Georgia Life Insurance Practice Exam Free - 2026

• A. At policy delivery
• B. Not later than at the time of taking the application
• C. Within 10 working days after the application is signed
• D. Only if the applicant asks about replacement

Correct answer: B. Not later than at the time of taking the application

Explanation: Georgia's replacement regulation requires the agent, where replacement is or may be involved, to present the Replacement Notice not later than at the time of taking the application, have it signed by both the applicant and the agent, and leave a copy with the applicant. The agent must also obtain a list of all existing life insurance to be replaced and submit a copy of the notice to the replacing insurer with the application. See Ga. Comp. R. & Regs. 120-2-24-.05.

• A. One year
• B. Two years
• C. Three years, or until the next regular examination by its domiciliary insurance department, whichever is later
• D. Ten years

Correct answer: C. Three years, or until the next regular examination by its domiciliary insurance department, whichever is later

Explanation: The replacing insurer must maintain copies of the Replacement Notice, its written communications with the existing insurer, the applicant's signed statement, and a replacement register cross-indexed by replacing agent and existing insurer, for at least three years or until the conclusion of the next succeeding regular examination by the insurance department of its state of domicile, whichever is later. The regulation also requires the replacing insurer to notify the existing insurer, which then has 10 working days to furnish a policy summary to its policyholder. See Ga. Comp. R. & Regs. 120-2-24-.06.

• A. The contract is valid as long as the insured signed the application
• B. The contract is void, and the insurer must refund the premiums paid without interest
• C. The contract is valid but the death benefit is paid to the insured's estate
• D. The contract is voidable only if the insured objects within two years

Correct answer: B. The contract is void, and the insurer must refund the premiums paid without interest

Explanation: Georgia requires an insurable interest, meaning a reasonable expectation of pecuniary advantage from the continued life of the insured or a substantial interest arising from close relationship, to exist at the time the contract becomes effective (it need not exist when the loss occurs). A personal insurance contract procured on another person without such an interest is void; the insurer is not liable on it but must repay all premiums, without interest, to whoever paid them. See O.C.G.A. 33-24-3.

• A. A creditor on the life of a debtor
• B. One spouse on the life of the other spouse
• C. A business partner on the life of another partner
• D. An adult child on the life of a parent

Correct answer: B. One spouse on the life of the other spouse

Explanation: Georgia's consent statute lists the limited situations in which insurance may be effected on another person without the insured's consent, and a spouse insuring the other spouse is one of them. A creditor, partner or adult child may well have an insurable interest, but insurable interest alone does not remove the need for the insured's consent. See O.C.G.A. 33-24-6 (consent) and 33-24-3 (insurable interest).

• A. taxed only if the insured was under age 65
• B. received income tax-free
• C. always taxed as ordinary income
• D. paid only after a probate court approves the insurer

Correct answer: B. received income tax-free

Explanation: Life insurance death benefits are generally received income tax-free when paid as a lump sum to a named beneficiary. Interest paid with the proceeds may be taxable.

• A. The producer's appointment
• B. The policy number
• C. Interest earned on retained proceeds
• D. The beneficiary designation itself

Correct answer: C. Interest earned on retained proceeds

Explanation: The death benefit itself is generally income tax-free, but interest credited while proceeds are held by the insurer is generally taxable as interest income.

• A. as ordinary income in the year the interest is credited
• B. as a capital gain reported annually by the policyowner
• C. as fully tax-exempt income, including any gain taken at surrender
• D. on a tax-deferred basis while it remains in the policy

Correct answer: D. on a tax-deferred basis while it remains in the policy

Explanation: Cash value in a permanent life policy generally grows tax-deferred while it remains inside the contract, subject to tax rules and policy treatment.

• A. taxable income
• B. an automatic beneficiary change
• C. a new death benefit
• D. a premium discount

Correct answer: A. taxable income

Explanation: Withdrawals up to basis are generally a return of premium, but amounts above basis may be taxable. Candidates should remember tax treatment can vary by product and transaction.

• A. taxable as ordinary income in the year the loan is received
• B. not taxable when taken, if the policy remains in force
• C. taxable to the beneficiary when the death benefit is later paid
• D. limited to the premiums paid and free of interest charges

Correct answer: B. not taxable when taken, if the policy remains in force

Explanation: Policy loans are generally not taxable when taken if the policy stays in force, but unpaid loans can reduce benefits and may create tax issues if the policy lapses or is surrendered.

• A. deducted only by the beneficiary
• B. fully deductible by every policyowner
• C. not deductible as a personal expense
• D. treated as state exam fees

Correct answer: C. not deductible as a personal expense

Explanation: Individual life insurance premiums are generally not deductible as a personal expense. Business and employee benefit situations may have separate rules.

• A. converted into auto insurance
• B. paid to the producer
• C. ignored for all tax purposes
• D. taxable as ordinary income

Correct answer: D. taxable as ordinary income

Explanation: When a policy is surrendered, any amount received above the policyowner's cost basis is generally taxable as ordinary income.

• A. They may receive special tax treatment under retirement-plan rules
• B. They are taxed in the year contributed and again when distributed
• C. They are treated the same as premiums on a nonqualified annuity
• D. They produce earnings that are taxed annually as ordinary income

Correct answer: A. They may receive special tax treatment under retirement-plan rules

Explanation: Qualified annuities are connected to retirement-plan rules and may receive special tax treatment. Taxes usually apply when distributions are taken, depending on the arrangement.