Life and Health Insurance- Florida 2-15

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

$0

A Hospital/Surgical expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?

$1,000

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 ½ months, what is the MAXIMUM amount he would receive for an approved claim?

$1,250

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

$1,600

Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:

$10,000

An agent may provide a prospective client with an advertising gift as long as the value of that gift does not exceed _____.

$100

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?

$50,000 minus any outstanding policy loans

P is self-employed and owns an individual Disability Income Policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?

0

In Florida, monthly-premium health insurance policies must provide a grace period of at least

10 days

G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?

10 years

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is:

100%

An insurer must provide an insured with claim forms within ___ days after receiving notice of loss.

15

Florida requires that coverage for newborn begins "from the moment of birth" and continues for

18 months

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (MINI COBRA).

20

Eligibility for coverage under the Florida Healthy Kids Corporation requires a family to be within ____ of the federal poverty level.

200%

The free-look period for all qualified Long-term care policies sold in Florida is __ days.

30

Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund?

30

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36

A ___day notice to the policyholder is required for any health insurer that wishes to cancel a health insurance policy.

45

In florida, what is the maximum percentage of controlled business an agent may produce?

50%

The individual most likely to buy a Medicare Supplement policy would be a(n):

68-year old male covered by Medicare

What do families pay that are covered by the Florida Healthy Kids Corporation?

A portion of the premium

What is Florida's definition of Life Insurance replacement?

A transaction in which a new policy is bought and an old policy is terminated

Which of the following types of care is typically not covered in a Long-term Care policy?

Acupuncture

Which of the following employer tasks does a Professional Employer Organization normally handle?

Administration Tasks

Which of the following situations does NOT apply to the Florida Replacement Rule?

An existing policyholder purchases an additional policy from the same insurer

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?

An immediate annuity

Which of the following Statements BEST describes that the Legal Actions provision of an Accident and Health policy requires?

An insured must wait 60 days after Proof of Loss has been submitted before a lawsuit can be filed

Any changes made on an insurance application requires the initials of whom?

Applicant

Before a life insurance policy is issued, which of these components of the contract is required?

Applicant's signature on application

What is the initial source of underwriting for an insurance policy?

Application containing statements from the insured

An incomplete life insurance application submitted to an insurer will result in which of these actions?

Application will be returned to the writing agent

What action can a policyowner take if an application for a bank loan requires collateral?

Assign policy ownership to the bank

When does a Probationary Period provision become effective in a health insurance contract?

At the policy's inception

All of the following are Nonforfeiture Options EXCEPT

Automatic Premium Loan Option

The difference between group insurance and blanket health policies is:

Blanket health policies do not issue certificates

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is:

Business Overhead Expense

Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?

Buyer's Guide

A policy loan is made possible by which of these life insurance policy features?

Cash value provision

Which of the following reimburses it insureds for covered medical expenses?

Commercial Insurers

The policy summary contains specific information on all of the following, EXCEPT:

Commission

The type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.

Common accident deductible

Which of the following would be a likely candidate for disability income insurance on a key employee?

Company executive

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

Conversion provision

Which statement regarding the Misstatement of Age provision is considered to be true?

Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

In Florida, which agency is responsible for the rehabilitation or liquidation of insurers?

Department of Financial Services

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

Disability income policy premiums are tax-deductible

Which of the following does Social Security Not provide benefits for?

Dismemberment

Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?

Each partner owns a $500,000 policy on their partner's life

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period

P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

Endowment at age 70

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:

Entire Contract provision

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

Equity index insurance

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?

Establishes the needs of the individual and his dependents

D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?

Extended term

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Family Maintenance Policy

Taking receipt of premiums and holding them for the insurance company is an example of:

Fiduciary Responsibility

Which of the following employees may NOT be excluded from a group life plan?

Full-time employees after the probationary period

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

Gives the policyowner additional time to pay overdue premiums

All of these are prerequisite for becoming a licensed agent EXCEPT

Graduate from High school

Which of the following is a standard provision of the conversion privileges in a Group Life policy?

Group Life coverage can be converted to an individual policy at regular rates on attained-age basis

Which requirement must be met for an association to be eligible for a group life plan?

Group was formed for a purpose other than acquiring insurance

X is insured with a Disability Income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain?

Guaranteed Renewable

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

All of these are characteristics of a Health Reimbursement Arrangement(HRA) EXCEPT

HRA is entirely funded by the employee

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

Her group health plan

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

Income that cannot be outlived by the owner

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?

