FL Health Exam 150 Questions
Premature IRA distributions are assessed a penalty tax of: a. 0% b. 10% c. 15% d. 20%
10%
In Florida, a health policy that is paid on a quarterly basis requires a grace period of a. 7 days b. 10 days c. 31 days d. 45 days
31 days
A Major Medical policy typically contains a provision that requires the insurer to pay only part of a loss, while the balance is paid by the insured. This provision is called a. Assignment of Benefits b. Coinsurance c. Indemnity d. Co-deductible
Coinsurance
How are surrender charges deducted in a life policy with a rear-end loaded provision? a. deducted from the death benefit b. deducted when the policy is discontinued c. deducted fro policy's cash value d. deducted when assigned to another policyowner
Deducted when the policy is discontinued.
How can an agent-in-charge have ore then one location? a. Only in the locations are in Florida b. By keeping all locations within a close proximity c. An agent-in-charge can only have one location d. Only if the agent-in-charge is present when insurance activity occurs
Only if the agent-in-charge is present when insurance activity occurs
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term life Whole life Credit life Universal life
Whole life
An individual covered under a Group Life insurance policy is considered to be a(n) a. annuitant b. policyowner c. certificate holder d. contigent
certificate holder
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? a. $1,000,000 b. $500,000 c. $250,000 c. $0
$0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.
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? a. $20,000 b. $14,000 c. $6,000 c. $0
$0 disability income that derive from an individual policy which was paid entirely by the policyowner is not subject to federal income tax.
J has an Accident Death and Dismemberment policy with a principle sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? a. $0 b. $100,000 c. $25,000 d. $50,000
$25,000 The maximum sum payable would be the capital sum, or $25,000
A 15-year mortgage is best protected by what kind of life policy? a. Modified whole life b. 15-year level term c. 15-year decreasing term d. Adjustable life
15-year decreasing term
An insurance company can contest a life insurance contract due to application fraud within a. 60 days b. 1 year c. 2 years d. 3 years
2 years
Employers with less than __employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). 40 30 20 10
20 *Florida's Mini COBRA regulation entitles individuals to continuation of coverage for groups with less than 20 full-time employees.
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? a. Life Paid-up at Age 70 b. 20-pay Life c. Increasing Term to age 65 d. Straight Life
20-pay Life *the shorter the pay period, the faster the cash value growth.
Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? 15 20 25 30
30 *Medicare Supplement policies may be returned for a premium within a MAXIMUM of 30 days
An insurance company must act on an Accident and Health insurance application for reinstatement within ___ days. a. 45 b. 60 c. 75 d. 90
45 days
Which of the following situations does NOT apply to the Florida Replacement Rule? a. An existing policy is reissued with a reduction in cash value b. A new policy is issued while an existing one is surrendered c. An existing policy is subject to extensive borrowing d. An existing policyholder purchases an additional policy from the same insurer
An existing policyholder purchases an additional policy from the same insurer
Which of the following statement BEST describes what the Legal Actions provision of an Accident and Health policy requires? a. An insured must settle a claim within 60 days after Proof of Loss is submitted b. An insured must wait at least 30 days after Proof of Loss has been submitted before a lawsuit can be filed c. An insured must wait at least 60 days after Proof of loss has been submitted before a lawsuit can be file d. An insured must settle a claim within 30 days after Proof of Loss is submitted
An insured must wait at least 60 days after Proof of loss has been submitted before a lawsuit can be file
B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have? a. Comprehensive Major Medical b. Basic Hospital c. Critical illness d. Basic Surgical
Basic Hospital
T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary designation. IF T wishes to change the beneficiary, T must obtain permission from the a. payer b. agent c. beneficiary d. Commissioner of Insurance
Beneficiary
Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? a. Policy summary b. Conditional receipt c. Buyer's guide d. Illustration
Buyer's guide
The Bureau of Unclaimed Property is overseen by the a. Unclaimed Property Commissioner b. Chief Financial Officer c. Governor d. Insurance Department
Chief Financial Officer
What type of employee welfare plans are not subject to ERISA regulations? a. Church plans b. Major medical plans c. Corporate d. Qualified plans
Church plans *Church plans are exempt from ERISA regulations
