FLORIDA HEALTH AND LIFE INSURANCE STATE EXAM PRACTICE QUESTIONS AND CORRECT ANSWERS

FLORIDA HEALTH AND LIFE INSURANCE STATE EXAM PRACTICE QUESTIONS AND CORRECT ANSWERS “Which Accident and Health policy provision addresses preexisting conditions? - CORRECT ANSWER Time Limit on Certain Defenses" "Which of the following individual health insurance policies will provide the broadest protection? - CORRECT ANSWER Major Medical" "The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as: - CORRECT ANSWER Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure Premiums paid by an employer for an employee's coverage are deductible by the employer as a buisness expense" "What must the policyowner provide to the insurer for validation that a loss has occurred? - CORRECT ANSWER proof of loss" "Association Plans that are designed to provide health benefits to their members are regulated by the state because - CORRECT ANSWER They are insured by and authorized insurer" "Which of the following statements is CORRECT about the period in which a Term Policy can be converted? - CORRECT ANSWER It varies according to contracts" "When does a life insurance contract become effective if the initial premium is not collected during the application process? - CORRECT ANSWER When producer delives policy and collects initial premium" "A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: - CORRECT ANSWER Policy Loan Provision" "Medicare Part A and Part B do no pay for: - CORRECT ANSWER Dental Work" "When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? - CORRECT ANSWER Void the policy only if it is discovered during the Contestable period and proven to be material" "The insuring Clause - CORRECT ANSWER States the scope and limits of the coverage" "What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? - CORRECT ANSWER Waiver of Premium Rider" "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 Recipt A conditional recipt binds the insurer to coverage as the date of the application or medical exam, provided the proposed insured is determined to be an aceptable risk" "When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): - CORRECT ANSWER Exclusion" "A Stock insurance Company - CORRECT ANSWER is owned exclusively by it's shareholders A stock insurance company is best defined as an incorperated company that has its capital divided into shares and is owned exclusively by its shareholders." "When an insurance application is taken by a producer, which of these statements is true? - CORRECT ANSWER Any changes made on the applicationrequire the applicants initials" "All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT - CORRECT ANSWER an agents comission" "J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? - CORRECT ANSWER Twisting The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation" "Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT? - CORRECT ANSWER Premiums normally increase at the time of renewal" "M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? - CORRECT ANSWER Pay face amount minus the past due premium" "Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? - CORRECT ANSWER annuity" "Which of the following factors affects the amount of monthly disability benefits payable under Social Security? - CORRECT ANSWER The amount of benefits availible from other sources" "Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? - CORRECT ANSWER the income from the TSA is recieved tax-free" "What benefit does the Payor clause on a Juvenile Life policy provide? - CORRECT ANSWER premiums are waved if the payor becomes disabled" "In Florida, most life insurance policies have a contestability period of - CORRECT ANSWER 2 Years" "Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: - CORRECT ANSWER March 1 The elimination period of the time between the onset of a disability, and the time you are eligibe for benefits. It is best thought of as a deductible period for your policy. After a 30-Day Elimination period, Z will become eligible for recieving benefits on March 1." "When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? - CORRECT ANSWER at future dates specifies in the contrac with no evidence of insurability required" "Which is true concerning a Variable Life Universal Life Policy? - CORRECT ANSWER Policyowner controls where the investment will go and selects the amount of the premium payment" "A whole life insurance policy endows when the: - CORRECT ANSWER Cash Value equals the death benefit" "Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? - CORRECT ANSWER Joint Life" "When is the face amount of a Whole Life policy paid? - CORRECT ANSWER When the insured dies or at the policy's maturity date, whichever happens first" "According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - CORRECT ANSWER A Buyer's Guide and Policy Summary" "With Optionally Renewable Health policies, the insurer may: - CORRECT ANSWER review the policy annually and determine whether or not to renew it" "How does group insurance differ from individual insurance? - CORRECT ANSWER Premiums are Lower" "According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - CORRECT ANSWER Marital Status" "All of the following will result in the suspension of an agent's license EXCEPT - CORRECT ANSWER acting with a fiduciary