FLORIDA FINAL EXAM QUESTIONS AND VERFIED ANSWERS 100% PASS

FLORIDA FINAL EXAM QUESTIONS AND VERFIED ANSWERS 100% PASS “When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as - CORRECT ANSWER Estate conservation" "In group insurance, the primary purpose of the Coordination of Benefits provision is to - CORRECT ANSWER Prevent overinsurance" "Which of the following statements is NOT true regarding health insurance policy provisions? - CORRECT ANSWER All additional provisions written by insurers are cataloged by their respective states." "The "stop-loss" feature on a major medical policy is intended to - CORRECT ANSWER Establish a maximum amount of out-of-pocket expense that an insured will have to pay for medical expense in a calendar year." "If a business wants to make sure it will be able to cover losses due to the disability of its top employee, the business should get which type of insurance? - CORRECT ANSWER Key person disability income" "Life insurance creates an immediate estate. Which of the following best explains this statement? - CORRECT ANSWER The face value of the policy is payable to the beneficiary upon the death of the insured." "What is the maximum age that a disabled insured worker may receive Social Security disability benefits? - CORRECT ANSWER 65" "Whose responsibility is it to ensure that the application for health insurance is complete and accurate? - CORRECT ANSWER The agent's" "Which of the following policies would NOT offer a policy loan option? - CORRECT ANSWER Term Life" "Regarding the consideration clause, which of the following is NOT correct? - CORRECT ANSWER Consideration of the insurer and insured must be equal." "The guaranteed purchase option is also referred to as the - CORRECT ANSWER Future increase option." "When an insured terminates membership in the insured group, the insured can convert to - CORRECT ANSWER Whole life without proof of insurability." "Which dividend option will increase the death benefit? - CORRECT ANSWER Paid-up additions" "Under the mandatory uniform provision Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to - CORRECT ANSWER 60 days after written proof of loss has been submitted." "An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses? - CORRECT ANSWER Attending Physician's Statement" "Jack's retirement plan meets all federal requirements and entitles him to certain tax benefits as the owner of the plan. What term best describes Jack's retirement plan? - CORRECT ANSWER Qualified" "In a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT - CORRECT ANSWER Cash surrender values." "The Uniform Provision Law that prevents an insurance company from altering its agreement with a policyholder by referring to documents or other items not contained in the policy is called the - CORRECT ANSWER Entire Contract Provision." "When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used? - CORRECT ANSWER Paid-up additions b) Reduce the premium" "The entire contract includes all of the following EXCEPT - CORRECT ANSWER A buyer's guide." "Which of the following meets the insured's personal needs, and is provided by nonmedical personnel? - CORRECT ANSWER Custodial Care" "When an agent delivered an insurance policy to the insured, he collected the initial premium, as well as a document verifying that the insured had not had any injuries or illness since the application date. What is this document called? - CORRECT ANSWER Statement of Good Health" "Jacob is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did Jacob choose? - CORRECT ANSWER Fixed amount" "In life insurance, which of the following is NOT required to have an insurable interest in the insured? - CORRECT ANSWER The beneficiary" "Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy? - CORRECT ANSWER Use it for emergency expenses" "Which of the following best defines the Probationary Period in group health policies? - CORRECT ANSWER A specified period of time that a person joining a group has to wait before becoming eligible for coverage" "Which of the following best describes a Major Medical Expense Policy? - CORRECT ANSWER It provides catastrophic medical coverage beyond basic benefits on a usual, customary and reasonable basis." "An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment? - CORRECT ANSWER Conditional Receipt" "A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following? - CORRECT ANSWER A percentage of the face amount of the policy" "In order to reinstate a life insurance policy the insured must do all of the following EXCEPT - CORRECT ANSWER Pay next year's premium in advance" "If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do? - CORRECT ANSWER Inform the insurance company" "All of the following statements about indexed whole life insurance are correct EXCEPT - CORRECT ANSWER The death benefit is not guaranteed" "A limited health insurance policy that will pay a lump sum to an insured diagnosed with a heart attack, stroke, or renal failure is known as - CORRECT ANSWER critical illness insurance" "An agent delivers a life policy. He explains a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and