Final Exam Study Guide

How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated?

45

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

6 months

If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase

A Whole Life Policy with an Other Insured Rider

C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?

ABC is the policyowner, C is the insured, and ABC is the beneficiary

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

Blanket Accident policy

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

What is issued to each employee of an employer health plan?

Certificate

Whose life is covered on a life insurance policy that contains a payor benefit clause?

Child

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

Conditional

Which of these require an offer, acceptance, and consideration?

Contract

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

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

Select the appropriate response 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

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?

Grace Period

All of these are a prerequisite for becoming a licensed agent EXCEPT

Graduate from high school

What would be an accurate definition of "controlled business"?

Insurance business that is written on the agent's own life, property, or interests

In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies?

Naturopaths

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

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 only

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

PPO

Which of these statements concerning an Individual Straight Life annuity is accurate?

Payments are made to an annuitant for life

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

Premiums may increase at time of renewal

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

Prevents delayed claim payments made by the insurer

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

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

Universal Life

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

Void the policy only if it is discovered during the Contestable period and proven to be material

Which parts of a life insurance policy are guaranteed to be true?

Warranty

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT

When the state prohibits this by law

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

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and,

are less costly as compared to individual long term care coverage

An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company.

domestic

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

exclusion

The Financial Services Commission may hold hearings

for any reason deemed necessary

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

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

protect the producer

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

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

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

the possible tax ramifications as a result of the transaction

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

In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the

Florida Replacement Rule

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?

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

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?

Health Maintenance Organization

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

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the

Insuring clause

A life insurance arrangement which circumvents insurable interest statutes is called

Investor-Originated Life Insurance

Who is a mutual insurance company owned by?

Its policyholders

Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

Joint Life

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 policy rider?

Long term care

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

Misrepresentation

In order to establish a Health Reimbursement Arrangement (HRA), it MUST

be established by the employer

An individual covered under a Group Life insurance policy is considered to be a(n)

certificate holder

An example of sliding would be

charging for an additional product without the applicant's consent

Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.

conditional

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

date of delivery

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

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

The Notice of Claims provision requires a policyowner to

notify an insurer of a claim within a specified time

An example of unfair discrimination would be

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

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

only if the child is incapable of employment and chiefly dependent on the policyowner

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

$10,000

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

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

10 days

What is the maximum Social Security Disability benefit amount an insured can receive?

100% of the insured's Primary Insurance Amount (PIA)

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

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

2 years

An insured must notify an insurer of a medical claim within how many days after an accident?

20

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

20

The USA Patriot Act was enacted in

2001

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

Return of premium rider

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

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

Risk classification

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

She does NOT need to provide evidence of insurability

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

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

How long is the typical free look period for Long Term care insurance policies?

30 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

Which of the following is considered to be misrepresentation?

An agent guaranteeing a policy's dividends

All of the following are eligibility requirements for an association group EXCEPT

Contributory plans require a minimum of 25 participants

The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the

Cost of insurance

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income

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

Dismemberment

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

Elimination Period

Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?

Employee funds the HRA entirely

Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?

People that smoke

The underwriting process involves all of these, EXCEPT for

Policy loan

A Medical Information Report (MIB) report may disclose which of the following

Prior use of marjuana

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

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form

What would the Medical Information Bureau (MIB) identify?

Testing positive for marijuana use from a previous screening

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

According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?

The premiums for the handicapped child are not paid

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

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

Twisting

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