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life insurance

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A 15-year mortgage is best protected by what kind of life policy? Modified whole life 15-year level term 15-year decreasing term Adjustable life

15-year decreasing term A 15-year mortgage is best protected by a 15-year decreasing term policy.

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 Term to Age 70 Universal Life Adjustable Life

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

One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months

5 months Disability income benefits are paid to the covered worker in the amount of the PIA after a 5-month waiting period.

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

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

Which of these Nonforfeiture Options continue a build-up of cash value?

A Reduced Paid-Up option would provide continuing cash value build-up.

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

A Straight Life annuity pays for the life of the annuitant.

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

A payor benefit clause is generally added to a life policy that insures the life of a juvenile. It provides continuance of insurance coverage in the event of the death or total disability of the individual responsible for the payment of premiums.

Whose life is covered on a life insurance policy that contains a payor benefit clause? Parent Beneficiary Child Spouse

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

A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.

The underwriting process involves all of these EXCEPT for Credit report Policy loan Risk classification Application

A policy loan is not a factor in the underwriting process.

Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?

Agents can help prospective insureds understand and purchase the most appropriate product by delivering a buyer's guide.

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

Agents do not authorize payment of claims.

Which of the following acts is an agent NOT authorized to do on behalf of an insurer? Accept premiums from policyowners Complete insurance applications Authorize claim payments Ask health related questions

Agents do not authorize payment of claims.

What are adjustable rates for life policy loans in Florida based on?

Adjustable rates for life insurance policy loans in Florida are based on Moody's corporate bond index.

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.

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 Claim will be denied and coverage will remain in force Claim will be denied and coverage will be cancelled Claim will be denied, the coverage cancelled, and all premiums paid will be refunded

The act of an insurance company publishing misleading information about its policy's provisions is called

An insurance company that publishes misleading information about insurance coverage may be found guilty of false advertising.

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

An insurer may void the policy only if the misrepresentation is discovered during the Contestable period and proven to be material.

Basic Medical Expense insurance

Basic Medical Expense insurance typically has lower benefit limits than Major Medical insurance.

The benefits under a Disability Buy-Out policy are

Benefits payable under a Disability Buy-Out policy are paid to the company or another shareholder.

When must insurable interest be present in order for a life insurance policy to be valid? When the insured dies Within the incontestability period At the time of application Before the insured dies

Insurable interest must exist when the application is made for it to be valid.

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

Insurable interest must only exist at the inception of the 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 provides temporary coverage that may be changed to permanent coverage without evidence of insurability.

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.

Which of these factors do NOT play a role in the underwriting of a life insurance policy? Avocations Credit status Marital status Occupation

Marital status does not affect the underwriting of a life insurance policy.

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

Medicare Supplement policies may be returned for a premium refund within a MAXIMUM of 30 days.

Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? 15 20 25 30

Medicare Supplement policies may be returned for a premium refund within a MAXIMUM of 30 days.

Which statement about a whole life policy is correct?

One feature of whole life policies is that the policyowner may borrow against the cash value.

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

One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.

Which of these is considered a mandatory provision?

Payment of Claims is considered a mandatory provision and directs where the claim benefits will go. The others are considered optional provisions.

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? Payor provision Accelerated Benefits provision Assignment provision Waiver of Premium provision

Payor provision". A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.

Which of these is NOT a legal entity for selling life insurance in Florida?

Risk management advisers do not qualify as a legal entity for selling life insurance.

Which mode of payment is NOT used by health insurance policies? Monthly premium Annual premium Single premium Semi-annual premium

Single premium is not used when paying for health insurance policies.

Which of the following is considered to be misrepresentation?

Stating that dividends are guaranteed is considered a misrepresentation.

Who owns a stock company?

Stockholders

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

The correct answer is "24". Florida agents licensed less than six years are required to complete 24 hours of continuing education.

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years. 8 20 24 36

The correct answer is "24". Florida agents licensed less than six years are required to complete 24 hours of continuing education.

Within how many days must a licensee notify the Department of Financial Services of a change in address?

The correct answer is "30". All licensees are required to notify the Department of Financial Services of a change in address within 30 days.

Within how many days must a licensee notify the Department of Financial Services of a change in address? 30 60 90 120

The correct answer is "30". All licensees are required to notify the Department of Financial Services of a change in address within 30 days.

In Florida, a health policy that is paid on a quarterly basis requires a grace period of 7 days 10 days 31 days 45 days

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

Which of the following situations does a Critical Illness plan cover? Asthma Leukemia Alcohol rehabilitation Severe car accident

The correct answer is "Leukemia". Leukemia is a type of cancer and would be covered under a Critical Illness plan.

An example of an unfair claims practice would be

The correct answer is "failing to effectuate prompt, fair, and equitable settlements of a claim". Failing to effectuate prompt, fair, and equitable settlements of claims is considered to be an unfair claims practice.

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.

Who does an agent represent during the solicitation of insurance? The State of Florida The Department of Financial Services The insurance company The client

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

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have

Which of the following services is NOT covered under a hospitalization expense policy? daily room and board surgeon's fees intensive care miscellaneous expenses

While an insured is hospitalized, the hospitalization expense coverage includes benefits for the cost of all of these services EXCEPT a surgeon's fees.

Which of the following activities will NOT result in the suspension of an agent's license?

Working for a foreign insurance company does not result in the revocation or suspension of an agent's license.

The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called

reserves

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

Twisting is a misrepresentation made by an agent in order to induce a policyholder to lapse a policy and switch insurance companies. It's considered an unfair trade practice.

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? 36 18 15 6

Under COBRA, if an employee dies, the dependents may continue their group health coverage for up to 36 months.

A characteristic of Preferred Provider Organizations (PPOs) would be: Discounted fees for the patient Not allowed to see out-of-network physicians Physicians are paid on a capitation basis A primary care physician is required

Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.

According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? The handicapped child has reached the limiting age The premiums for the handicapped child are not paid The handicapped child becomes a full-time student The family moves outside the provider network

Under a Family Health policy issued in Florida, a handicapped child must continue to be covered in all of these situations EXCEPT when premium payments cease to be paid.

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.

The amount of coverage on a group credit life policy is limited to half of the insured's total loan value the insured's total loan value 75% of the insured's total loan value $25,000

the insured's total loan value With a group credit life policy, the amount of insurance on the life of a debtor is limited to the total amount of the insured's loan.

The amount of coverage on a group credit life policy is limited to

the insured's total loan value". With a group credit life policy, the amount of insurance on the life of a debtor is limited to the total amount of the insured's loan.

An agent is an individual that represents whom?

the insurer An agent is an individual who is authorized by an insurer to sell goods and services on its behalf. An agent is also the insurer's representative in dealing with the public.

The Consideration clause of an insurance contract includes

the schedule and amount of premium payments

A 15-year mortgage is best protected by what kind of life policy?

"15-year decreasing term". A 15-year mortgage is best protected by a 15-year decreasing term policy.

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

"Controlled business" is insurance business that is written on the agent's own life, property, or interests.

What action should a producer take if the initial premium is NOT submitted with the application? Keep the application until premium is paid Forward the application to the insurer after giving the applicant a binding receipt Forward the application to the insurer without the initial premium Forward the application to the insurer after giving the applicant a conditional receipt

"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 these actions should a producer take when submitting an insurance application to an insurer? Issue a binding receipt to applicant if no initial premium is submitted Disclose to the applicant the amount of commissions to be earned on this transaction Inform insurer of relevant information not included on the application Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer

"Inform insurer of relevant information not included on the application". One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.

What is being delivered during a policy delivery? A binding receipt to the proposed insured Insurance contract to the proposed insured Application and initial premium to the insurer Policy summary sheet and disclosure material to the proposed insured

"Insurance contract to the proposed insured". Policy delivery refers to the delivery of the insurance contract to the applicant.

Which statement regarding third-party ownership of a life insurance policy is true? Beneficiary is required to be irrevocable Policy cannot be assigned once issued It is illegal in most states It is used extensively in estate-planning as well as business circumstances

"It is used extensively in estate-planning as well as business circumstances". Third-party ownership of a life insurance policy is widely used in business settings and estate-planning situations.

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? Nonforfeiture Entire Contract Insuring Clause Owner's Rights

"Owner's Rights" states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy.

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? Portion of the premiums paid for by the employer may be a tax deduction Portion of the premiums paid for by the employee may be a tax deduction Portion of the death proceeds are taxable to the beneficiary Portion of the death proceeds are taxable to the estate

"Portion of the premiums paid for by the employer may be a tax deduction". In a contributory plan, the employer may file a tax deduction for its share of the premium costs.

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

"Term life". Term insurance would provide the greatest amount of protection for a limited period of time.

Which statement regarding the Change of Beneficiary provision is true? The beneficiary can only be changed with the consent of the insurer The policyowner can change the beneficiary The insured can change the beneficiary A beneficiary change is subject to underwriting procedures

"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.

Before a life insurance policy is issued, which of these components of the contract is required? Applicant's signature on application Beneficiary's signature A conditional receipt Attending Physician Statement (APS)

"Upon completion of the application". An applicant for life insurance must be informed of their rights upon completion of the application.

A Limited-Pay Life policy has

"premium payments limited to a specified number of years". In a Limited-Pay Life policy, premium payments are limited to a specified number of years.

A noncontributory group term life plan is characterized by the entire cost of the plan is paid for by the employer the entire cost of the plan is paid for by the employee the cost of the plan is shared by both employer and employee both employer and employee must provide evidence of insurability

"the entire cost of the plan is paid for by the employer". When an employer provides noncontributory group term life insurance, the employer pays the entire cost of the plan.

Which of these are NOT an example of a Nonforfeiture option?

. All of these are examples of Nonforfeiture options EXCEPT Life Income.

G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? 5 years 10 years 15 years 20 years

10 years In this situation, the family would receive an income from the policy for 10 years. Family Income Policies pay an income beginning at the insured's death and continues for a period specified from the date of policy issue.

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate

20-Pay Life accumulates cash value faster than Straight Life

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

A Business Disability Buy-Sell policy is designed to assist in the sale of a business when one of the owners becomes disabled.

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 Disability Income Key Employee Life Contributory

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

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Premiums may increase at time of renewal Premiums may increase at any time Policy may be renewed at the discretion of the insured Policy may be amended by insurer at any time

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

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? Family Lump Sum Policy Family Maintenance Policy Family Survivor Policy Family Income Policy

A Family Maintenance Policy pays a monthly income from the date of death of the insured to the end of the preselected period. The payment of the face amount of the policy is payable at the end of such preselected period.

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

A Guaranteed Insurability rider allows the insured to periodically increase the amount of benefits payable under the policy.

Which of the following will a Long Term Care plan typically provide benefits for?

A Long Term Care policy will typically pay for home health care.

Which of the following will a Long Term Care plan typically provide benefits for? disability income death unemployment home health care

A Long Term Care policy will typically pay for home health care.

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? Unemployment Banking Retirement Insurance

A Multiple Employer Welfare Arrangement (MEWA) provides insurance benefits.

Which of these statements concerning an Individual Straight Life annuity is accurate? Life expectancy of the annuitant is not a factor The payments are received tax-free Only available to employees of nonprofit charitable, educational, and religious organizations Payments are made to an annuitant for life

A Straight Life annuity pays for the life of the annuitant.

What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit

A Term rider Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

How does a typical Variable Life Policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to Treasury Bills

A Variable Life Policy has investment values based instruments such as mutual funds, stocks, and bonds.

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

Which type of contract liquidates an estate through recurrent payments?

A contract that provides for the liquidation of all or part of an estate through periodic payments is known as an annuity.

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 Defamation Rebating Misrepresentation

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.

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

A decreasing term policy has a death benefit that adjusts periodically and is written for a specific period of time.

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

A disability buy-sell plan allows the remaining partners to buy out the interest of the disabled business partner.

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

A domestic insurance company is domiciled and incorporated under the laws of the state in which its home office is located.

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

A domestic insurance company is domiciled and incorporated under the laws of the state in which its home office is located.

Which of these is an element of a Variable Life policy? A fixed, level premium Insurer assumes the investment risk No investment risk to the policyowner Rate of returns are guaranteed

A fixed, level premium Variable Whole Life policies have a fixed, level premium.

A guaranteed insurability rider guarantees the insured the option of purchasing additional amounts of disability income coverage at predetermined times without requiring the insured to provide evidence of insurability.

A level premium indicates the premium is fixed for a period stated in the contract, then becomes variable the premium can only be changed with the consent of the insurer the premium stays level until the policy's renewal date the premium is fixed for the entire duration of the contract

A level premium means that the premium remains fixed through the life of a policy.

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

A life insurance company may make policy rate discriminations against people that smoke.

Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against? People of different religions People that are married People that smoke People of different races

A life insurance company may make policy rate discriminations against people that smoke.

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Modified Whole Life Variable Life Universal Life Adjustable Life

A life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable Life.

Who is a mutual insurance company owned by?

A mutual insurance company is owned by its policyholders.

Who is a mutual insurance company owned by? Its board of directors Its policyholders The State of Florida Its employees

A mutual insurance company is owned by its policyholders.

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?

A new employee must sign an enrollment card during the open enrollment period.

How many hours of continuing education must a newly licensed agent complete every two years? 4 8 16 24

A newly licensed agent must complete 24 hours of continuing education every 2 years.

What type of life policy covers 2 lives and pays the face amount after the first one dies?

A policy that promises to pay the face amount on the death of first of 2 lives covered by the policy is called a Joint Life Policy.

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

A policy that provides an income for a specific period starting at the death of the insured is a Family Maintenance Policy.

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Revocable assignment Beneficiary change Irrevocable assignment Collateral assignment

A policyowner using the Life Insurance policy as collateral for a bank loan normally would make a collateral assignment.

Which of these types of coverage is best described as a short term medical policy?

A short term medical policy is best described as interim coverage.

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

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

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

A stock company is owned by its shareholders and a mutual company is owned by its policyholders.

A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast? Stock company is regulated by the state where it's incorporated. Mutual company is regulated by its policyholders. Stock company is considered an authorized insurer. Mutual company is considered an unauthorized insurer. Stock company is owned by its policyholders. Mutual company is owned by its shareholders. Stock company is owned by its shareholders. Mutual company is owned by its policyholders.

A stock company is owned by its shareholders and a mutual company is owned by its policyholders.

A stock insurance company is owned exclusively by its policyowners guarantees dividends to its shareholders elects a governing body by its policyowners is owned exclusively by its shareholders

A stock insurance company is best defined as an incorporated company that has its capital divided into shares and is owned exclusively by its shareholders.

Who owns a stock company? Its policyowners Its stockholders Its board of directors Its CEO

A stock insurance company is owned by its stockholders.

****Which of the following statements about the classification of applicants is INCORRECT? Substandard applicants are never declined by underwriters Substandard applicants are occasionally declined by underwriters Preferred risk applicants typically have better premium rates than standard risk applicants An applicant can be classified as substandard risk because of a hazardous job

A substandard risk is below the insurer's average risk guidelines. An individual can be rated substandard for a number of reasons and can even be rejected outright. The correct answer is "Substandard applicants are never declined by underwriters". This is false. An individual can be rated substandard for a number of reasons and can even be rejected outright.

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

A table indicating the policy's projected future costs is not required in an Outline of Coverage.

Which of the following is NOT required in the Outline of Coverage for a health insurance policy? Explanation of the policy's benefits Listing of the policy's exclusions and limitations Projection of the policy's future costs Explanation of the policy's renewal and cancellation provisions

A table indicating the policy's projected future costs is not required in an Outline of Coverage.

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

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

Which of these is considered a statement that is assured to be true in every respect? Estoppel Warranty Guarantee Representation

A warranty is a statement that is considered guaranteed to be true.

In Florida, deceptive advertising is considered to be a form of coercion a form of sliding a form of rebating a form of misrepresentation

According to Florida law, deceptive advertising is considered a form of misrepresentation.

In Florida, deceptive advertising is considered to be

According to Florida law, deceptive advertising is considered a form of misrepresentation.

Which of the following are NOT managed care organizations? Point-of-Service plan (POS) Preferred Provider Organization (PPO) Medical Information Bureau (MIB) Health Maintenance Organization (HMO)

All of the following entities are managed care organizations EXCEPT MIB (Medical Information Bureau).

Who is NOT required to sign a life insurance application?

All of the following individuals must sign a life insurance application EXCEPT the beneficiary.