must be paid before the policy goes into effect. He collects a Statement of Good Health, relinquishes the policy, and leaves. What did he do wrong? - CORRECT ANSWER He left the policy with the insured without collecting the premium" "The presumptive disability provision assumes that the insured is totally disabled upon loss of all of the following EXCEPT - CORRECT ANSWER Felling" "What does an annuity protect the annuitant against? - CORRECT ANSWER Living longer than expected" "All of the following are true of annually renewable term insurance Except - CORRECT ANSWER Proof of insurability must be provided at each renewal." "When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? - CORRECT ANSWER Extended Term" "An insured had a heart attack while jogging but, is expected to return to work in approximately 6 weeks. The insured's Disability income policy will - CORRECT ANSWER Replace a percentage of his lost income" "Insurance contracts are unilateral in nature. What does that mean? - CORRECT ANSWER Only one party makes a promise" "What advantage does the "recurrent disability" provision provide to the insured under a disability income policy? - CORRECT ANSWER It eliminates the imposition of a second elimination period for the same disability." "Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insured's race. What practice does this describe? - CORRECT ANSWER Unfair discrimination" "Who regulates the minimum standards for coverage in health insurance? - CORRECT ANSWER Florida Law" "All of the following could qualify as a group for the purpose of purchasing group life insurance EXCEPT - CORRECT ANSWER An association formed 1 year ago." "An insurer who transacts insurance in this state but whose articles of incorporation are registered in Canada is considered what type of insurer? - CORRECT ANSWER Alien" "In a group life policy with a death benefit of more than $50,000 a) Premium cost above $50,000 is taxable as income to the employee. - CORRECT ANSWER Premium cost above $50,00 is taxable as income to the employee" "Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination? - CORRECT ANSWER Changing the insured higher premiums based on her race" "Premiums collected on behalf of the insurance company by an agent will be held in what capacity? - CORRECT ANSWER Fiduciary" "An employee has just started working for a small group corporation and works 25 hours per week. The employee is - CORRECT ANSWER Eligible to receive full health coverage" "What is the maximum value of an item an insurer may gift a prospective insured as an advertisement? - CORRECT ANSWER $25" "A policyowner who purchases an individual insurance policy and then asks for a refund within 2 weeks after the policy was delivered will receive - CORRECT ANSWER A full refund of the premium" "Which of the following statements about HMOs in Florida is FALSE? - CORRECT ANSWER HMOs can engage in selling insurance contracts." "Why does Florida have state laws regulating Medicare Supplement Insurance? - CORRECT ANSWER States cannot enforce and prosecute federal laws" "Which of the following would make a child over the age of 5 INELIGIBLE for Florida Healthy Kids coverage? - CORRECT ANSWER Qualifying for Medicaid" "When one insurer buys insurance from another company to minimize the effects of catastrophic losses, they are - CORRECT ANSWER Reinsuring" "If a life policy insured is 64 years of age or older, the insurer must advise him or her of which of the following? - CORRECT ANSWER The insured's right to designate a secondary addressee to receive a copy of a policy lapse notice" "Which of the following sources would explain the state policies regarding appropriate agent conduct? - CORRECT ANSWER Code of Ethics of the Florida Association of Insurance and Financial Advisers" "Which of the following actions does NOT constitute false advertising? - CORRECT ANSWER Stating that dividends are not guaranteed" "An individual long-term care policy cannot be issued until the insurer has received from the applicant a written designation of at least - CORRECT ANSWER 1 person" "According to the terms of the policy or an agreement between the insured, the group policyholder, and the insurer, the insured person may not do which of the following? - CORRECT ANSWER Assign an appropriate premium based on preference" "During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of - CORRECT ANSWER Defamation" "In long-term care insurance, what type of care is provided with intermediate care? - CORRECT ANSWER Occasional nursing or rehabilitative care" "After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? a) The employee can convert from group to individual insurance within 31 days of termination. b) The premium of the individual health insurance policy can be higher than the original policy. c) By law, the new, individual policy must provide the same benefits as the group insurance policy. d) Continuation of group coverage need not include dental, vision, or prescription drug benefits. - CORRECT ANSWER c) By law, the new, individual policy must provide the same benefits