Florida Life and Health Insurance Final Revised Exam 2025

Florida Life and Health Insurance Final Revised Exam 2025 Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? - ANSWER-Misrepresentation Who owns a stock company? - ANSWER-A stock insurance company is owned by its stockholders. In Florida, which of the following is considered an Unfair Trade Practice? - ANSWER Coercion Which of these options can an individual use their medical flexible spending account to pay for? - 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? - 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 - 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? - 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 - 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? - 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? - 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. FLORIDA LIFE FLORIDA LIFE 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? - 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? - 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 - 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 - 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? - 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? - 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? - 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? - ANSWER-Entire Contract. FLORIDA LIFE FLORIDA LIFE 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? - 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 - 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 - 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? - 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? - ANSWER-Monthly. Claims on an individual disability policies must be paid out at monthly intervals, at minimum. Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? - ANSWER-An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed. The Legal Actions provision of an Accident & Health policy requires that the insurer settle a claim within 60 days after receipt of Proof of Loss. According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - ANSWER-Marital status. FLORIDA LIFE FLORIDA LIFE Florida law requires an agent who is recommending the purchase of an annuity to a person to obtain information regarding all of these EXCEPT the person's marital status. J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? - ANSWER-Twisting. Twisting is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation. An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - ANSWER-In this situation, the maximum allowable IRA contribution is $25,000. What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law? - ANSWER "0%". Most noncontributory group health plans require 100% participation by eligible members. Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance. What is Florida's definition of Life insurance replacement? - ANSWER-Florida's Replacement Rule defines replacement of Life insurance as a transaction in which a new policy is bought and an old policy is discontinued. Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? - ANSWER-The grace period is the additional period of time after a premium payment is due that will allow the policy to remain in force in the event of nonpayment. A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast? - ANSWER-Stock company is owned by its shareholders. Mutual company is owned by its policyholders. An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed - ANSWER-Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies. Which of the following situations are NOT subject to Florida life insurance laws? - ANSWER-Insurance companies' day-to-day operations According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - ANSWER-a Buyer's Guide and Policy Summary Which provision is NOT a requirement in a group life policy? - ANSWER-Accidental. FLORIDA LIFE FLORIDA LIFE An AD&D provision is not required in a group life policy. T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? - ANSWER-the insurer will rescind the policy, deny the claim, and recover all payments made. K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - ANSWER-coverage will go into effect the date the agent delivers the policy, collects the initial premium, and obtains a good health statement from the insured. T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition? - ANSWER-Insurer will likely treat as a pre-existing condition which may not be covered for one year According to Florida law, which of the following statements accurately describes an admitted mail order insurance company? - ANSWER-It may solicit insurance business by mail without the assistance of a licensed agent A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as - ANSWER-A representation is a statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract. Which of the following areas of state regulation is NOT protected by the savings clause in ERISA? - ANSWER-All of these areas of state regulation are protected by the savings clause in ERISA EXCEPT for commerce. J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken? - ANSWER-An insurer must notify each certificate holder (employee) when the master policy has expired or is being cancelled. The insurer may take such action through the policyholder (employer). When an insurance application is taken by a producer, which of these statements is true? - ANSWER-Any changes made on the application require the applicant's initials When must insurable interest exist for a life insurance contract to be valid? - ANSWER Insurable interest must only exist at the inception of the contract. FLORIDA LIFE FLORIDA LIFE An assignment of benefits of a Health Policy - ANSWER-An assignment of benefits of a Health Policy transfers payments to someone other than the policyowner. Which of the following provisions is NOT required in HMO contracts/certificates? - ANSWER-Seven-day grace period. A grace period of no less than 10 days must be expressly included in an HMO contract. In a Life insurance contract, an insurance company's promise to pay stated benefits is called the - ANSWER-The insuring clause in a Life insurance contract establishes the basic promise of the insurance company. Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? - ANSWER-When replacing an existing life insurance policy, an agent must submit notice to existing insurer and replacing insurer of intentions. The coordination of benefits (COB) provision exists in order to - ANSWER-The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments. The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as - ANSWER-Premiums paid by an employer for an employee's coverage are deductible by the employer as a business expense.ì S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? - ANSWER-$50,000 At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - ANSWER-At the time of application. With life insurance, insurable interest must exist only at the policy inception. The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond - ANSWER-Under a Medicare Supplement policy, the waiting period