Final Exam - Florida Life and Health

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

"0%". Most noncontributory group health plans require 100% participation by eligible members. Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance.

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

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. In this situation, the beneficiary will receive $50,000 less any outstanding loans and interest. At the time of the insured's death, the policy is beyond the contestable period.

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. In this situation, the insured's maximum out-of-pocket expenses for 2013 would be $1,000.

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

15. Under the Claims Forms provision, an insurer must provide an insured with claim forms within a MAXIMUM of 15 days after receiving notice of a loss.

In Florida, most life insurance policies have a contestability period of

2 years. The maximum contestability period for most life insurance policies is 2 years.

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?

20-pay Life. The shorter the pay period, the faster the cash value growth.

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

20. Florida's Mini COBRA regulation entitles individuals to continuation of coverage for groups with less than 20 full-time employees.

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 Pay Life. Limited pay whole life policies have level premiums that are limited to a certain period.

In Florida, a health policy that is paid on a quarterly basis requires a grace period of

31 days. Florida law requires that the minimum grace period on a health insurance policy paid on a quarterly basis is 31 days.

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days. In IRA's and qualified plans, the time limit for rollover funds is 60 days, or the funds could be subjected to income taxes and a penalty tax.

Which of the following annuities pays benefits based on units rather than specific dollar amounts?

A Variable annuity pays benefits based on units rather than specific dollar amounts.

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured's death.

Which of the following statements about noncontributory employee group life insurance is FALSE?

A minimum number of employees is required to participate". Noncontributory employee group life insurance plans must cover ALL eligible employees at all times

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 desribes this policy is called

A noncancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

A policy that uses the "accidental bodily injury" definition of an accident is less restrictive than the one that uses the "accidental means" definition.

A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as

A representation is a statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract.

Who owns a stock company?

A stock insurance company is owned by its stockholders.

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. An AD&D clause provides benefits for death due to an accident or for the loss of one or more hands, feet, arms, legs, or loss of sight.

Which provision is NOT a requirement in a group life policy?

Accidental. An AD&D provision is not required in a group life policy.

Which of the following Dividend options results in taxable income to the policyowner?

Accumulation at Interest. While policy dividends are not taxable, any interest paid on them is taxable income in the year the interest is credited to the policy.

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?

After the 30-day Elimination period has been satisfied, there will be 4 months of benefit payments.

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Aleatory. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount that the insurer will pay in the event of a loss.

Which of the following areas of state regulation is NOT protected by the savings clause in ERISA?

All of these areas of state regulation are protected by the savings clause in ERISA EXCEPT for commerce.

An assignment of benefits of a Health Policy

An assignment of benefits of a Health Policy transfers payments to someone other than the policyowner.

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. The Legal Actions provision of an Accident & Health policy requires that the insurer settle a claim within 60 days after receipt of Proof of Loss.

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement

J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?

An insurer must notify each certificate holder (employee) when the master policy has expired or is being cancelled. The insurer may take such action through the policyholder (employer).

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicant's initials

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

Applicant's signature on application. A signature on an application is required before a life policy will be issued.

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

At the moment of birth.

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

At the time of application. Florida insurance law requires that if a Medicare Supplement policy is sold, the agent must deliver an Outline of Coverage to the applicant no later than when the application is taken.

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. With life insurance, insurable interest must exist only at the policy inception.

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

Beneficiary will be paid the Death Benefit. The incontestable clause prevents the insurer from canceling the contract even for a material misrepresentation.

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is

Business Overhead Expense. A Business Overhead Expense policy's purpose is to cover certain overhead expenses that continue when the businessowner is disabled.

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. After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable period, in which the insurer may not deny a claim based on information not disclosed at the time of application.

In Florida, which of the following is considered an Unfair Trade Practice?

Coercion

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. A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion.

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. A conditional receipt binds the insurer to coverage as of the date of the application or medical exam, provided the proposed insured is determined to be an acceptable risk.

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration Clause. A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

D's ex wife is still the beneficiary of this policy, even though policy ownership has changed to his current spouse.

Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition?

Defamation. An agent who makes a statement that is maliciously critical of another person's financial condition is guilty of defamation.