as the group insurance policy." "An insured has endured multiple surgeries and hospitalizations for an illness during the last few months. Her insurer no longer bills her for medical expenses. Which of the following allows for that? a) Waiver of premium b) Maximum loss c) Stop-loss limit d) Grace period - CORRECT ANSWER c) Stop-loss limit" "L has a major medical policy with a $500 deductible and 80/20 coinsurance. Lis hospitalized and sustains a $2.500 loss. What is the maximum amount that L will have to pay? - CORRECT ANSWER $900 L would first pay the $500 deductible; out of the remaining $2,000, the insurer will pay 80% ($1,600) and the insured will pay 20% ($400)." "Which of the following entities has the authority to make changes to an insurance policy? a) Department of Insurance b) Broker c) Producer d) Insurer's executive officer - CORRECT ANSWER d) Insurer's executive officer Only an executive officer of the company, not an agent, has authority to make any changes to the policy. The insurer must have the insured's written agreement to the change." "All of the following statements about Medicare supplement insurance policies are correct EXCEPT a) They cover the cost of extended nursing home care. b) They cover Medicare deductibles and copayments. c) They supplement Medicare benefits. d) They are issued by private insurers. - CORRECT ANSWER a) They cover the cost of extended nursing home care." "Long-term care coverage may be available as any of the following options EXCEPT: a) Endorsement to a life policy. b) Endorsement to a health policy. c) Group long-term care d) Individual long-term care. - CORRECT ANSWER b) Endorsement to a health policy. LTC policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy." "An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? - CORRECT ANSWER 10 days. The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes." "Aninsurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? - CORRECT ANSWER Conditional A conditional contract requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies which put the burden of condition on either the insurer or the policyowner." "How are HMO territories typically divided? - CORRECT ANSWER Geographic areas" "A participating insurance policy may do which of the following? a) Provide group coverage b) Pay dividends to the stockholder c) Require 80% participation d) Pay dividends to the policyowner - CORRECT ANSWER d) Pay dividends to the policyowner." "When may an insurer require an insured to provide genetic information? - CORRECT ANSWER Never. Insurers are prohibited from requesting a person or relative of a person to supply genetic information." "If an insurance company offers Medicare supplement policies, it must offer which of the following plans? a) В-N b) A-D c) A d) A & B - CORRECT ANSWER c) A An insurance company must make available to each applicant a policy form offering the basic core benefits (Plan A) if it will offer any Medicare Supplement policies. An insurance company does not have to issue all or any of the plans B through N." "Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy? a) The right to return the policy for a refund b) Basic information about the insurance company c) Basic information about supplementary policies d) The policy number - CORRECT ANSWER c) Basic information about supplementary policies outline of coverage must follow standard format included in insurance regulations. Must include information about the insurance company, the policy number, important features of the policy, and explain the right to return the policy for a refund." "All of the following are required provisions in all individual health insurance policies delivered in this state EXCEPT a) Grace period. b) Reinstatement. c) Misstatement of age. d) Entire contract. - CORRECT ANSWER c) Misstatement of age. Misstatement of age is an optional health insurance policy provision, meaning that it may be included in a policy at the option of the insurer." "An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? - CORRECT ANSWER The policy will not be affected. In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. In this particular instance the applicant did not commit intentional fraud." "A long-term care shopper's guide must be presented at what point? - CORRECT ANSWER Prior to the time of application A long-term care insurance shopper's guide must be provided in the format developed by the National Association of Insurance Commissioners (NAIC). The shopper's guide must be presented to the applicant prior to completing the application." "In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment? - CORRECT ANSWER Within 30 days of birth The insured must notify the insurer of a newly born dependent, and if additional payment is required, pay within 30 days." "In order to maintain an insurance license, an agent will need to satisfy Florida's continuing education requirement of : - CORRECT ANSWER 24 hours of continuing education in every 2-year period." "An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed? - CORRECT ANSWER Unfair claims