responsibility" "According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: - CORRECT ANSWER two years from the date of the policy was issued" "What does the ownership clause in a life insurance policy state? - CORRECT ANSWER Who the policyowner is and what rights the policyowner is entitled to" "In Florida, monthly-premium health insurance policies must provide a grace period of at least - CORRECT ANSWER 10 days" "Florida's 14-day free-look period for life insurance policies begins at the - CORRECT ANSWER date of delivery" "P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - CORRECT ANSWER P will still recieve declared dividends" "What is the main reason for regulating the insurance industry? - CORRECT ANSWER maintain solvency of insurance companies" "A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: - CORRECT ANSWER mandatory income tax withholding on the transfer amount" "Which of the following is NOT an unfair claim settlement practice? - CORRECT ANSWER Needing written documentation of claim details" "Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? - CORRECT ANSWER misrepresentation" "Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - CORRECT ANSWER Buisness Overhead Expense" "In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? - CORRECT ANSWER Naturopaths" "Which of the following BEST describes a short-term medical expense policy? - CORRECT ANSWER nonrenewable" "An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? - CORRECT ANSWER Gender" "A policy loan is made possible by which of these life insurance policy features? - CORRECT ANSWER Cash Value Provision" "Which of the following is a standard provision of the conversion privileges in a Group Life policy? - CORRECT ANSWER Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis" "Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? - CORRECT ANSWER Entire Contract" "What is Florida's definition of Life insurance replacement? - CORRECT ANSWER A transaction in which a new policy is bought and an old policy is terminated" "What percentage of eligible persons must a policy cover in a noncontributory group? - CORRECT ANSWER %100" "Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - CORRECT ANSWER Risk Classification" "Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? - CORRECT ANSWER Buyer's Guide" "At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - CORRECT ANSWER at the time of the appliation" "What would be an accurate definition of "controlled business"? - CORRECT ANSWER Insurance business that is written on the agent's own life, property, or interests" "What are three common classifications underwriters use for risk? - CORRECT ANSWER Standard, substandard, and preferred" "What is intended to be covered by health insurance? - CORRECT ANSWER Accidental injury, illness, and medical costs" "If the total of a taxpayer's medical expense exceeds 10% of their adjusted gross income, what can be deducted? - CORRECT ANSWER Accident insurance premiums, health insurance premiums, and long-term care premiums" "What is the minimum grace period for group life insurance in Florida? - CORRECT ANSWER 31 days" "In what type of health insurance contract are the premiums guaranteed not to increase and the insurance company may not cancel the policy? - CORRECT ANSWER Non-cancellable" "A binding arrangement under which an insured their health plan be made directly to a person or facility that they dictate (such as a doctor or hospital) - CORRECT ANSWER Assignment of benefits" "What is the minimum number of employers that must be insured contributory employer-sponsored group health insurance plans? - CORRECT ANSWER There is no minimum" "What are the elements of insurable risks? - CORRECT ANSWER Loss must occur by chance or accident, large number of homogeneous units, and the loss must be predictable" "When recommending a replacement policy, a producer should remember that: - CORRECT ANSWER He/she has liabilities because of errors or omissions" "What defines proper business practices expected of agents? - CORRECT ANSWER The Florida Code of Ethics" "Irving has a policy that states that his coverage is renewable to age 65 and beyond that age in the event certain circumstance are present. This type of renewability is known as: - CORRECT ANSWER Conditionally renewable" "What type of insurer is formed under the laws of Florida? - CORRECT ANSWER Domestic" "To fall under the common disaster provision, most policies specify that the death of the primary beneficiary must occur: - CORRECT ANSWER Within 30-90 days of the accident" "What are the required provisions for health policies? - CORRECT ANSWER Grace period, Reinstatement, and Proof of loss" "What is the minimum grace period for individual life insurance policies in Florida? - CORRECT ANSWER 30 days" "Upon the death of an insured, life insurance policy proceeds are designed for: - CORRECT ANSWER The beneficiary only" "In what provision does this statement appear: "Benefits are subject to all the provisions, conditions and exclusions of the policy?" - CORRECT ANSWER Insuring clause" "What are the advantages of a survivorship policy? - CORRECT ANSWER It is less expensive, it helps to build your estate, and it can help pay estate taxes" "James has agreed to purchase insurance. When will the coverage be in