Florida Life and Health Final Exam: Questions
With In-Depth Solutions
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.
With In-Depth Solutions
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.