settlement Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements are completed and submitted by insureds is an example of unfair claims settlement." "If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, what will occur? - CORRECT ANSWER The extra hours may be continued into the next period, Excess classroom hours accumulated during any 2-year period may be carried forward to the next 2-year period." "All small employer group health plans, in order to comply with the requirements of the Florida Employee Health Care Access Act, must be issued on what basis? - CORRECT ANSWER Guaranteed issue A small group plan must be issued on a guaranteed-issue basis, which means an insurance policy must be offered to an employer, employee, or dependent of the employee, regardless of health status, pre-existing conditions or claims history." "If an agent is in the military, which of the following is true? a) The agent cannot sell a policy to someone outside of the military base. b) The agent cannot sell any policies during times of war or conflict. c) The agent cannot sell policies while on active duty. d) The agent cannot sell a policy to another active military person who is of a lower rank. - CORRECT ANSWER d) The agent cannot sell a policy to another active military person who is of a lower rank." "Which of the following will NOT be considered unfair discrimination by insurers? a) Cancelling individual coverage based on the insured's marital status b) Assigning different risk classifications to applicants based on gender identity c) Discriminating in benefits and coverages based on the insured's habits and lifestyle d) Charging applicants with similar health histories different premiums based on their ethnicity - CORRECT ANSWER c) Discriminating in benefits and coverages based on the insured's habits and lifestyle Discriminating between individuals of the same class with equal life expectancies, or by reason of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also not allowed to cancel individual coverage due to a change in marital status. Discriminating in benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is acceptable." "Which of the following would be required to be licensed as an insurance producer? a) A salaried full-time employee who furnishes information for group insurance b) An insurance company director who performs executive, administrative and managerial duties c) A salaried employee who advertises and solicits insurance d) A person whose activities are limited to producing insurance advertisements - CORRECT ANSWER c) A salaried employee who advertises and solicits insurance A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required." "Which of the following is NOT among the goals of a Medicare supplement application? a) Determining whether or not the policy will replace another accident and health policy b) Advising applicants regarding the availability of counseling services c) Presuming the applicant is eligible for Medicaid, based on the nature of the policy d) Determining whether or not an applicant has an existing Medicare supplement policy - CORRECT ANSWER c) Presuming the applicant is eligible for Medicaid, based on the nature of the policy Medicare supplement policies must ask the applicant if they are eligible for Medicaid." "While a claim is pending, an insurance company may require: A. An independent examination only once every 45 days. B An independent examination as often as reasonably required. C. The insured to be examined only within the first 30 days. D. The insured to be examined only once annually. - CORRECT ANSWER B An independent examination as often as reasonably required." "The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called - CORRECT ANSWER A collateral assignment" "A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will - CORRECT ANSWER Continue to increase" "When filling out an application for insurance, the applicant makes a mistake. If a fresh application were not available, what could the applicant do to properly correct the mistake? - CORRECT ANSWER Cross the incorrect answer out, write the correct one beside it, and initial the answer." "Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy? - CORRECT ANSWER An Accidental Death Rider" "All of the following are consideration in an insurance policy EXCEPT - CORRECT ANSWER The cash value in the policy." "An individual has a $200,000 convertible term life insurance policy. If he chooses, he can - CORRECT ANSWER Convert to a whole life policy for the same face amount without proof of insurability." "Which of the following is NOT true regarding a deferred annuity? - CORRECT ANSWER Income payments begin within 1 year from the date of purchase." "A retail shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2,500. His actual monthly expenses are $3,000. If the owner becomes disabled, the monthly benefit payable under his policy will be - CORRECT ANSWER $2,500" "Which federal act defines rules pertaining to protected health information? - CORRECT ANSWER HIPAA" "What is the difference between a straight life policy and a 20-pay