § 33-21-29, an employer may require an employee who accepts the point-of-service option to:

1. Waive the grievance and appeal rights the plan otherwise provides for denied claims
2. Sign a release of any malpractice claim arising from care by providers located outside the HMO's provider panel
3. Drop coverage for any dependents and enroll in the point-of-service option on a single-person basis instead
4. Be responsible for paying a premium over the amount of the HMO premium, directly or by payroll deduction ✓

Why: O.C.G.A. § 33-21-29(d) permits an employer to require an employee who accepts the point-of-service option to be responsible for paying a premium over the HMO premium, directly or by payroll deduction.

A person automatically receives Medicare Part A and Part B at 65 (no separate sign-up) if they:

1. Are already receiving Social Security benefits ✓
2. Have earned the 40 quarters of Medicare-covered work credit
3. Delay their Social Security claim past age 65
4. Are covered only by a state Medicaid program

Why: Those already drawing Social Security are enrolled automatically in Parts A and B at 65; others must actively enroll.

When a sale involves replacing an existing life policy, the producer must:

1. Guarantee in writing that the replacement policy will always cost the client less
2. Give the applicant the required replacement notice ✓
3. Personally surrender the client's existing policy before submitting the new application
4. Wait until the new policy is issued before mentioning the existing coverage at all

Why: Replacement rules require delivering a replacement notice/disclosure and following defined procedures.

A health policy with monthly premiums has a grace period of 10 days. A premium is 8 days late when the insured incurs a covered loss. The insurer:

1. Pays half of the benefit and bills the insured for the two months of overdue premium
2. Rescinds coverage back to the paid-to date and refunds the unearned premium to the insured
3. Denies the claim, since coverage lapsed on the due date
4. Covers the loss, since the policy is still in force during the grace period ✓

Why: Coverage continues during the grace period; the claim is paid (the overdue premium may be deducted).

A disability buy-sell policy's benefits are used to:

1. Pay the hospital and rehabilitation bills arising from the owner's injury
2. Meet the firm's rent, utilities, and staff payroll while the owner recovers
3. Replace the disabled owner's monthly salary until they return to work
4. Fund the purchase of a totally disabled owner's business interest ✓

Why: Disability buy-sell provides funds for remaining owners to buy out an owner who becomes totally disabled, separate from income replacement or overhead coverage.

A married couple's policy transfers the death benefit to the surviving spouse. For estate tax, this transfer:

1. Counts against the annual gift exclusion
2. Qualifies for the unlimited marital deduction ✓
3. Is fully taxable in the deceased's estate
4. Triggers the transfer-for-value rule

Why: Transfers to a surviving citizen spouse qualify for the unlimited marital deduction and pass free of federal estate tax.

To enroll in a Medicare Advantage (Part C) plan, a beneficiary must first have:

1. Only a Medicare Part D drug plan
2. Both Medicare Part A and Part B ✓
3. Full Medicaid eligibility in their state
4. An existing Medicare Supplement policy

Why: Medicare Advantage requires the beneficiary to be enrolled in both Part A and Part B; the MA plan then delivers those benefits (usually with Part D).

A Medicare beneficiary delayed Part D for three years without other creditable drug coverage. The result is:

1. A one-time penalty collected at the first prescription fill
2. A permanent late-enrollment surcharge added to the Part D premium ✓
3. No consequence, because Part D enrollment is voluntary
4. A permanent bar from enrolling in any Part D drug plan

Why: Going without creditable coverage adds a permanent late-enrollment surcharge to the Part D premium.

Under O.C.G.A. § 33-39-3, 'personal information' does NOT include an individual's name, address, and age when:

1. The information is coded before it is placed in the file
2. It comes from a consumer reporting agency report
3. The individual signs the insurer's disclosure authorization
4. No other underwriting information is gathered on that individual ✓

Why: O.C.G.A. § 33-39-3 provides that "personal information" does not include an individual's name, address, and age when no other underwriting information is gathered on that individual.

Under the Georgia individual A&S optional 'misstatement of age' provision, if the insured's age was misstated, the amount payable is adjusted to what?

1. What the premium paid would have purchased at the correct age ✓
2. The amount payable at the age the insured stated
3. Nothing, because a misstatement of age renders the policy void from its date of issue
4. The full amount stated in the policy, with the premium shortfall deducted from the claim

Why: O.C.G.A. § 33-29-4(2) provides that if the insured's age was misstated, the amount payable is what the premium paid would have purchased at the correct age.

An out-of-pocket maximum (stop-loss) in a health plan:

1. Is the fixed monthly premium the insured must pay the insurer
2. Sets the smallest claim amount the plan is willing to process
3. Caps the total cost-sharing an insured pays in a policy year ✓
4. Limits how much the provider may bill for any single service

Why: Once the insured's deductible, copays, and coinsurance reach the out-of-pocket maximum, the plan pays 100% of covered costs for the rest of the year.

