214 FLORIDA INSURANCE EXAM FINAL STUDY GUIDE
Questions with Correct Answers (Grade A+)
Question 1: A group life insurance plan in which the employer pays the entire premium is known as a
________________ plan.
Answer: noncontributory
Question 2: If a disabled worker covered under Social Security disability benefits recovers and then is
disabled again within five years, a new waiting period is required before benefits begin again.
Answer: FALSE
Question 3: Robert had an accident and qualified for Social Security disability. Given the waiting
period, when will Robert begin to receive benefits?
Answer: After 5 months
Question 4: The Insuring Clause includes all of the following EXCEPT the
Answer: beneficiary
Question 5: Mutualization occurs when a stock company turns to a __________ company.
Answer: mutual
Question 6: To provide a safeguard for insureds, most major medical policies contain a ____________
feature that limits the insured's out-of-pocket expenses.
Answer: stop-loss
Question 7: Tom is a newly appointed life, health and variable annuity agent with Acme Insurance
Agency. He is writing his first insurance policy on his brother-in-law's life. Who does Tom legally
represent in this transaction?
Answer: Acme Insurance Agency
Question 8: An insurance clause is a distinct article in a formal document that establishes the rules in
the contract that _____________________ must adhere to.
Answer: both the insurer and the insured
Question 9: "ACC" refers to the type of disability that prevents someone from performing the job he
was performing prior to the disability.
Answer: FALSE
Page 1
,Question 10: Which statement is CORRECT about the Department of Financial Services' right to
examine an agent's records?
Answer: An examination can be conducted at any time to discover any unfair trade practices.
Question 11: Bill gives Jim a couple of tickets to a Florida Gators game to thank him for purchasing a
policy. This is an example of:
Answer: rebating
Question 12: ____________ term insurance provides a level amount of protection for a specified period,
after which the policy expires.
Answer: Level
Question 13: Business overhead expense (B.O.E.) insurance does not provide benefits to cover the
business owner's salary.
Answer: TRUE
Question 14: Level, decreasing, and increasing insurance are all basic forms of ____________
insurance.
Answer: term
Question 15: Hospice services are covered under Medicare Part A.
Answer: TRUE
Question 16: Under Florida law, group health insurers must offer mental and nervous disorder
insurance to policyowners.
Answer: TRUE
Question 17: Deductibles under a group major medical plan usually run from $250 to $500; whereas
individual health plans usually run from:
Answer: $1,000 plus.
Question 18: Every HMO subscriber must receive a benefits package that includes a copy of the HMO
contract and certificate, and:
Answer: a member's handbook.
Page 2
, Question 19: A life insurance policy will not be reinstated if it has been:
Answer: surrendered for its cash value.
Question 20: Which of the following is NOT a type of permanent life insurance?
Answer: Term Life
Question 21: In Florida, a ______________ must sign for and on behalf of a minor purchasing life
insurance.
Answer: parent or legal guardian
Question 22: When an agent spreads a false story that damages a competing agent's reputation, the
offense is called:
Answer: defamation
Question 23: __________ is when policy values of an insurance policy are used to purchase another
policy with the same insurer for the sole purpose of earning additional premiums or commissions.
Answer: Churning
Question 24: Once an organization has filed an application to conduct insurance business, the Office of
Insurance Regulation will begin its review for issuing a(n):
Answer: Certificate of Authority
Question 25: Florida law requires health insurance policies and HMO contracts to provide coverage for
all medically necessary equipment, supplies and services used to treat diabetes when the patient's
physician certifies that they are medically necessary.
Answer: TRUE
Question 26: If an insurance company reimburses the insured for medical expenses, can the insured
deduct that amount from their federal income tax?
Answer: NO
Question 27: Which of the following is NOT a benefit to key person insurance?
Answer: Wage control
Page 3
Questions with Correct Answers (Grade A+)
Question 1: A group life insurance plan in which the employer pays the entire premium is known as a
________________ plan.
Answer: noncontributory
Question 2: If a disabled worker covered under Social Security disability benefits recovers and then is
disabled again within five years, a new waiting period is required before benefits begin again.
Answer: FALSE
Question 3: Robert had an accident and qualified for Social Security disability. Given the waiting
period, when will Robert begin to receive benefits?
Answer: After 5 months
Question 4: The Insuring Clause includes all of the following EXCEPT the
Answer: beneficiary
Question 5: Mutualization occurs when a stock company turns to a __________ company.
Answer: mutual
Question 6: To provide a safeguard for insureds, most major medical policies contain a ____________
feature that limits the insured's out-of-pocket expenses.
Answer: stop-loss
Question 7: Tom is a newly appointed life, health and variable annuity agent with Acme Insurance
Agency. He is writing his first insurance policy on his brother-in-law's life. Who does Tom legally
represent in this transaction?
Answer: Acme Insurance Agency
Question 8: An insurance clause is a distinct article in a formal document that establishes the rules in
the contract that _____________________ must adhere to.
Answer: both the insurer and the insured
Question 9: "ACC" refers to the type of disability that prevents someone from performing the job he
was performing prior to the disability.
Answer: FALSE
Page 1
,Question 10: Which statement is CORRECT about the Department of Financial Services' right to
examine an agent's records?
Answer: An examination can be conducted at any time to discover any unfair trade practices.
Question 11: Bill gives Jim a couple of tickets to a Florida Gators game to thank him for purchasing a
policy. This is an example of:
Answer: rebating
Question 12: ____________ term insurance provides a level amount of protection for a specified period,
after which the policy expires.
Answer: Level
Question 13: Business overhead expense (B.O.E.) insurance does not provide benefits to cover the
business owner's salary.
Answer: TRUE
Question 14: Level, decreasing, and increasing insurance are all basic forms of ____________
insurance.
Answer: term
Question 15: Hospice services are covered under Medicare Part A.
Answer: TRUE
Question 16: Under Florida law, group health insurers must offer mental and nervous disorder
insurance to policyowners.
Answer: TRUE
Question 17: Deductibles under a group major medical plan usually run from $250 to $500; whereas
individual health plans usually run from:
Answer: $1,000 plus.
Question 18: Every HMO subscriber must receive a benefits package that includes a copy of the HMO
contract and certificate, and:
Answer: a member's handbook.
Page 2
, Question 19: A life insurance policy will not be reinstated if it has been:
Answer: surrendered for its cash value.
Question 20: Which of the following is NOT a type of permanent life insurance?
Answer: Term Life
Question 21: In Florida, a ______________ must sign for and on behalf of a minor purchasing life
insurance.
Answer: parent or legal guardian
Question 22: When an agent spreads a false story that damages a competing agent's reputation, the
offense is called:
Answer: defamation
Question 23: __________ is when policy values of an insurance policy are used to purchase another
policy with the same insurer for the sole purpose of earning additional premiums or commissions.
Answer: Churning
Question 24: Once an organization has filed an application to conduct insurance business, the Office of
Insurance Regulation will begin its review for issuing a(n):
Answer: Certificate of Authority
Question 25: Florida law requires health insurance policies and HMO contracts to provide coverage for
all medically necessary equipment, supplies and services used to treat diabetes when the patient's
physician certifies that they are medically necessary.
Answer: TRUE
Question 26: If an insurance company reimburses the insured for medical expenses, can the insured
deduct that amount from their federal income tax?
Answer: NO
Question 27: Which of the following is NOT a benefit to key person insurance?
Answer: Wage control
Page 3
