XCEL FL TEST STUDY GUIDE

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?

100

The minimum age at which a person can sign a life insurance application is

15 years

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

18 months

An insurance company can contest a life insurance contract due to application fraud within

2 years

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

20

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-Pay Life accumulates cash value faster than Straight Life

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

200%

The USA Patriot Act was enacted in:

2001

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.

24

How many hours of continuing education must a newly licensed agent complete every two years?

24

A life insurance policy's grace period entitles the insured a period of no less than ___ days to make the premium payment.

30

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

30

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

31

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?

4 months

An insurance company must act on an Accident and Health insurance application for reinstatement within ____ days.

45

A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time?

48 months

Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their license for at least how long?

5 years

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

59 1/2

According to Florida law, an additional lapse must be issued after the standard grace period has expired for policyowners age

64 years or older

What is Medicare?

A hospital and medical expense insurance program

What do Dread Disease policies cover?

A specific disease or illness

All are true statements regarding the underwriting process, EXCEPT:

AIDS and HIV virus exams can be conducted in a discriminatory fashion

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

Accidental Death and Dismemberment clause

A policyowner may generate taxable income from which of the following Dividend Options?

Accumulation at Interest

A "reimbursement policy" pays what amount of coverage Long-Term Care expenses?

Actual covered expenses up to the daily maximum

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:

After an insured has become totally disabled as defined in the policy

What type of insurance company is domiciled in England, but conducts business in Florida?

Alien

The Consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n):

An exclusion

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

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

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

Which of the following medical expenses does Cancer insurance NOT cover?

Arthritis

When is a Group Health policy required to provide coverage for a newborn child?

At the moment of birth

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

At the time of application

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?

Blanket Accident policy

The insurer must provide a prospective buyer with a(n)

Buyer's Guide and Policy Summary

P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the

Capital Sum

Which statement about a whole life policy is true?

Cash value may be borrowed against

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

Cash value provision

Company XYZ offers a group Term Life insurance plan to its employees. What does each employee covered under this plan receive?

Certificate of insurance

A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT

Change the policy's interest rate

S is covered by a whole life policy. Which insurance product can cover his children?

Child term rider

Additional coverage can be added to a Whole Life policy by adding a(n):

Decreasing term rider

Any violations of the Florida financial institutions code may be investigated by the

Department of Financial Services (DFS)

Which two entities regulate variable annuities?

Department of Financial Services; and Securities Exchange Commission

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Self

In the event of an illness, a(n) ______ ______ policy would reimburse an insured for loss of earnings.

Disability Income

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

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

Elimination Period

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Employee

Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?

Entire Contract

Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called

Fraternal life insurance organizations

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

Fund a buy-sell agreement

The purpose of the ____ Period clause is to avoid an unintentional lapse of a life insurance policy.

Grace

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 an attained-age basis

Which of the following situations does a Critical Illness plan cover?

Leukemia

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

If an agent would like to sell Variable annuities, which state examination must the agent pass?

Life and Variable contracts

In Major Medical Expense policies, what is the objective of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local unemployment rates

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

Long-Term Care

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

Which of these life products is NOT considered interest-sensitive?

Modified Whole Life

Which of these is NOT an element of Life insurance premiums?

Morbidity rate

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

Never

According to Florida law, a Group Life insurance policy requires a minimum of how many insureds?

No minimum

A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be

Noncancelable

What funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

None

S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning:

November 1

P is insured under a basic cancer plan. Which of the following conditions would be covered under this plan?

Operation for a malignant tumor

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

Owner's Rights

The provision that defines to whom the insurer will pay benefit to is called:

Payment of Claims

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provision

When an employee is terminated, which statement about a group term life conversion is true?

Policy proceeds will be paid if the the employee dies during the conversion period

Which of the following information is NOT required to be included in a Whole Life policy?

Policy's guaranteed dividend table

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

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

Premiums are waived if Payor becomes disabled

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?

Premiums may increase at time of renewal

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a:

Primary Care Physician

Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness?

Probationary Period

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 is the purpose of the Insurance Guaranty Fund Association?

Protects policyowners against insolvent insurance companies

Which of these provisions require proof of insurability after a policy has lapsed?

Reinstatement

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

Renewable

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

Request of the change will be refused

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?

Residual Benefit clause

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

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

Which of the following is considered an accurate statement of an unfair trade practice?

Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchases a new life insurance policy with another company

Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?

USA Patriot Act

Life and health insurance policies are:

Unilateral contracts

The cash value in a(n) ______ Life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.

Universal

A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) _______ rate loan.

Variable

A(n) ______ annuity pays benefits based on units rather than stated dollar amounts.

Variable

An agent that sells ______ Life insurance MUST be registered with the Financial Industry Regulatory Authority (FINRA).

Variable

In order to sell a(n) _______Life policy, a producer is required to register with the Financial Industry Regulatory Authority (FINRA).

Variable

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?

Variable Life

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

Variable Universal Life

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?

Variable universal life

What is the primary factor that determines the benefits paid under a disability income policy?

