FINAL EXAM - FLORIDA LIFE AND
HEALTH QUESTIONS & VERIFIED
CORRECT ANSWERS
Which Unfair Trade Practice involves making a false statement on an insurance
application in order to receive money from an insurer? - CORRECT ANSWER
Misrepresentation
Who owns a stock company? - CORRECT ANSWER A stock insurance company is
owned by its stockholders.
In Florida, which of the following is considered an Unfair Trade Practice? - CORRECT
ANSWER Coercion
Which of these options can an individual use their medical flexible spending account to
pay for? - CORRECT ANSWER Prescription drugs are an allowable expense when
paid for by a medical flexible spending account.
Which of the following features of a group Term Life policy enables an individual to
leave the group and continue his or her insurance without providing evidence of
insurability? - CORRECT ANSWER The conversion privilege allows an individual to
leave the group term plan and continue his or her insurance without providing evidence
of insurability.
An example of false advertising would be - CORRECT ANSWER An insurer
exaggerating its dividends in a magazine advertisement
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first
six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of
unequal values reflects which of the following insurance contract features? -
CORRECT ANSWER Aleatory.
Insurance contracts are aleatory in that the amount the insured will pay in premiums is
unequal to the amount that the insurer will pay in the event of a loss.
An example of an unfair trade practice is - CORRECT ANSWER Making a material
misrepresentation to an insured is considered to be an unfair trade practice.
How would a contingent beneficiary receive the policy proceeds in an Accidental Death
and Dismemberment (AD&D) policy? - CORRECT ANSWER A contingent beneficiary
will receive the policy proceeds if the primary beneficiary dies before the insured's
death.
,Which of these terms accurately defines an underwriter's assessment of information on
a life insurance application? - CORRECT ANSWER Risk classification.
Underwriting, another term for risk selection, is the process of reviewing the many
characteristics that make up the risk profile of an applicant to determine if the applicant
is insurable and, if so, at standard or substandard rates.
T applies for a life insurance policy and is told by the producer that the insurer is bound
to the coverage as of the date of the application or medical examination, whichever is
later. Assuming that T is an acceptable risk, what item is given to T? - CORRECT
ANSWER Conditional receipt.
A conditional receipt binds the insurer to coverage as of the date of the application or
medical exam, provided the proposed insured is determined to be an acceptable risk.
What is required in the Florida Employee Health Care Access Act? - CORRECT
ANSWER Small group benefit plans are to be issued on a "guarantee-issue" basis
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent
beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly.
The Accidental Death benefits will be paid to - CORRECT ANSWER P.
In this situation, benefits will be paid to P because P survived the accident and is the
primary beneficiary.
The health insurance program which is administered by each state and funded by both
the federal and state governments is called - CORRECT ANSWER Medicaid- is funded
by both the federal and state governments and administered by individual states.
Which of the following BEST describes a short-term medical expense policy? -
CORRECT ANSWER Nonrenewable.
A typical short-term medical expense policy is best described as nonrenewable.
Which of the following statements about noncontributory employee group life insurance
is FALSE? - CORRECT ANSWER A minimum number of employees is required to
participate". Noncontributory employee group life insurance plans must cover ALL
eligible employees at all times
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - CORRECT
ANSWER Claim will be paid and coverage will remain in force.
, After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable
period, in which the insurer may not deny a claim based on information not disclosed at
the time of application.
S takes out a health insurance policy which contains a provision that states that the
agent does not have the authority to change the policy or waive any of its provisions.
Which health policy provision is this? - CORRECT ANSWER Entire Contract.
The Entire Contract provision states that the agent does NOT have the authority to
change the policy or waive any of its provisions.
What type of life insurance gives the greatest amount of coverage for a limited period of
time? - CORRECT ANSWER Term life.
Level Term or Level-Premium: Level term life insurance provides the insured with
coverage for a specified period of time; the term may be one, five, 10, 20 years or
longer. The premium is calculated based on the age and health of the insured.
Periodic health claim payments MUST be made at least - CORRECT ANSWER
monthly.
Under an individual health policy, periodic claim payments must be made at least
monthly.
Many small business owners worry how their business would survive financially if the
owner becomes disabled. The policy which BEST addresses this concern is -
CORRECT ANSWER Business Overhead Expense.
A Business Overhead Expense policy's purpose is to cover certain overhead expenses
that continue when the businessowner is disabled.
J purchased a Disability Income Policy that ONLY J can terminate and on which the
rates will never increase above those illustrated in the policy. Which of the following
types of policies did J purchase? - CORRECT ANSWER Noncancelable.
A Disability Income Policy that only the policyowner can terminate and on which the
rates will never increase is a Noncancelable policy.
Under an Individual Disability policy in Florida, what is the minimum schedule of time in
which claims must be made to an insured? - CORRECT ANSWER Monthly.
Claims on an individual disability policies must be paid out at monthly intervals, at
minimum.