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Disability Income would reimburse an insured for loss of earnings if the insured became sick.

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

Dismemberment. Social Security provides for all of these types of benefits EXCEPT dismemberment. (Survivorship, Disability, Retirement)

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Entire Contract. The Entire Contract provision states that the agent does NOT have the authority to change the policy or waive any of its provisions.

Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions?

Entire Contract. The Entire Contract provision states that the producer does NOT have the authority to change the policy or waive any of its provisions.

Which of these statements describe a Modified Endowment Contract (MEC)?

Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract. Policies that do not meet the 7-pay test are considered MEC's and will lose favorable tax treatment. The test is designed to discourage premium schedules that would result in a paid-up policy before the end of a seven year period.

In a life insurance policy, which feature states that the policy will not cover certain risks?

Exclusion. The feature of a life insurance policy stating that the policy will not cover certain risks is called an exclusion.

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

Florida agents licensed less than six years are required to complete 24 hours of continuing education.

What is Florida's definition of Life insurance replacement?

Florida's Replacement Rule defines replacement of Life insurance as a transaction in which a new policy is bought and an old policy is discontinued.

What action should a producer take if the initial premium is NOT submitted with the application?

Forward the application to the insurer without the initial premium. In this situation, the producer should submit the application to the insurance company without the premium. However, if a premium is not paid with the application, the policy will not become valid until the initial premium is collected.

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

Full-time employees after the probationary period. All of these employees may be excluded from a group life plan except for "Full time employees after the probationary period".

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

Fund a buy-sell agreement. Life insurance is purchased to fund a buy-sell agreement in the event of the death of a major shareholder in a business.

An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors?

Gender. An insurance company may NOT reject a prospective insured's life application on the basis of gender.

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 Conversion at regular rates on an attained-age basis without a medical exam is a standard provision for conversion privileges in Group Life policies.

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered

Guaranteed renewable. Guaranteed renewable is best described as a policy that must be renewed and premium rate increases can only be applied if for an entire class of insureds.

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. If the employer has more than 20 employees, the group health plan generally pays first.

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

High-deductible health plan. To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

In this situation, the insurance company will deny the claim, as the policy would have lapsed due to nonpayment by September 15.

An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

In this situation, the maximum allowable IRA contribution is $25,000.

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

In this situation, the type of annuity purchased is best described as deferred.

Which of these actions should a producer take when submitting an insurance application to an insurer?

Inform insurer of relevant information not included on the application.

When must insurable interest exist for a life insurance contract to be valid?

Insurable interest must only exist at the inception of the contract.

Which of the following situations are NOT subject to Florida life insurance laws?

Insurance companies' day-to-day operations

T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?

Insurer will likely treat as a pre-existing condition which may not be covered for one year

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. The insuring clause or provision sets forth the company's basic promise to pay benefits upon the insured's death.

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

Irrevocable. An irrevocable beneficiary designation requires the consent and signature of that named beneficiary before a change of beneficiary occurs.

According to Florida law, which of the following statements accurately describes an admitted mail order insurance company?

It may solicit insurance business by mail without the assistance of a licensed agent

Who is a mutual insurance company owned by?

Its policyholders

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. There is only a 6-month limitation on pre-existing conditions for Medicare Supplements.

An example of an unfair trade practice is

Making a material misrepresentation to an insured is considered to be an unfair trade practice.

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

Marital status. Florida law requires an agent who is recommending the purchase of an annuity to a person to obtain information regarding all of these EXCEPT the person's marital status.

The health insurance program which is administered by each state and funded by both the federal and state governments is called

Medicaid- is funded by both the federal and state governments and administered by individual states.

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement. A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles.

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Misrepresentation

Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured?

Monthly. Claims on an individual disability policies must be paid out at monthly intervals, at minimum.

J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase?

Noncancelable. A Disability Income Policy that only the policyowner can terminate and on which the rates will never increase is a Noncancelable policy.

What type of renewability guarantees premium rates and renewability?

Noncancellable. Noncancellable policies provides guaranteed renewability and premium rates.

Which of the following BEST describes a short-term medical expense policy?

