Florida 2-15 exam questions and answers already passed

Florida 2-15 exam questions and answers already passed In a 3 partner cross-purchase plan, how many policies need to be purchased in order to protect each partner against the loss of any other partner? 6 According to the NAIC Life Insurance Solicitation Model, when soliciting life insurance, a producer is required to provide a prospect with a ______ and a _______ specific to the product being marketed. general buyer's guide; policy summary The Incontestable Clause states that the insurer cannot contest the validity of a life insurance policy as long as it remains in force after what period of time? Usually 2 years, but in some states only 1 year Mr. Baker has named his son as the beneficiary to his life insurance policy, but he is worried about his son's spending habits and the money his son might already owe when he receives the death benefit. Which policy provision, clause or rider best fits his situation? Spendthrift Provision The following life policy settlement options are available to the policy's beneficiary EXCEPT: Interest-Free Option When dividends are issued, the policyowner has the following dividend options in utilizing a return EXCEPT: Life Income Option Which two life insurance riders can Bill purchase to guarantee that his policy will continue without further commitment from him and that income will be paid to him if he becomes totally and permanently disabled? Waiver of premium and Disability Income Riders In the event that a parent dies or becomes disabled, which rider allows surviving child coverage to continue until the child reaches a specified age? Payor Rider According to the NAIC Model Group Life Insurance Provisions, what is the standard grace period? 30-31 days Which statement regarding annuities is CORRECT? Variable annuity units are fixed but the annuity payment will vary according to the value of the annuity unit. For individuals who have reached their normal retirement age, their spouses are entitled a retirement benefit that is equal to what percentage of the retired worker's primary insurance amount (PIA)? 50% n order to be considered currently insured and thus eligible for limited survivor benefits from Social Security, a worker must have earned ___ credits during the 13-quarter period ending with the quarter in which the worker died. 6 Due to the historical mismanagement of employee retirement plans, which federal law did Congress pass to protect employee retirement plans against misuse? Employee Retirement Income Security Act (ERISA) In a qualified employer retirement plan, an employee is entitled to what percentage of the vested interest in benefits that accrue from his or her contributions? 100% Under the 1035 policy exchange provision, which of the following will NOT receive favorable tax treatment? An annuity contract exchanged for a life insurance policy Barbara is currently in her Social Security 'blackout' period. Which answer BEST describes this period? The period after a surviving spouse's youngest child is no longer eligible and before the surviving spouse turns age 60, or age 50 if he or she is disabled. Which type of whole life insurance policy is characterized by affordable premiums in its initial years, then gradually increasing over the next few years until finally leveling off at a slightly higher rate than a standard whole life policy? Graded Premium Whole Life Theodore, who has purchased an immediate annuity with 20-year period certain coverage and receives $1000 monthly, dies after receiving payments for 15 years. What is the amount his beneficiary will receive? $60,000 Variable annuities are characterized by: A variable rate of growth and a variable benefit payable to the annuitant When pertaining to a defined contribution plan, all of the following are incorrect EXCEPT: The final fund available to any one participant depends on total amounts contributed, plus interest and dividends earned All of the statements below pertaining to group life insurance are correct EXCEPT: If the insurance coverage is less than $75,000, employees do not have to report the employer-paid premiums as income Which of the following is NOT associated with a term life policy? Cash value vs. Conversion, Insuable interest, Step-up premiums An 'in force' life insurance policy illustration is defined as an illustration that is furnished at any time after the policy that it depicts has been in force for at least how long? 1 Year Susan has been paying premiums on her whole life policy for the past 14 years. Recently, she decided to stop making payments, but did not select a nonforfeiture option. Since she did not select such option, what actions will her insurer take? Her insurer will issue a paid-up term life policy with the same face value as the original whole life policy and a term length based on the amount of cash value that the forfeited whole life policy can purchase. In a group life contract, evidence of insurability is required only after the enrollment period ends. Per Stirpes Rule Death proceeds from an insurance policy are divided equally among the named beneficiaries. If