The policy summary contains specific information on all of the following, EXCEPT: a. provisions b. benefits c. commission d. coverage
Commission
The combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy. a. Decreasing b. Universal c. Variable d. Level
Decreasing
Which two entities regulate variable annuities? a. National Association of Insurance Commissioners; and Department of Financial Services b. Department of Financial Services; and Securities Exchange Commission c. National Association of Insurance and Financial Advisor; and Security Exchange Commission d. Financial Industry Regulatory Authority; and Department of Financial Serives
Department of Financial Services and Security Exchange Commission
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? a. Legal Actions b. Insurance with other insurers c. Entire Contract d. Reinstatement
Entire Contract
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 a. Gramm-Leach-Billey Act b. Florida Solicitation Law c. Existing Coverage Statute d. Florida Replacement Rule
Florida Replacement Rule *The Florida Replacement Rule sets forth the requirements and procedure to be followed by insurance companied and procedures when replacing existing life insurance contracts.
Nonprofit life insurance providers that are covered by special section in the Florida insurance code are called a. Fraternal life insurance organizations b. Domestic life insurance organizations c. Unauthorized insurers d. Mutual life insurers
Fraternal life insurance organizations
Which of the following provisions specified how long a policy owner's health coverage will remain in effect if the policyowner does not pay the premium when it is dues? a. Grace period b. Consideration c. Waiver of Premium d. Reinstatement
Grace Period *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.
All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT a. HRA is entirely funded by the employee b. HRA is entirely funded by the employer c. Reimbursement for eligible medical expenses are allowed d. HRA can be offered with other health plans
HRA is entirely funded by the employee
W is a 390year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n): a. Flexible Premiu Deferred annuity b. Variable annuity c. Immediate annuity d. Straight Life annuity
Immediate annuity
When must insurable interest exist for a life insurance contract to be valid? a. Inception of the contract b. Throughout the entire length of the contract c. When the insured dies d.During the contestable period
Inception of the contract
A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? a. Unemployment b. Banking c. Retirement d. Insurance
Insurance *MEWA provides insurance benefits
In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT: a. Applicant b. Owner c. Payor d. Insured
Insured
Which statement regarding third-party ownership of a life insurance policy is true? a. Beneficiary is required to be irrevocable b. Policy cannot be assigned once issued c. It is illegal in most states d. It is extensively in estate-planning as well as business circumstances
It is extensively in estate-planning as well as business circumstances
Which of these is NOT relevant when determining the amount of personal life insurance needed? a. Existing life insurance coverage b. Local unemployment rate c. Household income d. Household debt
Local unemployment rate
An insurance company would MOST likely pay benefits under an accidental Death and Dismemberment policy for which of the following losses? a. Loss of life due to a heart attack b. Loss of eyesight due to an accident injury c. Loss of the spleen due to an accidental injury d. Partial paralysis due to a stroke
Loss of eyesight due to an accidental injury
The individual Health Insurance policy that offers the broadest protection is a(n) ___ ____ policy a. Surgical Benefit b. Indemnity Medical c. Major Medical d. Hospital Expense
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 come eligible to receive benefits starting on: a. January 1 b. January 15 c. February 1 d. March 1
March 1
Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock? a. Twisting b. Intimidation c. Misrepresentation d. Sliding
Misrepresentation
Which of the following characteristics is associated with a large group disability income policy? a. No waiting periods b. No medical underwriting c. No elimination periods d. No limit of benefits
No medical underwriting
What type of renewability guarantees premium rates and renewability? a. Optionally renewable b. Conditionally renewable c. Noncancellable d. Warrantied renewable
Noncancellable
A life insurance policy owner would like to file a complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the a. Department of Homeland Security b. Office of Financial Regulation c. Securities Exchange Commission d. Office of Insurance Regulation
Office of Financial Regulation
Under Florida law, a variable annuity policy owner must be notified of the accumulated value of the contract a. only when requested by the policyowner b. once each month c. once each year d. twice each year