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n) Term rider Accidental Death and Dismemberment rider (AD&D) Family rider Annuity

An Accidental Death and Dismemberment (AD&D) rider provides an additional death benefit for a limited period of time at the lowest possible cost.

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.

Which of the following is NOT an unfair claim settlement practice? Failing to acknowledge and act promptly with respect to an insurance claim Compelling an insured to initiate a lawsuit by offering less on an insurance claim Failing to accept or deny a claim within reasonable time after proof of loss is submitted Needing written documentation of claim details

All of these are unfair claim settlement practices except "Needing written documentation of claim details".

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.

Which of the following employees may NOT be excluded from a group life plan? Part-time employees Seasonal workers Full-time employees before the probationary period 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".

A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for hospital charges physician fees experimental and investigative services nursing services

All of these services are typically covered under a comprehensive major medical health insurance policy EXCEPT for "experimental and investigative services".

Which of these retirement plans can be started by an employee, even if another plan is in existence? Individual Retirement Account (IRA) Defined plan Keogh plan 403(b) plan

An IRA may be established by an employee, regardless of any other retirement plan.

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

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

Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client. $25 $50 $75 $100

An agent is allowed to give advertising gifts to a prospective customer, provided they do not exceed $25.

An agent is an individual that represents whom?

An agent is an individual who is authorized by an insurer to sell goods and services on its behalf. An agent is also the insurer's representative in dealing with the public.

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

An agent must disclose the possible tax consequences of replacing or exchanging an existing annuity or life insurance policy.

When replacing or exchanging an annuity, the agent must disclose to the annuitant the commissions to be paid as a result of the transaction the possible tax ramifications as a result of the transaction the insurer's A.M. Best rating proof of appointment by the agent

An agent must disclose the possible tax consequences of replacing or exchanging an existing annuity or life insurance policy.

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

An agent who intentionally makes an untrue or incomplete statement during the course of an insurance transaction may be guilty of misrepresentation.

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

An agent who intentionally makes an untrue or incomplete statement during the course of an insurance transaction may be guilty of misrepresentation.

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

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

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? Coercion Fraud Misrepresentation Sliding

An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation.

If an agent would like to sell Variable annuities, which state examination must the agent pass? Variable annuities Accident and Health insurance Life insurance Life and Variable contracts

An agent who wants to sell Variable annuities must be licensed by the state which includes examinations in Life and Variable contracts.

An agent's license can be suspended or revoked by

An agent's license can be suspended or revoked by writing primarily controlled business.

An agent's license can be suspended or revoked by writing primarily controlled business not meeting annual sales quota replacing an existing insurance policy with a new one issuing a binding receipt

An agent's license can be suspended or revoked by writing primarily controlled business.

An immediate annuity consists of a

An immediate annuity has a single premium.

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Before the appointment is scheduled Upon completion of the application At the policy's delivery When the insurer receives the MIB report

An applicant for life insurance must be informed of their rights upon completion of the application.

Why is an applicant's signature required on a life insurance application? To attest that the statements on the application are warranties To attest that the statements on the application are accurate to the best of the applicant's knowledge To give Power of Attorney to the producer if needed To attest that all statements on the application are guaranteed to be true

An applicant's signature represents that the statements on the application are true to the best of the applicant's knowledge.

Under a trustee group life policy, who would be eligible for a certificate of coverage? Corporation Employee Employer Labor union

An employee would be a certificate holder under a trustee group life policy.

Which of these would be considered a Limited-Pay Life policy?

An example of a Limited-Pay Life policy is a Life Paid-Up at Age 70.

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.

What is considered to be a characteristic of an immediate annuity? Benefit payments start within one payment period of purchase Benefit payments start within 5 years of initial purchase Normally tied to a specific equity or stock index Periodical contributions begin immediately

An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.

How does an indexed annuity differ from a fixed annuity?

An indexed annuity differs from a fixed annuity in that indexed annuity owners receive credited interest tied to the fluctuations of the linked index

How does an indexed annuity differ from a fixed annuity? Fixed annuity owners receive credited interest tied to the fluctuations of the linked index Indexed annuity owners receive credited interest tied to the fluctuations of the linked index Fixed annuity owners have a separate investment account Indexed annuity owners receive annual dividends

An indexed annuity differs from a fixed annuity in that indexed annuity owners receive credited interest tied to the fluctuations of the linked index.

In Florida, an insurer domiciled and incorporated in this state is called a(n)

An insurance company domiciled and incorporated under the laws of Florida is a domestic company in Florida.

An example of false advertising would be Paid testimonials from celebrity endorsements An insurer exaggerating its dividends in a magazine advertisement An agent spending more than $25 on marketing gifts for a client An insurer advertising in an insurance trade journal

An insurance company may be judged guilty of false advertising if it exaggerates its dividends in a magazine advertisement.

The act of an insurance company publishing misleading information about its policy's provisions is called coercion false advertising twisting intimidation

An insurance company that publishes misleading information about insurance coverage may be found guilty of false advertising.

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? Void the policy if found during the Contestable period Void the policy, no matter when it is discovered Void the policy at any time only if it is found to be material Void the policy only if it is discovered during the Contestable period and proven to be material

An insurer may void the policy only if the misrepresentation is discovered during the Contestable period and proven to be material.

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).

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? J must cover the group with another policy at cancellation All of the employees must be notified of the cancellation either by the insurance company or through J The insurance company must replace the existing policy with one to J's liking No obligation is required from either the insurance company nor J

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).

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 they conduct business in Florida they provide a service to their members they require a certain level of member participation

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

Insurable interest must exist at what time?

At the time of application It is important to note that insurable interests must exist upon issuance of a life or health insurance contract. It does not have to continue throughout the duration of the policy nor does it have to exist at the time of claim.

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? Proceeds will be paid to P's estate Proceeds will be divided equally between K's and P's estate Proceeds will be paid to K's estate The courts will decide who will receive death benefits

Because the sole beneficiary outlived the insured, the proceeds will be payable to the estate of the deceased beneficiary.

A license may be denied, suspended, or revoked if the licensee

Being found guilty of misrepresentation may result in the Department of Financial Services denying, suspending, revoking, or not renewing any license.

A license may be denied, suspended, or revoked if the licensee engages in replacement of an existing policy is found guilty of misrepresentation does not meet a sales quota files for bankruptcy

Being found guilty of misrepresentation may result in the Department of Financial Services denying, suspending, revoking, or not renewing any license.

A life insurance application must be signed by all of these EXCEPT the policyowner the agent the insured (if an adult) beneficiary

Beneficiaries are not required to sign an insurance application.

A Business Overhead Expense policy

Business Overhead Expense insurance covers eligible expenses for utilities, rent, and staff.

A Business Overhead Expense policy covers any loss of income by the business owner covers business expenses such as rent and utilities covers employee wages only reimburses the company for any reduction in sales due to the owner's disability

Business Overhead Expense insurance covers eligible expenses for utilities, rent, and staff.

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

Cancer insurance typically covers all of these medical expenses except for arthritis.

Which of the following medical expenses does Cancer insurance NOT cover? Chemotherapy Radiation treatment Physician visit Arthritis

Cancer insurance typically covers all of these medical expenses except for arthritis.

Which of these is NOT considered to be a right given to a policyowner?

Changing contract provisions is not a policyowner right.

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

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

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?

Commercial health insurance companies use the reimbursement approach, which allows policyowners to seek medical treatment then submit the charges to the insurer for reimbursement.

Which of the following reimburses its insureds for covered medical expenses?

Commercial insurance companies function on the reimbursement approach. Policyowners obtain medical treatment from whatever source they feel is most appropriate and submit their charges to their insurer for reimbursement.

Which of the following reimburses its insureds for covered medical expenses? Health maintenance organizations Preferred provider organizations Commercial insurers Service providers

Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation

Contract Offer, acceptance, and consideration are all elements of a contract.

Insurance policies offered on a "take it or leave it" basis are considered what?

Contracts of Adhesion

What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? Endowment policy Limited-Pay Whole life Convertible Term Decreasing Term

Convertible Term provides temporary coverage that may be changed to permanent coverage without evidence of insurability.

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

Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.

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 for up to an additional 10 years only only if physically disabled only if mentally disabled

Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? Modified whole life 20-year paid up policy Endowment Decreasing term

Decreasing term A decreasing term policy has a death benefit that adjusts periodically and is written for a specific period of time.

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy A life insurance policy written for a specified period of time with a death benefit that changes regularly according to a schedule is a decreasing term policy.

Additional coverage can be added to a Whole Life policy by adding a(n) payor rider accelerated benefit rider decreasing term rider automatic premium loan rider

Decreasing term rider A decreasing term rider can add additional coverage to a whole life policy.

Which of the following statements BEST describes dental care indemnity coverage?

Dental care indemnity plans reimburse services only after the carrier receives the bill.

An example of an unfair claims settlement practice is

Denying an insured's claim without indicating the basis of denial under the policy is considered an unfair claim settlement practice.

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.

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

Dread Disease

What do Dread Disease policies cover? A specific disease or illness All diseases or illnesses Only terminal illnesses Only heart-related diseases

Dread Disease policies cover only a single disease or illness.

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

Each person insured under a Group Life insurance policy is a certificate holder.

An individual covered under a Group Life insurance policy is considered to be a(n) annuitant policyowner certificate holder contingent

Each person insured under a Group Life insurance policy is a certificate holder.

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

Employees covered by an employer health plan are issued an insurance certificate.

What type of group plan involves employees sharing the cost? contributory plan non-contributory plan qualified plan non-qualified plan

Employees share the cost of group insurance with an employer in a contributory plan.

How long does the coverage normally remain on a limited-pay life policy? age 65 age 100 when premium payments stop at the discretion of the insurer

Even though the premium payments are limited to a certain period, the insurance protection extends until the insured's death, or to age 100.

An agent selling Medicare Supplement policies must provide every applicant with a(n) MIB form COBRA form Suitability form Signed consent form

Every agent soliciting Medicare Supplements must provide a suitability form.

Which of these statements describe a Modified Endowment Contract (MEC)? Falls below the minimum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract The 7-pay test is used to determine the minimum death benefit of the policy The 7-pay test is used to determine the maximum death benefit of the policy

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.

E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? F The dissolved partnership E's family E's estate

F In this situation, the proceeds from E's life insurance policy will go to F. Insurable interest only needs to exist at the time of application.

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? Face amount plus the policy's cash value Face amount plus the policy's dividends The greater amount of the policy's death benefit or the cash value Face amount plus total premium paid throughout the life of the policy

Face amount plus the policy's cash value A Face Amount Plus Cash Value Policy is a contract that promises to pay at the insured's death the face amount of the policy plus a sum equal to the policy's cash value.

An example of an unfair claims practice would be requesting a third-party arbitrator to resolve a disagreement failing to effectuate prompt, fair, and equitable settlements of a claim paying a claim promptly after receiving proof of loss requiring the insured to give a statement under oath

Failing to effectuate prompt, fair, and equitable settlements of claims is considered to be an unfair claims practice.

Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated 1970 - Fair Credit Reporting Act 1959 - Intervention by (SEC) The Securities and Exchange Commission 1999 - Financial Services Modernization Act 1945 - The McCarran-Ferguson Act

Fair Credit Reporting Act requires the fair and accurate reporting of information about consumers. Insurers must inform applicants about any investigations being made. If the report is used to deny coverage or charge higher rates, the insurer must provide the applicant the name of the credit reporting agency conducting the investigation.

What do families pay that are covered by the Florida Healthy Kids Corporation?

Families with children covered by the Florida Healthy Kids Corporation program pay only a portion of the premium.

What do families pay that are covered by the Florida Healthy Kids Corporation? Full premium A portion of the premium The first initial premium Nothing

Families with children covered by the Florida Healthy Kids Corporation program pay only a portion of the premium.

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? Family Benefit policy Family Maintenance policy Family Income policy Family Survivor policy

Family Maintenance policy

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes.

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.

According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant? At the time of application At the time of policy delivery Within 14 days of the time of application Within 14 days of policy delivery

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.

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

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.

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

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

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

Florida life insurance laws apply to all of these situations EXCEPT "Insurance companies' day-to-day operations".

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

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

Group life insurance policies are generally written as

Group life insurance policies are generally written as annually renewable term.

What is Florida's definition of Life insurance replacement? A transaction in which coverage on an existing policy is increased A transaction in which group life coverage is converted to an individual policy A transaction in which a new policy is bought and an old policy is terminated A transaction in which a policyowner reinstates a lapsed policy

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.

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

Florida's insurance law that governs group life insurance conversion privileges provides that the individual policies do not require evidence of insurability.

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with a Certificate of Coverage and Buyer's Guide a Summary Statement and Buyer's Guide a Buyer's Guide and Policy Summary a Written Comparison and Policy Summary

Florida's rules on disclosure require an insurance company to provide a purchaser of life insurance with a Buyer's Guide and a Policy Summary.

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

Graduating from high school is not a prerequisite for becoming a licensed agent.

How does group insurance differ from individual insurance?

Group insurance differs from individual insurance in that it provides coverage at a lower cost.

How does group insurance differ from individual insurance? Evidence of insurability is required Premiums are higher Premiums are lower Pre-existing conditions not covered

Group insurance differs from individual insurance in that it provides coverage at a lower cost.

What type of renewability guarantees premium rates and renewability?

Guaranteed renewable policies provides guaranteed renewability and premium rates.

A medical care provider which typically delivers health services at its own local medical facility is known as a Health Maintenance Organization Regional Provider Multiple Employer Trust Preferred Provider Organization

Health Maintenance Organizations (HMO's) traditionally provide services to its members at its own local health care facilities.

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

Health insurance policies in Florida must cover payment to all of these practitioners EXCEPT naturopaths.

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

Health insurance policies in Florida must cover payment to all of these practitioners EXCEPT naturopaths.

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force??

Health insurance will automatically be placed back in force if the insurer fails to notify an applicant within 45 days that the reinstatement application was denied.

Which type of plan normally includes hospice benefits?

Hospice benefits are typically included in managed care plans.

Which type of plan normally includes hospice benefits? Short-term disability plans Group life plans Workers' Compensation Managed care plans

Hospice benefits are typically included in managed care plans.

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? Claim will be denied and policy terminated Claim will be partially paid Claim will be paid Claim will be denied

If a person is injured while committing an illegal act, health insurance will not cover the expense of the injury.

If a policyowner does not pay the premium by the due date, the

If a policyowner does not pay the premium by the due date, the premium may be paid during the grace period.

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock? Twisting Intimidation Misrepresentation Sliding

If an agent tells an applicant that an insurance policy is like a share of stock, the agent may be guilty of misrepresentation.

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

If an insured dies during the Grace Period of a life insurance policy before paying the past due premium, the beneficiary will receive the face amount of the policy less any past due premiums.

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? Refund of all premiums paid, plus interest Refund of all premiums paid Full face amount minus any past due premiums Full face amount

If an insured dies during the Grace Period of a life insurance policy before paying the past due premium, the beneficiary will receive the face amount of the policy less any past due premiums.

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

If the insurer takes no action within 45 days, the policy will be reinstated automatically.

Which premium schedule results in the lowest cost to the policyowner?

If the policyowner chooses to pay the premium more than once per year (example monthly, quarterly, semi-annually) there normally will be an additional charge because the company will have additional charges in billing and collecting the premium payments.

Which premium schedule results in the lowest cost to the policyowner? Semi-annual Monthly Quarterly Annual

W is a 39-year 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)

Immediate annuities start providing income payments usually starting within 30 days from the purchase date. Deferred annuities start providing income payments after the first year.

A foreign insurance company doing business in Florida is not subject to Florida insurance laws is a company that was formed under the laws of another state is a company that was formed under the laws of another country is only authorized to write business outside the United States

In Florida, a foreign insurance company is a company that is formed under the laws of a state other than Florida.

Florida's 14-day free-look period for life insurance policies begins at the date of delivery date of approval date of application date of physical examination

In Florida, the free-look period for life insurance contracts is 14 days from policy delivery.

According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? 2 25 100 No minimum

In Florida, there is no minimum number of insureds required for a group life insurance policy.

The investment gains from a Universal Life Policy usually go toward

In a Universal Life Policy, income is usually directed toward the cash value.

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?

In a contributory plan, the employer may file a tax deduction for its share of the premium costs.

What percentage of eligible persons must a policy cover in a noncontributory group?

In a noncontributory group, the policy must cover 100% of eligible persons.

