FLORIDA LIFE AND HEALTH INSURANCE EXAM 2025

FLORIDA LIFE AND HEALTH INSURANCE EXAM 2025 Insured - -The person covered by the insurance policy. Rider - -A written modification attached to a policy that increases or decreases coverage and/or premiums. What is a unilateral contract? - -A contract in which only one of the parties is legally bound to fulfill its obligations. What law protects consumers from the circulation of inaccurate or obsolete information? - -The Fair Credit Reporting Act. What are the three types of agent authority? - -Implied, Express, and Apparent. Agent - -An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. What is name of the process that insurance companies use to determine whether or not an applicant is insurable? - -Underwriting The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility? - -Fiduciary What is a third-party ownership? - -An insurance arrangement in which the policy owner and the insured are not the same person. Suitability - -Factors that determine if an insurance product is appropriate for a particular customer. Premium - -A payment by the policy owner to the insurance company to keep the policy in force. Disclosure - -Providing sufficient information to help someone make informed decision. An agent offer a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? - -Rebating If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer? - -Authorized What information are the members of the medical information bureau required to report? - -Adverse medical information about the applicants or insureds. FLORIDA LIFE FLORIDA LIFE What type of beneficiary can be changed at any point by the policy owner? - -Revocable What document describes the specific information about a policy? - -Policy Summary What is the term for the causes of loss insured against in an insurance policy? - -Peril Whom does an insurance agent represent? - -Insurance Company What is an unfair trade practice? - -Any fraudulent, deceptive, or dishonest business practice that is prohibited by statutes and regulations. Insurer - -The company that issues an insurance policy. Peril - -Cause of loss Contract of Adhesion - -A contract prepared by one party that must be accepted as written or be rejected by the other party. What are the four elements of an insurance contract? - -Agreement (Offer and Acceptance), consideration, competent parties, and legal purpose. Policy Provision - -A clause that stipulates the rights and obligations under an insurance contract. Fiduciary - -A producer who handles insurer's funds in a trust capacity. Who is considered a nonresident agent? - -An agent who resides and is licensed in another state, but is authorized to transact insurance in Florida. What is underwriting? - -The risk selection and classification process. What is the best way to handle incomplete insurance applications? - -Return the application to the applicant for completion. What are the five characteristics of an ideally insurable risk? - -Loss must be: 1. Due to Change 2. Definite and measurable 3. Statistically predictable 4. Not catastrophic 5. Coverage cannot be mandatory. What type of policy issues certificates of insurance to the insurance? - -Group Policy What is the purpose of a free-look period? - -To allow the insured to return the policy and get a full refund (if done during the free-look period) FLORIDA LIFE FLORIDA LIFE Whose responsibility is it to determine that all of the questions on an insurance application are answered? - -The Agent's What types of licensee represents the insurance company? - -Agent Who must be notified of the producers change of address? - -The department of Insurance Certificate of Insurance - -A document issued to insureds under a group plan that states the coverage being issued, and indicates the coverage type and amounts. Nonrenewal - -Termination of a policy by an insurer on the anniversary or renewal date. Representation - -A statement made by the applicant on the insurance application that is believed to be true. What is a warranty? - -An absolutely true statement that, if breached, may viod an insurance contract. In insurance, when is the offer usually made on a contract? - -When the insurance application is submitted. When a change needs to be made on the application for insurance, which is the best method for correcting the information? - -Complete a new application or ask the applicant to initial the correction on the original application. A situation in which a person can only experience a loss and no gain represents what type of risk? - -Pure Risk Who is responsible for the contents of insurance advertisements? - -The Insurance Company What is the entire contract in health insurance underwriting? - -The policy with riders and endorsements, plus a copy of the application. What is the main purpose for requiring a person to be licensed to transact insurance? - To protect the general public. Who is an insurance agent? - -A person authorized to sell, solicit, and negotiate insurance contracts. What illegal act does a producer commit what representing a policy in a more favorable light than the policy really is? - -Misrepresentation FLORIDA LIFE FLORIDA LIFE Field Underwriter - -An insurance agent who conducts an initial policy solicitation and application. (The company's front line of underwriting) Policyowner - -The person entitled to exercise the rights and privileges in the policy. What is solvency? - -An insurer's ability to meet its financial obligations of policy owners, insureds, and beneficiaries. What entities make up the medical information bureau (MIB)? - -Insurers What is the foundation of statistical prediction of loss upon which rate for insurance are calculated? - -Law of Large Numbers Adverse Selection - -The tendency of risk with higher probability of loss to purchase and maintain insurance more often than the risks who represent lower probability of loss. Concealment - -The withholding of known facts that, if material, can void a contract. What is the purpose of a cease and desist order? - -To prevent a producer or insurer from violating laws for transacting insurance. What is the purpose of the Florida Guaranty Association? - -To protect policy owners, insureds, and beneficiaries from financial losses caused by insolvent insurers. Who's responsible for paying the cost of a medical examination required in the process of underwriting? - -The Insurer Which of the two types of policy assignments requires transfer of all ownership rights in the policy to a third-party? - -Absolute Assignment Who may share in the commissions from the sale of a life insurance policy? - -Only producers properly licensed for the type of insurance transaction. (Ex. Life insurance agents may share commissions for life insurance transactions) Who must be a member of a state insurance guaranty association? - -Any authorized insurer within a state. When should an agent obtain a statement of good health from the insured? - -When the premium was paid upon delivery rather that at the time of application. What is the main responsibility of a company's underwriting unit? - -Risk Selection Conditions that increase the chance of a loss are known as what? - -Hazards FLORIDA LIFE FLORIDA LIFE What is the purpose of the agent's report during the application process? - -It provides the agent's observation about the proposed insured that may help in the underwriting process. If an underwriter requires extensive information about the applicants medical history, what report will best serve this purpose? - -Attending Physician's statement. What are agents required to do in order to renew their license? - -Complete required continuing education hours. Primary Beneficiary - -A beneficiary who has the first claim to the policy proceeds after the death of the insured. Why are dividends in life insurance polices not taxable? - -Dividends are not considered income for tax purposes; they are a return of unused premium. How soon can income payments begin in an immediate annuity? - -No later that one year from the time of annuity purchase. What type of annuity requires an agent to have a securities license? - -Variable Annuity What are some examples of Life qualified plans? - -IRA, 401(k), HR 10 (keogh), SEP, SIMPLE Under what non-forfeiture option does the company pay the policy's surrender value and have no further obligations to the policy owner? - -Cash Surrender What provision in a life insurance policy extends coverage beyond the premium due date? - -Grace Period. In term policies, what happens to the premium throughout the term of the policy? - -The premium remains level. What type of whole life insurance policy only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and endows at the insured's age 100? - -Single premium whole life. What are the characteristics of the group that underwriters will consider before issuing a group life policy? - -Groups purpose, size, financial strength, and turnover. What is the main advantage of converting from group life insurance to individual coverage? - -Evidence of insurability is not required What is included in Part 2 of a life insurance application? - -Medical information about