Once each year
All of the following statement are true regarding a policy's Grace period, EXCEPT: a. Past due premiums are waived b. Policy loans may still be made c. Full coverage continues d. Grace period terms are stated in the policy
Past due premiums are waived
Which statement is TRUE in regards to a policy loan? a. Past-due interest payments not paid after 3 months will void the policy b. Past-due interest on a policy loan is added to the total debt c. Insurance companies can send delinquent interest accounts to collection agency d. Insurance companies can charge an interest rate based on the policy owner's credit report
Past-due interest on a policy loan is added to the total debt
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: a. Policy Loan provision b. Automatic Premium Loan provision c. Accelerated Benefits provision d. Consideration clause
Policy Loan Provision
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle the situation? a. Premium will be fully refunded minus a surrender charge b. Policy was not returned within the free-look period, premium will not be refunded c. Policy was returned within the free-look period, premium will be fully refunded d. Premium will be fully refunded minus a prorated amount for the period of February 7-February 13
Policy was returned within the free-look period, premium will be fully refunded
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? a. beneficiary b. insured c. policyowner d. insurer
Policyowner
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? a. Portion of the premiums paid for by the employer may be a tax deduction b. Portion of the premiums paid for by the employee may be a tax deduction c. Portion of the death proceeds are taxable to the beneficiary d. Portion of the death proceeds are taxable to the estate
Portion of the premiums paid for by the employer may be a tax deduction
Which statement is correct regarding the premium payment schedule for whole life policies? a. Premium are payable throughout the insured's lifetime/coverage lasts until death of the insured b. Premium are payable for a set period/coverage expires at that point c. Premiums are payable until age 65/coverage lasts a lifetime d. A single premium is paid at time of application/coverage lasts until retirement
Premium are payable throughout the insured's lifetime/coverage lasts until death of the insured
A primacy 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? a. Precedes will go to the primary beneficiary's estate b. Probate will decide who receives proceeds c. Proceeds will go to the contingent beneficiary d. Proceeds will go to the insured's estate
Proceeds will go to the contingent beneficiary
An insured covered by Accident 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? a. Proceeds will go to the primary beneficiary's estate b. Probate will decide who receives proceeds c. Proceeds will go to the contingent beneficiary d. Proceeds will go to the insured's estate
Proceeds will go to the contingent beneficiary
T is covered by an Accident 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? a. Request will be accepted only if in writing by the insured b. Change will be made only if premiums are paid current c. Change will be made immediately d. Request of the change will be refused
Request of the change will be refused
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 stoke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take? a. Send the initial premium back to the applicant b. Send a notice to the applicant that the coverage was declined c. Send a notice to the MIB that the applicant was declined d. Send a notice to the agent that the applicant was declined
Send a notice to the MIB that the applicant was declined
Which of the following is NOT considered rebating? a. Sharing commissions with an agent licensed in the same line of business b. Returning premium to a client as an inducement for purchasing a policy c. Giving something of value to an insured in exchange for their business d. Offering special dividends
Sharing commissions with an agent licensed in the same line of business
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? a Single Premium Deferred Annuity with Period Certain b. Flexible Premium with Survivor Annuity c. Flexible Premium with Period Certain d. Single Premium Immediate Joint with Survivor Annuity
Single Premium Immediate Joint with Survivor Annuity
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary? a. The applicant chose an annual premium mode b. The applicant is suspected of making a material misrepresentation c. The initial premium was submitted with the application d. The initial premium was NOT submitted with the application
The initial premium was NOT submitted with the application
According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a family Healthy policy? a. The handicapped child has reached the limiting age b. The premiums for the handicapped child are not paid c. The handicapped child becomes a full-time student d. The family moves outside the provider network