Increase face amount

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

Increase her policy's coverage amount

The _____ clause identifies which losses resulting from an accident or sickness are insured by the policy.

Insuring

A life insurance arrangement which circumvents insurable interest statutes is called:

Investor- Originated Life Insurance

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance

A policyowners rights are limited under which beneficiary designation?

Irrevocable

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?

Irrevocable beneficiary

K is an insured under a life insurance policy owned by a third party. Which of these statements is true?

K has no ownership rights

AN architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?

Key person insurance

Which of the following is NOT a limited benefit plan?

Life Insurance policy

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Life annuity with period certain

Which of these are NOT an example of a Nonforfeiture option?

Life income

Under Florida Law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on pre-existing conditions for up to 12 months

An insured's inability to perform two or more activities of daily living may trigger which type of life policy rider?

Long term care

What is the main reason for regulating the insurance industry?

Maintain the solvency of insurance companies

A catastrophic illness would be best covered by which of the following health insurance plans?

Major Medical

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:

March 1

According to Florida Law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase

Marital status

When a life insurance policy exceeds certain IRS table values, the result would create which of the following?

Modified Endowment Contract (MEC)

J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?

Modified Premium Life

Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?

More physicians to choose from

Which type of insurance company allows their policyowner's to elect a governing body?

Mutual

Under which circumstance may a licensed agent in Florida represent an unauthorized entity?

Never

What type of renewability guarantees premium rates and renewability?

Noncancellable

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

Nonoccupational coverage

Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?

Notice to existing and replacing insurers of intention to replace

A life insurance policyowner would like to file a complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the

Office of Financial Regulation

Which department oversees 'Market Conduct Examinations' in Florida?

Office of Insurance Regulation(OIR)

All of these statements concerning Settlement Options are true, EXCEPT

Only the beneficiary may select

In a life insurance policy, which provision states who may select policy options, designated and name a beneficiary, and be the recipient of any financial benefits from the policy?

Owner's Rights

Which life insurance rider typically appears on a Juvenile life insurance policy?

Payor Benefit rider

Which action could result in a hearing being ordered by the Department of Financial Services?

Performing insurance transactions without a license

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the:

Policy Loan provision

Which of these do NOT constitute policy delivery?

Policy issued with a rating

What benefit does the Payor clause on a Juvenile Life policy provide?

Premiums are waived if payor becomes disabled

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Primary Insurance Amount (PIA)

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be payable to K's estate if P dies within a specified time

A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?

Proceeds will go to the contingent beneficiary

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Proceeds will go to the contingent beneficiary

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

Projection of the policy's future costs

What must the policyowner provide to the insurer for validation that a loss has occurred?

Proof of Loss

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?

Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

Post-tax dollar contributions are found in:

Roth IRA investments

What does a 401(k) plan generally provide its participants?

Salary-deferral contributions

Which of the following is NOT considered rebating?

Sharing commissions with an agent in the same line of business

An immediate annuity consists of a:

Single Premium

Which of the following types of permanent life insurance policies offers the highest initial cash value?

Single Premium

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

Single premium Immediate Joint with Survivor Annuity

The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

Social Security Disability Income

The insuring clause

States the scope and limits of the coverage

What type of life insurance are credit policies issued as?

Term

Which of the following statements is CORRECT about an agent who is taking an insurance application?

The agent should have the applicant initial any changes made on the application

Which of the following statements is correct regarding an employer/employee group health plan?

The employer receives a master policy and the employees receive certificates

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

AN agent that sells _____ life insurance MUST be registered with the Financial Industry Regulatory Authority (FINRA).

Variable

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Variable life

ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has:

Waived one of its legal rights

At what point does a Whole Life Insurance policy endow?

When the cash value equals the death benefit

Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term Coverage for his wife on the same policy. Which of these policies did Y purchase?

