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An insured, age 60, decides to stop paying premiums on his $100,000 whole life policy. The policy has a cash value of $30,000. He exchanges it for extended term insurance. What face value will the term insurance have?

$100,000

Regarding Florida law on continuing education, all of the following statements are correct:

- 24 hours of continuing education credit are required every two years, with certain exceptions. -Agents that have been licensed for at least 6 ears must complete 20 or more hours of intermediate or advanced courses every two vears -Failure to comply with continuing education requirements may result in cancellation or nonrenewal of appointments with insurers

Under Medicare Part B, what must the participant pay?

20% of covered charges above the deductible

A 64-year-old Florida resident purchased an ordinary life policy 6 months ago. How long is the grace period for the policy? 31 days

31 days

James was terminated by his employer. Under the group insurance conversion privilege, how long does he have to convert his coverage to an individual policy without evidence of insurability?

31 days

How long is the waiting period before a person may file a claim for Social Security disability benefits?

5 months

An insured, who is a 65-year-old Florida resident, purchased an ordinary whole life policy at the age of 63. How long is the grace period for the policy?

51 days

Which of the following is required to start an HMO in Florida?

A Certificate of Authority

Which of the following statements regarding term life insurance is TRUE?

A Convertible Term policy may be converted retroactively to the date the term policy was originally purchased A Convertible Term policy may be converted on a current (attained age) basis The premium for an Annual Renewable Term policy increases at each additional renewable period

Major medical insurance plans usually contain a stated maximum benefit period. This is the time period over which eligible expenses will be paid after a deductible has been satisfied. In the case of a continuing illness, what happens when the maximum benefit period expires?

A new deductible must be met to reestablish a new benefit period.

Regarding Stock insurance companies, which of the following statements is correct?

A stock company is structured the same as any corporation.

Which of the following would NOT be covered under a special risk policy?

A traveler who purchases an accident policy at the airport to provide coverage while he or she is a passenger on a commercial airline flight.

Which of the following is a rider attached to a life insurance policy which provides for payment of a multiple of the face value for death from a specified cause?

Accidental Death Benefit Rider

Which of the following is NOT a sound reason for agents to conduct policy delivery reviews with their clients?

Accomplishes legal (constructive) delivery of the policy by physically delivering it to the policyowner.

How is most insurance sold?

Agents or Brokers

Regarding Florida law on continuing education, all of the following statements are correct EXCEPT:

All agents are required to complete 24 hours of credit in continuing education.

Which one of the following statements regarding risk pooling is CORRECT?

All forms of insurance-life, health, accident, property and casualty-rely on risk pooling.

A proprietor wishes to establish a Keogh plan. He must include which of the following?

All full-time employees with at least one year of service

Which of the following is NOT a purpose of underwriting?

Allow the insurer to be able to sell their policies to applicants that are normally uninsurable

All of the following regarding the Guaranteed Insurability Rider in a disability income policy are true EXCEPT:

Allows the insured to increase benefits at 3-year intervals without evidence of insurability.

Which of the following is covered under a long-term care policy?

Alzheimer's disease Senile dementia Parkinson's disease

Which type of company is licensed to sell insurance in a state?

An admitted company

Regarding Limited Risk Policies, which of the following is correct?

An aviation policy provides benefits for accidental death or dismemberment if death or injury results from an aviation accident during a specified trip. An automobile policy provides benefits for accidental death or injury while riding in a car. Travel accident covers most kinds of travel accidents.

Which of the following statements regarding annuities is INCORRECT?

Anyone can set up an annuity and pay income for life.

Regarding Stock and Mutual insurance companies, which of the following statements is CORRECT?

Anyone purchasing insurance from a mutual insurer Is both a customer and an owner -Policy dividends are paid to the policyowner. -Occasionally a stock companv mav be converted into a mutual company through a process called mutualization.

Regarding taxation of benefits received from health insurance policies, which of the following statements is CORRECT?

Benefits received from personal disability income policies are not taxable.

Concerning Hospital Indemnity policies, which of the following statements is NOT correct?

Benefits usually are paid directly to the hospital.