force? - CORRECT ANSWER When the agent delivers the policy to the insured" "In a group life policy, an insured's dependent spouse may be covered up to hat percentage of the amount of insurance for which the employee is insured? - CORRECT ANSWER 100%" "The Fair Credit Reporting Act states that generally, consumer reports cannot contain what? - CORRECT ANSWER Adverse information about an individual that dates back over seven years, tax liens older than seven years, and an individual's criminal history" "Benefits of a qualified retirement plan - CORRECT ANSWER Employers can deduct contributions for each participant, contributions and earning on the contributions are tax deferred until withdrawn, and transferring the contributions into a different IRA can further defer taxes" "When can the Office of Insurance Regulation examine the records of an insurer? - CORRECT ANSWER Anytime" "How much time before coverage is in effect for a Medicare supplemental policy that replaces another Medicare supplemental policy that was held for 1 year? - CORRECT ANSWER Immediately" "What is contained on Part III of an application for insurance? - CORRECT ANSWER Agent's report" "The grace period in a health insurance plan is based on what? - CORRECT ANSWER The premium mode" "Insurance advertisements may not refer to premiums as: - CORRECT ANSWER Deposits" "Where replacement is involved, what must the replacing insurance company provide to the applicant of a policy that does not contain an unconditional refund provision prior to accepting the applicant's initial premium? - CORRECT ANSWER Buyer's Guide and Policy Summary" "What action will an insurance company take in issuing an individual health insurance policy to someone who has had asthma since childhood? - CORRECT ANSWER Issue the policy with an impairment rider" "Jamie had group life insurance with his former employer, but his new company does not offer life insurance. What are his options? - CORRECT ANSWER He can convert his insurance to an individual policy" "How does one handle the designation of minor beneficiaries on a life policy? - CORRECT ANSWER Set up a trust to receive and administer the proceeds of the policies, instruct the insurance company to hold the proceeds until the children are of a competent age, and/or appoint a guardian to administer the proceeds" "What is considered "transacting" insruance? - CORRECT ANSWER Negotiation, solicitation, and effectuation" "What are risk factors for a health policy? - CORRECT ANSWER Family health history, gender, and age" "What is the length of time that the suicide clause is in effect? - CORRECT ANSWER 2 years" "At what point will the Automatic Premium Loan (APL) provision on a life policy no longer pay premiums? - CORRECT ANSWER It will pay until there is no longer cash value to cover the premium" "Thomas submitted an application for health insurance with the full first premium and was issued a conditional receipt. On which provision of the contract is the application and premium payment based? - CORRECT ANSWER The consideration clause" "Statements made in an insurance application are held to a principle of: - CORRECT ANSWER Representation" "How much time does an individual have to convert to a new individual life policy after they are terminated from employment covered by a group life policy? - CORRECT ANSWER 31 days" "In order to transact insurance policies in Florida, insurance agents must be: - CORRECT ANSWER Licensed and appointed" "What provisions will limit benefits in an insurance contract? - CORRECT ANSWER Exclusions" "How much time does an appointing entity have to report a termination to the Florida Department of Insurance? - CORRECT ANSWER 30 days" "What is described as charging insureds additional fees without their consent? - CORRECT ANSWER Sliding" "Florida created the Small Employers Access Program to specifically target employers with up to how many employees? - CORRECT ANSWER 25" "What are features of variable universal life insurance? - CORRECT ANSWER Flexible premiums, cash value based on investment in separate account, and death protection is deduced from cash value" "If a replacement is involved, what must the agent do? - CORRECT ANSWER Provide the insurer with the signed statement from the applicant pertaining to replacement, provide the applicant with a policy comparison statement, and list any and all of the applicant's existing policies/annuities to be replaced" "Appropriately addressing an applicant's financial objectives is known as determining: - CORRECT ANSWER Suitability" "What is the first action the Office of Insurance Regulation will take for an insurer engaging in an unsound practice? - CORRECT ANSWER A cease and desist order" "What is the minimum free look period for life insurance policies in Florida? - CORRECT ANSWER 14 days" "What are the characteristics of an interest sensitive whole life policy? - CORRECT ANSWER Flexible premiums, guaranteed minimum death benefits, and guaranteed minimum rates of return" "What is a type of Medicare health plan that provides all the Part A and Part B benefits? - CORRECT ANSWER Medicare Advantage" "What is considered unfair discrimination? - CORRECT ANSWER Discrimination based on race, discrimination based on blindness, and discrimination based on sex" "What law requires that