Florida Life and Health 2-15 Final Exam 2026/2027
Actual Exam | Complete Questions & Detailed
Rationales | Pass Guaranteed - A+ Graded
TABLE OF CONTENTS
Section 1 | Life Insurance Policies and Provisions | Q1 – Q10
Section 2 | Health Insurance Policies and Provisions | Q11 – Q20
Section 3 | Annuities and Retirement Plans | Q21 – Q30
Section 4 | Florida State Laws, Regulations, and Ethics | Q31 – Q40
Section 5 | Insurance Concepts, Underwriting, and Claims | Q41 – Q50
Instructions: Choose the single best answer. Pass: 75% in 90 minutes.
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SECTION 1: LIFE INSURANCE POLICIES AND PROVISIONS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
Margaret, age 42, has owned a $250,000 whole life policy for 15 years. She recently lost
her job and can no longer afford the premiums. She does not want to surrender the
policy but needs to stop paying premiums immediately. Her agent explains that she can
use the policy's cash value to purchase a smaller amount of paid-up insurance that will
remain in force for life without further premium payments.
A. Margaret must continue paying premiums for at least two more years before this
option becomes available.
B. The cash value will be used to purchase a reduced paid-up policy with a lower face
amount but no further premiums due. ✓ CORRECT
C. Margaret can only access her cash value through a policy loan, which would require
her to repay the loan with interest.
,D. The insurer will automatically convert the policy to term insurance with the same face
amount for five years.
Correct Answer: B
Rationale: The reduced paid-up nonforfeiture option allows a policyowner to use the
accumulated cash value to purchase a smaller amount of fully paid-up permanent
insurance, eliminating future premium obligations while maintaining lifetime coverage.
Option A is incorrect because nonforfeiture options are available once cash value has
accumulated, not after an arbitrary two-year waiting period. Option C confuses a policy
loan with a nonforfeiture option; loans require repayment, while reduced paid-up is a
permanent change. Option D describes an extended term option, not reduced paid-up,
and term conversion does not use cash value to create permanent paid-up coverage.
Question 2 of 50
James, age 35, purchases a $500,000 20-year level term life insurance policy. Three
years into the policy, James is diagnosed with a terminal illness and has less than 12
months to live. He needs access to cash for medical expenses and asks his agent
about options available under his term policy.
A. James can access the policy's cash surrender value since he has paid premiums for
three years.
B. The insurer will automatically advance 50% of the death benefit upon proof of
terminal illness.
C. James may be able to add an accelerated death benefit rider if his policy includes
this provision. ✓ CORRECT
D. Term policies always include a waiver of premium provision that would refund all
premiums paid.
Correct Answer: C
Rationale: An accelerated death benefit rider allows terminally ill insureds to receive a
portion of the death benefit while still living, typically upon certification by a physician
,that life expectancy is 24 months or less. Option A is incorrect because term life
insurance does not build cash value or have a surrender value. Option B is wrong
because automatic advancement is not a standard term policy feature; it requires a
specific rider. Option D confuses waiver of premium, which waives future premiums
during disability, with a refund provision that does not exist in standard term policies.
Question 3 of 50
Robert, age 55, has a $200,000 whole life policy with a current cash value of $45,000.
He takes out a $20,000 policy loan to renovate his kitchen. Two years later, Robert dies
unexpectedly without having repaid the loan. The policy's outstanding loan balance,
including accrued interest, is now $22,000.
A. The beneficiary will receive the full $200,000 face amount because policy loans are
forgiven at death.
B. The beneficiary will receive $178,000, which is the face amount minus the
outstanding loan and interest. ✓ CORRECT
C. The beneficiary will receive $200,000 minus only the original $20,000 principal, with
interest waived.
D. The beneficiary must repay the loan from the death benefit proceeds within 30 days
of claim filing.
Correct Answer: B
Rationale: When an insured dies with an outstanding policy loan, the insurer deducts the
loan principal plus accrued interest from the death benefit before paying the beneficiary;
the net amount here is $200,000 minus $22,000, or $178,000. Option A is incorrect
because policy loans are not forgiven at death; they are secured by the policy's cash
value and death benefit. Option C improperly waives the interest, which continues to
accrue until death. Option D imposes an arbitrary repayment deadline that does not
exist; the insurer simply reduces the payout by the loan balance.
Question 4 of 50
, Susan, age 28, is applying for a $300,000 life insurance policy. On the application, she
states her age as 28, but the insurer later discovers she is actually 30. The policy was
issued based on the incorrect age, and Susan has been paying premiums calculated for
a 28-year-old for two years. The policy contains a standard misstatement of age
provision.
A. The insurer must void the policy because the application contained a material
misrepresentation.
B. The insurer will adjust the face amount to reflect the premiums Susan actually paid
based on her true age. ✓ CORRECT
C. Susan must repay all premiums paid with interest before the policy can remain in
force.
D. The misstatement is irrelevant because the incontestability period has already
expired.
Correct Answer: B
Rationale: The standard misstatement of age provision requires the insurer to adjust the
face amount to what the premiums paid would have purchased at the insured's correct
age, rather than voiding the policy for an honest age error. Option A is wrong because
age misstatements are specifically addressed by policy provision and do not
automatically void coverage. Option C is incorrect because the provision does not
require premium repayment; it simply adjusts benefits to match the correct age. Option
D is wrong because the incontestability period applies to contesting the validity of the
policy, not to correcting benefit amounts for age errors.
Question 5 of 50
David, age 40, purchases a universal life policy with a $100,000 death benefit and an
adjustable premium structure. After five years, David's financial situation improves and
he wants to increase his death benefit to $250,000 without providing new evidence of
insurability.