All of the following are associated with the Final Expense Fund:

Burial costs Current Debts Estate Taxes

Which of the following policies covers a disabled owner's business expenses other than income and wages?

Business Overhead Expense insurance

What provisions is required by the Florida Employee Health Care Access Act?

Carriers must use a "modified community rating" methodology. All small group health benefit plans must be issued on a "guarantee-issue" basis. Preexisting exclusions are limited to 12 months for conditions manifested during the previous 6 months for small employers with 2-50 employees

What is not a mandatory provision in a health policy:

Change of Occupation

The variable annuity contract is similar to a life contract because it contains all of the following?

Contains Loan provision, beneficiary designations, death benefits.

Which of the following statements regarding term life insurance is FALSE?

Converting term insurance requires proof of insurability

Complete the statement. The difference between the insurability and approval types of conditional receipts is when the:

Coverage goes into effect

What type of insurance is typically purchased to cover a mortgage?

Decreasing term insurance

In which way does a PPO differ from an HMO?

Doctors are paid on a fee for service basis

All of the following statements are correct regarding post-hospital skilled nursing care benefits under Medicare EXCEPT:

Does not require a deductible or co-payments.

What is the effect of elimination periods in disability income policies?

Eliminates claims for short-term disabilities for which the insured can usually manage without financial hardship and save processing expenses for small claims

What are the mandatory provisions in a health policy

Entire Contract Physical Examination and Autopsy Time Limit on Certain Defenses

Which of the following statements are TRUE about exercising a Guaranteed Insurability option?

Evidence of insurability is not required.

What type of group health plan provides health insurance coverage to members of an association or professional society?

Franchise Health plan

All of the following activities by an agent may result in the suspension or revocation of an agent's license:

Fraud Twisting Misrepresentation

The most popular method of obtaining health insurance is through which of the following?

Group Insurance

To whom does the Florida Employee Health Care Access Act apply to?

Group health insurance providers

The variable annuity contract is similar to a life contract because it contains all of the following, EXCEPT:

Guaranteed cash values

Any factor that increases the chance of loss to an insured is a what?

Hazard

When must all life insurance premiums be paid?

In advanced

In which type of whole life insurance does the face amount automatically increase as the Consumer Price Index (CPI) increases?

Indexed Whole Life

Which of the following is NOT a common exclusion of a health policy?

Injuries received as a result of a non-occupational accident

Health insurance premium factors include all of the following:

Interest Occupation Expense

Which of the following statements is CORRECT about the elimination period in disability income policies?

It is also called the waiting period. It is the period of time from the start of a disability that no benefits are paid. The choice of elimination period length vs. amount of premium, within the company's guidelines, is up to the insured.

Which of the following statements regarding a Medicare supplement policy is CORRECT?

It is illegal for anyone to sell a Medigap policy to a person who is in a Medicare Advantage plan.

Which of the following statements is INCORRECT about the elimination period in disability income policies?

It is the same as the probationary period

Which of the following types of insurance would indemnify a business if an employee died or became disabled?

Key Person Insurance

What are legal reserves in life insurance?

Liabilities

Which of the following options will pay the beneficiary the largest monthly life income payment?

Life Income Only

Joe Client purchased a variable annuity contract and selected an annuity option that gave him the largest possible monthly payment. Which of the following did he select?

Life only annuity

Regarding Limited Risk Policies, which of the following is NOT correct?

Limited Risk Policies are also called Special Risk Policies.

The Chief Financial Officer and the Office of Insurance Regulation has the power to do all of the following EXCEPT:

Make insurance laws

Which of the following programs was established to help states expand their public assistance programs for individuals whose income and resources are insufficient?

Medicaid

Which of the following statements regarding Medicare Part B is NOT correct?

Medicare Part B will pay 100% of covered reasonable charges, following an annual deductible.

Which of the following is an individual tendency that arises from an attitude or state of mind that causes indifference to loss?

Morale hazard

Complete the sentence. Compared to individual health plans, the rules for preexisting conditions in a group health plan are:

More liberal than individual plans.