an applicant be notified that an insurance underwriter may request a report from an investigative agency? - CORRECT ANSWER Fair Credit Reporting Act" "What is the waiting period under the waiver of premium rider before the first premium will be waived? - CORRECT ANSWER 3 or 6 months" "Employee group life insurance is for the benefit of: - CORRECT ANSWER Employee only" "When does an agent have to inform a proposed insured that a credit report may be pulled? - CORRECT ANSWER The proposed insured should be informed at the time of application" "Who must sign the Notice Regarding Replacement of Medicare Supplement Coverage? - CORRECT ANSWER The applicant and the replacing agent" "What would be best for someone who received a large lump sum from their company retirement and wants to be sure their basic living needs are always covered? - CORRECT ANSWER An immediate annuity purchased with a lump sum" "What is the purpose of the Florida Life and Health Guaranty Association? - CORRECT ANSWER To protect policy holders and insureds from insurers who cannot fulfill their financial obligations" "Who much sign the Notice Regarding Replacement of Accident and Sickness or Long-term Care Coverage? - CORRECT ANSWER The applicant only" "What are nonprofit entities that provide life insurance as a benefit for their members and beneficiaries? - CORRECT ANSWER Fraternal organizations" "What purposes does an individual annuity serve? - CORRECT ANSWER Individual Retirement Account (Qualified), tax deferred savings, and retirement income" "What rider can decrease the death benefit when utilized? - CORRECT ANSWER Long-term care rider" "An answer an applicant provides on an application is considered a: - CORRECT ANSWER Represetation" "What is the latest that the outline of coverage can be delivered? - CORRECT ANSWER When the policy is delivered" "A surgeon who has a neurological problem in his arm is not able to perform surgery, but he can practice internal medicine. His disability policy states that he will qualify for benefits if he is unable to perform the essential duties of his occupation as a result of a sickness or an accident for 5 years and any occupation for which he have had prior experience, education or training thereafter. What benefits might he expect from this policy? - CORRECT ANSWER Full benefits for 5 years and no benefits thereafter" "What out of pocket expense does NOT qualify for a medical deduction? - CORRECT ANSWER Disability insurance premium" "What organization did Florida create to improve access to health insurance for uninsured children in Florida? - CORRECT ANSWER Florida Healthy Kids Corporation" "When would a life insurance's proceeds be excluded in the deceased's estate? - CORRECT ANSWER The deceased's wife was the beneficiary" "What is an example of represetations? - CORRECT ANSWER Carla has represented that the information she has furnished is true to the best of her knowledge" "What is NOT a duty or power of the Office of Insurance Regulation? - CORRECT ANSWER Write and amend insurance statutes" "When must an outline of coverage be given to a prospective applicant for long-term care insurance? - CORRECT ANSWER At the time of solicitation" "How many parts are there to an application? - CORRECT ANSWER Three" "What requires that an individual have a valid concern for the continuation of the life or well being of the person insured? - CORRECT ANSWER Insurance interest" "Which clause in a policy contains information on the parameters to pay claims in the event of a loss? - CORRECT ANSWER Payment of claims" "What type of care is nursing care and rehabilitation needed on a daily basis that is performed by a medical professional under a physician's orders? - CORRECT ANSWER Skilled care" "What benefit will Medicaid NOT provide? - CORRECT ANSWER Monthly income" "In a group health insurance contract, the individual insureds are each given: - CORRECT ANSWER A certificate of Insurance" "What guarantee sates that if the policyholder discontinues payment of the premiums, the policyholder can have access to the cash value of the policy? - CORRECT ANSWER Nonforfeiture provision" "Mark names his wife and children as beneficiaries on his life policy. They would not be considered: - CORRECT ANSWER Other insureds" "What is considered a reimbursement contract? - CORRECT ANSWER Major medial contract" "Which policy would best suit someone who retires with a large amount of cash? - CORRECT ANSWER Single premium whole life insurance" "What is NOT a payment option to an annuity owner? - CORRECT ANSWER Dual premium option" "A schedule that reimburses based on general costs in the geographical area is known as: - CORRECT ANSWER Usual, reasonable, and customary (URC)" "In Florida, what is the minimum number of employees to be considered a "small employer?" - CORRECT ANSWER 1" "Which assignment may a person insured under a group life insurance policy NOT make? - CORRECT ANSWER Insured" "What practice may NOT be used by agents when selling annuities to senior citizens? - CORRECT ANSWER Cold lead advertising" "Under an HMO contract, when does coverage for newborns begin? - CORRECT ANSWER The moment of birth" "The fact that an insurance agent cannot commingle their insurance funds with their personal funds is referred to in legal terms as: - CORRECT