ESTUDYR
SIMULATOR FLORIDA-LIFE & HEALTH / FL HEALTH & LIFE AND ANNUITY
COMPLETE STUDY GUIDE ACTUAL TEST QUESTIONS WITH DETAILED VERIFIED
ANSWERS / ALREADY GRADED A+
1. A non-contributory group health plan requires ______ participation of all eligible employees.
A. 75%
B. 90%
C. 100%
D. 50%
Rationale: By definition, non-contributory plans mandate full (100%) employee enrollment, with
the employer paying the entire premium.
2. A characteristic feature of a Preferred Provider Organization (PPO) is:
A. Exclusive use of in-network providers only
B. No out-of-pocket costs
C. Discounted fees when using preferred providers
D. Required referrals for specialists
Rationale: PPO members may use out-of-network providers but pay less if they use contracted
(preferred) providers at discounted rates.
3. ERISA’s “saving clause” preserves state regulation authority except over:
A. Insurer solvency
B. Marketing practices
C. Benefit mandates
D. Commerce
Rationale: ERISA preempts state laws relating to employee benefit plans but expressly does not
affect state regulation of insurance “to the extent that such regulation is not inconsistent with
ERISA,” leaving commerce regulation unaffected by the saving clause.
4. Additional coverage added to a Whole Life policy via a rider that decreases in face amount
over time is called a:
A. Guaranteed insurability rider
B. Waiver of premium rider
C. Decreasing term rider
D. Accidental death rider
Rationale: A decreasing term rider provides extra coverage that shrinks over time, often used to
cover a mortgage balance.
5. The Payor Clause on a Juvenile Life policy ensures that:
A. The policy is canceled if the payor dies
B. Premiums double if the payor becomes disabled
C. Premiums are waived if the payor becomes disabled
D. The insured child pays premiums when they reach age 18
,ESTUDYR
Rationale: This clause protects juvenile policies by waiving premium payments if the adult payor
can no longer work.
6. Under Florida law, an agent must deliver the Outline of Coverage for a Medicare Supplement
policy:
A. Within 30 days after issue
B. At policy delivery
C. At the time of application
D. Upon first premium payment
Rationale: The law requires disclosure of coverage details before enrollment decisions are
made.
7. An insurer’s liability is limited by a policy Exclusion when N, a student pilot, is killed flying.
This Exclusion is found in the:
A. Insuring clause
B. Consideration clause
C. Free-look provision
D. Exclusion clause
Rationale: Exclusions specifically remove coverage for designated risks, such as certain aviation
activities.
8. Regarding a minor beneficiary of a life policy, it is generally required that:
A. The minor signs to accept proceeds
B. A guardian be appointed
C. Proceeds are paid directly to the minor
D. The insurer retains funds until age 18 automatically
Rationale: Without a legal guardian or trustee, the insurer cannot pay benefits directly to a
minor.
9. A sole proprietor can establish an Individual Retirement Account (IRA) only if:
A. They have no employees
B. All employees are also included
C. The business is a C corporation
D. They earn over $100,000
Rationale: To maintain nondiscrimination, all eligible employees must be allowed the same IRA
opportunities.
10. Which provision is not required in HMO contracts under Florida law?
A. Notice of grievance procedures
B. Explanation of benefits covered
C. Statement of patient rights
D. Seven-day grace period
Rationale: Grace periods apply to individual policies, not to managed-care contract billing.
,ESTUDYR
11. The Florida Bureau of Unclaimed Property is overseen by the:
A. Insurance Commissioner
B. Secretary of State
C. Chief Financial Officer
D. Attorney General
Rationale: Unclaimed property administration falls under the CFO’s duties.
12. A life policy featuring a monthly mortality charge plus self-directed investment accounts is a:
A. Term Life policy
B. Universal Life policy
C. Variable Life policy
D. Variable Universal Life policy
Rationale: VUL combines flexible premiums, adjustable death benefits, and investment
subaccounts.
13. The two-year contestable period in an A&H policy begins on the date the:
A. First claim is filed
B. Policy is dated
C. Insured pays premium
D. Agent delivers the policy
Rationale: Contestability runs from the policy’s issue (effective) date.