Wages

When does a life insurance contract become effective if the initial premium is not collected during the application process?

When producer delivers policy and collects initial premium

When must insurable interest be present in order for a life insurance policy to be valid?

When the application is made

When is the face amount of a Whole Life policy paid?

When the insured dies or at the policy's maturity date, whichever happens first

If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations, EXCEPT:

When the state prohibits this by law

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

additional Whole Life coverage at specified times

A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of

adhesion

Insurance companies that are organized in countries outside the United States are referred to as

alien

A qualified profit-sharing plan is designed to :

allow employees to participate in the profits of the company

Group life insurance policies are generally written as:

annually renewable term

To be eligible for Social Security disability benefits, an employee must be unable to perform:

any occupation

In a qualified retirement plan, the yearly contributions to an employee's account:

are restricted to maximum levels set by the IRS

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

at future

Medicare Part C is:

available to those who are enrolled in a Medicare Supplement Plan with income under $12,000 per year

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

avoid excessive hospitalization

Variable Whole Life Insurance can be described as:

both an insurance and securities product

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

broker dealer

K is insured under a Group Life Insurance policy. K is considered to be a(n)

certificate holder

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

commission

The incontestable clause allows an insurer to:

contest a claim during the Contestable Period

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

date of delivery

S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:

deny the claim

A variable insurance policy:

does not guarantee a return on its investment accounts

The Department may request all of these during the licensing application process EXCEPT

drug test

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT:

free-look period has expired

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

guaranteed-issue

T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits

immediately

The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured:

is blinded in an accident

Pre-hospitalization authorization is considered an example of:

managed care

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the

marital deduction

During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of

misrepresentation

With a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?

monthly

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:

noncancelable

In an individual retirement account (IRA), rollover contributions are:

not limited by dollar amount

In Florida, agents are allowed to engage in rebating if

offered to all insureds in the same actuarial class

An example of unfair discrimination would be

offering different terms of coverage for different policyowners having the same risk classification

Under Florida law, a variable annuity policyowner must be notified of accumulated value of the contract

once a year

Deductibles are used in health policies to lower:

overuse of medical services

B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will

pay the amount that the premium would have purchased at the correct age

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

The ______ has the right to change a life insurance policy's beneficiary.

policyowner

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

policyowner

The fundamental reason for regulation of insurance is to:

protect consumers

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:

representations

According to Florida law, group life insurance conversion privileges must NOT

require evidence of insurability

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

secondary addressee

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

six

The Consideration clause of an insurance contract includes:

the schedule and amount of premium payments

Association Plans that are designed to provide health benefits to their members are regulated by the state because

they are insured by an authorized insurer

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

An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed

twisting

A life insurance policyowner may sell their policy to a(n) ____ in order to receive a percentage of the policy's face value.

viatical settlement provider

The part of a life insurance policy guaranteed to be true is called a(n):

warranty

If a 10-Year Term Life policy contains a Renewability provision, the policy will renew

without evidence of insurability

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law?

0%

What kind of life insurance product covers children under their parent's policy?

Term rider

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

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 the family's out-of-pocket medical expenses for 2013?

$1,000

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

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Coercion

Which of the following reimburses its insureds for medical expenses?

Commercial insurers

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T?

Conditional receipt

Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?

Conversion privilege

What provision in a life insurance policy states that the application is considered part of the contract?

Entire Contract provision

Which of the following is NOT included in the policy face?

Exclusions

P has recently signed an application for insurance. The insurer MUST advise her in writing that an investigative consumer report may be conducted according to the

Fair Credit Reporting Act

Which of these is NOT a source of funding for Social Security benefits?

Federal Government

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

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

Health Maintenance Organization (HMO)

Which type of provider is known for stressing preventative medical care and routine physical examinations?

Health Maintenance Organizations (HMO's)

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

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

In regards to representations or warranties, which of these statements is TRUE?

If material to the risk, false representations will void a policy

A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes applying if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

How does an indexed annuity differ from a fixed annuity?

Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

Which of the following actions may NOT be taken by an insurance company to insure a substandard applicant for disability income coverage?

Lengthen the contestability period

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?

Insurance

In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT:

Insured

All of these statements about the Waiver of Premium provision are correct, EXCEPT:

Insured must be eligible for Social Security disability for claim to be accepted

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the:

Insuring clause

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

Investor-Originated Life Insurance

A policyowner's right 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

Which statement regarding third-party ownership of a life insurance policy is true?

It is used extensively in estate-planning as well as business circumstances

A sole proprietor may use this plan ONLY if the employees of this business are included.

Keogh Pension Plan

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

Set up a meeting with the applicant and completed and returned to the agent

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

Whole Life insurance is sometimes referred to as " Straight Life". What does the word "Straight" indicate when using this phrase?

The duration of premium payments

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

The employee

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.

J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age, as stated on the application five years ago, was found to be understated by ten years. Which of the following actions will the insurance company take?

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

Which of the following MUST be included in a Medicare Supplement policy's Outline of Coverage?

The policy's limitations and exceptions

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