ANSWER Fiduciary responsibility" "What should NOT be considered in a needs approach calculation? - CORRECT ANSWER Amount needed to retire comfortably" "What type of health insurance policy states that the insurance company may not cancel the policy, but they may increase the rates on a specified class of insureds? - CORRECT ANSWER Guaranteed renewable policy" "What is an effective and legal way to deliver a policy? - CORRECT ANSWER Personal delivery by an agent, mailing the policy to the policy owner, and giving the policy to an agent of the policy owner" "What is NOT necessary for a policy to take effect? - CORRECT ANSWER The policy was reviewed by the applicant" "What does NOT affect a group health plan's rates? - CORRECT ANSWER Mortality tables" "How frequently must domestic insurers be examined by the Office of Insurance Regulation? - CORRECT ANSWER At least once every 5 years" "The Entire Contract Provision states: - CORRECT ANSWER The policy along with all attached riders and endorsements and other papers constitutes the entire contract between the policyholder and the company" "Who is NOT on the Financial Services Commission? - CORRECT ANSWER The Florida Commissioner of Insurance" "What is required for the conversion/exchange to take place in a convertible term policy? - CORRECT ANSWER It requires that premiums be paid on time" "In Florida, what is the minimum age to become licensed as an insurance producer? - CORRECT ANSWER 18" "When an agent or insurer does not truthfully explain the terms of an insurance policy, this is: - CORRECT ANSWER Misrepresentation" "The clause that prevents an insurer from denying a claim, except for nonpayment of premiums, after the policy has been in force for over 2 years is called the: - CORRECT ANSWER Incontestability clause" "What is NOT included in the insuring clause on the face of a life insurance policy? - CORRECT ANSWER Name of the beneficiary" "What is NOT true about a straight whole life policy? - CORRECT ANSWER The cash value goes to the beneficiary upon the death of the insureds" "What can riders and endorsements NOT be used to accomplish? - CORRECT ANSWER Modify the time limit for certain defense clause" "What is NOT a settlement option for a life policy? - CORRECT ANSWER Extended term option" "What is NOT a right of the owner of a life insurance policy? - CORRECT ANSWER Changing the irrevocable beneficiary, implementing a verbally agreed change, and borrowing funds before cash value exists" "Term insurance provides: - CORRECT ANSWER Pure protection and is the least expensive form of insurance" "What are Florida insurance laws administered by? - CORRECT ANSWER The Commissioner of the Office of Insurance Regulation, the Chief Financial Officer, and the Financial Services Commission" "Marlyn's husband was mowing the yard, and a rock hit her in the eye causing her to lose sight in that eye. Her husband tried to stop the lawnmower and lost a finger. Marilyn has a family accidental death and dismemberment policy through her employer. What benefits will be paid as a result of these accidents? - CORRECT ANSWER Marilyn will receive a benefit for the loss of an eye" "What riders provide for payment of double or triple the accidental death or dismemberment benefits based on the cause of death or specific type of dismemberment? - CORRECT ANSWER Multiple indemnity rider" "Who can change the beneficiary on a life policy? - CORRECT ANSWER Policy owner only" "On the death of an insured, settlement of a life insurance policy is made when: - CORRECT ANSWER Proof of death and surrender of the policy" "What is NOT true about the guaranteed insurability rider (GIR)? - CORRECT ANSWER The older the insured gets, the more frequent the purchase option dates" "What is an entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers? - CORRECT ANSWER Prepaid limited health service organization (PLHSO)" "What is NOT true concerning taxation of medical benefits? - CORRECT ANSWER Medical expenses deducted from income tax became taxable in the next year if they are reimbursed after the deduction is taken" "An annual maximum benefit will provide what? - CORRECT ANSWER No specified life time amount, but a limited benefit for each year" "What would be a routine exclusion in a life policy? - CORRECT ANSWER A military pilot dies flying a fighter plane, a stunt rider dies trying to leap 25 buses on a motorcycle, and a medic dies in a war zone" "When John dies, the death benefit will be paid to Sherrie. If Sherrie dies before John, the benefit would go to Collin. Who is the primary beneficiary? The contingent beneficiary? - CORRECT ANSWER The primary beneficiary is Sherrie, and Collin is the contingent beneficiary" "When does an applicant have the right to designate a second addressee? - CORRECT ANSWER At the time of the policy application or at any time the policy is in force" "Max and Janet were killed simultaneously. Max had a life policy with Janet as the primary beneficiary. How will the proceeds from the policy be disbursed? - CORRECT ANSWER The proceeds were disbursed to the contingent beneficiary" ""Take it or leave it' is thee basis for insurance policies. Because of this, they are referred to as: - CORRECT ANSWER Contracts of adhesion" "Martha has both Medicare Part A and a group policy to cover her