The premiums for the handicapped child are not paid
The Consideration clause of an insurance contract includes: a. the buyers guide b. a summary of the coverage provided c. the named beneficiaries d. the schedule and amount of premium payments
The schedule and amount of premium payments
Which of the following statement is true about most Blue Cross/Blue Shield organizations? a. They are the same as private insurance companies b. They are federally sponsored c. They are nonprofit organizations d. They are owned by hospitals and physicians
They are nonprofit organizations
How does a typical Variable Life Policy investment account grow? a. Tied to price of gold b. Throughout mutual funds, stocks, bonds c. based on return from insure's general account d. Tied to Treasury Bills
Through mutual funds, stocks, bonds
A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss? Five Ten Twenty Thirty
Twenty
Which of the following is considered an accurate statement of an unfair trade practice? a. Coercion involves making a malicious statement about the financial condition of an insurance company b. Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company c. No more than 25% of an agent's insurance sales are allowed to come from controlled business d. Rebating occurs when someone intentionally deceives another with the intent to gain financially
Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company
A Variable Annuity has which of the following characteristics? a. Underlying equity investments b. Only available with Single Premium c. Offers a fixed interest rate d. Does not require an insurance license
Underlying equity investments
What type of life insurance incorporates flexible premiums and an adjustable death benefit? a. Endowment Policy b. Modified Whole Life c. Decreasing Term d. Universal Life
Universal Life
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n) a. joint life policy b. endowment c. Variable Universal Life policy d. Universal Life Policy
Variable Universal Life policy
S owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own? Endowment Variable Term Life Variable Whole Life Joint Life
Variable Whole Life
When must insurable interest by present in order for a life insurance policy to be valid? a. When the insured dies b. Within the incontestability period c. When the application is made d. Before the insured dies
When the application is made
Y purchased $100,000 worth of permanent protection on himself and $50,000 with of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase? a. Endowment with extended Term b. Endowment with a Payor Benefit c. Whole Live policy with an other Insured Rider d. Family Income policy
Whole Life policy with an Other Insured Rider
A life insurance policy that provides a policyowner with cash value along with a level face amount is called a. Whole life b. Level term c. Credit life d. Ordinary life
Whole life
What are adjustable rates for life policy loans in Florida based on? a. Moody's corporate bond index b. 90-day treasury bill rate c. National average of other states' variable rate d. Prime lending rate
a. Moody's corporate bond index
A qualified profit-sharing plan is designed to: a. allow key employees to participate in the profits of the company b. allow employees to participate in the profits of the company c. keep key employee from leaving the company d. allow employees to elect company officers
allow employees to participate in the profits of the company
When is it acceptable to share commissions with another agent? a. as long as both agents are license for the same lines of insurance b. as long as both agents work for the same insurance company c. as long as both agents are licensed in the same satate d. it is never acceptable
as long as both agents are license for the same lines of insurance
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? a. Administrative-services-only plan b. Commercial insurer c. Preferred provider organization D. Health maintenance organization
b. Commercial insurer
Which of the following MUST be included in a Medicare Supplement policy's Outline of Coverage? a. The policy's projection of future costs b. The policy's limitations and exceptions c. The agents contact information d. A copy of the MIB report
b. The policy's limitations and exceptions
A Health Reimbursement Arrangement MUST be established: a. with employee funding b. with other employer-sponsored benefit plans c. by the employer d. only during specific open enrollment periods
by the employer *HRAs are employer-established benefit plans that must be funded by the employer
When does a life insurance contract become effective if the initial premium is not collected during the application process? a. After all medical and personal information has been evaluated b. When insurer receives initial premium from the producer c. When producer delivers policy and collects initial premium d. After application has been approved by the underwriters
c. When producer delivers policy and collects initial premium
