Simulation Exam - Florida Life and Health Exam

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy/ Which of the following insurance principles has the insurer violated?

Consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.

Which of the following insurance products will be subject to the regulation on life insurance solicitation?

A Term life policy.

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability. which policy provision allow this?

A lapsed policy may be reinstated within 3 years by paying back premiums, with interest, and proving insurability.

Which of the following is true regarding the agent's appointments?

A person may hold several appointments at one time.

All of the following are correct about the required provisions of a health insurance policy EXCEPT?

A reinstated policy provides immediate coverage for an illness

Which if the following groups would probably be covered by blanket insurance?

A university's sports team

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?...

As off the application date.

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

Benefit payment amounts are not guaranteed

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time.

Which of the following must an insurer obtain in order to transact insurance within a giver state?

Certificate of authority.

All of the following are duties and responsibilities of producers at the time of application EXCEPT ?

Change any incorrect statement on the application by personally initialing next to the corrected statement.

All of the following are required provisions in all individual health insurance policies delivered in this state EXCEPT?

Change of occupation.

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the Illegal Occupation provision.

A producer who fails to separate premium monies from his own personal funds is guilty of

Commingling.

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment.

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance?

Convert to an individual health policy

A key person insurance policy can pay for which of the following ?

Costs of training a replacement.

What characteristic makes whole life permanent protection?

Coverage until death or age 100.

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

Which if the following terms describes making false statements about the financial consider of any insurer that are intended to injury any person engaged in the business of insurance?

Defamation

Social Security disability definition includes all of the following EXCEPT?

Disability expected to last for at least 6 months.

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle.

All of the following statements concerning dividends are true EXCEPT?

Dividend amounts are guaranteed in the policy dividends cannot be guaranteed

Which of the following is considered a qualifying event under COBRA?

Divorce. Other qualifying events include the voluntary termination of employment; an employee's change from full time to part time; or the death of the employee.

All of the following are advantages of HMO or PPO for a Medicare recipient EXCEPT ? A Prescriptions might be covered, unlike Medicare. B Health care costs can be budgeted. C There are no claims forms required D Elective cosmetic procedures are covered.

Elective cosmetic procedures are covered.

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Stranger-oriented life insurance policies are in direct opposition to the principle of

Insurable interest.

Which of the following entities can legally bind coverage?

Insurer

Who makes up the Medical Information Bureau?

Insurers

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring Clause

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

Interest only

The Florida Employee Health Care Access Act serves which of the following purposes?

It regulates group health insurance provisions provided by insurers or HMOs to small employers.

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

Which of the following provisions is mandatory for health insurance policies?

Physical examination and autopsy

Regarding long-term care coverage, as the elimination period gets shorter, the premium

Premiums are not based on elimination periods.

An insurance agent B likes to add additional coverages to applicants' policies and charge them for such coverage without their knowledge. the agents is guilty of

Sliding

Which of the following insurers are owned by stockholders?

Stock

Which of the following terms described the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?

Stop-loss limit

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation.

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

Applications to an insurer must include all of the following information except a. license identification number of agent b.name of insurer. c.name of agent d. credit history report

credit history report

What is the maximum allowed value of promotional gifts that an agent may give to a prospective insured?

$100

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?

$120 a day

An employee will eb taxed on the cost of group life insurance paid by the employee if the amount of coverage exceeds

$50,000 are not taxable as income to the employee.

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

An annuit contract is issued to a senior consumer over age 65. What is the maximum surrender charge or a withdrawal of money allowed on this annuity?

10%

In order for a debtor group to qualify for group life insurance, what should be the minimum number of participants joining the plan every year?

100

An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?

14 days The free-look provision in Florida allows the insured to return a life policy or annuity after 14 days if dissatisfied for any reason.

In this state, long term care benefits may be triggered by inability to perform how many activities of daily living?

2 ADL

In order for an employee to be considered eligible for small group insurance, he/she must work at least how many hours per week?

25 ( "eligible employee" means an employee who works full time, having a normal work week of 25 or more hours, and who has met any applicable waiting-period requirements or other requirements)

When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?

5 years. When a group policy terminates, every individual insured under the policy at the date of such termination who has been so insured for at least 5 years prior to such termination date will be entitled to have issued to him by the insurer an individual policy of life insurance.

In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?

50%

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50. After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage

Individuals who itemize deductions can claim deduction for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income?

7.5%

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss.

Which of the following is another term for an authorized insurer?

Admitted.

Group health insurance is characterized by all of the following EXCEPT?

Adverse selection

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

Ask her to sign a statement of good heath

When must an insurance company present an outline of coverage to an applicant for a Medicare supplement policy?

At the time of application.

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period. This is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of coverage and eliminates the filing of many claims

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount

Which type of premium do both Universal Life and variable Universal Life policies have?

Flexible

An insured received a new life insurance policy days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?

Free look. The free-look provision generally allows an insured a specified number of days from the delivery date of the policy to look over a new policy and return it for a full premium refund if dissatisfied for any reason. For life policies and annuities in Florida, that time period is extended to 14 days.

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full Benefits

Which one of the following is an eligibility requirement for Social Security dyability income benefits

Fully Insureds status.

Which of the following is among the regulations set forth by the Florida Replacement Rule?

If claim made on policy during grace period, an insurer is allowed to deduct overdue premium and to charge interest.

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint life

which of the following settlement options in life insurance is known as straight life?

Life income

Which of the following programs expands individual public assistance programs for people with insufficient income and resources?

Medicaid

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs?

Metal level classification

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly

For which of the following reasons may an insurer terminate a small employer health insurance policy?