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? Payor clause Automatic Premium Loan provision Reinstatement provision Waiver of Premium

In cases where a policyowner wishes to reinstate a lapsed policy, the reinstatement provision allows the policyowner to do so with some limitations.

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

In cases where a policyowner wishes to reinstate a lapsed policy, the reinstatement provision allows the policyowner to do so with some limitations.

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called Reinstatement Grace period Automatic premium loan Waiver of premium

In cases where a policyowner wishes to reinstate a lapsed policy, the reinstatement provision allows the policyowner to do so with some limitations.

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim? $2,100 $2,020 $2,000 $100

In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100.

C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000? $0 $400 $720 $1,000

In this situation, $400 deductible + 20% of the remaining medical bill = $720.

What type of policy would offer a 40-year old the quickest accumulation of cash value?

In this situation, a 20-pay Life policy offers the quickest accumulation of cash value.

What type of policy would offer a 40-year old the quickest accumulation of cash value? Paid-up at 65 20-pay life 30-pay life Straight whole life

In this situation, a 20-pay Life policy offers the quickest accumulation of cash value.

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?

In this situation, a Disability Income policy would pay monthly benefits.

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? Long-term care Indemnity Medicare Supplement Medicaid

In this situation, a Medicare Supplement policy would provide the subscriber the best coverage for excess charges.

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT medical history gross income occupation spouse's occupation

In this situation, a spouse's occupation is not necessary for the application.

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?

In this situation, any earned but unpaid benefits will be paid.

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

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

On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

In this situation, coverage became effective on the date the policy was delivered and first premium collected.

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

In this situation, coverage may be restored under the reinstatement provision.

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?

In this situation, 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.

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

In this situation, the agent may be guilty of coercion.

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?

In this situation, the beneficiary is entitled to receive $50,000.

P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask 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?

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.

In this situation, the beneficiary will receive the full death benefit stated in the policy.

An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

In this situation, the contingent beneficiary will receive the proceeds.

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 nonforfeiture options The contestable period The assignment of ownership

In this situation, the cost of insurance is most important when an insured owner is trying to decide whether to convert term insurance at the insured's original age or the insured's attained age.

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?

In this situation, the insurance company will adjust the death benefit to what the premiums paid would have purchased at the insured's actual age.

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be converted to an individual permanent policy at an individual rate converted to an individual permanent policy at a group rate continued at an individual rate continued at a group rate

In this situation, the insured can convert to a permanent policy at the individual rates.

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?

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

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses? 0 $3,000 $8,000 $11,000

In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability benefit.

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? Collect premium from M's estate Deny the claim Pay face amount minus the past due premium Subtract past due premium from cash value

In this situation, the insurer would pay the death benefit less the past-due premium because death occurred within the grace period.

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? No deduction allowed $25,000 $20,000 $10,000

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

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) delayed effective date exclusion for the medical condition extended Contestable period Concealment clause

In this situation, the policy may be issued with an exclusion for the medical problem.

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

In this situation, the policy will go into effect after all these actions occur EXCEPT the expiration of the free-look period.

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

In this situation, the policy will pay $300,000.

In this situation, the proceeds from E's life insurance policy will go to F. Insurable interest only needs to exist at the time of application.

In this situation, the producer should deliver the policy and obtain the premium payment along with a signed health statement.

P is a producer who notices 5 questions on a life application were not answered. What actions should P take? Mail incomplete application to applicant to be completed and returned to the agent Submit the application as-is to the insurer Call the applicant and complete application over the phone Set up a meeting with the applicant to answer the remaining questions

In this situation, the producer should schedule another appointment with the applicant to complete the unanswered questions.

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.

When does a life insurance contract become effective if the initial premium is not collected during the application process? After all medical and personal information has been evaluated When insurer receives initial premium from the producer When producer delivers policy and collects initial premium After application has been approved by the underwriters

Insurance becomes effective on delivery of the policy to the insured and payment of the initial premium to the producer.

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?

Insured In a contract of adhesion, any confusing language would be interpreted in the favor of the insured.

Which of these arrangements allows one to bypass insurable interest laws? Concealment Indemnity contract Contract of adhesion Investor-Originated Life Insurance

Investor-Originated Life Insurance Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.

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

Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.

A variable insurance policy guarantees a minimum rate of return does not allow the policyowner to assume the investment risk does not guarantee a return on its investment accounts does not guarantee an assignment provision

It does not guarantee a return on investment accounts In contrast, variable insurance products do not guarantee contract cash values, and it is the policyowner who assumes the investment risk. Variable life insurance contracts do not make any promises as to either interest rates or minimum cash values.

Convincing a prospective insured to buy an insurance policy based on exaggerations is called

It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called misrepresentation.

What type of life policy covers 2 lives and pays the face amount after the first one dies? Group Life Joint Life Policy Family Income Policy Last Survivor Policy

Joint Life Policy A policy that promises to pay the face amount on the death of first of 2 lives covered by the policy is called a Joint Life Policy.

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? Limited-pay life Graded Premium Level term Endowment

Level term Life insurance written to cover a need for a specified period of time at the lowest premium is called level term insurance.

Which of these would be considered a Limited-Pay Life policy? 10-year Renewable and Convertible Term Life Paid-Up at Age 70 Straight Whole Life Renewable Term to Age 100

Life Paid-Up at Age 70

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Limited-Pay Life.

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Adjustable Life Renewable Term Limited-Pay Life Joint Life

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Limited-Pay Life.

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

Life insurance written to cover a need for a specified period of time at the lowest premium is called level term insurance.

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

All of the following statements about Major Medical benefits are true EXCEPT

Major Medical benefits normally have a maximum limit.

Major Medical policies typically

Major Medical policies typically contain a deductible and coinsurance.

An example of an unfair trade practice is an agent making a material misrepresentation to the insured an agent writing less than 50% of their total sales from controlled business replacing an old life insurance policy with a new one denying payment of a claim within a reasonable time after proof of loss statements were provided

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

Pre-hospitalization authorization is considered an example of managed care PPO care Medicaid 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.

The health insurance program which is administered by each state and funded by both the federal and state governments is called Long-term care Medicaid Medicare Supplemental Program Medicare

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

Which of these is considered a true statement regarding Medicaid? Funded by both state and federal governments Intended to be used by individuals age 65 and older Provides disability income benefits Automatically covers those receiving Social Security disability benefits

Medicaid is funded by both the federal and state governments.

Which type of policy is considered to be overfunded, as stated by IRS guidelines? Modified Whole Life Modified Endowment Contract Variable Universal Life Interest-Sensitive Whole Life

Modified Endowment Contract A policy that is overfunded to where it does not meet the 7-pay test is considered a Modified Endowment Contract.

Which of these life products is NOT considered interest-sensitive? Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life

Modified Whole Life All of these have an interest-sensitive investment aspect EXCEPT Modified Whole Life.

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

Most Blue Cross/Blue Shield organizations are considered to be nonprofit.

Which of the following statements is true about most Blue Cross/Blue Shield organizations? They are the same as private insurance companies They are federally sponsored They are nonprofit organizations They are owned by hospitals and physicians

Most Blue Cross/Blue Shield organizations are considered to be nonprofit.

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

Most Long Term Care policies require a 30-day free look period.

How long is the typical free look period for Long Term care insurance policies? 20 days 30 days 40 days 50 days

Most Long Term Care policies require a 30-day free look period.

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

Most major medical benefits begin to be paid after the deductible is satisfied.

Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?

PPO's normally provide a wider choice of physicians and hospitals.

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

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.

When an employee is terminated, which statement about a group term life conversion is true? Employee must convert group term life coverage into an individual term life policy Employee must provide evidence of insurability for conversion Policy proceeds will be paid if the employee dies during the conversion period Policy proceeds will NOT be paid if the employee dies during the conversion period

Policy proceeds will be paid if the employee dies during the conversion period An individual must apply for individual permanent coverage within 31 days after the date of group coverage termination. An individual is covered under the group policy during the conversion period.

Which type of insurance company allows their policyowners to elect a governing body?

Policyholders elect the governing bodies of mutual insurance companies.

Which type of insurance company allows their policyowners to elect a governing body? Stock Mixed Admitted Mutual

Policyholders elect the governing bodies of mutual insurance companies.

Which is true concerning a Variable Universal Life policy? Policyowner controls where the investment will go and selects the amount of the premium payment Policyowner has no say where the investment will go but can choose the premium mode The investment vehicle for this type of policy is held in the insurer's general portfolio The death benefit can vary but the policyowner has no say in the premium amount paid

Policyowner controls where the investment will go and selects the amount of the premium payment With Variable Universal Life, the policyowner controls the investment of cash values and chooses the timing and amount of premium payments.

Which of these describe a participating life insurance policy? -Policyowners are entitled to receive dividends -Policyowners pay assessments for company losses -Stock companies allow their policyowners to share in any company earnings -Policyowners are not entitled to vote for members of the board of directors

Policyowners are entitled to receive dividends

Pre-hospitalization authorization is considered an example of

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.

Which of these characteristics is consistent with a Straight Life policy? Owner can adjust both premium and death benefit Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner has the option of converting to term insurance Premiums are payable for as long as there is insurance coverage in force

Premiums are payable for as long as there is insurance coverage in force". Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death (or age 100).

Which statement is correct regarding the premium payment schedule for whole life policies? Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured Premiums are payable for a set period/ coverage expires at that point Premiums are payable until age 65/ coverage lasts a lifetime A single premium is paid at time of application/ coverage lasts until retirement

Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured

The federal income tax treatment of employer-provided group health 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.

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance? Disability income policy premiums are NOT tax-deductible Disability income policy premiums are tax-deductible Major medical policy benefits are normally not taxed Disability income policy benefits are normally not taxed

Premiums paid by individuals for Disability income policies are NOT tax-deductible. However, the benefits would be considered tax-free to the individual.

Which of these options can an individual use their medical flexible spending account to pay for? Vitamins and supplements Prescription drugs Household expenditures Cosmetic procedures

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

Which of these is NOT a type of agent authority? Express Implied Principal Apparent

Principal Agent authority is what an agent is authorized to do on behalf of his company. The three types of agent authority include express, implied, and apparent authority.

***An example of unfair discrimination would be declining an insurance application because of involvement in a hazardous occupation offering the same terms of coverage to different policyowners in the same risk classification offering different terms of coverage for different policyowners having the same risk classification issuing a policy at a substandard rate because of poor health

Providing different terms of coverage for different policyowners in the same risk classification would be an example of unfair discrimination.

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

Renewable Term policies guarantee the insured the right to continue term coverage after expiration of the initial policy period.

All of these statements concerning Settlement Options are true EXCEPT

Settlement options may be selected by the policyowner.

Which of the following is NOT considered rebating?

Sharing commissions with other licensed agents is not considered rebating.

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? 403(b) Plan Deferred Premium Single Premium Period Certain

Single Premium Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date.

An example of sliding would be speaking maliciously of an insurer intending to harm charging for an additional product without the applicant's consent replacing an existing insurance policy with a new one inducing an applicant to purchase an insurance policy by returning some of the premium

Sliding involves selling additional coverage to an insurance applicant who doesn't want or need it. An agent will often "slide" this additional coverage in without the customer's knowledge or consent.

What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA

Social Security, also known as Old Age, Survivors, and Disability Insurance (OASDI), was signed into law in 1935 by President Roosevelt as part of the Social Security Act.

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

Survivorship A survivorship life policy insures two individuals and is designed to pay a benefit upon the second death.

What type of life insurance are credit policies issued as? Whole Variable Term Universal

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

Term insurance would provide the greatest amount of protection for a limited period of time.

In life insurance, the needs approach is used mostly to establish which type of life insurance a client should apply for how much life insurance a client should apply for which company a client should use when applying for life insurance what the maximum amount the client can spend on life insurance

The "needs approach" in life insurance is most useful in determining the amount of life insurance to be recommended to a client.

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

The Automatic Policy Loan provision will keep a Whole Life policy in force if a required premium payment is not made and there is sufficient cash value.

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for

The Health Insurance Portability and Accountability Act (HIPAA) provides privacy protection for health information.

The Automatic Policy Loan provision will keep a Whole Life policy in force if a required premium payment is not made and there is sufficient cash value.

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

The Automatic Premium Loan provision can be incorporated into all of these policies EXCEPT decreasing term.

The Bureau of Unclaimed Property is overseen by the

The Chief Financial Officer oversees the Bureau of Unclaimed Property.

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?

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

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?

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

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

The Entire Contract provision states that the application and policy contain all provisions and constitute the entire contract.

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the Entire Contract provision Insuring clause Time Limit on Certain Defense provision Legal Contract clause

The Entire Contract provision states that the application and policy contain all provisions and constitute the entire contract.

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? Consideration Entire Contract Free-look Insuring

The Entire Contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract.

Which Federal law allows an insurer to obtain an inspection report on a potential insured? Medical Information Bureau Act Freedom of Information Act Fair Credit Reporting Act Medical Information Act

The Fair Credit Reporting Act of 1970, or FCRA, established procedures for the collection and disclosure of information obtained on consumers through investigation and credit reports.

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

The Fair Credit Reporting Act requires that an insurance application state that an investigative consumer report may be obtained on an applicant.

The Financial Services Commission may hold hearings

The Financial Services Commission may hold hearings for any purpose within the scope of the insurance code deemed necessary.

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency? National Association of Insurance Commissioners (NAIC) Florida Life and Health Insurance Guaranty Association Department of Financial Services Office of Insurance Regulation

The Florida Life and Health Insurance Guaranty Association exists to protect an insured in the event of an insurer's insolvency.

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

The Florida Replacement Rule sets forth the requirements and procedures to be followed by insurance companies and producers when replacing existing life insurance contracts.

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for insolvency health information financial information overinsurance

The Health Insurance Portability and Accountability Act (HIPAA) provides privacy protection for health information.

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT Fixed Period Interest Only Fixed Amount Life Income

The Interest Only option does NOT involve the systematic liquidation of the death proceeds.

What is the purpose of the Life and Health Insurance Guaranty Association?

The Life and Health Insurance Guaranty Association is an association that protects policyowners against insolvent insurance companies.

What is the purpose of the Life and Health Insurance Guaranty Association? Enforces Florida's insurance regulations Underwrites high-risk insurance applicants Protects policyowners against insolvent insurance companies Establishes underwriting guidelines for admitted insurers

The Life and Health Insurance Guaranty Association is an association that protects policyowners against insolvent insurance companies.

The Life and Health Insurance Guaranty Association is an entity that assists in underwriting large insurance policies funded by admitted insurance companies through assessments funded by the state government administered by the Federal government

The Life and Health Insurance Guaranty Association is funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent.

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

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 the initial premium back to the applicant Send a notice to the applicant that the coverage was declined Send a notice to the MIB that the applicant was declined Send a notice to the agent that the applicant was declined

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

A policyowner is allowed to pay premiums more than once a year under which provision?

The Mode of Premium provision permits an insured to pay premiums more than once every year.

A policyowner is allowed to pay premiums more than once a year under which provision? Insuring Consideration Payor Mode of Premium

The Mode of Premium provision permits an insured to pay premiums more than once every year.

The provision that defines to whom the insurer will pay benefits to is called Entire Contract Proof of Loss Claim Forms Payment of Claims

The Payment of Claims provision in a Health Insurance policy states to whom claims will be paid.

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) Cash Refund Installment Refund Straight Life annuity Life Annuity with Period Certain

The Straight Life annuity pays the largest monthly benefit to a single annuitant because it is based only on life expectancy, but it creates a risk that the annuitant may die early and forfeit much of the value of the annuity to the insurance company.

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called

The Time Limit on Certain Defenses (Incontestability) provision limits the time during which the insurance company may challenge the validity of an insurance claim on the basis of a misstatement made on the insured's application.

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.

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

The Waiver of Premium is a rider on a life insurance policy that guarantees that the premium will be paid if the insured is disabled for a specified period of time.

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT type of life insurance S's attained age dividend amount used toward purchase beneficiary's age

The age of the beneficiary is irrelevant in determining how much paid-up additions can be purchased.

During the application process, the agent's primary responsibility is to

The agent's primary responsibility in the application process is to the insurer.

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as

The cash value and death benefits of a Variable Life policy can fluctuate according to the performance of its underlying investment portfolio.

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay $1,600 $2,000 $3,600 $8,000

The correct answer is "$3,600". In this situation, $2,000 + 20% of the remaining bill = $3,600.

What group term life feature permits an individual to depart from the group and continue to be covered 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.