Omitting information that affects the issuance or the rate of an insurance contract is called: a. twisting b. coercion c. sliding d. concealment
concealment
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: a. continue group health benefits b. take out an individual health policy c. transfer their coverage to another insurer d. convert to disability coverage
continue group health benefits
D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST a. correct the information with no further action from prospect necessary b. receive a verbal acknowledgment from prospect of the mistake made c. request that the insurer issue the policy with rating d. correct the information and have the prospect initial the change
correct the information and have the prospect initial the change
An agent takes an individual Disability income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to: a. assure the policy only when the initial premium check has cleared b. determine if the applicant is insurable by investigating family health history c. issue the policy on a standard basis d. determine if the applicant is an acceptable risk by completing standard underwriting procedures
determine if the applicant is an acceptable risk by completing standard underwriting procedures
A Universal Life policy is sometimes referred to as an unbundles Life Policy because the owner can see the interest earned, cost of insurance, and the a. inherent risk b. commission rate c. inflation factor d. expense charge
expense charge
An example of an unfair claims practice would be a. requesting a third-party arbitrator to resolve a disagreement b. failing to effectaute prompt, fair, and equitable settlements of a claim c. paying a claim promptly after receiving proof loss d. requiring the insured to give a statement under oath
failing to effectaute prompt, fair, and equitable settlements of a claim
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: a. policy is delivered b. free-look period has expired c. insurance company issues policy d. initial premium is collected
free-look period has expired
The Insurance Guaranty Fund Association is a. an entity that assists in underwriting large insurance policies b. funded by admitted insurance companies through assessments c. funded by the state government d. administered by the Federal government
funded by admitted insurance companies through assessments
Insurers/agents must, in Florida, offer and issue all small employer health plans on a ____ basis Fair nonrenewal discounted guaranteed-issue
guaranteed-issue
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds we're rolled over? a. Only income taxes on $30,000 b. Only income taxes on $24,000 c. Income taxes plus a 10% penalty tax on $30,000 Income taxes plus a 10% penalty tax on $24,000
income taxes plus a 10% penalty tax on $30,000
A life insurance policy would be considered a wagering contract WITHOUT: a. insurable interest b. premium payment c. agent solicitation d. constructive delivery
insurable interest
Who makes the legally enforceable promises in a unilateral insurance policy? a. Beneficiary b. Insurance company c. Insured d. Applicant
insurance company
Pre-hospitalization authorization is considered an example of: a. managed care b. PPO care c. Medicaid d. Major Medical insurance
managed care *Pre-hospitalization authorization is the insurer's approval of an insured entering a hospital. Many health policies require this as part of an effort to manage costs.
According to Florida law, group life insurance conversion privileges must NOT a. allow the converted policy to exceed 75% of the original group life amount b. allow a tie period to convert group life coverage to an individual life policy c. require a rate increase d. require evidence of insurability
require evidence of insurability
What is the Suicide provision designed to do? a. decline an applicant who is contemplating suicide b. safeguard the insurer from an applicant who is contemplating suicide c. protect the insurer the option to pay a death benefit in the event of suicide
safeguard the insurer from an applicant who is contemplating suicide
An immediate annuity consists of a: a. variable premium b. flexible premium c. single premium d. deferred premium
single premium
The reason for backdating a policy is a. to avoid being considered a substandard risk due to a recent cancer diagnosis b. to obtain a premium rate based on an earlier age c. to decrease the face amount d. to decrease the Contestable period
to obtain a premium rate based on an earlier age
An example of an unfair claims settlement practice is a. making it mandatory that proof of loss be provided for each claim b. requiring a time limit for submitting a claim c. paying a claim in a timely matter d. turning down a claim without providing the basis of denial
turning down a claim without providing the basis of denial
A life insurance policy owner may sell their policy to a(n) ____ in order to receive a percentage of the policy's face value. a. vatical settlement provider b. broker c. insurer d. Viator agent
viatica settlement provider