HEALTH QUESTIONS & VERIFIED
CORRECT ANSWERS
Which Unfair Trade Practice involves making a false statement on an insurance
application in order to receive money from an insurer? - CORRECT ANSWER
Misrepresentation
Who owns a stock company? - CORRECT ANSWER A stock insurance company is
owned by its stockholders.
In Florida, which of the following is considered an Unfair Trade Practice? - CORRECT
ANSWER Coercion
Which of these options can an individual use their medical flexible spending account to
pay for? - CORRECT ANSWER Prescription drugs are an allowable expense when
paid for by a medical flexible spending account.
Which of the following features of a group Term Life policy enables an individual to
leave the group and continue his or her insurance without providing evidence of
insurability? - CORRECT ANSWER The conversion privilege allows an individual to
leave the group term plan and continue his or her insurance without providing evidence
of insurability.
An example of false advertising would be - CORRECT ANSWER An insurer
exaggerating its dividends in a magazine advertisement
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first
six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of
unequal values reflects which of the following insurance contract features? -
CORRECT ANSWER Aleatory.
Insurance contracts are aleatory in that the amount the insured will pay in premiums is
unequal to the amount that the insurer will pay in the event of a loss.
An example of an unfair trade practice is - CORRECT ANSWER Making a material
misrepresentation to an insured is considered to be an unfair trade practice.
How would a contingent beneficiary receive the policy proceeds in an Accidental Death
and Dismemberment (AD&D) policy? - CORRECT ANSWER A contingent beneficiary
will receive the policy proceeds if the primary beneficiary dies before the insured's
death.
,Which of these terms accurately defines an underwriter's assessment of information on
a life insurance application? - CORRECT ANSWER Risk classification.
Underwriting, another term for risk selection, is the process of reviewing the many
characteristics that make up the risk profile of an applicant to determine if the applicant
is insurable and, if so, at standard or substandard rates.
T applies for a life insurance policy and is told by the producer that the insurer is bound
to the coverage as of the date of the application or medical examination, whichever is
later. Assuming that T is an acceptable risk, what item is given to T? - CORRECT
ANSWER Conditional receipt.
A conditional receipt binds the insurer to coverage as of the date of the application or
medical exam, provided the proposed insured is determined to be an acceptable risk.
What is required in the Florida Employee Health Care Access Act? - CORRECT
ANSWER Small group benefit plans are to be issued on a "guarantee-issue" basis
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent
beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly.
The Accidental Death benefits will be paid to - CORRECT ANSWER P.
In this situation, benefits will be paid to P because P survived the accident and is the
primary beneficiary.
The health insurance program which is administered by each state and funded by both
the federal and state governments is called - CORRECT ANSWER Medicaid- is funded
by both the federal and state governments and administered by individual states.
Which of the following BEST describes a short-term medical expense policy? -
CORRECT ANSWER Nonrenewable.
A typical short-term medical expense policy is best described as nonrenewable.
Which of the following statements about noncontributory employee group life insurance
is FALSE? - CORRECT ANSWER A minimum number of employees is required to
participate". Noncontributory employee group life insurance plans must cover ALL
eligible employees at all times
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - CORRECT
ANSWER Claim will be paid and coverage will remain in force.
, After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable
period, in which the insurer may not deny a claim based on information not disclosed at
the time of application.
S takes out a health insurance policy which contains a provision that states that the
agent does not have the authority to change the policy or waive any of its provisions.
Which health policy provision is this? - CORRECT ANSWER Entire Contract.
The Entire Contract provision states that the agent does NOT have the authority to
change the policy or waive any of its provisions.
What type of life insurance gives the greatest amount of coverage for a limited period of
time? - CORRECT ANSWER Term life.
Level Term or Level-Premium: Level term life insurance provides the insured with
coverage for a specified period of time; the term may be one, five, 10, 20 years or
longer. The premium is calculated based on the age and health of the insured.
Periodic health claim payments MUST be made at least - CORRECT ANSWER
monthly.
Under an individual health policy, periodic claim payments must be made at least
monthly.
Many small business owners worry how their business would survive financially if the
owner becomes disabled. The policy which BEST addresses this concern is -
CORRECT ANSWER Business Overhead Expense.
A Business Overhead Expense policy's purpose is to cover certain overhead expenses
that continue when the businessowner is disabled.
J purchased a Disability Income Policy that ONLY J can terminate and on which the
rates will never increase above those illustrated in the policy. Which of the following
types of policies did J purchase? - CORRECT ANSWER Noncancelable.
A Disability Income Policy that only the policyowner can terminate and on which the
rates will never increase is a Noncancelable policy.
Under an Individual Disability policy in Florida, what is the minimum schedule of time in
which claims must be made to an insured? - CORRECT ANSWER Monthly.
Claims on an individual disability policies must be paid out at monthly intervals, at
minimum.