Basic hospital expense coverage differs from major medical coverage because basic coverage typically:

1. Carries a large deductible and shares costs through coinsurance with the insured
2. Includes broad coverage for almost every type of medical service
3. Pays first-dollar benefits but only up to limited amounts ✓
4. Has very high lifetime maximums covering catastrophic illnesses

Why: Basic hospital/surgical/medical plans pay first-dollar (no deductible) but with limited benefits; major medical adds deductibles, coinsurance, and high limits.

A consumer who buys insurance through a producer representing the buyer (not the insurer) is working with a(n):

1. Adjuster
2. Underwriter
3. Captive agent
4. Broker ✓

Why: A broker legally represents the insurance buyer; an agent represents the insurer.

A tax-sheltered annuity (TSA / 403(b)) is available to employees of:

1. Only for-profit corporations listed on a stock exchange
2. Public schools and certain tax-exempt nonprofit organizations ✓
3. Any employer, with no limits on annual contribution amounts
4. Federal agencies exclusively, in place of Social Security

Why: 403(b) tax-sheltered annuities are for employees of public schools and 501(c)(3) tax-exempt organizations; contributions are pre-tax and grow tax-deferred.

A nonqualified deferred compensation plan is an arrangement in which an employer agrees to:

1. Provide tax-free retirement income guaranteed by the federal government
2. Match the employee's 401(k) contributions dollar for dollar each year
3. Pay an executive future compensation, without meeting qualified-plan rules ✓
4. Contribute equally for every employee under strict nondiscrimination tests

Why: Nonqualified deferred comp promises future pay to select executives; it avoids qualified-plan nondiscrimination rules but the employer's deduction is deferred until paid.

Which type of life insurance provides lifelong coverage with a level premium and a guaranteed cash value?

1. Annually renewable term
2. Whole (ordinary) life ✓
3. Level term to age 65
4. Credit life

Why: Whole life is permanent coverage with a level premium and a guaranteed, tax-deferred cash value. Term provides only temporary coverage with no cash value.

The 'consideration clause' of an insurance contract identifies:

1. The specific perils and conditions the policy will never cover
2. The right of the owner to return the policy during the free-look period
3. The premium and the applicant's statements as the consideration given ✓
4. The insurer's promise to renew the coverage for the life of the insured

Why: The consideration clause states what each party gives: the applicant's premium and statements in exchange for the insurer's promise to pay.

Under Georgia's Medicare Supplement law, within how many days of delivery may an applicant return a Medicare supplement policy or certificate for a full premium refund if not satisfied for any reason?

1. 30 days ✓
2. 10 days
3. 20 days
4. 45 days

Why: O.C.G.A. § 33-43-6 permits the applicant to return a Medicare supplement policy or certificate within 30 days of delivery for a full premium refund if not satisfied for any reason.

A flexible-premium deferred annuity allows the owner to:

1. Make varying contributions over time before payouts begin ✓
2. Fund the contract with a single premium at issue and make no further deposits, as an SPDA requires
3. Direct every dollar into FDIC-insured bank certificates
4. Start income payments within 30 days of the first deposit

Why: An FPDA accepts ongoing, variable contributions during accumulation, with income deferred to a later date.

Which of the following must a Georgia insurance license state under Code Section 33-23-11?

1. The total amount of premium the licensee is authorized to write each year
2. The licensee's social security number and residence telephone number
3. The licensee's projected renewal date, the name of every insurer that has appointed the licensee, and the commission rates payable
4. The name and address of the licensee, the date of issue, and the kind or kinds of insurance covered if not an agency license ✓

Why: O.C.G.A. § 33-23-11(b) provides the license shall state the name and address of the licensee, the date of issue, general conditions on expiration or termination, the kind(s) of insurance covered if not an agency license, and other conditions of licensing.

Which term life policy has a face amount that declines over the term and is commonly used to cover a mortgage balance?

1. Increasing term
2. Decreasing term ✓
3. Level term
4. Renewable term

Why: Decreasing term's face amount drops over time (premium usually level), matching a declining debt such as a mortgage.

Limited credit insurance agency licenses issued under Code Section 33-23-12 renew on what schedule?

1. Annually on the licensee's anniversary date, with a 30-day grace period for late fees
2. Quarterly, at the Commissioner's discretion
3. Every three years on July 1 of the renewal year
4. Biennially on December 31 of the applicable renewal year ✓

Why: O.C.G.A. § 33-23-12(b.1)(7) provides that limited credit insurance agency licenses renew biennially on December 31 of the applicable renewal year.

Under Georgia's required reinstatement provision, a lapsed life policy may be reinstated within what period from the date of premium default, provided its cash surrender value has not been exhausted or paid out?

1. Two years
2. Three years ✓
3. Five years
4. One year

Why: O.C.G.A. § 33-25-3(a)(8) requires that a lapsed policy be reinstatable within three years from the date of premium default, unless its cash surrender value has been exhausted or paid out.