whole life policy? - CORRECT ANSWER Premium payment period" "Which of the following policies can be described as a flexible premium adjustable life policy? - CORRECT ANSWER Universal Life" "All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT - CORRECT ANSWER It does not have a guaranteed death benefit." "An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following? - CORRECT ANSWER An insured suffers a relapse of a prior disability within 6-months of the initial covered disability" "An insured was seriously injured in a skiing accident that required him to be hospitalized for 5 weeks. His medical expense policy covered all of the following EXCEPT - CORRECT ANSWER Loss of income while hospitalized. b) Necessary medicine and" "Which of the following used to be called Medicare + Choice Plans? - CORRECT ANSWER Medicare Advantage Plans" "How does insurance distribute the financial consequences of individual losses? - CORRECT ANSWER It transfers the risk to all persons insured." "According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT - CORRECT ANSWER If an applicant is declined for an insurance policy, he or she has no right to know what was in the report." "Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application? - CORRECT ANSWER The application contains material misstatements." "According to the metal level classification of health plans, what percentage of health care costs will be covered under a gold plan? - CORRECT ANSWER 80%" "Your client is sole proprietor and wishes to include his family on a medical expense plan. How much of the cost of the medical expense plan can be deducted (since he is considered self-employed)? - CORRECT ANSWER 100%" "Which of the following statements regarding HIV testing is NOT true? - CORRECT ANSWER Test results must be sent to the Department of Insurance." "To be valid, an insurance policy must have all of the following EXCEPT - CORRECT ANSWER Countersignature" "If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses? - CORRECT ANSWER Supplementary major medical" "Who is the annuity owner? a) The person who receives - CORRECT ANSWER The person who purchases the annuity" "Under the Payment of Claims provision, to whom will the insured's benefits be paid if the insured is deceased? - CORRECT ANSWER The insured's primary beneficiary" "An insured's cancelable health insurance policy is being cancelled. One day before the policy is scheduled to end, he is involved in a major accident and is hospitalized for a week. Which of the following best describes the coverage that he would receive? - CORRECT ANSWER Full benefits, as if the policy were still completely in effect" "A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal? - CORRECT ANSWER Family term" "Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy? - CORRECT ANSWER Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy?" "A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of deductible do they have in their policy? . - CORRECT ANSWER Family" "HMOs are known as what type of plans? - CORRECT ANSWER Service" "Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance? - CORRECT ANSWER Insurance application b) Risk analysis c) The law of large numbers" "Decreasing Term insurance is often used to - CORRECT ANSWER Cover a mortgage." "Following a covered loss, the Time Payment of Claims Provision requires that an insurance company pay disability income benefits no less frequently than - CORRECT ANSWER Monthly" "Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies? - CORRECT ANSWER Probationary Period" "In health insurance, the length of the grace period varies according to the - CORRECT ANSWER Mode of premium payment." "All of the following are excluded from coverage in an individual health insurance policy EXCEPT - CORRECT ANSWER Mental illness." "Answers to questions in an insurance application are called representations and, as such, they are - CORRECT ANSWER Believed to be true to the best of the applicant's knowledge." "Which of the following describes the relationship between a capital sum and a principal sum? - CORRECT ANSWER Capital sums are percentages of principal sums." "In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health? - CORRECT ANSWER By requiring that the insurance be incidental to the group" "Medicare is a health insurance program for all the following individuals EXCEPT - CORRECT ANSWER Those with low income and low assets." "Riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this agreement? - CORRECT ANSWER Insuring Clause" "Which of the following types of care could be provided at a community center? - CORRECT ANSWER Adult day care" "Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options? - CORRECT ANSWER Both guarantee that the principal and interest will be fully paid out." "Which of the following statements is INCORRECT? - CORRECT ANSWER The insurer does not have the right to conduct an autopsy" "What is the purpose of a benefit schedule? - CORRECT ANSWER To state what and how much is covered in the plan" "An insured purchased a health insurance policy with a renewability