medical costs. When she is injured in an accident at work, which of her policies is considered primary? - CORRECT ANSWER Workers' Compensation" "What is NOT a life insurance policy nonforfeiture option in Florida? - CORRECT ANSWER Secondary universal life benefit" "Samantha purchased a universal life policy when the death benefit in the policy was $200,000. With a current cash value of $50,000, she has selected death benefit option B. How much is her current death benefit? - CORRECT ANSWER $250,000" "Giving a client's child a stuffed animal with a company's logo that is valued at less than $25 would be considered: - CORRECT ANSWER Advertising" "After breaking his leg, Oliver purchased a major medical policy and filed a claim for the treatment on his broken leg. The claim is denied due to: - CORRECT ANSWER The pre-existing clause" "Does an employee retain any ownership rights under a group contract? - CORRECT ANSWER Yes, the employee may change a beneficiary and convert to an individual policy" "What is NOT a mandatory provision under the uniform NAIC law? - CORRECT ANSWER Coinsurance Provision" "Where replacement is involved, what else must an agent give the insurer with an application for life insurance? - CORRECT ANSWER Notice to Applicant Regarding Replacement of Life Insurance and a copy of all sales proposals" "The definition of "Medicare eligible expense" for a Medicare supplement policy cannot be: - CORRECT ANSWER More restrictive than Medicare's" "What is NOT true about nonoccupational and occupational policies? - CORRECT ANSWER Social Security benefits do not impact benefit payments on either of these policies" "What is the free look period for a Medicare supplement policy? - CORRECT ANSWER 30 days" "If a person is covered by 2 health policies, one as an employee and one as a dependent, which policy pays first when there is a claim? - CORRECT ANSWER The policy as an employee" "What can Isabelle do to increase her coverage on a predetermined schedule without further evidence of insurability? - CORRECT ANSWER Add a guaranteed insurability option" "What is the maximum percentage of premiums for policies sold by a license in a 12-month period can be from controlled business? - CORRECT ANSWER 50%" "In Florida, all small employer health plans must be: - CORRECT ANSWER Guaranteed issue" "How much time does someone have to transfer funds from one IRA to another without incurring a tax penalty? - CORRECT ANSWER 60 days" "Which of the following situations does NOT apply to the Florida Replacement Rule? - CORRECT ANSWER An existing policyholder purchases an additional policy from the same insurer" "Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? - CORRECT ANSWER Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company" "Under which of the following circumstances will the benefits under COBRA continuation coverage end? - CORRECT ANSWER All group health plans are terminated by the employer" "Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? - CORRECT ANSWER Garunteed Renewable" "An incomplete life insurance application submitted to an insurer will result in which of these actions? - CORRECT ANSWER Application will be returned to the writting agent" "The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond - CORRECT ANSWER 6 Months" "Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? - CORRECT ANSWER Entire cash surrender value is taxable" "Which of these is considered a mandatory provision? - CORRECT ANSWER Payment of Claims" "Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? - CORRECT ANSWER Issue the policy with an altered Time of Payment of Claims provision" "Which of the following phrases refers to the fees charged by a healthcare professional? - CORRECT ANSWER Usual, customary, and reasonable expenses" "D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? - CORRECT ANSWER The full face amount" "N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is: - CORRECT ANSWER $1,250 No benefits are available during the elimination period." "Who does an agent represent during the solicitation or insurance? - CORRECT ANSWER The insurance company" "Which of the following costs would a Basic Hospital/Surgical policy likely cover? - CORRECT ANSWER Sugically removing a facial birthmark" "An applicant's medical information recieved from the Medical Information Bureau (MIB) may be furnished to the: - CORRECT ANSWER Applicant's physician" "K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - CORRECT ANSWER Daughter" "K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - CORRECT ANSWER Primary Beneficiary." "Which of the following is NOT considered rebating - CORRECT ANSWER Sharing commissions with an agent licensed in the same line of buisness" "Which of the following employer tasks does a Professional Employer Organization normally handle? - CORRECT ANSWER Administration tasks" "What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? - CORRECT ANSWER Decreasing Term" "Which action could result in a hearing being ordered by the Department of Financial Services? - CORRECT ANSWER Performing insurance transactions without a license" "What kind of special need would a policyowner require with an Adjustable Life insurance policy? - CORRECT ANSWER Flexible Premiums" "The premiums paid by an employer for