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? Entire contract Owner's rights Nonforfeiture options Conversion

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

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? Owner's Rights clause Incontestable Period Insuring Agreement Conversion privilege

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

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?

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

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? $2,000 $1,760 $1,600 $400

The correct answer is "$1,600". In this situation, $2,200 - $200 deductible x 80% = $1,600.

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a $125,000 individual whole life policy $25,000 modified whole life policy $25,000 individual term life policy $25,000 individual whole life policy

The correct answer is "$25,000 individual whole life policy". In this situation, a terminated employee may convert to a $25,000 individual whole life policy.

J has an Accidental Death and Dismemberment policy with a principal 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? $0 $100,000 $25,000 $50,000

The correct answer is "$25,000". The maximum sum payable would be the capital sum, or $25,000.

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? $100,000 $50,000 Refund of premiums paid plus interest No claim will be paid because cause of death was from natural causes

The correct answer is "$50,000". In this situation, the beneficiary is entitled to receive $50,000.

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

The correct answer is "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.

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law? 0% 25% 75% 100%

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

The correct answer is "10 days". In Florida, monthly-premium health insurance policies must provide a grace period of at least 10 days.

In Florida, monthly-premium health insurance policies must provide a grace period of at least 7 days 10 days 14 days 31 days

The correct answer is "10 days". In Florida, monthly-premium health insurance policies must provide a grace period of at least 10 days.

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

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

What is the maximum Social Security Disability benefit amount an insured can receive? 50% of the insured's Primary Insurance Amount (PIA) 75% of the insured's Primary Insurance Amount (PIA) 100% of the insured's Primary Insurance Amount (PIA) 100% of the insured's Primary Insurance Amount (PIA) minus any monies received from a retirement plan

The correct answer is "100% of the insured's Primary Insurance Amount (PIA)". The MAXIMUM Social Security Disability benefit an insured may receive is equal to 100% of the insured's Primary Insurance Amount (PIA).

What percentage of eligible persons must a policy cover in a noncontributory group? 25% 50% 75% 100%

The correct answer is "100%". In a noncontributory group, the policy must cover 100% of eligible persons.

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is 25% 50% 75% 100%

The correct answer is "100%". Most noncontributory group health plans require 100% participation by eligible employees.

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

The correct answer is "15 years". A person 15 years or older may contract for life insurance on his/her own life.

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

The correct answer is "18 months". Florida requires that newborn coverage begins "from the moment of birth" and continues for eighteen (18) months.

Florida requires that coverage for newborns begins "from the moment of birth" and continues for 31 days 6 months 12 months 18 months

The correct answer is "18 months". Florida requires that newborn coverage begins "from the moment of birth" and continues for eighteen (18) months.

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

The correct answer is "2 years". There is a 2 year time limit for an insurer to contest a life insurance contract due to application fraud.

An insurance company can contest a life insurance contract due to application fraud within 60 days 1 year 2 years 3 years

The correct answer is "2 years". There is a 2 year time limit for an insurer to contest a life insurance contract due to application fraud.

What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?

The correct answer is "2". A qualified Long Term Care policy must stipulate that the insured be incapable of performing at least two of the ADL's without assistance for at least 90 days to qualify for benefits.

What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? 1 2 3 4

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). 40 30 20 10

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

The correct answer is "20-Pay Life accumulates cash value faster than Straight Life". In this situation, the statement "20-Pay Life accumulates cash value faster than Straight Life" would be correct.

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

The correct answer is "Insurance". A Multiple Employer Welfare Arrangement (MEWA) provides insurance benefits.

A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination?

The correct answer is "31 days". If a group plan is terminated, covered persons are guaranteed coverage for 31 days after termination.

A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination? 14 days 31 days 45 days 60 days

The correct answer is "31 days". If a group plan is terminated, covered persons are guaranteed coverage for 31 days after termination.

The correct answer is "45 days". Health insurance will automatically be placed back in force if the insurer fails to notify an applicant within 45 days that the reinstatement application was denied.

A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time? 12 months 24 months 36 months 48 months

The correct answer is "48 months". An agent's license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license.

One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months

The correct answer is "5 months". Disability income benefits are paid to the covered worker in the amount of the PIA after a 5-month waiting period.

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

The correct answer is "5". Florida requires that an insurance agent must complete 5 hours of continuing education on the subject of law and ethics every two years.

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years. 3 4 5 6

The correct answer is "5". Florida requires that an insurance agent must complete 5 hours of continuing education on the subject of law and ethics every two years.

In Florida, what is the maximum percentage of controlled business an agent may produce?

The correct answer is "50%". In Florida, an agent's controlled business may NOT exceed a maximum of 50%.

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? 70 1/2 65 55 59 1/2

The correct answer is "59 1/2". Traditional Individual Retirement Account (IRA) withdrawals are normally subject to a tax penalty if they are made before the owner reaches age 59 1/2.

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

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

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

The correct answer is "64 years or older". In Florida, insurers are required to issue an additional lapse notice after the applicable statutory grace period has expired for policyholders 64 years of age or older.

According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age 21 and under 59 1/2 or older 64 years or older 69 or older

The individual most likely to buy a Medicare Supplement policy would be a(n)

The correct answer is "68-year old male covered by Medicare". Medicare Supplements are available to those covered by Medicare.

The individual most likely to buy a Medicare Supplement policy would be a(n) unemployed 64-year old female 62-year old male covered by Medicaid 68-year old male covered by Medicare uninsured 60-year old male

The correct answer is "68-year old male covered by Medicare". Medicare Supplements are available to those covered by Medicare.

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

The correct answer is "A Term rider". Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

All students attending a large university could be covered by a blanket policy a franchise policy a jumbo group policy a commercial insurance policy

The correct answer is "A blanket policy". Blanket health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group (the individuals within the group) are constantly changing.

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? A presumptive disability An occupational disability A residual disability A recurrent disability

The correct answer is "A recurrent disability". A second period of disability from the same or related cause of a prior disability is called a recurrent disability.

What do Dread Disease policies cover?

The correct answer is "A specific disease or illness". Dread Disease policies cover only a single disease or illness.

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

The correct answer is "Accidental Death and Dismemberment provision". 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? Conversion Grace period Incontestable period Accidental

The correct answer is "Accidental". An AD&D provision is not required in a group life policy.

Which of the following employer tasks does a Professional Employer Organization normally handle? Marketing strategies Setting sales quotas Administration tasks Hiring staff

The correct answer is "Administration tasks". A Professional Employer Organization typically handles administration functions.

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments Whenever an insured is unable to work During the time an insured is confined in a hospital Following an accidental injury, but not during sickness After an insured has become totally disabled as defined in the policy

The correct answer is "After an insured has become totally disabled as defined in the policy". The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.

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

The correct answer is "Alien". An insurance company that is domiciled in any country other than the United States is known as an alien insurance company.

What type of insurance company is domiciled in England, but conducts business in Florida? Foreign Domestic Alien Transatlantic

The correct answer is "Alien". An insurance company that is domiciled in any country other than the United States is known as an alien insurance company.

Under which of the following circumstances do the benefits under COBRA continuation coverage expire?

The correct answer is "All group health plans are eliminated by the employer". One of the disqualifying events that can result in the termination of continuing coverage under COBRA is when the employer terminates all group health plans.

Under which of the following circumstances do the benefits under COBRA continuation coverage expire? Employee has become uninsurable All group health plans are eliminated by the employer Employer moves headquarters to another state Employee becomes permanently disabled

Which of the following is considered to be misrepresentation? Replacing an existing policy with a new one An agent guaranteeing a policy's dividends Sharing commissions with other licensed agents Representing a foreign insurer

The correct answer is "An agent guaranteeing a policy's dividends". Stating that dividends are guaranteed is considered a misrepresentation.

Which of the following situations does NOT apply to the Florida Replacement Rule?

The correct answer is "An existing policyholder purchases an additional policy from the same insurer". Florida's Replacement Rule applies to all of these situations EXCEPT "An existing policyholder purchases an additional policy from the same insurer".

Which of the following situations does NOT apply to the Florida Replacement Rule? An existing policy is reissued with a reduction in cash value A new policy is issued while an existing one is surrendered An existing policy is subject to extensive borrowing An existing policyholder purchases an additional policy from the same insurer

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? A straight life annuity A variable annuity An immediate annuity A deferred annuity

The correct answer is "An immediate annuity". An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.

The type of annuity that can be purchased with one monetary deposit is called a(n)

The correct answer is "An immediate annuity". An immediate annuity is purchased with one monetary deposit.

The type of annuity that can be purchased with one monetary deposit is called a(n) Single Deposit annuity Single Premium annuity Fixed annuity Immediate annuity

The correct answer is "An immediate annuity". An immediate annuity is purchased with one monetary deposit.

Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? An insured must settle a claim within 60 days after Proof of Loss is submitted An insured must wait at least 30 days after Proof of Loss has been submitted before a lawsuit can be filed An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed An insured must settle a claim within 30 days after Proof of Loss is submitted

The correct answer is "An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed".

Which type of contract liquidates an estate through recurrent payments? Universal life insurance Whole life insurance Annuity 401(k)

The correct answer is "Annuity". A contract that provides for the liquidation of all or part of an estate through periodic payments is known as an annuity.

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? Variable Life Interest-sensitive Life Universal Life Annuity

The correct answer is "Annuity". In this situation, an annuity would be recommended.

What action can a policyowner take if an application for a bank loan requires collateral?

The correct answer is "Assign policy ownership to the bank". A policyowner may assign ownership of the policy to a bank as collateral.

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

The correct answer is "At the moment of birth". A Group Health policy is required to provide coverage for a newborn child at the moment of birth.

When is a Group Health policy required to provide coverage for a newborn child? When the policyowner notifies the insurance company At the moment of birth When the required additional premium is paid No more than 10 days after date of birth

The correct answer is "At the moment of birth". A Group Health policy is required to provide coverage for a newborn child at the moment of birth.

When does a Probationary Period provision become effective in a health insurance contract? At the policy's inception 30 days after the policy's inception When a claim is submitted When a covered loss occurs

The correct answer is "At the policy's inception". The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.

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

The correct answer is "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.

All of the following are Nonforfeiture Options EXCEPT

The correct answer is "Automatic Premium Loan Option". An automatic premium loan is not considered a Nonforfeiture Option.

All of the following are Nonforfeiture Options EXCEPT Cash Surrender Option Extended Term Option Reduced Paid-Up Option Automatic Premium Loan Option

The correct answer is "Automatic Premium Loan Option". An automatic premium loan is not considered a Nonforfeiture Option.

All of the following statements about Major Medical benefits are true EXCEPT The deductible can be expressed as a fixed dollar amount The benefit period begins only after a specified amount of expenses have accrued Benefits are generally expressed as a percentage of eligible expenses Benefits have no maximum limit

The correct answer is "Benefits have no maximum limit". Major Medical benefits normally have a maximum limit.

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?

The correct answer is "Binding receipt". A binding 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.

The difference between group insurance and blanket health policies is

The correct answer is "Blanket health policies do not issue certificates".

The difference between group insurance and blanket health policies is Blanket health policies do not issue certificates Group health policies do not issue certificates Group health plans may be issued to an airline to cover its passengers Blanket health policies are sometimes called wholesale plans

The correct answer is "Blanket health policies do not issue certificates".

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble? Deferral provision Carryover provision Stop Loss provision Corridor provision

The correct answer is "Carryover provision". The Carryover provision permits expenses incurred during the last three months of the calendar year to be carried over into the new year if needed to satisfy the deductible for the next year.

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

The correct answer is "Cash value provision". The Cash value provision makes a policy loan possible.

What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate

The correct answer is "Certificate". Employees covered by an employer health plan are issued an insurance certificate.

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? Relation of earnings to insurance provision Change of occupation provision Conformity of state statutes provision Modified occupation provision

The correct answer is "Change of occupation provision". The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.

****The Bureau of Unclaimed Property is overseen by the Unclaimed Property Commissioner Chief Financial Officer Governor Insurance Department

The correct answer is "Chief Financial Officer". The Chief Financial Officer oversees the Bureau of Unclaimed Property.

S is covered by a whole life policy. Which insurance product can cover his children? Assignment provision Payor benefit Accelerated benefit rider Child term rider

The correct answer is "Child term rider". The means of providing life insurance on the children of a person who is covered by a life insurance policy is by a child term rider.

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? Claim will be denied Claim will be paid in full Claim will be partially paid Claim will be decided by an arbitrator

The correct answer is "Claim will be denied". In this situation, the insurance company will deny the claim, as the policy would have lapsed due to nonpayment by September 15.

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?

The correct answer is "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.

Which of the following is an example of an Unfair Trade Practice?

The correct answer is "Coercion". Coercion is considered an unfair trade practice in this state.

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

The correct answer is "Coercion". Coercion is considered an unfair trade practice under Florida law.

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

The correct answer is "Coercion". In this situation, the agent may be guilty of coercion.

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as Assignment of Benefits Coinsurance Indemnity Co-deductible

The correct answer is "Coinsurance". The provision in a Major Medical policy that requires the insurance company pay only part of a loss and the insured to pay the balance is known as coinsurance.

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? Collect initial premium Collect initial premium along with a signed health statement Explain to the applicant the policy is no longer in effect due to change in health condition Collect initial premium and leave a binding receipt

The correct answer is "Collect initial premium along with a signed health statement". In this situation, the producer should deliver the policy and obtain a premium payment along with a signed health statement.

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

The correct answer is "Commerce". All of these areas of state regulation are protected by the savings clause in ERISA EXCEPT for commerce.

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? Administrative-services-only plan Commercial insurer Preferred provider organization Health maintenance organization

The correct answer is "Commercial insurer". Commercial health insurance companies use the reimbursement approach, which allows policyowners to seek medical treatment then submit the charges to the insurer for reimbursement.

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? The employee's family Company Y Company X The employee's estate

The correct answer is "Company X". With Key Person Insurance, the company purchases, owns, pays the premiums and is the beneficiary of the life insurance policy on the key person.

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

The correct answer is "Conditional". A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

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? Entire Contract clause MIB clause Insuring clause Consideration clause

The correct answer is "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.

Insurance policies offered on a "take it or leave it" basis are considered what?

The correct answer is "Contracts of Adhesion". Because insurance policies are offered on a "take it or leave it" basis they are referred to as Contracts of Adhesion.

Insurance policies offered on a "take it or leave it" basis are considered what? Conditional Contracts Aleatory Contracts Unilateral Contracts Contracts of Adhesion

The correct answer is "Contracts of Adhesion". Because insurance policies are offered on a "take it or leave it" basis they are referred to as Contracts of Adhesion.

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

The correct answer is "Contributory plans require a minimum of 25 participants". This is inaccurate. At least 100 members must participate if the premium is contributory.

All of the following are eligibility requirements for an association group EXCEPT Group must have been in existence for two years Contributory plans require a minimum of 25 participants Group must hold regular meetings at least on an annual basis Must have been organized for some reason other than to obtain group insurance

The correct answer is "Contributory plans require a minimum of 25 participants". This is inaccurate. At least 100 members must participate if the premium is contributory.

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans? Joint Noncontributory Contributory Participating

The correct answer is "Contributory". Group plans where employees pay a portion of the premiums are called contributory plans.

Which statement regarding the Misstatement of Age provision is considered to be true?

The correct answer is "Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered". The Misstatement of Age provision states an adjustment be made in the amount of insurance if the age of the insured is misstated.

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? Daughter Husband's estate K's estate Trust fund

The correct answer is "Daughter". With a common disaster provision, a policyowner can be sure that if both the insured and the primary beneficiary die within a short period of time, the death benefits will be paid to the contingent beneficiary.

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

The correct answer is "Decreasing term rider". A decreasing term rider can add additional coverage to a whole life policy.

How are surrender charges deducted in a life policy with a rear-end loaded provision? Deducted from the death benefit Deducted when the policy is discontinued Deducted from policy's cash value Deducted when assigned to another policyowner

The correct answer is "Deducted when the policy is discontinued". In a policy with a rear-end loaded provision, surrender charges are deducted when the policy is discontinued.

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

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

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? Immediate Retroactive Deferred Universal

The correct answer is "Deferred". In this situation, the type of annuity purchased is best described as deferred.

Which two entities regulate variable annuities?

The correct answer is "Department of Financial Services; and Securities Exchange Commission". Variable annuities are regulated by both the Department of Financial Services and the Securities Exchange Commission.