Which of the following is NOT covered under a long-term care policy?

Nonorganic mental conditions

When an applicant signs and submits a completed application with the premium, he is given a conditional receipt. When does coverage become effective?

On the date of application

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO

What dividend option permits the policyowner to leave dividends with the life insurance company without incurring a taxable income responsibility

Paid-Up-additions

With regard to a typical dismemberment provision, the "Principal Sum" is best described by which one of the following?

Payment of a minimum sum if death follows the loss of a hand, foot, or eye.

An immediate specific event causing loss and risk is defined as a what?

Peril

Regarding Stock and Mutual insurance companies, which of the following statements is NOT correct?

Policyowners cannot share in the profits or the company

Which of the following concerning industrial insurance is NOT true?

Premiums may be paid by mail on a quarterly basis.

What is the primary purpose of the Coordination of Benefits (COB) provision found in group medical expense coverage?

Prevent the claimant from profiting from an injury or sickness.

Regarding "coinsurance," which of the following is CORRECT?

Provides for percentage participation by the insured.

All of the following are associated with the Final Expense Fund EXCEPT:

Readjustment Income

What nonforfeiture option allows the cash value to continue to grow?

Reduced-paid up

When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is considered to be which of the following?

Reimbursements

Mary K. purchased a Term to 65 life insurance policy. Her premium will:

Remain level throughout the period of the contract

Health insurance premium factors include all of the following EXCEPT:

Reserves

Accepting the risk and confronting it if and when it occurs is called what?

Risk Retention

Which of the following regulates the separate account in a variable annuity?

SEC

What are the major investment objectives of a life insurance company?

Safety of principal, Adequacy of investment yield, Liquidity of investment

What is risk pooling?

Sharing the burden and spreading the risk of death over a large group of people.

Which of the following risks involves the chance of both loss and gain?

Speculative Risk

All of the following are covered under Part A of Medicare EXCEPT:

Surgeon's and physician fees

Benefits that are available under the Social Security Act include which of the following?

Survivor's, Disability, and Retirement

If at the time of death, the claims examiner discovered that the insured's age had been misstated on the application as being one year younger, which of the following would occur?

The amount of death proceeds would be increased to an amount that could have been purchased by the premiums actually paid at the insured's correct age

Concerning group credit life insurance, which of the following is true?

The amount of insurance must match the balance of the loan, The debtor pays the premium, The creditor is the beneficiary

Which of the following regarding a key-person life insurance policy is CORRECT?

The business owner is the applicant and premium payer

All of the following regarding the Guaranteed Insurability Rider in a disability income policy are true:

The options are usually required to be exercised prior to age 50. Increases are contingent upon the insured meeting an earnings test prior to each purchase. Disability income is the only type of health insurance this rider may be attached to.

For health insurance purposes, what is consideration considered to be?

The premium payment and the application

Which of the following statements regarding life insurance policy proceeds is INCORRECT?

The proceeds are subject to the claims of creditors of the insured

Which of the following statements regarding HMOs is CORRECT?

They place special emphasis on preventive health care.

Which of the following is NOT a function of accident insurance?

To provide benefits for the loss of time away from the job as a result or sickness.

An insurance contract where only one party makes any kind of enforceable promise is called:

Unilateral Contract

Which of the following is a distinguishing characteristic of insurance contracts?

Unilateral contracts

An agreement which, for a reason satisfactory to the court, may be set aside by one of the parties to the contract, is called what?

Voidable Contract

Which of the following is ARE common exclusions of a health policy?

War, Pre existing illness, injuries received bc of a felony ARE common exclusions.

In which of the following situations is a medical examination virtually never required in the health insurance underwriting process?

When application is made for limited accident coverage.

Which of the following statements regarding life insurance policy proceeds is CORRECT?

When the policy names a beneficiary, the proceeds must inure solely to that beneficiary The cash surrender value of life insurance policies and annuities are not subject to garnishment When the estate of the insured is beneficiary, the proceeds become part of that estate and are subject to the claims of the insured's creditors

Drug addiction is an example of which of the following?

moral hazard