his employee's group life insurance are usually considered to be: - CORRECT ANSWER Tax deductible to the employer" "Which of the following consists of an offer, acceptance, and consideration? - CORRECT ANSWER Contract" "Which of the following statements is true about most Blue Cross/Blue Shield organizations? - CORRECT ANSWER They are non-profit organizations" "Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: - CORRECT ANSWER Signed HIPAA disclosure" "Which of the following characteristics is associated with a large group disability income policy? - CORRECT ANSWER No medical underwritting" "When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? - CORRECT ANSWER Change of Occupation Provision" "Which of the following claims are typically excluded from Medical expense policies? - CORRECT ANSWER Intentionally Self-Inflicted injuries" "T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called: - CORRECT ANSWER Time lImit of certain Defenses" "If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - CORRECT ANSWER contributory" "What do families pay that are covered by the Florida Healthy Kids Corporation? - CORRECT ANSWER A Portion of the premium" "A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: - CORRECT ANSWER experimental and investigative servives" "A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: - CORRECT ANSWER $300,000" "G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? - CORRECT ANSWER The insured" "The minimum age at which a person can sign a life insurance application is - CORRECT ANSWER 15 Years" "Which of these would be considered a Limited-Pay Life policy? - CORRECT ANSWER Life Paid-Up at age 70" "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? - CORRECT ANSWER All of the employees must be notified of the cancellation either by the insurance company or through J" "Which of the following provisions is NOT required in HMO contracts/certificates? - CORRECT ANSWER Seven-day Grace Period" "M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT: - CORRECT ANSWER Free-look period has expired" "W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim? - CORRECT ANSWER The proceeds would be reduced based on whatever the premium would have been if purchased at age 59" "If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called: - CORRECT ANSWER noncancellable" "Which of the following is NOT included in an annuity contract? - CORRECT ANSWER AD&D rider" "Disability policies do NOT normally pay for disabilities arising from which of the following? - CORRECT ANSWER War" "All of these are considered sources of underwriting information about an applicant, EXCEPT: - CORRECT ANSWER Rating Services" "Taking receipt of premiums and holding them for the insurance company is an example of: - CORRECT ANSWER Fiduciary Responsibillity" "The guarantee of insurability option provides a long-term care policyowner the ability to: - CORRECT ANSWER buy additional coverage at a later date" "Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). - CORRECT ANSWER 20" "Which of the following health insurance policy provisions specifies the health care services a policy will provide? - CORRECT ANSWER Insuring Clause" "Health insurance benefits NOT covered due to an act of war are: - CORRECT ANSWER excluded by the insurer in the contract provisions" "When applied to Whole Life insurance, the word "straight" denotes: - CORRECT ANSWER the duration of premium payments" "Which statement is TRUE in regards to a policy loan? - CORRECT ANSWER Past-due interest on a policy loan is added to the total debt" "WHat is the purpose of the U.S.A. Patriot Act? - CORRECT ANSWER detect and deter terrorism" "The insurer must provide a prospective buyer with a(n) - CORRECT ANSWER Buyer's Guide and Policy Summary" "The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - CORRECT ANSWER Insuring Agreement" "S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? - CORRECT ANSWER Automatic Policy Loan" "As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of? - CORRECT ANSWER Coercion" "Which requirement must be met for an association to be eligible for a group life plan? - CORRECT ANSWER Group was formed for a purpose other than acquiring insurance" "A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value. - CORRECT ANSWER viatical settlement provider" "A life policy loan in Florida cannot charge a fixed rate of interest higher than - CORRECT ANSWER 10%" "What type of life insurance incorporates flexible premiums and an adjustable death benefit? - CORRECT ANSWER Univeral Life" "Which of the following statements BEST describes dental care indemnity coverage? - CORRECT ANSWER Services are reimbursed after insurer receives the invoice" "According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? - CORRECT ANSWER No Minimum" "Any changes made on an insurance application requires the initials of whom? - CORRECT ANSWER Applicant" "When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: - CORRECT ANSWER Entire Contract Provision" "Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? - CORRECT ANSWER 30" "In Florida, an element of an insurance transaction would be - CORRECT ANSWER issuing insurance contract" "T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert - CORRECT ANSWER to an individual policy upon employment