Which two entities regulate variable annuities? National Association of Insurance Commissioners; and Department of Financial Services Department of Financial Services; and Securities Exchange Commission National Association of Insurance and Financial Advisors; and Securities Exchange Commission Financial Industry Regulatory Authority; and Department of Financial Services

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

The correct answer is "Disability Income". Disability Income would reimburse an insured for loss of earnings if the insured became sick.

A characteristic of Preferred Provider Organizations (PPOs) would be:

The correct answer is "Discounted fees for the patient". Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? MEWA Blanket insurance Dread disease insurance Disability insurance

The correct answer is "Dread disease insurance". Dread disease insurance provides benefits for ONLY specific types of illnesses such as cancer or stroke.

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? One policy is owned and paid for by the company Each partner must own a policy on the other partners One policy is owned by the company and premiums are split equally among the partners Each partner owns their own individual policy

The correct answer is "Each partner must own a policy on the other partners".

The correct answer is "Earned, but unpaid benefits". In this situation, any earned but unpaid benefits will be paid.

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

The correct answer is "Entire Contract provision". The Entire Contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract.

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?

The correct answer is "Entire Contract". The Entire Contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract.

Which of the following is an important underwriting principle of group life insurance?

The correct answer is "Everyone must be covered in the group". An important underwriting principle of group life is that all or a large percentage of persons in the group must be covered by the insurance.

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

The correct answer is "Evidence of insurability is required when the option is exercised". All of these statements are true EXCEPT "Evidence of insurability is required when the option is exercised".

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?

The correct answer is "Ex-wife". D's ex-wife is still the beneficiary of this policy, even though policy ownership has changed to his current spouse.

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

The correct answer is "Exclusion". Exclusions are specified hazards listed in a policy for which benefits will not be paid.

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? Misrepresentation Exclusion Collateral assignment Concealment

The correct answer is "Exclusion". Exclusions are specified hazards listed in a policy for which benefits will not be paid.

What does the Medical Information Bureau (MIB) identify?

The correct answer is "Existing life insurance coverage with other carriers". The Medical Information Bureau (MIB) report will identify life insurance in force with other carriers.

What does the Medical Information Bureau (MIB) identify? The applicant's personal physician Existing life insurance coverage with other carriers Credit scores Personal avocations and hobbies

The correct answer is "Existing life insurance coverage with other carriers". The Medical Information Bureau (MIB) report will identify life insurance in force with other carriers.

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

The correct answer is "Face amount plus the policy's cash value". A Face Amount Plus Cash Value Policy is a contract that promises to pay at the insured's death the face amount of the policy plus a sum equal to the policy's cash value.

An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the State Guaranty Association Fair Labor Standards Board Fair Credit Reporting Act National Association of Insurance Commissioners

The correct answer is "Fair Credit Reporting Act". The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if that individual is being investigated by an inspection company.

Which of the following is NOT a consequence for placing business with an unauthorized insurer? Third degree felony First degree misdemeanor Insurance license revoked Responsible for unpaid claims

The correct answer is "First degree misdemeanor". All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

The correct answer is "Fixed Deferred". A Fixed Deferred annuity pays out a fixed amount for life starting at a future date.

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? Fixed Period Fixed Deferred Fixed Immediate Fixed Variable

The correct answer is "Fixed Deferred". A Fixed Deferred annuity pays out a fixed amount for life starting at a future date.

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?

The correct answer is "Florida Life and Health Insurance Guaranty Association". The Florida Life and Health Insurance Guaranty Association exists to protect an insured in the event of an insurer's insolvency.

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 Gramm-Leach-Bliley Act Florida Solicitation Law Existing Coverage Statute Florida Replacement Rule

The correct answer is "Florida Replacement Rule". The Florida Replacement Rule sets forth the requirements and procedures to be followed by insurance companies and producers when replacing existing life insurance contracts.

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

The correct answer is "Fraternal life insurance organizations". A fraternal life insurance organization is a nonprofit provider of life insurance that is covered by a special section of the Florida insurance code.

Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called Fraternal life insurance organizations Domestic life insurance organizations Unauthorized insurers Mutual life insurers

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

The correct answer is "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".

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 Consideration Waiver of Premium Reinstatement

The correct answer is "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.

Which of the following is a standard provision of the conversion privileges in a Group Life policy? Group Life coverage can only be converted if the employer pays for the individual policy Group Life coverage can normally be converted to an individual policy within 6 months Group Life coverage can only be converted by providing evidence of insurability Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis

The correct answer is "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.

Which requirement must be met for an association to be eligible for a group life plan?

The correct answer is "Group was formed for a purpose other than acquiring insurance". Group life insurance can be formed just as long as they are formed for a reason other than to purchase insurance.

Which requirement must be met for an association to be eligible for a group life plan? Group was formed for a purpose other than acquiring insurance Group must establish a President Group must have at least 10 members Group was formed for the purpose of acquiring insurance

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? Conditionally Renewable Noncancellable Guaranteed Renewable Optionally Renewable

The correct answer is "Guaranteed Renewable". The renewal provision in a guaranteed renewable policy specifies that the policy must be renewed (as long as premiums are paid) until the insured reaches a specified age. These usually have increasing premiums.

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 Additional coverage rider Paid-up option rider Extended insurability rider

The correct answer is "Guaranteed insurability rider". A guaranteed insurability rider guarantees the insured the option of purchasing additional amounts of disability income coverage at predetermined times without requiring the insured to provide evidence of insurability.

What type of renewability guarantees premium rates and renewability? Optionally renewable Conditonally renewable Noncancellable Guaranteed renewable

The correct answer is "Guaranteed renewable". Guaranteed renewable policies provides guaranteed renewability and premium rates.

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? Multiple Employer Welfare Arrangement Multiple Employer Trust Health Maintenance Organization Co-op Arrangement

The correct answer is "Health Maintenance Organization". A Health Maintenance Organization (HMO) contracts with doctors and hospitals to provide medical benefits to subscribers at a predetermined price.

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? Medicaid Long-term care Medicare Her group health plan

The correct answer is "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 Low-deductible health plan Medicare Supplement High-deductible health plan Flexible savings plan

The correct answer is "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.

W is a 39-year 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) Flexible Premium Deferred annuity Variable annuity Immediate annuity Straight Life annuity

The correct answer is "Immediate annuity". Immediate annuities start providing income payments usually starting within 30 days from the purchase date. Deferred annuities start providing income payments after the first year.

What would be an accurate definition of "controlled business"? Insurance business that is written on the agent's own life, property, or interests Insurance business obtained by an agent through coercion, intimidation, or boycotting Insurance business that is obtained through false advertising Insurance business that is obtained by replacing an existing policy through misrepresentation

The correct answer is "Insurance business that is written on the agent's own life, property, or interests". "Controlled business" is insurance business that is written on the agent's own life, property, or interests.

Which of the following situations are NOT subject to Florida life insurance laws? Insurance companies' day-to-day operations Insurance companies' life policy replacement requirements Insurance companies' setting of life insurance policy rates Insurance companies' guidelines for paying a life insurance claim

The correct answer is "Insurance companies' day-to-day operations". Florida life insurance laws apply to all of these situations EXCEPT "Insurance companies' day-to-day operations".

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

The correct answer is "Insured must be eligible for Social Security disability for claim to be accepted". This is inaccurate. Receiving Social Security disability benefits is not a requirement to be eligible for the Waiver of Premium.

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? Insurer Beneficiary Reinsurer Insured

The correct answer is "Insured". In a contract of adhesion, any confusing language would be interpreted in the favor of the insured.

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 require a higher deductible for any claims resulting from this condition Insurer is required to initially cover this pre-existing condition Insurer will permanently exclude the condition from the policy Insurer will likely treat as a pre-existing condition which may not be covered for one year

The correct answer is "Insurer will likely treat as a pre-existing condition which may not be covered for one year". This condition would likely be considered a pre-existing condition and may not be covered for one year.

The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the Insuring clause Contestable clause Consideration clause Free-look provision

The correct answer is "Insuring clause". The Insuring clause states the amount of benefits to be paid in an Accident and Health policy.

Which of the following health insurance policy provisions specifies the health care services a policy will provide?

The correct answer is "Insuring clause". The insuring clause identifies the specific type of health care services that are covered by that policy.

Which health policy clause specifies the amount of benefits to be paid? Insuring Consideration Free-look Payment mode

The correct answer is "Insuring". In an Accident & Health policy, the insuring clause states the amount of benefits to be paid.

Which of these arrangements allows one to bypass insurable interest laws? Concealment Indemnity contract Contract of adhesion Investor-Originated Life Insurance Submit Reset

The correct answer is "Investor-Originated Life Insurance". Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made? Irrevocable beneficiary Tertiary beneficiary Primary beneficiary Revocable beneficiary

The correct answer is "Irrevocable beneficiary". An irrevocable designation may not be changed without the written consent of the beneficiary.

A policyowner's rights are limited under which beneficiary designation? Revocable Tertiary Contingent Irrevocable

The correct answer is "Irrevocable". An irrevocable beneficiary designation requires the consent and signature of that named beneficiary before a change of beneficiary occurs.

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? Revocable Contingent Irrevocable Primary

The correct answer is "Irrevocable". An irrevocable designation may not be changed without the written consent of the beneficiary.

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? Issue the policy with a diabetes exclusion Issue the policy with an altered Time of Payment of Claims provision Issue the policy with a rating Decline the applicant

The correct answer is "Issue the policy with an altered Time of Payment of Claims provision". The insurance company may take all of these actions EXCEPT issue the policy with an altered Time of Payment of Claims provision.

The correct answer is "It is used extensively in estate-planning as well as business circumstances". Third-party ownership of a life insurance policy is widely used in business settings and estate-planning situations.

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

The correct answer is "It may solicit insurance business by mail without the assistance of a licensed agent". An admitted mail order insurance company may solicit and accept business by mail without the aid of a licensed agent.

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 It may solicit insurance business by mail only with the assistance of a licensed Florida agent Admitted mail order insurance companies are illegal in Florida Admitted mail order insurance companies cannot solicit insurance business outside the state of Florida

Which plan is intended to be used by a sole proprietor and the employees of that business?

The correct answer is "Keogh Plan". A Keogh Plan may be used by a sole proprietor only if the employees of the business are included.

Which plan is intended to be used by a sole proprietor and the employees of that business? SEP Plan Keogh Plan Individual Retirement Account (IRA) SIMPLE Plan

The correct answer is "Keogh Plan". A Keogh Plan may be used by a sole proprietor only if the employees of the business are included.

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

The correct answer is "Life Annuity with Period Certain". This situation involves a Life Annuity with Period Certain.

Which of these are NOT an example of a Nonforfeiture option? Extended Term Reduced Paid-up Cash Surrender Life Income

The correct answer is "Life Income". All of these are examples of Nonforfeiture options EXCEPT Life Income.

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

The correct answer is "Life and Variable contracts". An agent who wants to sell Variable annuities must be licensed by the state which includes examinations in Life and Variable contracts.

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

The correct answer is "Limitation on pre-existing conditions for up to 12 months". There is only a 6-month limitation on pre-existing conditions for Medicare Supplements.

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy? Suitability form Guaranteed issue Free-look period of 30 days Limitation on pre-existing conditions for up to 12 months

The correct answer is "Limitation on pre-existing conditions for up to 12 months". There is only a 6-month limitation on pre-existing conditions for Medicare Supplements.

In Major Medical Expense policies, what is the intent of a Stop Loss provision? Limits an insurer's premium increases Limits an insurer's liability Limits an insured's out-of-pocket medical expenses Limits an insured's coverage for pre-existing conditions

The correct answer is "Limits an insured's out-of-pocket medical expenses". The purpose of a Stop Loss provision in Major Medical Expense policies is to limit the amount of an insured's out-of-pocket medical expenses.

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses? Loss of life due to a heart attack Loss of eyesight due to an accidental injury Loss of the spleen due to an accidental injury Partial paralysis due to a stroke

The correct answer is "Loss of eyesight due to an accidental injury". In this situation, an Accidental Death and Dismemberment policy will most likely pay benefits for loss of eyesight due to an accidental injury.

Which of these is an element of a Single Premium annuity?

The correct answer is "Lump-sum payment". A lump-sum payment is required for a Single Premium annuity.

Which of these is an element of a Single Premium annuity? Deferred payment Lump-sum payment Fixed income Tax-deductible

The correct answer is "Lump-sum payment". A lump-sum payment is required for a Single Premium annuity.

What is the main reason for regulating the insurance industry? Add revenue to Florida's treasury Maintain the solvency of insurance companies Controlling the replacement of existing insurance policies Setting sales quotas for insurers

The correct answer is "Maintain the solvency of insurance companies". The primary purpose of regulation of the insurance industry is to promote the public welfare by maintaining the solvency of insurance companies.

Which of the following types of health coverage frequently uses a deductible? Major Medical policy Basic Surgical policy Basic Hospital policy Worker's Compensation

The correct answer is "Major Medical policy". Most major medical benefits begin to be paid after the deductible is satisfied.

Comprehensive Major Medical policies usually combine

The correct answer is "Major Medical with Basic Hospital/Surgical coverage". A Comprehensive Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.

Comprehensive Major Medical policies usually combine Major Medical with Disability Income coverage Major Medical with Basic Hospital/Surgical coverage Basic Hospital/Surgical with Accidental coverage Basic/Hospital/Surgical with Disability Income coverage

The correct answer is "Major Medical with Basic Hospital/Surgical coverage". A Comprehensive Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.

According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? Annual income Age Marital status Financial objectives

The correct answer is "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.

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

The correct answer is "Medicare Supplement". In this situation, a Medicare Supplement policy would provide the subscriber the best coverage for excess charges.

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock? Twisting Intimidation Misrepresentation Sliding

The correct answer is "Misrepresentation". Making a fraudulent statement on an insurance application would be considered an act of misrepresentation.

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

The correct answer is "Misrepresentation". Making a fraudulent statement on an insurance application would be considered an act of misrepresentation.

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

The correct answer is "Twenty". Written notice of a claim must be given to the insurer within 20 days.

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? Variable Life Adjustable Life Graded Premium Whole Life Modified Whole Life

The correct answer is "Modified Whole Life". The type of policy in this situation is a Modified Whole Life.

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

The correct answer is "Monthly". Claims on an individual disability policies must be paid out at monthly intervals, at minimum.

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? Annually Semiannually Quarterly Monthly

The correct answer is "Monthly". The time of payment for claims is usually specified in different policies as 60 days, 45 days, or 30 days. However, if the claim involves disability income benefits, the benefits must be paid not less frequently than monthly.

What are adjustable rates for life policy loans in Florida based on?

The correct answer is "Moody's corporate bond index". Adjustable rates for life insurance policy loans in Florida are based on Moody's corporate bond index.

Which of the following statements is CORRECT about accelerated death benefits?

The correct answer is "Must have a terminal illness to qualify". Accelerated death benefits provide for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury.

Which of the following professional organizations has its code of ethics incorporated into Florida law?

The correct answer is "National Association of Insurance and Financial Advisors (NAIFA)". The professional organization whose code of ethics is incorporated into Florida law, and whose responsibility is to establish the activities of agents is the National Association of Insurance and Financial Advisors.

Which of the following professional organizations has its code of ethics incorporated into Florida law? Financial Industry Regulatory Agency (FINRA) National Association of Insurance Commissioners (NAIC) National Association of Insurance and Financial Advisors (NAIFA) The American College of Life Insurance

Which of these statements concerning an individual Disability Income policy is TRUE? Premiums are normally tax-deductible Age of the insured determines the amount of the benefits Normally includes an Elimination period Benefits are normally taxable

The correct answer is "Normally includes an Elimination period". Disability Income policies typically contain an Elimination period.

Which statement is true regarding a minor beneficiary?

The correct answer is "Normally, a guardian is required to be appointed in the Beneficiary clause of the contract". In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.

Which statement is true regarding a minor beneficiary? Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 Normally, a guardian is required to be appointed in the Beneficiary clause of the contract The minor must pay the debts of the insured's estate before receiving any of the proceeds The minor is entitled to receive the death proceeds immediately

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 A list of all policies the agent has replaced in the last 3 years A statement made by the agent that NAIC guidelines have been met during the replacement process A copy of the agent's insurance license

The correct answer is "Notice to existing and replacing insurers of intention to replace". When replacing an existing life insurance policy, an agent must submit notice to existing insurer and replacing insurer of intentions.

Which entity approves the insurance policy forms used in Florida?