Actual Exam | Complete Questions & Detailed
Rationales | Pass Guaranteed - A+ Graded
TABLE OF CONTENTS
Section 1 | Life Insurance Policies and Provisions | Q1 – Q10
Section 2 | Health Insurance Policies and Provisions | Q11 – Q20
Section 3 | Annuities and Retirement Plans | Q21 – Q30
Section 4 | Florida State Laws, Regulations, and Ethics | Q31 – Q40
Section 5 | Insurance Concepts, Underwriting, and Claims | Q41 – Q50
Instructions: Choose the single best answer. Pass: 75% in 90 minutes.
══════════════════════════════════════
SECTION 1: LIFE INSURANCE POLICIES AND PROVISIONS Q1 – Q10
══════════════════════════════════════
Question 1 of 50
Margaret, age 42, has owned a $250,000 whole life policy for 15 years. She recently lost
her job and can no longer afford the premiums. She does not want to surrender the
policy but needs to stop paying premiums immediately. Her agent explains that she can
use the policy's cash value to purchase a smaller amount of paid-up insurance that will
remain in force for life without further premium payments.
A. Margaret must continue paying premiums for at least two more years before this
option becomes available.
B. The cash value will be used to purchase a reduced paid-up policy with a lower face
amount but no further premiums due. ✓ CORRECT
C. Margaret can only access her cash value through a policy loan, which would require
her to repay the loan with interest.
,D. The insurer will automatically convert the policy to term insurance with the same face
amount for five years.
Correct Answer: B
Rationale: The reduced paid-up nonforfeiture option allows a policyowner to use the
accumulated cash value to purchase a smaller amount of fully paid-up permanent
insurance, eliminating future premium obligations while maintaining lifetime coverage.
Option A is incorrect because nonforfeiture options are available once cash value has
accumulated, not after an arbitrary two-year waiting period. Option C confuses a policy
loan with a nonforfeiture option; loans require repayment, while reduced paid-up is a
permanent change. Option D describes an extended term option, not reduced paid-up,
and term conversion does not use cash value to create permanent paid-up coverage.
Question 2 of 50
James, age 35, purchases a $500,000 20-year level term life insurance policy. Three
years into the policy, James is diagnosed with a terminal illness and has less than 12
months to live. He needs access to cash for medical expenses and asks his agent
about options available under his term policy.
A. James can access the policy's cash surrender value since he has paid premiums for
three years.
B. The insurer will automatically advance 50% of the death benefit upon proof of
terminal illness.
C. James may be able to add an accelerated death benefit rider if his policy includes
this provision. ✓ CORRECT
D. Term policies always include a waiver of premium provision that would refund all
premiums paid.
Correct Answer: C
Rationale: An accelerated death benefit rider allows terminally ill insureds to receive a
portion of the death benefit while still living, typically upon certification by a physician
,that life expectancy is 24 months or less. Option A is incorrect because term life
insurance does not build cash value or have a surrender value. Option B is wrong
because automatic advancement is not a standard term policy feature; it requires a
specific rider. Option D confuses waiver of premium, which waives future premiums
during disability, with a refund provision that does not exist in standard term policies.
Question 3 of 50
Robert, age 55, has a $200,000 whole life policy with a current cash value of $45,000.
He takes out a $20,000 policy loan to renovate his kitchen. Two years later, Robert dies
unexpectedly without having repaid the loan. The policy's outstanding loan balance,
including accrued interest, is now $22,000.
A. The beneficiary will receive the full $200,000 face amount because policy loans are
forgiven at death.
B. The beneficiary will receive $178,000, which is the face amount minus the
outstanding loan and interest. ✓ CORRECT
C. The beneficiary will receive $200,000 minus only the original $20,000 principal, with
interest waived.
D. The beneficiary must repay the loan from the death benefit proceeds within 30 days
of claim filing.
Correct Answer: B
Rationale: When an insured dies with an outstanding policy loan, the insurer deducts the
loan principal plus accrued interest from the death benefit before paying the beneficiary;
the net amount here is $200,000 minus $22,000, or $178,000. Option A is incorrect
because policy loans are not forgiven at death; they are secured by the policy's cash
value and death benefit. Option C improperly waives the interest, which continues to
accrue until death. Option D imposes an arbitrary repayment deadline that does not
exist; the insurer simply reduces the payout by the loan balance.
Question 4 of 50
, Susan, age 28, is applying for a $300,000 life insurance policy. On the application, she
states her age as 28, but the insurer later discovers she is actually 30. The policy was
issued based on the incorrect age, and Susan has been paying premiums calculated for
a 28-year-old for two years. The policy contains a standard misstatement of age
provision.
A. The insurer must void the policy because the application contained a material
misrepresentation.
B. The insurer will adjust the face amount to reflect the premiums Susan actually paid
based on her true age. ✓ CORRECT
C. Susan must repay all premiums paid with interest before the policy can remain in
force.
D. The misstatement is irrelevant because the incontestability period has already
expired.
Correct Answer: B
Rationale: The standard misstatement of age provision requires the insurer to adjust the
face amount to what the premiums paid would have purchased at the insured's correct
age, rather than voiding the policy for an honest age error. Option A is wrong because
age misstatements are specifically addressed by policy provision and do not
automatically void coverage. Option C is incorrect because the provision does not
require premium repayment; it simply adjusts benefits to match the correct age. Option
D is wrong because the incontestability period applies to contesting the validity of the
policy, not to correcting benefit amounts for age errors.
Question 5 of 50
David, age 40, purchases a universal life policy with a $100,000 death benefit and an
adjustable premium structure. After five years, David's financial situation improves and
he wants to increase his death benefit to $250,000 without providing new evidence of
insurability.