Whole Life policy with an Other Insured Rider

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

a Buyer's guide and Policy Summary

A term Life rider offers the insured

additional life coverage

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers L had understated her age on the application. Under the Misstatement of Age provision, the insurer will:

adjust the death benefit to a reduced amount

How long does the coverage normally remain on a limited-pay life policy?

age 100

A qualified profit-sharing plan is designed to:

allow employees to participate in the profits of the company

An example of an unfair trade practice is

an agent making a material misrepresentation to the insured

All of the following entries are classified under the four principal areas of Florida insurance law except

an agents commission

AN example of false advertising would be

an insurer exaggerating its dividends in a magazine advertisement

Which of the following is the best description of insurer?

any person, corporation, association, or society that writes insurance contracts

Under a Graded Premium policy, the premiums

are lower during the policy's early years

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

at future dates specified in the contract with no evidence of insurability required

According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

at the time of application

The coordination of benefits (COB) provision exists in order to

avoid duplication of benefit payments

Group health plans typically contain a coordination of benefits(COB) provision. This provision's purpose is to

avoid the duplication of benefit payments

A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(N)

broker dealer

Which of these is NOT considered to be a cost connected with an individual's death?

business expenses

The guarantee of insurability option provides a long-term care policyowner the ability to:

buy additional coverage at a later date

A Health Reimbursement Arrangement MUST be established:

by the employer

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

change of occupation provision

A whole life insurance policyowner does not have the right to

change the grace period

Which of these actions is taken when a policyowner uses a Life insurance policy as collateral for a bank loan?

collateral assignment

An applicant who pays the initial premium at the time of application is typically given a(n)

conditional receipt

Major Medical policies typically:

contain a deductible and coinsurance

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:

continue group health benefits

D the agent met with a prospect and ended up selling an insurance policy. While fillining out the insurance application, D makes a mistake. In this situation, D MUST

correct the information and have the prospect initial the change

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges, and the

cost of insurance

Florida's 14-day free-look period for life insurance policies begins at the

date of delivery

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?

daughter

The combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy

decreasing

All of these are characteristics of an Adjustable Life policy, Except:

face amount can be adjusted using policy dividends

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

fiduciary responsibility

The Florida Employee Health Care Access Act was established to make

group health insurance available to employer with up to 50 employees

Insurers/agents must, in Florida, offer and issue all small employer health plans on a _____ basis:

guaranteed-issue

Which of these is NOT a reason for purchasing life insurance on the life of a minor?

if both parents were to die, it would provide death benefits to the child

A policy of adhesion can only be modified by whom?

insurance company

An insurance company Normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy

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):

insuring agreement

Which of the following claims are typically excluded from Medical expense policies?

intentionally self-inflicted injuries

J was reviewing her health insurance policy and noticed the phrase "this policy will only pay for a semi-private room". This phrase is considered to be a(N)

internal limit

A policyowner's rights are limited under which beneficiary designation?

irrevocable

A stock insurance company

is owned exclusively by its shareholders

Dividends paid from a life insurance policy are

issued by the insurer

In Florida, an element of an insurance transaction would be

issuing an insurance contract

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

marital status

Which of these is not considered to be an element of an insurance contract?

negotiating

Deductibles are used in health policies to lower:

overuse of medical services

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

policyowner

A Limited-Pay Life policy has:

premium payments limited to a specified number of years

Which statement is correct regarding the premium payment schedule for whole life policies?

premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:

probability of making timely premium payments

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

protect the producer

What is the purpose of the insurance guaranty Fund Association?

protects policyowners against insolvent insurance companies

T is covered by AD&D policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

request of change will be refused

With Optionally Renewable health policies, the insurer may:

review the policy annually and determine whether or not to renew it

A long term care lapse notice must be delivered to both the applicant and

secondary addressee

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

send a notice to the MIB that the applicant was declined

An application for Medicare Supplement coverage may NOT be denied by the insurer if the application was submitted ____ month(s) after the applicant reaches the age of 65.

six

The premiums paid by an employer for his employee's group life insurance are usually considered to be:

tax-deductible to the employer

According to Florida's life insurance replacement laws, a policyowner must be provided with a written Comparison and Summary Statement when it's requested by

the policyowner

A level premium indicates:

the premium is fixed for the entire duration of the contract

Under a Renewable Term policy,

the renewal premium is calculated on the basis of the insured's attained age

An individual who purchases a Life annuity is given protection against:

the risk of living longer than expected

The consideration clause of an insurance contract includes:

the schedule and amount of premium payments

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?

the state where they are conducting business

Group life policies in Florida are required to contain a conversion privilege that allows for conversion

to an individual policy for a stated period of time

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

to an individual policy upon employment termination

The free-look provision begins

upon the completion of the application

A term life insurance policy matures:

upon the insured's death during the term of the policy

Term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period

varies according to the contract

What must an insurer obtain to conduct an HIV test?

written consent