The correct answer is "Office of Insurance Regulation (OIR)". The insurance policy forms used in Florida are approved by the Office of Insurance Regulation (OIR).

Which entity approves the insurance policy forms used in Florida? National Association of Insurance Commissioners (NAIC) Department of Financial Services (DFS) Financial Services Commission (FSC) Office of Insurance Regulation (OIR)

The correct answer is "Office of Insurance Regulation (OIR)". The insurance policy forms used in Florida are approved by the Office of Insurance Regulation (OIR).

How can an agent-in-charge have more than one location? Only if the locations are in Florida By keeping all locations within a close proximity An agent-in-charge can only have one location Only if the agent-in-charge is present when insurance activity occurs

The correct answer is "Only if the agent-in-charge is present when insurance activity occurs". Multiple locations are allowed as long as the agent-in-charge is present when insurance activity occurs.

The correct answer is "P only". In this situation, benefits will be paid to P because P survived the accident and is the primary beneficiary.

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

The correct answer is "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.

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? HMO PPO EPO PLHSO

The correct answer is "PPO". Under a Preferred Provider Organization (PPO), a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured.

Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)? PPO's normally have more providers to chose from as compared to an HMO Prices are negotiated in advance for PPO providers In-network PPO providers offer members better coverage of incurred expenses PPO's are NOT a type of managed care systems

The correct answer is "PPO's are NOT a type of managed care systems". This is incorrect. PPO's ARE considered to be a managed health care system.

What does Medicare Parts A and B cover?

The correct answer is "Part A covers hospitalization; Part B covers doctor's services". Medicare Part A covers hospital benefits. Part B covers physician's services.

What does Medicare Parts A and B cover? Part A covers hospitalization; Part B covers long-term care Part A covers doctor's services; Part B covers hospitalization Part A covers hospitalization; Part B covers doctor's services Part A covers prescription drugs; Part B covers disability

The correct answer is "Part A covers hospitalization; Part B covers doctor's services". Medicare Part A covers hospital benefits. Part B covers physician's services.

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?

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

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? Sell the client a more appropriate annuity Pay monetary restitution to the client Provide a written apology letter Pay a penalty of three times the client's loss

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

The correct answer is "Payments are made to an annuitant for life". A Straight Life annuity pays for the life of the annuitant.

Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?

The correct answer is "Payor clause". A Payor clause ensures that premiums will be waived for a Juvenile Life policy if the policyowner becomes disabled.

Which action could result in a hearing being ordered by the Department of Financial Services? Representing a foreign insurer Sharing commissions with another licensed agent Performing insurance transactions without a license Conducting insurance business in this state while being a resident of another

The correct answer is "Performing insurance transactions without a license". A hearing may be conducted if anyone is suspected of engaging in the business of insurance without a license.

Which of these do NOT constitute policy delivery? Policy mailed to applicant Policy mailed to agent Policy delivered to the applicant by the agent Policy issued with a rating

The correct answer is "Policy issued with a rating". All of these constitute delivery of the policy EXCEPT issuing a rated policy.

Which of these describe a participating life insurance policy? Policyowners are entitled to receive dividends Policyowners pay assessments for company losses Stock companies allow their policyowners to share in any company earnings Policyowners are not entitled to vote for members of the board of directors

The correct answer is "Policyowners are entitled to receive dividends". A participating life policy is one in which the policyowner receives dividends deriving from the company's divisible surplus.

A policyowner is able to choose the frequency of premium payments through what policy feature?

The correct answer is "Premium Mode". Premium Mode is the feature that allows the policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc.

A policyowner is able to choose the frequency of premium payments through what policy feature? Consideration Payor benefit Premium Mode Assignment provision

The correct answer is "Premium Mode". Premium Mode is the feature that allows the policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc.

Which of these characteristics is consistent with a Straight Life policy?

The correct answer is "Premiums are payable for as long as there is insurance coverage in force". Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death (or age 100).

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

The correct answer is "Premiums are waived if the payor becomes disabled". The Payor clause of a juvenile life policy provides a waiver of premiums if the payor becomes disabled.

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT? Premiums normally decrease at time of renewal Premiums normally increase at time of renewal Policy can renewed at any time by the company Policy can be cancelled at any time by the company

The correct answer is "Premiums normally increase at time of renewal". A Guaranteed Renewable Health Insurance policy can have increasing premiums at time of renewal.

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? Primary Insurance Amount (PIA) Total taxes paid into FICA Number of dependents State of residence

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

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision? Principal carrier Surplus carrier Primary carrier Secondary carrier

The correct answer is "Primary carrier". In double coverage situations, the insurer covering the employee who has the claim is called the primary insurance company. The primary company must pay as much of the claim as the policy limits permit.

Which of these is NOT a type of agent authority?

The correct answer is "Principal". Agent authority is what an agent is authorized to do on behalf of his company. The three types of agent authority include express, implied, and apparent authority.

What must the policyowner provide to the insurer for validation that a loss has occurred? Proof of Coverage Proof of Claim Proof of Loss Proof of Payment

The correct answer is "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

The correct answer is "Rating Services". All of these are valid sources to obtain underwriting information about an applicant EXCEPT for a rating service (A.M. Best, Standard & Poor's).

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the Residual Disability provision Presumptive Disability provision Recurrent Disability provision Partial Disability provision

The correct answer is "Recurrent Disability provision". In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability provision.

The correct answer is "Recurrent Disability". In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability benefit.

Which of these Nonforfeiture Options continue a build-up of cash value? Waiver of Premium Extended Term Reduced Paid-Up Cash Surrender

The correct answer is "Reduced Paid-Up". A Reduced Paid-Up option would provide continuing cash value build-up.

The correct answer is "Reinstatement". In this situation, coverage may be restored under the reinstatement provision.

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

The correct answer is "Residual Benefit clause". A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income.

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? Irrevocable Contingent Primary Revocable

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

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? Tertiary Irrevocable Revocable Contingent

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

The correct answer is "Send a notice to the MIB that the applicant was declined". The MIB does not need to be notified that coverage was denied.

Which of the following provisions is NOT required in HMO contracts/certificates? Enrollment Rates shall not be excessive No pre-existing exclusions for children Seven-day grace period

The correct answer is "Seven-day grace period". This is inaccurate. 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?

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

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

The correct answer is "broker dealer". An agent marketing variable life insurance must be licensed and appointed as a life and variable contract agent and a broker dealer.

Which of the following is NOT considered rebating? Sharing commissions with an agent licensed in the same line of business Returning premium to a client as an inducement for purchasing a policy Giving something of value to an insured in exchange for their business Offering special dividends

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

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? Authorize for payroll deductions Agree to a physical examination Sign an enrollment card Register with her state of residency

The correct answer is "Sign an enrollment card". A new employee must sign an enrollment card during the open enrollment period.

The correct answer is "Single Premium". Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date.

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 the beneficiary? Split-dollar plan Employer purchase plan Key employee plan Deferred compensation plan

The correct answer is "Split-dollar". A split-dollar plan is an arrangement where an employer and an employee share in the cost of purchasing a life insurance policy on the employee. The employee is also allowed to name the policy beneficiary.

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) Cash Refund Installment Refund Straight Life annuity Life Annuity with Period Certain

The correct answer is "Straight Life annuity". The Straight Life Annuity pays the largest monthly benefit to a single annuitant because it is based only on life expectancy, but it creates a risk that the annuitant may die early and forfeit much of the value of the annuity to the insurance company.

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?

The correct answer is "Submit the claim in any form". If forms are not furnished, the insured should submit the claim in any form, which must be accepted by the company as adequate proof of loss.

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? File a lawsuit Submit the claim in any form Wait for the claim form to arrive Resubmit the request for a claim form

The correct answer is "Submit the claim in any form". If forms are not furnished, the insured should submit the claim in any form, which must be accepted by the company as adequate proof of loss.

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

The correct answer is "Subrogation". 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.

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? Indemnity Subrogation Legal action Consideration

Which of the following statements about the classification of applicants is INCORRECT?

The correct answer is "Substandard applicants are never declined by underwriters". This is false. An individual can be rated substandard for a number of reasons and can even be rejected outright.

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

The correct answer is "Suitability form". Every agent soliciting Medicare Supplements must provide a suitability form.

Which of the following costs would a Basic Hospital/Surgical policy likely cover? Surgically removing a facial birthmark Care given at a nursing home Treating a wound from a soldier injured at war Lost income caused by a hospital stay

The correct answer is "Surgically removing a facial birthmark". A Basic Hospital/Surgical policy would most likely cover cosmetic surgery to remove a facial birthmark.

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?

The correct answer is "Ten-Year Endowment". In this situation, a Ten-Year Endowment should be purchased to ensure the funds will be available when needed.

Which of these life insurance riders allows the applicant to have excess coverage?

The correct answer is "Term rider". Term riders allow an applicant to have excess life insurance coverage.

What type of life insurance are credit policies issued as?

The correct answer is "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 does a Guaranteed Insurability rider provide a Disability Income policyowner? The guarantee that the premiums will never increase The guarantee that the policy will never be cancelled The ability to periodically increase the amount of coverage without evidence of insurability The ability to periodically increase the amount of coverage only with evidence of insurability

The correct answer is "The ability to periodically increase the amount of coverage without evidence of insurability". A Guaranteed Insurability rider allows the insured to periodically increase the amount of benefits payable under the policy.

Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency?

The correct answer is "The amount of premium collected at this location". The Department of Financial Services does not take into consideration the amount of premium collected at an agent's home when determining whether or not the home is an insurance agency.

Which statement regarding a Key Employee Life policy is NOT true? The application must be signed by the key employee Its purpose is to prevent the financial loss that may ensue if a key employee dies The beneficiary is named by the key employee The company purchases, owns, pays the premiums and is the beneficiary

The correct answer is "The beneficiary is named by the key employee". The company names the beneficiary, not the employee.

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? The gross premium is higher on a monthly payment mode as compared to being paid annually The gross premium is lower on a monthly payment mode as compared to being paid annually The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis

The correct answer is "The gross premium is higher on a monthly payment mode as compared to being paid annually". A premium payment mode that is more frequent than an annual payment will result in a higher gross premium.

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? The maximum premium an insurer can charge for their health insurance based on geography The maximum amount an employer can contribute to a contributory health plan The maximum deductible an insured can be charged The maximum amount considered eligible for reimbursement by an insurance company under a health plan

The correct answer is "The maximum amount considered eligible for reimbursement by an insurance company under a health plan". Usual, customary, and reasonable (UCR) charges are the maximum amount the insurer will consider eligible for reimbursement under a health insurance plan.

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

The correct answer is "The premiums for the handicapped child are not paid". Under a Family Health policy issued in Florida, a handicapped child must continue to be covered in all of these situations EXCEPT when premium payments cease to be paid.

The correct answer is "The proceeds would be reduced based on whatever the premium would have been if purchased at age 59". In this situation, the proceeds will be reduced based on whatever the premium would have been if purchased at age 59.

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 policy's full death benefit would be paid, due to the expiration of the incontestable period The proceeds would be reduced based on whatever the premium would have been if purchased at age 59 There would be no death proceeds paid out by the insurer The insurer is only obligated to refund all premiums paid

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?

The correct answer is "The state where they are conducting business". Domestic, foreign, or alien companies must be authorized by each state where they conduct business.

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom? The National Association of Insurance Commissioners (NAIC) The state where they are conducting business The attorney general in the state where they are domiciled Homeland Security

The correct answer is "The state where they are conducting business". Domestic, foreign, or alien companies must be authorized by each state where they conduct business.

Medicare is intended for all of the following groups EXCEPT

The correct answer is "Those enrolled as a full-time student". All of these groups of people are typically eligible for Medicare full-time students.

Medicare is intended for all of the following groups EXCEPT Those enrolled as a full-time student Those receiving Social Security disability benefits for at least 24 months Those afflicted with chronic kidney failure Those 65 and older

The correct answer is "Those enrolled as a full-time student". All of these groups of people are typically eligible for Medicare full-time students.

How does a typical Variable Life Policy investment account grow?

The correct answer is "Through mutual funds, stocks, bonds". A Variable Life Policy has investment values based instruments such as mutual funds, stocks, and bonds.

Which Accident and Health policy provision addresses preexisting conditions? Proof of Loss Legal Actions Time Limit on Certain Defenses Payment of Claims

The correct answer is "Time Limit on Certain Defenses". 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.

What is the elimination period of an individual disability policy?

The correct answer is "Time period a disabled person must wait before benefits are paid". The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.

What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins Time period a disabled person must wait before benefits are paid Time period after the policy issue date in which the provisions are still contestable The point in time when benefits are no longer payable

Which of the following is considered an accurate statement of an unfair trade practice? Coercion involves making a malicious statement about the financial condition of an insurance company 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 No more than 25% of an agent's insurance sales are allowed to come from controlled business Rebating occurs when someone intentionally deceives another with the intent to gain financially

The correct answer is "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". This is considered an unfair trade practice.

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

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

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

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

What type of life insurance incorporates flexible premiums and an adjustable death benefit? Endowment Policy Modified Whole Life Decreasing Term Universal Life

The correct answer is "Universal Life". Universal Life is designed to provide flexible premiums and an adjustable death benefit.

Which of the following BEST describes how pre-admission certifications are used?

The correct answer is "Used to prevent nonessential medical costs". Pre-admission certification is used to prevent unnecessary medical costs.

Which of the following BEST describes how pre-admission certifications are used? Used to assist in underwriting Used to prevent nonessential medical costs Used to minimize hospital lawsuits Used to help process claims

The correct answer is "Used to prevent nonessential medical costs". Pre-admission certification is used to prevent unnecessary medical costs.

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled? Contributions to employee retirement plans Utilities and office rent Owner's salary Meals and entertainment

The correct answer is "Utilities and office rent". A Business Overhead Expense policy is designed to cover certain overhead expenses (rent, taxes, utility bills, employee's salaries etc) that continue when the business owner is disabled.

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

The correct answer is "Variable Life". Because of the transfer of investment risk from the insurer to the policyowner, variable insurance products are considered securities contracts as well as insurance contracts.

Which policy requires a producer to register with the National Association of Securities Dealers (NASD) before selling? Variable Life Credit Life Universal Life Interest-Sensitive Whole Life

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? Deferred Flexible Variable Fixed

The correct answer is "Variable". A variable annuity's cash value will depend on the results of its investment funds.

What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age

The correct answer is "Wages". The major factor in determining the benefit amount paid under a disability income policy is wages.

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the Grace Period Waiting Period Postponement Period Elimination Period

The correct answer is "Waiting Period". The waiting period in a Group Health policy gives an insurance company the rights to delay coverage for a covered sickness for a specified number of days after the effective date of the policy.

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the Probation Period Grace Period Waiver of Premium Elimination Period

The correct answer is "Waiver of Premium". The Waiver of Premium provision in a health insurance contract suspends the insurer's right to receive premiums during a covered period of disability.

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

The correct answer is "War". Disability policies do NOT normally pay for disabilities arising from an act of war.

Disability policies do NOT normally pay for disabilities arising from which of the following? Accidents War Negligence Sickness

The correct answer is "War". Disability policies do NOT normally pay for disabilities arising from an act of war.

Which of these is considered a statement that is assured to be true in every respect?

The correct answer is "Warranty". A warranty is a statement that is considered guaranteed to be true.

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

The correct answer is "Warranty". Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

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

The correct answer is "When the application is made". Insurable interest must exist when the application is made for it to be valid.

A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(n) accredited agent broker dealer Certified Variable Dealer (CVD) Registered Managing Agent (RMA)

The correct answer is "broker dealer". An agent marketing variable life insurance must be licensed and appointed as a life and variable contract agent and a broker dealer.

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? When the policy is issued The date of policy delivery When the conditions of the receipt are met The date the sales appointment was set

The correct answer is "When the conditions of the receipt are met". A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

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

The correct answer is "When the state prohibits this by law". Applicable state laws that prevent an autopsy take precedence.

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations EXCEPT When the cause of death is unknown When the state prohibits this by law When consent for the autopsy is not obtained When foul play was a contributing factor

The correct answer is "When the state prohibits this by law". Applicable state laws that prevent an autopsy take precedence.

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

The correct answer is "a Buyer's Guide and a Policy Summary". Florida's rules on disclosure require an insurance company to provide a purchaser of life insurance with a Buyer's Guide and a Policy Summary.