Nonrenewable. A typical short-term medical expense policy is best described as nonrenewable.

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends. Even though premiums are waived because of the disability, the insured will continue to receive dividends just as if the insured were still making the payments themselves.

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to

P. In this situation, benefits will be paid to P because P survived the accident and is the primary beneficiary.

Which statement is TRUE in regards to a policy loan?

Past-due interest on a policy loan is added to the total debt. Interest on a loan which is not paid when due is added to the total debt.

K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?

Pay monetary restitution to the client. The Department of Financial Services may order the agent to pay monetary restitution to the client.

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

Performing insurance transactions without a license

Which of these do NOT constitute policy delivery?

Policy issued with a rating. All of these constitute delivery of the policy EXCEPT issuing a rated policy.

How does group insurance differ from individual insurance?

Premiums are lower

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

Premiums may increase at time of renewal. A Conditionally Renewable Health Insurance policy can increase premiums at time of renewal.

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as

Premiums paid by an employer for an employee's coverage are deductible by the employer as a business expense.ì

Which of these options can an individual use their medical flexible spending account to pay for?

Prescription drugs are an allowable expense when paid for by a medical flexible spending account.

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

Prevents delayed claim payments made by the insurer. The purpose of the Time of Payment of Claims provision is to prevent the insurance company from delaying claim payments.

What is the consideration given by an insurer in the Consideration clause of a life policy?

Promise to pay a death benefit to a named beneficiary. Consideration is given by the insurer by promising to pay a death benefit to a named beneficiary.

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

Proof of Loss. A Proof of Loss statement must be provided to an insurance company to show that a loss actually occurred.

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services.

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable. With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

Risk classification. Underwriting, another term for risk selection, is the process of reviewing the many characteristics that make up the risk profile of an applicant to determine if the applicant is insurable and, if so, at standard or substandard rates.

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. The MIB does not need to be notified that coverage was denied. Submit

Which of the following provisions is NOT required in HMO contracts/certificates?

Seven-day grace period. A grace period of no less than 10 days must be expressly included in an HMO contract.

Which of the following is NOT considered rebating?

Sharing commissions with an agent licensed in the same line of business. Sharing commissions with other licensed agents is not considered rebating.

What is required in the Florida Employee Health Care Access Act?

Small group benefit plans are to be issued on a "guarantee-issue" basis

A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast?

Stock company is owned by its shareholders. Mutual company is owned by its policyholders.

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

An agent selling Medicare Supplement policies must provide every applicant with a(n)

Suitability form. Every agent soliciting Medicare Supplements must provide a suitability form.

What type of life insurance gives the greatest amount of coverage for a limited period of time?

Term life. Level Term or Level-Premium: Level term life insurance provides the insured with coverage for a specified period of time; the term may be one, five, 10, 20 years or longer. The premium is calculated based on the age and health of the insured.

What type of life insurance are credit policies issued as?

Term. The type of insurance used is decreasing term, with the term matched to the length of the loan period (though usually limited to 10 years or less) and the decreasing insurance amount matched to the declining loan balance.

What would the Medical Information Bureau (MIB) identify?

Testing positive for marijuana use from a previous screening. The Medical Information Bureau (MIB) report will identify marijuana use determined by a previous screening.

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

The Primary Insurance Amount (PIA) determines the full amount of retirement benefits for an eligible person.

Which Accident and Health policy provision addresses preexisting conditions?

The Time Limit on Certain Defenses provision limits the period during which an insurer can deny a claim on the basis of a preexisting condition.

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?

The conversion privilege allows an individual to leave the group term plan and continue his or her insurance without providing evidence of insurability.

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?

The conversion provision allows the policysowner to change the policy to a permanent life policy without providing evidence of insurability.

Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?

The grace period is the additional period of time after a premium payment is due that will allow the policy to remain in force in the event of nonpayment.

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?

The insured. In this situation, the insured is liable for the medical bills.

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

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

The insuring clause in a Life insurance contract establishes the basic promise of the insurance company.

A life policy loan in Florida cannot charge a fixed rate of interest higher than

The maximum fixed interest rate permitted on a life policy loan is 10%.