14. P, a new employee enrolling in non-contributory group Major Medical insurance, must during
open enrollment:
A. Pass a physical exam
B. Sign an enrollment card
C. Provide bank statements
D. Submit tax returns
Rationale: Non-contributory plans auto-enroll but require a signed card for record.
15. Most Blue Cross/Blue Shield organizations are:
A. For-profit companies
B. Government agencies
C. Nonprofit entities
D. Investment trusts
Rationale: BC/BS plans historically operate as nonprofit hospital and physician service plans.
16. A reimbursement long-term care policy pays:
A. A fixed daily amount regardless of costs
B. Benefit only if nursing home profit
C. Actual covered expenses up to the daily maximum
D. Lump sum on confinement
Rationale: Reimbursement policies repay actual costs, limited by policy-specified caps.
, ESTUDYR
17. An individual covered under a group life plan is called a:
A. Policyholder
B. Certificate holder
C. Third-party owner
D. Annuitant
Rationale: Group members receive certificates of insurance evidencing coverage.
18. The right to change a life insurance beneficiary belongs to the:
A. Insured only
B. Insurance company
C. Beneficiary
D. Policyowner
Rationale: The policyowner holds contract rights, including beneficiary designations.
19. During a life insurance replacement, the agent must submit to the replacing insurer:
A. The applicant’s medical records
B. The existing policy
C. Notice regarding intention to replace
D. A copy of the premium receipt
Rationale: Replacement rules mandate written notice to both insurers to prevent
misrepresentation.
20. A TRUE statement about individual Disability Income policies is that they typically include
a(n):
A. Immediate benefit start
B. Lifetime benefits
C. Elimination (waiting) period
D. Guaranteed insurability
Rationale: Elimination periods delay benefits to reduce adjudication of minor claims.
21. A statement on an application that is true to the applicant’s knowledge and part of the
contract is called a:
A. Warranty
B. Concealment
C. Representation
D. Misstatement
Rationale: Representations are believed true but have less force than warranties.
22. A foreign insurer in Florida is one that was formed:
A. In another country
B. Under another state’s laws
C. Under Florida law
SIMULATOR FLORIDA-LIFE & HEALTH / FL HEALTH & LIFE AND ANNUITY
COMPLETE STUDY GUIDE ACTUAL TEST QUESTIONS WITH DETAILED VERIFIED
ANSWERS / ALREADY GRADED A+
1. A non-contributory group health plan requires ______ participation of all eligible employees.
A. 75%
B. 90%
C. 100%
D. 50%
Rationale: By definition, non-contributory plans mandate full (100%) employee enrollment, with
the employer paying the entire premium.
2. A characteristic feature of a Preferred Provider Organization (PPO) is:
A. Exclusive use of in-network providers only
B. No out-of-pocket costs
C. Discounted fees when using preferred providers
D. Required referrals for specialists
Rationale: PPO members may use out-of-network providers but pay less if they use contracted
(preferred) providers at discounted rates.
3. ERISA’s “saving clause” preserves state regulation authority except over:
A. Insurer solvency
B. Marketing practices
C. Benefit mandates
D. Commerce
Rationale: ERISA preempts state laws relating to employee benefit plans but expressly does not
affect state regulation of insurance “to the extent that such regulation is not inconsistent with
ERISA,” leaving commerce regulation unaffected by the saving clause.
4. Additional coverage added to a Whole Life policy via a rider that decreases in face amount
over time is called a:
A. Guaranteed insurability rider
B. Waiver of premium rider
C. Decreasing term rider
D. Accidental death rider
Rationale: A decreasing term rider provides extra coverage that shrinks over time, often used to
cover a mortgage balance.
5. The Payor Clause on a Juvenile Life policy ensures that:
A. The policy is canceled if the payor dies
B. Premiums double if the payor becomes disabled
C. Premiums are waived if the payor becomes disabled
D. The insured child pays premiums when they reach age 18
,ESTUDYR
Rationale: This clause protects juvenile policies by waiving premium payments if the adult payor
can no longer work.
6. Under Florida law, an agent must deliver the Outline of Coverage for a Medicare Supplement
policy:
A. Within 30 days after issue
B. At policy delivery
C. At the time of application
D. Upon first premium payment
Rationale: The law requires disclosure of coverage details before enrollment decisions are
made.