termination" "What do Dread Disease policies cover? - CORRECT ANSWER A specific disease or illness" "What type of renewability guarantees premium rates and renewability? - CORRECT ANSWER Noncancellable" "P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? - CORRECT ANSWER $50,000 minus any outstanding policy loans" "In Florida, a health policy that is paid on a quarterly basis requires a grace period of - CORRECT ANSWER 31 days" "N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? - CORRECT ANSWER Claim will be denied" "P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? - CORRECT ANSWER An immediate annuity" "What are adjustable rates for life policy loans in Florida based on? - CORRECT ANSWER Moody's corporate bond index" "D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? - CORRECT ANSWER Residual Benefit Clause" "P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? - CORRECT ANSWER Claim will be denied" "What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? - CORRECT ANSWER Premiums may increase at the time of renewal" "A medical care provider which typically delivers health services at its own local medical facility is known as a: - CORRECT ANSWER HMO" "The investment gains from a Universal Life Policy usually go toward: - CORRECT ANSWER the cash value" "According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? - CORRECT ANSWER The premiums for the handicapped child are not paid" "The Florida Employee Health Care Access Act was established to make - CORRECT ANSWER group health insurance available to employers with up to 50 employees" "When is a Group Health policy required to provide coverage for a newborn child? - CORRECT ANSWER at the moment of birth" "Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - CORRECT ANSWER Policy was returned within the free-look period, premium will be fully refunded" "An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company. - CORRECT ANSWER domestic" "Which of the following is NOT required in the Outline of Coverage for a health insurance policy? - CORRECT ANSWER projection of the policy's future costs" "Who makes the legally enforceable promises in a unilateral insurance policy? - CORRECT ANSWER Insurance Company" "Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent - CORRECT ANSWER only if the child is incapable of employment and chiefly dependent on the policyowner" "Which of the following types of policies pays a benefit if the insured goes blind? - CORRECT ANSWER AD&D" "A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time? - CORRECT ANSWER 48 Months" "Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? - CORRECT ANSWER Each Partner must own a policy on the other partners" What is one condition to re-instate a lapsed life insurance policy? - CORRECT ANSWER The policy has been expired no more than 3 years" "What will an HMO stress? - CORRECT ANSWER Low or no co-pay for doctor visits, screenings for potential health conditions, and wellness as a lifestyle" "The Insurance Department may place on probation, suspend, revoke or refuse to issue or renew an insurance producer license for: - CORRECT ANSWER Failing to pay child support" "Florida's Long-term Care Partnership Program is a partnership between Medicaid and... - CORRECT ANSWER Private long-term care insurers" "What features may a short-term disability plan be designed with? - CORRECT ANSWER Benefits may be paid as a flat indemnity amount, both accidents and sicknesses will be covered, and benefit may be paid a percent of income" "Who sells the Small Business Health Plan insurance? - CORRECT ANSWER Only Florida insurers chosen by the Office of Insurance Regulation" "A medicare supplement insurer cannot deny an application for Medicare supplement policy if the applicant is both 65 and enrolled in: - CORRECT ANSWER Medicare Part B" "What are standard claim procedures? - CORRECT ANSWER Claim notice must be provided to the insurer within 20 days of the loss, the insurer must provide claim forms, and no legal action can be taken prior to 120 days after proof of claims has been provided to the insurer" "The insurer can void a life policy during the congtestable period for: - CORRECT ANSWER Not divulging a life-threatening medical condition" "Eligibility for the payment of long-term care benefits may not be more restrictive than requiring a deficiency in the ability to perform not more than: - CORRECT ANSWER 3 activities of daily living" "Level premium term provides a level face amount with level premiums during the policy period. In order to provide this protection, the insurer: - CORRECT ANSWER Charges premiums that are higher in the early years" "What are characteristics of group life insurance plans? - CORRECT ANSWER Minimum participation, lower overall costs, and master policy for all employees" "Individual and group health policies must provide coverage for newborn children of a family member from the moment of birth for at least: - CORRECT ANSWER 18 months" "After Michelle filed her income taxes, she received a check from the insurance company that reimbursed her for some of the expenses she deducted. What is the tax situation for these benefits? - CORRECT ANSWER Michelle should file an amended return, since reimbursed medical expenses do not count toward the 10% threshold"