clause that states the policy is "Guaranteed Renewable." This means that as long as the required premiums are paid, the policy will continue until the insured - CORRECT ANSWER Reaches 65" "A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend? - CORRECT ANSWER Payor benefit" "The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT - CORRECT ANSWER Purchase of a new home" "In a noncontributory group policy - CORRECT ANSWER 100% of eligible employees must participate" "An employee is covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102 each month. Why does the employer collect an extra $2? - CORRECT ANSWER To cover the employer's administration costs" "All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT - CORRECT ANSWER Reports may be sent to anyone who requests one." "According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed? - CORRECT ANSWER The primary beneficiary died before the insured" "When may HIV-related test results be provided to the MIB? - CORRECT ANSWER Only if the individual is not identified" "If an insured pays a health insurance premium each month, how long would the grace period be under the policy? - CORRECT ANSWER 10 Days" "An applicant misstates his age on his application for a health insurance policy. He states that he is 39, but his actual age is 49. When he files a claim, what will most likely happen? - CORRECT ANSWER Benefits paid will be those that would have been purchased at the correct age." "An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which of the following must be notified of the investigation? - CORRECT ANSWER The applicant" "What happens to the copy of the application for health insurance once the policy is issued? - CORRECT ANSWER It becomes part of the entire contract." "An annuity owner receives the same guaranteed payment every month. What type of annuity is it? - CORRECT ANSWER Fixed" "Life Insurance can provide which of the following? - CORRECT ANSWER Survivor protection" "Which statement best describes agreement as it relates to insurance contracts? - CORRECT ANSWER One party accepts the exact terms of the other party's offer." "When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity? - CORRECT ANSWER As a fiduciary" "An insurer recently collected information from a senior consumer, and used that information to make recommendations regarding insurance transactions. For how many years must this information be maintained after the transaction has been completed? - CORRECT ANSWER 5" "What is the only difference between blanket insurance and group health insurance? - CORRECT ANSWER The insured members are not named." "What is the minimum age requirement to enter into a life insurance contract in this state? - CORRECT ANSWER 15" "What is the latest point at which an Outline of Coverage may be presented? - CORRECT ANSWER At the time of policy delivery" "What is the maximum amount of individual life insurance coverage that a person can convert to if the existing group policy has been terminated? - CORRECT ANSWER $10,000" "All of the following are true regarding a producer's fiduciary responsibilities EXCEPT - CORRECT ANSWER Producers may commingle personal funds with company funds." "A stock insurer is defined as an insurer - CORRECT ANSWER Owned by its stockholders" "In individual health policies, proof of loss must be provided by the insured to the insurer within how many days of a loss? - CORRECT ANSWER 90" "Insurers CANNOT transact insurance in this state without a - CORRECT ANSWER Certificate of Authority" "A licensee may have their license suspended, terminated or revoked for all of the following EXCEPT - CORRECT ANSWER Unknowingly overinsuring any property insurance risk" "Which of the following groups is NOT eligible for group life insurance? - CORRECT ANSWER Social Groups" "What Florida insurance regulation established an outline of appropriate and inappropriate business behavior for life insurance agents? - CORRECT ANSWER The Code of Ethics of the Florida Association of Insurance and Financial Advisors" "Which of the following terms refers to solicitation, negotiation, effectuation or advising related to an insurance contract? - CORRECT ANSWER Insurance transaction" "An agent has completed 28 hours of continuing education to renew her license. Upon renewal, she realizes she has 4 extra hours of credit. What will happen to those extra hours? - CORRECT ANSWER They will be carried over to the next 2-year period" "All advertisements, regardless of their source of creation, are the responsibility of the - CORRECT ANSWER Insurer" "Which of the following best defines the unfair trade practice of rebating? - CORRECT ANSWER Offering an inducement of something of value not specified in the policy" "Which of the following is NOT considered eligible for group life insurance? - CORRECT ANSWER A credit union that needs coverage only for its top 10 employees" "A producer advises a policyholder that he should replace his life insurance policy with another, similar policy. The agent is advising this, however, for the sole purpose of earning a commission. What