7. An insurer’s liability is limited by a policy Exclusion when N, a student pilot, is killed flying.
This Exclusion is found in the:
A. Insuring clause
B. Consideration clause
C. Free-look provision
D. Exclusion clause
Rationale: Exclusions specifically remove coverage for designated risks, such as certain aviation
activities.
8. Regarding a minor beneficiary of a life policy, it is generally required that:
A. The minor signs to accept proceeds
B. A guardian be appointed
C. Proceeds are paid directly to the minor
D. The insurer retains funds until age 18 automatically
Rationale: Without a legal guardian or trustee, the insurer cannot pay benefits directly to a
minor.
9. A sole proprietor can establish an Individual Retirement Account (IRA) only if:
A. They have no employees
B. All employees are also included
C. The business is a C corporation
D. They earn over $100,000
Rationale: To maintain nondiscrimination, all eligible employees must be allowed the same IRA
opportunities.
10. Which provision is not required in HMO contracts under Florida law?
A. Notice of grievance procedures
B. Explanation of benefits covered
C. Statement of patient rights
D. Seven-day grace period
Rationale: Grace periods apply to individual policies, not to managed-care contract billing.
,ESTUDYR
11. The Florida Bureau of Unclaimed Property is overseen by the:
A. Insurance Commissioner
B. Secretary of State
C. Chief Financial Officer
D. Attorney General
Rationale: Unclaimed property administration falls under the CFO’s duties.
12. A life policy featuring a monthly mortality charge plus self-directed investment accounts is a:
A. Term Life policy
B. Universal Life policy
C. Variable Life policy
D. Variable Universal Life policy
Rationale: VUL combines flexible premiums, adjustable death benefits, and investment
subaccounts.
13. The two-year contestable period in an A&H policy begins on the date the:
A. First claim is filed
B. Policy is dated
C. Insured pays premium
D. Agent delivers the policy
Rationale: Contestability runs from the policy’s issue (effective) date.
14. P, a new employee enrolling in non-contributory group Major Medical insurance, must during
open enrollment:
A. Pass a physical exam
B. Sign an enrollment card
C. Provide bank statements
D. Submit tax returns
Rationale: Non-contributory plans auto-enroll but require a signed card for record.
15. Most Blue Cross/Blue Shield organizations are:
A. For-profit companies
B. Government agencies
C. Nonprofit entities
D. Investment trusts
Rationale: BC/BS plans historically operate as nonprofit hospital and physician service plans.
16. A reimbursement long-term care policy pays:
A. A fixed daily amount regardless of costs
B. Benefit only if nursing home profit
C. Actual covered expenses up to the daily maximum
D. Lump sum on confinement
Rationale: Reimbursement policies repay actual costs, limited by policy-specified caps.
, ESTUDYR
17. An individual covered under a group life plan is called a:
A. Policyholder
B. Certificate holder
C. Third-party owner
D. Annuitant
Rationale: Group members receive certificates of insurance evidencing coverage.
18. The right to change a life insurance beneficiary belongs to the:
A. Insured only
B. Insurance company
C. Beneficiary
D. Policyowner
Rationale: The policyowner holds contract rights, including beneficiary designations.
19. During a life insurance replacement, the agent must submit to the replacing insurer:
A. The applicant’s medical records
B. The existing policy
C. Notice regarding intention to replace
D. A copy of the premium receipt
Rationale: Replacement rules mandate written notice to both insurers to prevent
misrepresentation.
20. A TRUE statement about individual Disability Income policies is that they typically include
a(n):
A. Immediate benefit start
B. Lifetime benefits
C. Elimination (waiting) period
D. Guaranteed insurability
Rationale: Elimination periods delay benefits to reduce adjudication of minor claims.
21. A statement on an application that is true to the applicant’s knowledge and part of the
contract is called a:
A. Warranty
B. Concealment
C. Representation
D. Misstatement
Rationale: Representations are believed true but have less force than warranties.
22. A foreign insurer in Florida is one that was formed:
A. In another country
B. Under another state’s laws
C. Under Florida law
