Exam Simulator Florida – Life & Health (FL
Health, Life & Annuity) | Complete Study
Guide with 200+ Actual Test Questions &
Verified Answers (Xcel Solutions – Pearson,
Graded A)
Question 1
What is considered a characteristic of an immediate annuity?
Answer: Benefit payments start within one payment period of purchase
Rationale: Immediate annuities begin payouts shortly after the initial investment, typically
within a month or year.
Question 2
Which characteristic is consistent with a straight life policy?
Answer: Premiums are payable for as long as there is insurance coverage in force
Rationale: Straight life policies require lifelong premium payments to maintain coverage.
Question 3
An insured’s inability to perform two or more activities of daily living may trigger which type of
life policy rider?
Answer: Long-term care rider
Rationale: This rider provides benefits if the insured cannot perform activities like bathing or
dressing.
Question 4
What is the purpose of the Florida Life and Health Insurance Guaranty Association
(FLAHIGA)?
Answer: Protect the insuring public against the insolvency of an insurance company
Rationale: FLAHIGA provides a safety net for policyholders if an insurer becomes insolvent.
Question 5
What is the “free look” period for life insurance policies in Florida?
,Answer: 14 days
Rationale: Policyholders have 14 days to review and return a life insurance policy for a full
refund.
Question 6
What is the “free look” period for annuity contracts in Florida?
Answer: 21 days
Rationale: Annuities allow a 21-day period to cancel and receive a full refund.
Question 7
What is the maximum policy loan interest rate in Florida?
Answer: Not fixed, varies by policy
Rationale: Florida does not set a strict maximum; rates depend on policy terms.
Question 8
What form must an insurer provide when replacing a life insurance policy?
Answer: Notice Regarding Replacement
Rationale: This form informs the policyholder of the implications of replacing their policy.
Question 9
How often must group health insurance policies cover mammograms for women aged 50 or older
in Florida?
Answer: Annually
Rationale: Florida mandates annual mammogram coverage for women 50+.
Question 10
What is the grace period for a life insurance policy in Florida?
Answer: 31 days
Rationale: Policyholders have 31 days to pay overdue premiums without losing coverage.
Question 11
What is churning in insurance?
Answer: Using policy values to purchase another policy to earn commissions
Rationale: Churning is an unethical practice to generate additional commissions.
,Question 12
What are reserve funds in insurance?
Answer: Monies set aside for future claims costs
Rationale: Insurers maintain reserves to ensure they can pay future claims.
Question 13
What type of term insurance provides a level amount of protection for a specified period?
Answer: Level term
Rationale: Level term insurance maintains a constant death benefit.
Question 14
If a primary beneficiary dies before the insured, who receives the proceeds?
Answer: Contingent beneficiary
Rationale: The contingent beneficiary is next in line if the primary is deceased.
Question 15
Which plan can a sole proprietor use only if employees are included?
Answer: Keogh pension plan
Rationale: Keogh plans require employee inclusion for sole proprietors.
Question 16
What type of life policy combines investment choices with term coverage?
Answer: Variable universal life
Rationale: Combines flexibility of universal life with investment options.
Question 17
What type of term life policy is used to cover an insured mortgage balance?
Answer: Decreasing term
Rationale: Decreasing term aligns with a declining mortgage balance.
Question 18
What type of annuity pays benefits based on units rather than dollar amounts?
, Answer: Variable annuity
Rationale: Payments vary based on investment performance.
Question 19
How many days are covered individuals guaranteed coverage after a group plan’s termination in
Florida?
Answer: 31 days
Rationale: Florida law provides 31 days of continued coverage.
Question 20
What happens if an insured understates their age by 5 years at application, and this is discovered
after death?
Answer: Pay the amount the premium would have purchased at the correct age
Rationale: The insurer adjusts the payout based on the correct age.
Question 21
What is required under the Florida Employee Health Care Access Act?
Answer: Small group benefit plans are issued on a guaranteed issue basis
Rationale: Ensures coverage for small groups without exclusions.
Question 22
What type of annuity would a 40-year-old woman buy to provide income starting at age 60?
Answer: Deferred annuity
Rationale: Deferred annuities delay payouts until a future date.
Question 23
What is the situation where physicians are salaried employees in an HMO facility called?
Answer: Staff model HMO
Rationale: Physicians are employed directly by the HMO in this model.
Question 24
What happens when a policyowner cash surrenders a universal life policy early?
Answer: May be considered a red flag for churning
Rationale: Early surrender for commissions is unethical.