Nonpayment of premium

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid

All of the following are the most common variations in a Long-Term Care policy EXCEPT

Number of family dependents.

In long-term care insurance, what type of care is provided with immediate care?

Occasional nursing or rehabilitate care

Which of the following is NOT an Unfair Trade Practice under Florida law with regard to HMO plans?

Operating an HMO on a closed-panel basis (Florida law allows HMOs to operate as either open-panel or closed-panel)

If a health care plan has characteristics of an HMO and PPO, what type of plan is it?

POS

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of Medicare.

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

Which nonforfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

All of the following are dividend options EXCEPT

Reduction of premium

In the events of a loss, business overhead insurance will pay for

Rent

In an employer decides to change its life insurance policy to a similar one with different insurer, which of the following describes the extent that replacement regulation will be exercised?

Replacement regulations will not apply in this situation.

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC Registration

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action?

Send a written notification to the department of insurance.

For variable products, underlying assets must be kept in

Separate account

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Which of the following is called a "second-to-die" policy

Survivorship life.

An HMO that is found to be in violation by committing an unfair trade practice as define in the act, may suffer the penalty of

Suspension of certificate of authority. Revocation of license. Administrative fine.(Any of the above)

Which of the following is an example of a producer being involved in an unfair trade practice of rebating ?

Telling a client that his first premium will be waived if he purchased the insurance policy today

When does Medicare cover nursing home care?

The Medicaid program will pay indefinitely for nursing home care, provided the resident remains financially and clinically eligible. The Medicare program, by contrast, pays for nursing home care for a very limited period of time - at most, for 100 days per benefit period.

If an agent is the military, which of the following is true?

The agent cannot sell a policy to another active military person.

Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must

The agent should ask the customer to sign a statement acknowledging that he is aware of the change.

Which is true regarding obtaining underwriting sources?

The applicant must be informed of the sources contracted and how the information is being.

An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?

The cost of coverage is a deductible expense by the employer.

Who chosen a primary care physician in an HMO?

The individual member

An insured purchased a noncancelable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured does not pay the premium.

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

All of the following are true of a key person insurance EXCEPT? AThere is no limitation on the number of key employee plans in force at any one time.BThe employer is the owner, payor and beneficiary of the policy.CThe key employee is the insured.DThe plan is funded by permanent insurance only.

The plan is funded by permanent insurance only.

Which of the following best defines the "owner" as it pertains to life settlement contracts?

The policyowner of the life insurance policy.

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true?

The pre existing condition waiting period is fulfilled in the old policy, will be transferred to the new policy, the new one picking up where the old one left off.

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?

There is nothing wrong with this, form of policy delivery.

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?

They are tax deductible

Which of the following statement is most correct concerning the changing of an irrevocable beneficiary?

They can be changed only with the written consent of that beneficiary.

All of the following are true regarding the guaranteed insurability ride EXCEPT?

This rider is available to all insureds with no additional premium

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims

Which provision states that the insurance company must pay medical expense claims immediately?

Time of Payment of Claims

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies.

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?

To provide an incentive for the insured to return to work

When an HMO knowingly makes any misleading representations, incomplete or fraudulent comparisons for the purpose of inducing any person to lapse, forfeit, terminate, surrender or convert any insurance policy or contract with another insurance company or HMO, they are in violation of the unfair trade practice of

Twisting

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy.

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?

Worker's occupation

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

conditional

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

conditional

Which of the following is NOT a characteristic or a service of an HMO plan?

contracting with insurance companies

Partnership Buy-Sell Agreement in which each partner purchases insurance on the line of each of the other partners is called a

cross purchase plan

Which of the following is NOT typically excluded from life policies?

death due to plane crash for fare-paying passenger

the automatic premium loan provision is activated at the end of the

grace period

Which of the following statemen is true regarding coinsurance?

he larger the percentage that is paid by the insured, the lower the required premium will be.

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

held or transmitted in any form

Under what conditions will proof of insurability NOT be required if an employee wanting to enroll in a group insurance plan?

if employee enrolls within certain time period

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

illegal under any circumstances

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

insureds age at death

How are state Insurance Guaranty Associations funded?

insurers

The type of dental plan which is incorporated into a major medical expense plan is a/an

integrated dental plan

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called

life income with period certain

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

neither approved the application nor issued the policy

During replacement of life insurance, a replacing insurer must do which of the following?

obtain a list of all life insurance policies that will be replaced

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

other-insured rider

An insured pays her Major Medical Insurance premium premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg/ the insurance company would.

pay the claim; accident occurred during the grace period

A guaranteed renewable health insurance policy allows the

policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. Coverage is guaranteed but rates can be adjusted for the entire class.

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all the premiums paid. Which rider is attached to the policy?

return of premium

Which of the following types of annuities will generally provide the highest monthly income

straight life

Which of the following would be a qualifying event as it relates to COBRA?

termination of employment due to downsizing

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?

the applicant

If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur?

the extra hours may be continued into the next period

Which of the following is NOT true of the life settlements?

the seller must be terminally ill

Which is the purpose of establishing the target premium for a universal life policy?

to prevent the policy from lapsing

An absolute assignment is a

transfer of all ownership rights in a policy

When are HMO required to file a report of their activities with the Department of Financial Services?

within 3 months of the end of its fiscal year.

What is the purpose of key person insurance?

To lessen the risk of financial loss because of the death of a key employee

What happens if a non-member physician is utilized under the Point-of-service plan?

The attending physician will be paid a fee for service, but the member will have to pay a higher coinsurance amount.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

A universal life insurance policy is best described as a /an

An Annually Renewable Term policy with a cash value account.

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?

The employee can covert from group to individual insurance within 31 days of termination

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract