Life & Variables Insurance Test (Hard Questions)
T & S are named Cole primary beneficiaries on a 500,000 accidental death and dismemberment policy insuring their father. Their mother was named chondroitin 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
Which of the following statements about noncontributory employee group life insurance is FALSE?
A minimum number of employees is required to participate
Which of the following situations does NOT apply to the Florida Replacement Rule?
An existing policyholder purchases an additional policy from the same insurer
When does a Probationary Period provision become effective in a health insurance contract?
At the policy's inception
Which of the following acts is an agent NOT authorized to do on behalf of an insurer
Authorize claim payments
all of the following are considered to be typical characteristics describing the nature of an insurance contract, except:
Bilateral
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?
Business Overhead Expense
he loses an arm and a farm accident and he's paid $10,000 from his accident or death and dismemberment policy. This benefit is known as the
Capital Sum
The Bureau of Unclaimed Property is overseen by the
Chief Financial Officer
Which if the following consists of an offer, acceptance, and consideration?
Contract
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?
Convertible Term
Which of the following best describes how a policy that uses the accidental bodily injury definition of an accident differs from one that uses the accidental means definition
Less restrictive
A whole life insurance policy owner does not wish to continue making premium payments. Which of the following's enable the policyowner to sell the policy for more than it's cash value?
Life Settlement Contract
Group life insurance policies are generally written as?
annually renewable term
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the
applicant's physician
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a?
installment refund annuity
A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?
irrevocable
With a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?
monthly
In Florida, agents are allowed to engage in rebating if
offered to all insureds in the same actuarial class
The Coordination of Benefits provision:
prevents an insured covered by two health plans from making a profit on a covered loss
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
A long-term car lapse notice must be delivered to both the applicant and
secondary addressee
A noncontributory group term life plan is characterized by:
the entire cost of the plan is paid for by the employer
____ of personal life insurance premiums is usually deductible for federal income tax purposes.
0%
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 policy. Which of these statements made by the producer would be correct?
20-pay life accumulates cash value faster than straight life
how many days must a license notify the Department of financial services of a change in address
30 Days
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
One becomes eligible for Social Security disability benefits after having been disabled for
5 months
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing term
F needs life insurance that provides coverage for only a limited amount of time with the death benefit that changes regularly according to a schedule. What kind of policy is needed?
Decreasing term policy
A 45 year old woman won $100,000 in a scratch off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?
Deferred Fixed Annuity
In Florida, which agency is responsible for the rehabilitation or liquidation of insurers?
Department of Financial Services (DFS)
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
In the event of an illness, a(n) _______ _______ policy would reimburse an insured for loss of earnings.
Disability Income
A characteristic of Preferred Provider Organizations (PPOs) would be:
Discounted fees for the patient
M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
Earned, but unpaid benefits
The federal income tax treatment of employer-provided group medical expense insurance can be accurately described as:
Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure
P owns a 25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 79. What kind of policy does P own?
Endowment at Age 70
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
Entire Contract
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract provision
Term insurance has which of the following characteristics?
Expires at the end of the policy period
An insured is past due on his life insurance premium, but it's still within the grace period. What will the beneficiary receive if the insured dies during the grace period.
Full Face Amount minus any Past Due Premiums
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Fund a buy-sell agreement
which of the following provision specifies how long a policy owner's house coverage will remain in effect if the policy owner does not pay the premium when it is due?
Grace Period
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
Which of these retirement plans can be started by an employee, even if another plan is in existence?
Individual Retirement Account (IRA)
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring clause
What type of policy covers two lives and pays the face amount after the first one dies?
Joint Life Policy
K is an insured under a life insurance policy owned by a third party. Which of these statements is true?
K has no ownership rights
K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement Except
K will forfeit the right to use automatic loan provision upon reinstatement
An insured's inability to perform two or more activities of daily living may trigger which type of life policy rider?
Long term care
Defamation occurs when an agent makes a false statement intended to
Malign another Insurer
Asset Protection can be provided by a long-term care partnership policy if the policy holder qualifies for?
Medicaid
A policy owner is allowed to pay premiums more than once a year under which provision?
Mode of Premium
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?
Modified Premium Life
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage
K owns a whole life policy. If K wants an increasing death benefit to protect against inflation, which dividend option should she choose?
Paid-Up Additional Insurance
What does medicare Parts A & B cover
Part A covers hospitalization; Part B covers doctor's services
K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions with the Department of financial services likely order K to take?
Pay monetary restitution to the client
The provision that defines to whom the insurer will pay benefits to is called?
Payment of Claims
The insured and insurance company will share the cost of covered losses under which health policy feature?
Payment of Claims provision
Which of these do not constitute policy delivery?
Policy issued with a rating
A provision in a life insurance policy that pays the policy owner and amount that does not surpass the guaranteed cash value is called the
Policy loan provision
which of the following statements about a guaranteed renewable health insurance policy is correct?
Premiums normally increase at time of renewal
Which of these Provisions requires proof of insurability after a policy has lasped?
Reinstatement
when a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following
Residual disability
As far as the 10,000 whole life policy in 2003 and pays an annual premium of $100. S dies five years later in 2008 and the insurance pays the beneficiary 10,500. What kind of rather than us including the policy?
Return of Premium Rider
Post-tax dollar contributions are found in
Roth IRA investments
P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?
Sign an enrollment card
which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select a beneficiary?
Split-Dollar Plan
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
The premiums paid by an employer for his employee's group life insurance are usually considered to be:
Tax-deductible to the the employer
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?
The Cost
The investment gains from a Universal life Policy usually goes toward
The death benefit
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
The initial premium was NOT submitted with the application
The common disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true?
This clause provides the payment of proceeds to the insured's estate
what is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
A qualified profit-sharing plan is designed to
allow employees to participate in the profits of the company
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be
Universal Life
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 security dealers before selling?
Variable Life
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
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
what type of insurance offers permanent life coverage with premiums that are payable for life
Whole Life
which of the following statements is correct regarding the tax treatment of a lump sum payment paid to a life insurance policy as primary beneficiary?
all proceeds are income tax free in the year they are received
The guarantee of insurability option provides a long-term care policyowner the ability to
buy additional coverage at a later date
A Health Reimbursement Arrangement MUST be established:
by the employer
Which of the following is an example of an Unfair Trade Practice?
coercion
If an agent combines premiums collected with their personal funds, they have engaged in?
commingling
The incontestable clause allows an insurer to
contest a claim during the contestable period
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider
which of the following unfair trade practices involves an agent who makes malicious statements about another persons financial condition?
defamation
The reason for a business having a Business Overhead Expense Disability Plan is to cover
fixed business expenses
The purpose of the _____ Period clause is to avoid an unintentional lapse of a life insurance policy.
grace
Basic Medical Expense Insurance
has lower benefit limits than Major Medical insurance
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
A term life insurance policy matures
upon the insured's death during the term of the policy
An agent's license can be suspended or revoked by
writing primarily controlled business