Health, Life & Annuity) | Complete Study
Guide with 200+ Actual Test Questions &
Verified Answers (Xcel Solutions – Pearson,
Graded A)
Question 1
What is considered a characteristic of an immediate annuity?
Answer: Benefit payments start within one payment period of purchase
Rationale: Immediate annuities begin payouts shortly after the initial investment, typically
within a month or year.
Question 2
Which characteristic is consistent with a straight life policy?
Answer: Premiums are payable for as long as there is insurance coverage in force
Rationale: Straight life policies require lifelong premium payments to maintain coverage.
Question 3
An insured’s inability to perform two or more activities of daily living may trigger which type of
life policy rider?
Answer: Long-term care rider
Rationale: This rider provides benefits if the insured cannot perform activities like bathing or
dressing.
Question 4
What is the purpose of the Florida Life and Health Insurance Guaranty Association
(FLAHIGA)?
Answer: Protect the insuring public against the insolvency of an insurance company
Rationale: FLAHIGA provides a safety net for policyholders if an insurer becomes insolvent.
Question 5
What is the “free look” period for life insurance policies in Florida?
,Answer: 14 days
Rationale: Policyholders have 14 days to review and return a life insurance policy for a full
refund.
Question 6
What is the “free look” period for annuity contracts in Florida?
Answer: 21 days
Rationale: Annuities allow a 21-day period to cancel and receive a full refund.
Question 7
What is the maximum policy loan interest rate in Florida?
Answer: Not fixed, varies by policy
Rationale: Florida does not set a strict maximum; rates depend on policy terms.
Question 8
What form must an insurer provide when replacing a life insurance policy?
Answer: Notice Regarding Replacement
Rationale: This form informs the policyholder of the implications of replacing their policy.
Question 9
How often must group health insurance policies cover mammograms for women aged 50 or older
in Florida?
Answer: Annually
Rationale: Florida mandates annual mammogram coverage for women 50+.
Question 10
What is the grace period for a life insurance policy in Florida?
Answer: 31 days
Rationale: Policyholders have 31 days to pay overdue premiums without losing coverage.
Question 11
What is churning in insurance?
Answer: Using policy values to purchase another policy to earn commissions
Rationale: Churning is an unethical practice to generate additional commissions.
,Question 12
What are reserve funds in insurance?
Answer: Monies set aside for future claims costs
Rationale: Insurers maintain reserves to ensure they can pay future claims.
Question 13
What type of term insurance provides a level amount of protection for a specified period?
Answer: Level term
Rationale: Level term insurance maintains a constant death benefit.
Question 14
If a primary beneficiary dies before the insured, who receives the proceeds?
Answer: Contingent beneficiary
Rationale: The contingent beneficiary is next in line if the primary is deceased.
Question 15
Which plan can a sole proprietor use only if employees are included?
Answer: Keogh pension plan
Rationale: Keogh plans require employee inclusion for sole proprietors.
Question 16
What type of life policy combines investment choices with term coverage?
Answer: Variable universal life
Rationale: Combines flexibility of universal life with investment options.
Question 17
What type of term life policy is used to cover an insured mortgage balance?
Answer: Decreasing term
Rationale: Decreasing term aligns with a declining mortgage balance.
Question 18
What type of annuity pays benefits based on units rather than dollar amounts?
, Answer: Variable annuity
Rationale: Payments vary based on investment performance.
Question 19
How many days are covered individuals guaranteed coverage after a group plan’s termination in
Florida?
Answer: 31 days
Rationale: Florida law provides 31 days of continued coverage.
Question 20
What happens if an insured understates their age by 5 years at application, and this is discovered
after death?
Answer: Pay the amount the premium would have purchased at the correct age
Rationale: The insurer adjusts the payout based on the correct age.
Question 21
What is required under the Florida Employee Health Care Access Act?
Answer: Small group benefit plans are issued on a guaranteed issue basis
Rationale: Ensures coverage for small groups without exclusions.
Question 22
What type of annuity would a 40-year-old woman buy to provide income starting at age 60?
Answer: Deferred annuity
Rationale: Deferred annuities delay payouts until a future date.
Question 23
What is the situation where physicians are salaried employees in an HMO facility called?
Answer: Staff model HMO
Rationale: Physicians are employed directly by the HMO in this model.
Question 24
What happens when a policyowner cash surrenders a universal life policy early?
Answer: May be considered a red flag for churning
Rationale: Early surrender for commissions is unethical.