Medicare Part A 'lifetime reserve days' are:

1. Unlimited days of fully covered skilled nursing facility care
2. 60 extra hospital days usable once over the beneficiary's lifetime ✓
3. Days the beneficiary may transfer to a spouse or dependent
4. Renewed automatically at the start of every new benefit period

Why: After 90 days in a benefit period, a beneficiary may draw on 60 lifetime reserve days (with higher coinsurance); once used, they are not replaced.

'Defamation' in insurance regulation refers to:

1. Sharing part of a commission with another licensed producer
2. Making false or maligning statements about an insurer's financial condition ✓
3. Filing a consumer complaint with the state insurance department about an unreasonably delayed claim
4. Refusing to renew a policy after a single claim is filed

Why: Defamation is making, publishing, or circulating false statements that are maligning, especially about the financial condition of an insurer.

Under the uniform 'time limit on certain defenses' provision in a health policy, after a stated period (e.g., two years) the insurer generally cannot:

1. Require the insured to furnish written proof of loss within 90 days of the date of loss
2. Deny a claim based on a pre-existing condition or application misstatement ✓
3. Enforce a named exclusion such as war or self-inflicted injury
4. Raise the premium for an entire underwriting class

Why: After the stated period, the insurer cannot void coverage or deny non-fraudulent claims for pre-existing conditions or misstatements — the health-policy analog of incontestability.

A salaried, full-time employee advises only his own employer about the employer's insurance interests, does not sell or solicit insurance, and receives no commission. Under Georgia law, this employee:

1. Must be appointed as an agent by every insurer whose policies he discusses with his employer's officers
2. Must hold a counselor's license, because he renders opinions about the value and terms of insurance contracts
3. Is not required to hold an insurance agent's license under the exemption in Code Section 33-23-4(h) ✓
4. Must register with the Commissioner as an independent adjuster

Why: O.C.G.A. § 33-23-4(h)(2)(G) exempts a salaried, full-time employee who counsels or advises his or her employer about the employer's insurance interests, provided the employee does not sell or solicit insurance or receive a commission.

O.C.G.A. § 33-6-3 establishes the basic prohibition of the article. What does it provide?

1. No person shall engage in any trade practice defined or determined under the article to be an unfair method of competition or unfair or deceptive act ✓
2. A trade practice is unfair only when the Commissioner proves that a policyholder suffered an actual monetary loss of $500.00 or more as a direct result of the conduct
3. Only insurers and agents holding a Georgia license may be penalized for unfair methods of competition, and unlicensed persons fall entirely outside the reach of the article
4. Every trade practice must be submitted to and approved by the Commissioner in advance, and any practice used before approval is presumed to be an unfair method of competition

Why: O.C.G.A. § 33-6-3 provides that no person shall engage in any trade practice defined or determined under the article to be an unfair method of competition or an unfair or deceptive act or practice.

A deductible 'carryover' provision in a major medical plan allows expenses incurred in the last months of the year to:

1. Be refunded in full to the insured at year end
2. Double the plan's annual out-of-pocket maximum amount
3. Apply toward the next year's deductible ✓
4. Permanently eliminate the deductible for all future years

Why: A carryover provision lets eligible expenses from the final months (often the last three) count toward the following year's deductible.

A Medicare Supplement (Medigap) policy is designed to:

1. Pay only for outpatient prescription drug costs
2. Cover gaps like deductibles and coinsurance in Original Medicare ✓
3. Provide long-term custodial nursing-home care benefits for an indefinite period of time
4. Replace Original Medicare with a private network plan

Why: Medigap fills cost-sharing gaps in Original Medicare and is sold in standardized plans.

An applicant classified as a 'preferred' risk:

1. Is declined for individual coverage and steered to a guaranteed-issue plan
2. Must buy through an employer group plan, because individual underwriting is closed
3. Pays the lowest premium because of better-than-average risk factors ✓
4. Pays a rated premium reflecting poor health or hazardous habits

Why: Preferred risks (e.g., ideal build, nonsmoker) present lower-than-average mortality and qualify for the lowest premiums; standard and substandard pay more.

Under a presumptive disability provision, the insured is presumed totally disabled (and paid full benefits) upon:

1. Any short illness expected to resolve within a single week
2. Total loss of sight, hearing, speech, or two limbs ✓
3. Reaching the policy's stated benefit-period maximum age
4. Voluntary early retirement from a physically demanding job

Why: Presumptive disability pays full benefits for specified losses (sight, hearing, speech, or two limbs) even if the insured is able to work.

A partial disability benefit in a disability income policy typically:

1. Pays the full monthly benefit for any minor injury or illness
2. Pays a reduced amount when the insured can work only part of the time ✓
3. Continues for the insured's entire remaining lifetime automatically
4. Refunds the premiums paid if the insured is never fully disabled

Why: Partial disability pays a reduced (often flat) benefit when the insured can perform some duties or work part-time, frequently following a period of total disability.

An insurer incorporated in another U.S. state but doing business in this state is a(n) ____ insurer.

1. Foreign ✓
2. Alien
3. Admitted
4. Domestic

Why: Domestic = incorporated in this state; foreign = another state; alien = another country.