A stock life insurance company that issues both participating and nonparticipating policies is doing business on a mixed plan a diverse plan a multiple plan an assorted plan

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

All of the following will result in the suspension of an agent's license EXCEPT intentionally misrepresenting the provisions of a policy acting with fiduciary responsibility forging a name on an insurance application being convicted of a felony

The correct answer is "acting with fiduciary responsibility". Acting as a fiduciary would not result in suspension of an agent's license.

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of additional Term Life coverage at any time additional Term Life coverage at specified intervals additional Whole Life coverage at any time additional Whole Life coverage at specified times

The correct answer is "additional Whole Life coverage at specified times". A guaranteed insurability option in a Whole Life Policy permits the policyowner to purchase, without evidence of insurability, stated amounts of Whole Life insurance at specified times.

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

The correct answer is "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 example of an unfair trade practice is

The correct answer is "an agent making a material misrepresentation to the insured". Making a material misrepresentation to an insured is considered to be an unfair trade practice.

Group life insurance policies are generally written as a term rider annually renewable term increasing term group whole life

The correct answer is "annually renewable term". Group life insurance policies are generally written as annually renewable term.

To be eligible for Social Security disability benefits, an employee must be unable to perform any occupation his/her current occupation any occupation that reflects the employee's education level any occupation that the employee is qualified and willing to do

The correct answer is "any occupation". To be eligible for Social Security disability benefits, an employee must be unable to perform any occupation.

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

The correct answer is "applicant's physician". Information received from the Medical Information Bureau about a proposed insured may be released to the proposed insured's physician.

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the agent applicant's spouse National Association of Insurance Commissioners (NAIC) applicant's physician

The correct answer is "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

The correct answer is "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.

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 need to be individually approved or declined during the underwriting process must contribute toward the group health policy's premiums take a physical examination before the master policy is issued

Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk

The correct answer is "both an insurance and securities product". Variable Whole Life Insurance is both an insurance and securities product.

A Health Reimbursement Arrangement MUST be established with employee funding with other employer-sponsored benefit plans by the employer only during specific open enrollment periods

The correct answer is "by the employer". HRAs are employer-established benefit plans that must be funded by the employer.

A person who is insured within a group contract will be given a

The correct answer is "certificate". A person who is insured within a group contract will be given a certificate.

A person who is insured within a group contract will be given a certificate master policy policy summary participation agreement

The correct answer is "certificate". A person who is insured within a group contract will be given a certificate.

An example of sliding would be

The correct answer is "charging for an additional product without the applicant's consent". Sliding involves selling additional coverage to an insurance applicant who doesn't want or need it. An agent will often "slide" this additional coverage in without the customer's knowledge or consent.

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n) closed panel open panel co-op panel capitation panel

The correct answer is "closed panel". A closed panel is when an HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility.

One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is

The correct answer is "closely regulated and requires full disclosure". Replacement of insurance policies is strictly regulated and requires full disclosure.

An applicant who pays the initial premium at the time of application is typically given a(n)

The correct answer is "conditional receipt". A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.

An applicant who pays the initial premium at the time of application is typically given a(n) official receipt conditional receipt binding receipt certified receipt

The correct answer is "conditional receipt". A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.

Major Medical policies typically pay 100% of covered expenses contain a deductible and coinsurance require use of in-network facilities only do not contain a deductible and coinsurance

The correct answer is "contain a deductible and coinsurance". Major Medical policies typically contain a deductible and coinsurance.

What type of group plan involves employees sharing the cost?

The correct answer is "contributory plan". Employees share the cost of group insurance with an employer in a contributory plan.

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

The correct answer is "converted to an individual permanent policy at an individual rate". In this situation, the insured can convert to a permanent policy at the individual rates.

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

The correct answer is "date of delivery". In Florida, the free-look period for life insurance contracts is 14 days from policy delivery.

Medicare Part A and Part B do NOT pay for

The correct answer is "dental work". Dental services are not covered by Medicare Part A or B.

What is the purpose of the U.S.A. Patriot Act? detect and deter fraud detect and deter alien insurance companies detect and deter terrorism detect and deter misrepresentations

The correct answer is "detect and deter terrorism". The purpose of the U.S.A. Patriot Act is to detect and deter terrorism.

A producer 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 issue the policy only when the initial premium check has cleared determine if the applicant is insurable by investigating family health history issue the policy on a standard basis determine if the applicant is an acceptable risk by completing standard underwriting procedures

The correct answer is "determine if the applicant is an acceptable risk by completing standard underwriting procedures". With a conditional receipt, the insurance company will complete standard underwriting procedures before making a decision about whether to insure the applicant.

In Florida, an insurer domiciled and incorporated in this state is called a(n) alien company admitted company domestic company foreign company

The correct answer is "domestic company". An insurance company domiciled and incorporated under the laws of Florida is a domestic company in Florida.

Health insurance benefits NOT covered due to an act of war are excluded by the insurer in the contract provisions assigned to a reinsurer given a longer probationary period charged a higher premium

The correct answer is "excluded by the insurer in the contract provisions". An exclusion is a provision that entirely eliminates coverage for a specified risk, such as an act of war or aviation.

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)

The correct answer is "exclusion for the medical condition". In this situation, the policy may be issued with an exclusion for the medical problem.

All of these are characteristics of an Adjustable Life policy EXCEPT

The correct answer is "face amount can be adjusted using policy dividends". An insured may make all of these actions with an adjustable life policy EXCEPT "face amount can be adjusted using policy dividends".

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as fiduciary responsibility reasonable trust ethical behavior legal competence

The correct answer is "fiduciary responsibility". Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes.

The reason for a business having a Business Overhead Expense Disability Plan is to cover the cost of providing group disability insurance to the employees fixed business expenses the owner's loss of income all business-related expenses and salaries

The correct answer is "fixed business expenses". The reason for a business having a Business Overhead Expense Disability Plan is to cover fixed business costs in the event the owner becomes disabled.

What kind of special need would a policyowner require with an Adjustable Life insurance policy?

The correct answer is "flexible premiums". As financial needs and objectives change, the policyowner can make adjustments to the premium and/or face amount.

The Financial Services Commission may hold hearings for any reason deemed necessary only when a felony is involved when approved by the NAIC only if there is a complaint filed

The correct answer is "for any reason deemed necessary". The Financial Services Commission may hold hearings for any purpose within the scope of the insurance code deemed necessary.

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 policy is delivered free-look period has expired insurance company issues policy initial premium is collected

The correct answer is "free-look period has expired". In this situation, the policy will go into effect after all these actions occur EXCEPT the expiration of the free-look period.

The Life and Health Insurance Guaranty Association is

The correct answer is "funded by admitted insurance companies through assessments". The Life and Health Insurance Guaranty Association is funded by insurance companies through assessments and will pay claims if an insurance company becomes insolvent.

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

The correct answer is "gross income at the time of purchase". The insured's earned income at the time of purchase limits the amount of the monthly benefit that an insured may purchase in a Disability Income Policy.

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's monthly expenditures at the time of disability gross income at the time of purchase gross income at the time of disability occupation at the time of purchase

The Florida Employee Health Care Access Act was established to make group health insurance available to employers with up to 50 employees health insurance affordable for families with children individual health insurance available to all Floridians health insurance affordable to retired individuals

The correct answer is "group health insurance available to employers with up to 50 employees". The purpose of the Florida Employee Health Care Access Act is to make group health insurance available to employers with 50 or fewer employees.

Basic Medical Expense insurance normally has a deductible and coinsurance covers an illness but not an accident pays for lost wages while hospitalized has lower benefit limits than Major Medical insurance

The correct answer is "has lower benefit limits than Major Medical insurance". Basic Medical Expense insurance typically has lower benefit limits than Major Medical insurance.

With a Basic Medical Expense policy, what does the hospitalization expense cover? hospital room and board hospital administration expenses surgeon's fees physician fees

The correct answer is "hospital room and board". The hospitalization expense of a Basic Medical Expense policy pays for hospital room and board.

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is occupation income age medical condition

The correct answer is "income". When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is income.

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?

The correct answer is "increase face amount". All of these actions can be taken by a policyowner without proof of insurability except for increasing the face amount.

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

The correct answer is "insuring clause". The insuring clause in a Life insurance contract establishes the basic promise of the insurance company.

A foreign insurance company doing business in Florida

The correct answer is "is a company that was formed under the laws of another state". In Florida, a foreign insurance company is a company that is formed under the laws of a state other than Florida.

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?

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

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

The correct answer is "policyowner". The policyowner (investor) benefits upon the death of the insured.

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? Double indemnity Benefits are taxable More restrictive Less restrictive

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

Credit Life insurance is issued in any amount at the discretion of the applicant used in the event of loss of income issued in an amount not to exceed the amount of the loan coverage that waives the premiums on a loan payment in the event of total disability

The correct answer is "issued in an amount not to exceed the amount of the loan". Credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.

In Florida, an element of an insurance transaction would be ordering an MIB report setting up the sales appointment issuing an insurance contract determining how much coverage is needed

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

What kind of premium does a Whole Life policy have? decreasing adjustable level deferred

The correct answer is "level". A Whole Life insurance policy has a level premium.

Basic Hospital and Surgical policy benefits are lower than the actual expenses incurred higher than the actual expenses incurred normally subject to deductibles normally subject to coinsurance

The correct answer is "lower than the actual expenses incurred". Basic Hospital and Surgical policy benefits are typically lower than the actual expenses incurred.

Defamation occurs when an agent makes a false statement intended to

The correct answer is "malign another insurer". Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business.

Defamation occurs when an agent makes a false statement intended to malign another insurer replace an existing insurance policy with another restrict fair trade misrepresent the provisions of an insurance policy

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

The correct answer is "marital status". Marital status does not affect the underwriting of a life insurance policy.

Convincing a prospective insured to buy an insurance policy based on exaggerations is called rebating intimidation twisting misrepresentation

The correct answer is "misrepresentation". It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called misrepresentation.

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

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

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 noncancellable conditionally renewable cancellable guaranteed renewable

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

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

The correct answer is "nonrenewable". A typical short-term medical expense policy is best described as nonrenewable.

In Florida, agents are allowed to engage in rebating if

The correct answer is "offered to all insureds in the same actuarial class". Rebating is allowed in Florida if the agent rebates insureds in the same actuarial class.

An example of unfair discrimination would be

The correct answer is "offering different terms of coverage for different policyowners having the same risk classification". Providing different terms of coverage for different policyowners in the same risk classification would be an example of unfair discrimination.

**Under Florida law, a variable annuity policy owner must be notified of the accumulated value of the contract only when requested by the policyowner once each month once each year twice each year

The correct answer is "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.

Deductibles are used in health policies to lower

The correct answer is "overuse of medical services". One of the primary reasons for using deductibles in health policies is to reduce the overuse of medical services.

Deductibles are used in health policies to lower the incidents of fraud the coinsurance amount overuse of medical services adverse selection

The correct answer is "overuse of medical services". One of the primary reasons for using deductibles in health policies is to reduce the overuse of medical services.

The benefits under a Disability Buy-Out policy are normally paid in installments taxable to the beneficiary payable to the company or another shareholder normally paid after a short elimination period

The correct answer is "payable to the company or another shareholder". Benefits payable under a Disability Buy-Out policy are paid to the company or another shareholder.

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

The correct answer is "policy proceeds". If not repaid by the time the insured dies, the loan balance and any interest accrued are deducted from the policy proceeds at the time of claim.

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

The correct answer is "premiums paid for Disability income policies are tax-deductible". Premiums paid by individuals for Disability income policies are NOT tax-deductible. However, the benefits would be considered tax-free to the individual.

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

The correct answer is "representations". Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called representations.

According to Florida law, group life insurance conversion privileges must NOT allow the converted policy to exceed 75% of the original group life amount allow a time period to convert group life coverage to an individual life policy require a rate increase require evidence of insurability

The correct answer is "require evidence of insurability". Florida's insurance law that governs group life insurance conversion privileges provides that the individual policies do not require evidence of insurability.

What is the Suicide provision designed to do? decline an applicant who is contemplating suicide safeguard the insurer from an applicant who is contemplating suicide protect the insurer from ever paying a claim that results from suicide allows the insurer the option to pay a death benefit in the event of suicide

The correct answer is "safeguard the insurer from an applicant who is contemplating suicde". The purpose of a Suicide provision is to protect the insurer against the purchase of a policy in contemplation of suicide.

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

The correct answer is "secondary addressee". An insurer must mail a long-term care lapse notice at least 30 days prior to the effective date of cancellation to both the policyholder and a specified secondary addressee.

A long-term care lapse notice must be delivered to both the applicant and secondary addressee beneficiary personal physician MIB

An immediate annuity consists of a variable premium flexible premium single premium deferred premium

The correct answer is "single premium". An immediate annuity has a single premium.

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

The correct answer is "spouse's occupation". In this situation, a spouse's occupation is not necessary for the application.

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is

The correct answer is "the cost". The cost of insurance is most important when an insured owner is trying to decide whether to convert term insurance at the insured's original age or the insured's attained age.

A noncontributory group term life plan is characterized by

The correct answer is "the entire cost of the plan is paid for by the employer". When an employer provides noncontributory group term life insurance, the employer pays the entire cost of the plan.

During the application process, the agent's primary responsibility is to the Department of Financial Services the applicant the insurance company the State of Florida

The correct answer is "the insurance company". The agent's primary responsibility in the application process is to the insurer.

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 the insurer the Chief Financial Officer the Financial Services Commission

The correct answer is "the policyowner". The replacement of existing life insurance policies with new contracts of life insurance requires a written Comparison and Summary Statement at the policyowner's request.

An individual who purchases a Life annuity is given protection against

The correct answer is "the risk of living longer than expected". A Life annuity offers protection against the risk of living longer than anticipated.

An individual who purchases a Life annuity is given protection against inflation the risk of dying prematurely the risk of living longer than expected the risk of not having enough retirement income

The correct answer is "the risk of living longer than expected". A Life annuity offers protection against the risk of living longer than anticipated.

A disability elimination period is best described as a

The correct answer is "time deductible". The best way to describe a disability elimination period is a "time deductible"

A disability elimination period is best described as a time deductible dollar deductible eligibility period probation period

The correct answer is "time deductible". The best way to describe a disability elimination period is a "time deductible"

Group Life policies in Florida are required to contain a conversion privilege that allows for conversion

The correct answer is "to an individual policy for a stated period of time". In Florida, Group Life policies must contain a conversion privilege that allows for conversion to an individual policy for a specified period of time.

Group Life policies in Florida are required to contain a conversion privilege that allows for conversion with evidence of insurability to an individual policy for a stated period of time only if the premiums are paid by the employer to an individual policy at anytime

T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert to an individual policy, only by providing evidence of insurability to an individual policy, only if the employer pays the premiums to an individual policy upon employment termination to an individual policy with a higher amount of coverage

The correct answer is "to an individual policy upon employment termination". When an employee covered on a Group Life policy leaves the group, the conversion privilege gives the employee the right to convert to an individual policy upon termination of employment.

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

The correct answer is "twisting". Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies.

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 coercion rebating defamation twisting

The correct answer is "twisting". Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies.

All of these are considered to be a benefit under Social Security EXCEPT for survivorship unemployment disability retirement

The correct answer is "unemployment". All of these are considered benefits of Social Security EXCEPT for unemployment.

Which of the following phrases refers to the fees charged by a healthcare professional? Deductible Coinsurance Usual, customary, and reasonable expenses Hospital expense

The correct answer is "usual, customary, and reasonable expenses". The insurance phrase which considers a particular fee charged by a physician, dentist, or other health professional is usual, customary, and reasonable expenses.

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 broker insurer viator agent

The correct answer is "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.

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

The correct answer is "warranty". Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? Company becoming insolvent Death of the business owner Business owner becoming disabled Key employee becoming disabled

The correct answers is "Business owner becoming disabled" A Business Disability Buy-Sell policy is designed to assist in the sale of a business when one of the owners becomes disabled

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?

The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured's employment is called nonoccupational coverage.

Which of these is NOT considered to be an element of an insurance contract?

The elements of an insurance contract do not include negotiating.

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

The face amount of a Whole Life policy will be paid when the insured dies or on maturity of the policy, whichever occurs first.

Which of the following phrases refers to the fees charged by a healthcare professional?

The insurance phrase which considers a particular fee charged by a physician or other health professional is usual, customary, and reasonable expenses.

Who elects the governing body of a mutual insurance company? chairman of the board bondholders stockholders policyholders

The governing body of a mutual insurance company is elected by the policyholders.