a named beneficiary is deceased, his or her share then goes to the living descendants of that individual. Per Capita Rule Death proceeds from an insurance policy are divided equally among only the living primary beneficiaries. Revocable Beneficiary Designation Allows the policyowner to change beneficiaries after the policy becomes in force, if he or she so chooses, without the consent of the beneficiary. Irrevocable Beneficiary Designation The policyowner gives up the right to control the policy. Once a policy becomes in force as an irrevocable policy, it cannot be changed in the future without the consent of the beneficiary. Estate Conservation (Retention) Income is derived only from interest gained on the principal. Income is indefinite and creates a legacy for next of kin or for charity. Viatical (Life) Settlement If a policyowner is considered terminally ill, an option exists to sell the insurance policy after its contestability period has ended to a viatical settlement company who, in return, will pay anywhere from 60% to 80% of the face amount Human Life Value Approach An individual's life in terms of earning potential is calculated to determine a life insurance value to replace such individual's earnings Buy-Sell Agreements Life insurance can also be used to fund a partnership or corporation after the death of one of its partners or corporate shareholders. Cross-Purchase Plan (Few Partners) 2 partners x 1 policy on each other = 2 total policies 3 partners x 2 policies each = 6 total policies 4 partners x 3 policies each = 12 policies Entity Plan (Several Partners) An entity plan is typically used if several partners exist within a company. Instead of each partner purchasing multiple life policies, the company itself purchases a life policy on each partner and serves as the policyowner of each policy. Interim Term A type of convertible term policy, referred to as an Interim Insuring Agreement, is commonly provided by insurers to ensure immediate temporary term life protection during the underwriting of a whole life policy Long-term care policies generally provide coverage for what period of time? 3 to 5 years If an insurance company fails to provide proper claims forms to the insured within 15 days from the time the insurance company was notified of a claim, the insured: can submit proof of loss in any form, explaining the occurrence and extent of loss for which the claim is submitted How many days of skilled nursing facility care will Medicare provide benefits before a daily copayment is required? 20 days In the event that an insured becomes disabled due to loss of limbs or vision as a result of an accident, what will an AD&D policy pay the insured? A lump-sum benefit called the 'capital sum' Premiums paid by a company are generally _______ and employee benefits are __________. tax deductible; income-tax free Mailing an issued policy either directly to the insured, or to the agent who then mails or delivers the policy to the insured is a process known as: Constructive delivery While Frank was replacing siding on his house, on the way down the ladder he lost his balance and severely injured his arm to the point of amputation. Because both the cause and the result of the accident was unintentional, AD&D benefits will be awarded to Frank; however, if Frank was acting carelessly on the ladder, benefits would not have been paid. This is because Frank's policy is based on what DI provision? Accidental Means Provision How often does a Medicare enrollee pay his or her Medicare Part A deductible? Once every benefit period Terri's group health insurance plan is being terminated due to the HMO no longer providing coverage in the area. In order for her to convert her contract, she must have been enrolled for a period no less than: 3 months All of the following statements are true in regards to the incontestability of a life insurance policy EXCEPT Once this period of time ends, an insurance company cannot contest the validity of a policy and must pay its death benefits, even if a policyowner had no insurable interest in the insured at the time of application. Which type of whole life policy is characterized by premiums that are typically lower for the first few years, and then increases each year until leveling off? Graded Premium Whole Life policy Justin, age 37, earned an adjusted gross income of $45,000 for the calendar year. After a short stint in the hospital, his individual health policy covered most of his medical expenses; however, Justin was still responsible for paying his deductible, doctor copays and coinsurance amounts equaling $6,000 in unreimbursed medical expenses. Of this $6,000, what amount can Justin deduct when he files his annual taxes? $1,500 - Solution: Since Justin was born after January 2, 1950, he can deduct expenses that exceed 10% of his adjusted gross annual income. Math: 10% Threshold - $45,000 * 10% = $4,500 Justin exceeded his 10% threshold; therefore, he can deduct $1,500 of his $6,000 in medical expenses ($6,000 - $4,500 = $1,500). Which of the following is NOT considered to be a life policy settlement option? Extended Term option