Which statement regarding the Change of Beneficiary provision is true?

The policyowner can change the beneficiary. A policyowner may change a beneficiary at any time. However, consent may be needed by the current beneficiary if designated as irrevocable.

W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?

The proceeds would be reduced based on whatever the premium would have been if purchased at age 59

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

The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments.

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

Third-party ownership of a life insurance policy is widely used in business settings and estate-planning situations.

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 is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies.

J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting. Twisting is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation.

The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond

Under a Medicare Supplement policy, the waiting period for pre-existing conditions may not exceed 6 months.

Which of the following is a characteristic of a variable annuity?

Underlying equity investments. Variable annuities involve underlying equity investments in a separate account.

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

Universal Life is designed to provide flexible premiums and an adjustable death benefit.

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

Variable Universal Life is comprised of monthly mortality charges and self directed investment choices.

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of Premium rider. If a policyowner covered under an accident and health policy wanted to ensure the policy will continue if they ever become totally disabled, they would want to add a waiver of premium rider.

Disability policies do NOT normally pay for disabilities arising from which of the following?

War. Disability policies do NOT normally pay for disabilities arising from an act of war.

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

When replacing an existing life insurance policy, an agent must submit notice to existing insurer and replacing insurer of intentions.

Who does an agent represent during the solicitation of insurance?

When soliciting insurance to a client, an agent represents their insurance company.

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.

A Return of Premium life insurance policy is

Whole life and Increasing term. A Return of Premium life insurance policy is whole life insurance with a death benefit rider of increasing term insurance equal to the amount of premiums paid. If the insured dies within the period of term, the beneficiary will receive face amount plus the value of all paid premiums.

A life insurance policy that provides a policyowner with cash value along with a level face amount is called

Whole life- Whole life provides the insured with a cash value as well as a level face amount.

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 stock life insurance company that issues both participating and nonparticipating policies is doing business on

a mixed plan. When a stock life insurance company issues both participating and nonparticipating policies, the company is doing business on a mixed plan.

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that 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. In this situation, the Misstatement of Age provision in the policy specifies that the insurance proceeds will be adjusted to a reduced amount.

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

applicant's physician. Information received from the Medical Information Bureau about a proposed insured may be released to the proposed insured's physician

In Florida, the underwriting and issuance of a master group health policy requires that all employees

are eligible to participate, regardless of their individual health history. The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate, regardless of individual health history.

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will

continue coverage but exclude the heart condition. If the insured did not cite the condition on the application and the insurer did not exclude the conditon, the pre-existing condition provision still applies. Exclusions are subject to the "time limit on certain defenses" provision, however.

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?

coverage will go into effect the date the agent delivers the policy, collects the initial premium, and obtains a good health statement from the insured.

An example of an unfair claims practice would be

failing to effectuate prompt, fair, and equitable settlements of a claim

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. An insurance company can usually contest the information contained in an accident and health application for two years from the date the insurance company dates the policy.

In Florida, an element of an insurance transaction would be

issuing an insurance contract. The issuance of an insurance contract is considered to be an element of an insurance transaction.

Periodic health claim payments MUST be made at least

monthly. Under an individual health policy, periodic claim payments must be made at least monthly.

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

once each year. A variable annuity policyholder must be informed at least once each year of the accumulated value of the contract during the premium payment period

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

the initial premium. Coverage begins on the day in which the producer collects the initial premium and has the applicant sign the life insurance contract.

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and

the initial premium. The Consideration clause states that the policyowner's consideration consists of a completed application and the first initial premium.

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?

the insurer will rescind the policy, deny the claim, and recover all payments made.

When replacing or exchanging an annuity, the agent must disclose to the annuitant

the possible tax ramifications as a result of the transaction. An agent must disclose the possible tax consequences of replacing or exchanging an existing annuity or life insurance policy.

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. Association Plans must be fully insured by an authorized insurer. The insurer is subject to state regulation.

A term life insurance policy matures

upon the insured's death during the term of the policy. Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.

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. To receive a percentage of the policy face value, an owner of a life policy may sell the policy to a viatical settlement provider.