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

The grace period is a minimum of 31 days for policies that are paid for on an annual basis.

Which type of provider is known for stressing preventative medical care?

The health provider that stresses preventive medical care is known as a Health Maintenance Organization.

Which type of provider is known for stressing preventative medical care? Multiple Employer Welfare Arrangements (MEWA) Major medical provider Health Maintenance Organizations (HMO's) Preferred Provider Organizations (PPO's)

The health provider that stresses preventive medical care is known as a Health Maintenance Organization.

The incontestable clause allows an insurer to

The incontestable clause or provision specifies that after a certain period of time (usually two years from the issue date), the insurer no longer has the right to contest the validity of the life insurance policy so long as the contract continues in force.

The incontestable clause prevents the insurer from canceling the contract even for a material misrepresentation.

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 denied the claim Beneficiary will be denied the claim and refunded all paid premiums Beneficiary will be paid the Death Benefit Beneficiary will be paid a partial Death Benefit

The incontestable clause prevents the insurer from canceling the contract even for a material misrepresentation.

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

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a Primary Care Physician.

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a Physician's assistant Primary Care Physician Secondary Care Physician Third Party Administrator

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a Primary Care Physician.

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? File a lawsuit Contact the insurer again requesting forms Nothing File written proof of loss

The insured may file written proof of loss in any form if the insurer does NOT furnish forms after the insured gives notice of loss.

The insurer must provide a prospective buyer with a(n) Buyer's Guide and Policy Summary A.M. Best report actuarial table copy of the application

The insurer must provide a prospective buyer with a Buyer's Guide and Policy Summary.

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

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

What does the insuring agreement in a Life insurance contract establish? An insurer's basic promise The insurance policy's grace period An insurer's required reserve amount The obligations of the beneficiary

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

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)

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

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) Entire Contract provision Consideration clause Insuring agreement Assignment agreement

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

In Florida, most life insurance policies have a contestability period of 1 year 2 years 3 years 4 years

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

A life policy loan in Florida cannot charge a fixed rate of interest higher than 7% 8% 9% 10%

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

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? $1,000,000 $500,000 $250,000 $0

The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

The option to convert gives the insured the right to convert or exchange the term policy for a whole life (or permanent) plan without evidence of insurability.

Which of the following statements describes what an Accident and Health policyowner may NOT do?

The owner of an Accident and Health policy may not change the premium amount.

Which of the following statements describes what an Accident and Health policyowner may NOT do? File a covered claim Assign ownership Cancel the coverage Adjust the premium payments

The owner of an Accident and Health policy may not change the premium amount.

What does the ownership clause in a life insurance policy state? Who the policyowner is and what rights the policyowner is entitled to Who the beneficiary is and what rights the beneficiary is entitled to Ownership cannot be assigned after the incontestable period Allows the policyowner to adjust the death benefit and premium amount at anytime

The ownership clause in a life insurance policy is a provision that indicates who is the policyowner and provides a general description of the owner's rights.

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT

The payment of commissions to the agents is not classified under the four principal areas of Florida insurance law.

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT An agent's commission Policyowner's rights Policy provisions An agent's licensing requirements

The payment of commissions to the agents is not classified under the four principal areas of Florida insurance law.

On a life insurance policy, who is qualified to change the beneficiary designation?

The policyowner has the right to change the beneficiary designation. However, consent may needed by the current beneficiary if designated as irrevocable.

All of these statements about Equity Indexed Life Insurance are correct EXCEPT Cash value has a minimum rate of accumulation If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index The premiums can be lowered or raised, based on investment performance Tied to an equity index such as the S&P 500

The premiums can be lowered or raised, based on investment performance equity Indexex Life Insurance is permanent life insurance that allows policyholders to tie accumulation values to a stock market index.

What is the main reason for regulating the insurance industry?

The primary purpose of regulation of the insurance industry is to promote the public welfare by maintaining the solvency of insurance companies.

When does a Probationary Period provision become effective in a health insurance contract?

The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.

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

The producer should have the applicant initial any changes made on the application.

When an insurance application is taken by a producer, which of these statements is true? The applicant should have an attorney present during the application process Any changes made on the application require the applicant's initials Any changes made on the application can later be initialed by the producer if the applicant is unavailable The producer has the discretion to ask or not to ask any of the questions listed on the application

The producer should have the applicant initial any changes made on the application.

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

The provision in a Major Medical policy that requires the insurance company pay only part of a loss and the insured to pay the balance is known as coinsurance.

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

The provisions of the Florida Employee Health Care Access Act require that all small group health benefit plans be issued on a "guaranteed-issue" basis.

What is the Suicide provision designed to do?

The purpose of a Suicide provision is to protect the insurer against the purchase of a policy in contemplation of suicide.

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

The purpose of the Grace Period is to give the policyowner additional time to pay overdue premiums.

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

The purpose of the Time of Payment of Claims provision is to prevent the insurance company from delaying claim payments.

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.

The coordination of benefits (COB) provision exists in order to avoid duplication of benefit payments avoid excessive hospitalization lower insurance premiums maximize patient care

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

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?

The purpose of the insuring clause is to specify the scope and limits of the coverage provided.

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies? Specifies the additional time given to pay past due premiums States the scope and limits of the coverage Specifies a claim will be paid immediately upon receipt of proof of loss Prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss

The purpose of the insuring clause is to specify the scope and limits of the coverage provided.

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine driving history probability of making timely premium payments if applicant is a tobacco user overall health of the applicant

The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.

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 replacement of existing life insurance policies with new contracts of life insurance requires a written Comparison and Summary Statement at the policyowner's request.

The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called credits reserves surplus retention

The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called reserves.

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

The suicide occurred outside the Suicide clause period (normally 1-2 years), thus the face amount will be paid.

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

The total cash surrender value is NOT taxable. The interest gained is taxable.

Which of the following BEST describes a Hospital Indemnity policy? Coverage that reimburses an insured for surgeon expenses Coverage that pays a stated amount per day of a covered hospitalization Coverage that replaces lost income due to hospitalization Coverage that pays for hospital room and board

The typical Hospital Indemnity policy pays a stated amount per day of a covered hospitalization.

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

The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is

This provision limits the period during which an insurer can deny a claim based on a misstatement made by the insured.

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is Grace Period Physical Examination and Autopsy Entire Contract Time Limit on Certain Defenses

This provision limits the period during which an insurer can deny a claim based on a misstatement made by the insured.

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

This rider provides specific dates on which additional life insurance policies can be bought without providing proof of insurability.

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? 10 year increments at future dates specified in the contract with proof of insurability required at future dates specified in the contract with no evidence of insurability required at any time while policy is active

This rider provides specific dates on which additional life insurance policies can be bought without providing proof of insurability.

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

To determine the premium rate on a Whole Life policy, an insurance company will consider the risk classification of the applicant.

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Geographical location Source of income Risk classification Marital status

To determine the premium rate on a Whole Life policy, an insurance company will consider the risk classification of the applicant.

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

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

What type of reinsurance contract involves two companies automatically sharing their risk exposure?

Treaty

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?

Under a Preferred Provider Organization (PPO), a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured.

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Under a basic hospital/surgical expense policy, the amount of the patient's claim payment will be based on the terms of the policy.

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy

Under a basic hospital/surgical expense policy, the amount of the patient's claim payment will be based on the terms of the policy.

Who makes the legally enforceable promises in a unilateral contract?

Under a unilateral insurance policy, the insurance company makes the legally enforceable promises.

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? Primary beneficiary's estate Primary beneficiary's next of kin Insured's estate Insured's contingent beneficiary

Under the Uniform Simultaneous Death Act, if both insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if the insured died last. In other words, the proceeds will be paid to the secondary or contingent beneficiary.

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

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.

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? Risk classification Warranty review Insurable interest Inspection report

What action will an insurer take if an interest payment on a policy loan is not made on time? cancel the policy if not paid within the grace period automatically add the amount of interest due to the loan balance subtract from any dividends owed disallow any further loans

Unpaid interest from a policy loan is added to the loan balance if not paid by the due date.

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

Usual, customary, and reasonable (UCR) charges are the maximum amount the insurer will consider eligible for reimbursement under a health insurance plan.

Which of these is an element of a Variable Life policy? A fixed, level premium Insurer assumes the investment risk No investment risk to the policyowner Rate of returns are guaranteed

Variable Whole Life policies have a fixed, level premium.

Which parts of a life insurance policy are guaranteed to be true? Rating Representation Statement Warranty

Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

Any changes made on an insurance application requires the initials of whom?

When an applicant makes a mistake in the information given to an agent in completing the application, the applicant can have the agent correct the information, but the applicant must initial the correction.

Any changes made on an insurance application requires the initials of whom? Insured Agent Applicant Beneficiary

T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert

When an employee covered on a Group Life policy leaves the group, the conversion privilege gives the employee the right to convert to an individual policy upon termination of employment.

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is known as reimbursement.

A life insurance policy that provides a policyowner with cash value along with a level face amount is called Whole life Level term Credit life Ordinary life

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

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

Whole life insurance is designed to mature at age 100.

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 insurance is designed to mature at age 100.

With a conditional receipt, the insurance company will complete standard underwriting procedures before making a decision about whether to insure the applicant.

Which statement is TRUE regarding a group accident & health policy issued to an employer? Neither the employer or employee are policyowners The employer is issued a certificate of coverage and each employee receives a policy The employer is the policyowner and each employee receives a certificate of coverage Both the employer and employee are policyowners

With a group accident and health plan, a master policy is issued to the employer and each employee receives a certificate of insurance.

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

When can a policyowner change a revocable beneficiary?

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

When can a policyowner change a revocable beneficiary? Anytime After the consent of the current beneficiary Never Only if primary beneficiary dies

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

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

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

Term insurance has which of the following characteristics?

With term insurance, the policy expires at the end of the policy period.

Term insurance has which of the following characteristics? Expires at the end of the policy period Builds cash value Has nonforfeiture options Endows at the end of the policy period

With term insurance, the policy expires at the end of the policy period.

Which of the following activities will NOT result in the suspension of an agent's license? Making malicious and false statements about an insurer Replacing an insurance policy from one insurer to another based on misrepresentation Working for a foreign insurer Misrepresenting any fact about an insurance policy

Working for a foreign insurance company does not result in the revocation or suspension of an agent's license.

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? 3 4 5 6

You are eligible to file for Social Security benefits after being totally disabled for 5 months.

How long does the coverage normally remain on a limited-pay life policy?

age 100 Even though the premium payments are limited to a certain period, the insurance protection extends until the insured's death, or to age 100.

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? Extended term option Conversion provision 1035 Exchange Incontestable period

conversion provision The option to convert gives the insured the right to convert or exchange the term policy for a whole life (or permanent) plan without evidence of insurability.

A variable insurance policy... -guarantees a minimum rate of return -does not allow the policyowner to assume the investment risk -does not guarantee a return on its investment accounts -does not guarantee an assignment provision

does not guarantee a return on investment accounts In contrast, variable insurance products do not guarantee contract cash values, and it is the policyowner who assumes the investment risk. Variable life insurance contracts do not make any promises as to either interest rates or minimum cash values.

All of these are characteristics of an Adjustable Life policy EXCEPT adjustable premiums adjustable premium payment period combination of term and whole life insurance face amount can be adjusted using policy dividends

face amount can be adjusted using policy dividends An insured may make all of these actions with an adjustable life policy EXCEPT "face amount can be adjusted using policy dividends".

What kind of special need would a policyowner require with an Adjustable Life insurance policy? level premiums flexible premiums flexible nonforfeiture options level death benefits

flexible premiums As financial needs and objectives change, the policyowner can make adjustments to the premium and/or face amount.

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? increase face amount decrease face amount increase premium-paying period decrease premium payment

increase face amount All of these actions can be taken by a policyowner without proof of insurability except for increasing the face amount.

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have

insurable interest in the proposed insured

Credit Life insurance is

issued in an amount not to exceed the amount of the loan Credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.

Credit Life insurance is

issued in an amount not to exceed the amount of the loan". Credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.

What kind of premium does a Whole Life policy have? decreasing adjustable level deferred

level

An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary? Proceeds will go to the primary beneficiary's estate Probate will decide who receives proceeds Proceeds will go to the contingent beneficiary Proceeds will go to the insured's estate

n this situation, the contingent beneficiary will receive the proceeds.

The part of a life insurance policy guaranteed to be true is called

warranty Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

What type of insurance offers permanent life coverage with premiums that are payable for life?

whole life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? Joint policy Joint survivor policy Whole life policy with other insured rider Whole life policy with a Guaranteed Insurability option

A Whole life policy with other insured rider In this situation, a whole life policy with an other insured rider would be appropriate.

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the Policy Loan provision Automatic Premium Loan provision Accelerated Benefits provision Consideration clause

A policy loan will pay the policyowner an amount that, with interest, does NOT exceed the guaranteed cash value.

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? Interest-Sensitive Whole Life Ten-Year Endowment Variable Universal Life Ten-Year Renewable Term

In this situation, a Ten-Year Endowment should be purchased to ensure the funds will be available when needed.

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? Refund of premiums paid plus interest Nothing, due to actively serving in the armed forces Double the face amount because cause of death was accidental The full face amount

In this situation, the beneficiary will receive the full death benefit stated in the policy.

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

Promise to pay a death benefit

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called Reinstatement Grace period Automatic premium loan Waiver of premium

Reinstatement

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? The total premiums paid minus any policy loans Nothing $50,000 $100,000

The correct answer is "$50,000". The suicide occurred outside the Suicide clause period (normally 1-2 years), thus the face amount will be paid.

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? Accelerated Benefits provision Entire Contract Accidental Death and Dismemberment provision Consideration clause

The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due

The correct answer is "Amount of premium payments and when they are due". The consideration clause in a life insurance policy specifies the amount and frequency of premium payments that the policyowners must make to keep the insurance in force.

A policy loan is made possible by which of these life insurance policy features? Policy loan clause Cash value provision Owner's rights provision Consideration clause

The correct answer is "Cash value provision". The Cash value provision makes a policy loan possible.

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? Claims are denied under the Suicide clause of the policy Company pays twice the face amount under the double indemnity clause Claims are paid in full Premiums are returned under the Consideration clause

The correct answer is "Claims are denied under the Suicide clause of the policy". Claims are denied under the Suicide clause of the policy.

What provision in a life insurance policy states that the application is considered part of the contract? Application provision Policy Exclusions provision Entire Contract provision Incontestability provision

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Policy Exclusion Incontestable Entire Contract Assignment

The correct answer is "Entire contract provision". The entire contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be "incorporated by reference," meaning that the policy cannot refer to any outside documents as being part of the contract.

Which statement is TRUE in regards to a policy loan? Past-due interest payments not paid after 3 months will void the policy Past-due interest on a policy loan is added to the total debt Insurance companies can send delinquent interest accounts to a collection agency Insurance companies can charge an interest rate based on the policyowner's credit report

The correct answer is "Past-due interest on a policy loan is added to the total debt".

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? Accelerated death benefit rider Return of premium rider Family income rider Term rider

The correct answer is "Return of premium rider". In this situation, a return of premium rider was included on the policy.

Which of these life insurance riders allows the applicant to have excess coverage? Automatic Premium Loan rider Waiver of Premium rider Guarantee Insurability rider Term rider

The correct answer is "Term rider". Term riders allow an applicant to have excess life insurance coverage.

The automatic premium loan provision is designed to provide a source of revenue to the insurance company avoid a policy lapse allow a policyowner to request a policy loan allow a policyowner to take out additional coverage without evidence of insurability

The correct answer is "avoid a policy lapse". The purpose of the automatic premium loan is to keep the policy from lapsing

The incontestable clause allows an insurer to disallow a change of ownership throughout the Contestable period disallow a change of beneficiary during the Contestable period contest a claim at anytime if the cause of death was accidental contest a claim during the contestable period

The correct answer is "contest a claim during the contestable period". The incontestable clause or provision specifies that after a certain period of time (usually two years from the issue date), the insurer no longer has the right to contest the validity of the life insurance policy so long as the contract continues in force.

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the Insuring clause Consideration clause Entire Contract Owner's rights

The correct answer is "insuring clause". The insuring clause in a Life insurance contract establishes the basic promise of the insurance company.

A policy of adhesion can only be modified by whom?

The insurance company

The investment gains from a Universal Life Policy usually go toward the death benefit the dividends the cash value paying off a policy loan

the cash value In a Universal Life Policy, income is usually directed toward the cash value.

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