violation has the agent committed? - CORRECT ANSWER Churning" "An insurance company that is owned by the policyholders is called a - CORRECT ANSWER Mutual insurer" "HMO contracts may only be sold by a licensed and appointed health insurance agent or a full-time salaried employee or officer of an HMO who devotes most of his or her services to - CORRECT ANSWER Activities other than soliciting HMO contracts from the public and who receives no commissions or compensation for procuring such contracts." "Within how many days after receiving a written communication of replacement must an existing insurer provide a policyowner with a policy summary? - CORRECT ANSWER 10 Days" "Maternity benefits include all of the following EXCEPT - CORRECT ANSWER Coverage without cost sharing." "What Florida law governs group health insurance provisions provided by insurers and HMOs to small employers? - CORRECT ANSWER Florida Employee Health Care Access Act" "All of the following statements regarding the Life insurance Policy Summary are correct EXCEPT - CORRECT ANSWER It must illustrate all guaranteed policy dividend values." "Which of the following statements is INCORRECT? - CORRECT ANSWER Medicare and Medigap policies provide coverage for long-term custodial or nursing home care." "Which of the following entities is considered the Principal? - CORRECT ANSWER The insurer issuing a policy" "An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done? - CORRECT ANSWER Misrepresentation" "On individual health insurance policies, an insurer must furnish the claimant with claim forms within how many days? - CORRECT ANSWER 15 Days" A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as - CORRECT ANSWER Usual, customary and reasonable" "What provision would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? - CORRECT ANSWER Payment of Claims" "All of the following are true about group disability Income insurance EXCEPT a) The longer the waiting period, the lower the premium. b) Coverage applies both on and off the job. c) Benefits are usually short term. d) The waiting period starts at the onset of the injury or sickness. - CORRECT ANSWER Coverage applies both on and off the job." "Which of the following statements regarding Business Overhead Expense policies is NOT true? a) Premiums paid for BOE are tax-deductible. b) Any benefits received are taxable to the business. c) Leased equipment expenses are covered by the plan. d) Benefits are usually limited to six months, - CORRECT ANSWER d) Benefits are usually limited to six months" "The Florida Health Insurance Coverage Continuation Act requires insurers that sell health plans to small employers to offer in those plans a right to elect to continue coverage, without providing evidence of insurability, to employees who lose their coverage and are unable to replace it. The premium rate for this coverage may NOT exceed: - CORRECT ANSWER 115% of the regular group rate. The coverage may be extended for a period of up to 18 months at a rate not to exceed 115% of the regular group rate." "An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? - CORRECT ANSWER False advertising False advertising is the illegal practice of advertising or circulating materials that are untrue, deceptive, or misleading." "Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? a) Any riders or endorsements b) The aggregate amount of premiums due c) The meaning of the terms "reasonable" and "customary" 'd) Any limitations or conditions of eligibility for LTC benefits - CORRECT ANSWER b) The aggregate amount of premiums due." "Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? - CORRECT ANSWER Residual disability A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss." "An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? - CORRECT ANSWER Full benefits Presumptive Disability plans offer full benefits for specified conditions." "Which of the following is NOT provided by an HMO? a) Reimbursement b) Services c) Financing d) Patient care - CORRECT ANSWER a) Reimbursement The HMO provides benefits in the form of services rather than in the form of reimbursement for the services of the physician or hospital." "In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits? - CORRECT ANSWER 60 days Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment." "When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. how would this claim be handled? - CORRECT ANSWER The insurer is considered to be notified since the notification to agent equals notification to the insurer. Notice to the agent equals notice to the insurer. The agent is the insurer's representative." "Which of the following is NOT a feature of a guaranteed renewable provision? a) The insured has a unilateral right to renew the policy for the life of the contract. b) Coverage is not renewable beyond the insured's age 65. c) The insured's benefits cannot be reduced d) The insurer can increase the policy premium on an individual basis. - CORRECT ANSWER d) The insurer can increase the policy premium on an individual basis. Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy."