2-40 Practice Exam Questions

The Department may request all of these during the licensing application process except:

A drug test. They can request: fees, proof of citizenship, and fingerprints.

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as:

A fraternal benefits society

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

A portion of the premium

What do Dread Disease policies cover?

A specific disease or illness

A "reimbursement policy" pays what amount of covered Long-Term Care expenses?

Actual covered expenses up to the daily maximum

Which of the following types of care is typically not covered in a Long-Term Care policy?

Acupuncture

Under a Long Term Care policy, which benefit would be typically excluded or limited?

Alcohol Rehabilitation

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

Alien

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT:

An agent's commission

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT:

An agents commission CLASSIFIED: policyowners rights, policy provisions, and agents licensing requirements.

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

Are less costly as compared to the premiums for individual long term care.

The coordination of benefits (COB) provision exists in order to:

Avoid duplication of benefit payments

B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have?

Basic Hospital

All of the following statements about Major Medical Benefits are true EXCEPT:

Benefits have no maximum limit

All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT ....

Bilateral

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is

Business overhead expense

Which type of policy would pay an employees salary if the employer was injured in a a bicycle accident and out of work for six week?

Business overhead expense

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

Business owner becoming disabled.

The guarantee of insurability option provides a long-term care policyowner the ability to :

Buy additional coverage at a later date

What can the agent provide to help a prospective client understand and purchase the most appropriate product?

Buyers Guide

Which required disclosure helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies?

Buyers Guide

Which of the following consists of an offer, acceptance, and consideration?

Contact

Which of these is considered a true statement regarding Medicaid?

Funded by both state and federal governments.

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

Graduate from highschool.. Requirements are: Complete a prelicensing course, resident of Florida, and be at least 18 years old.

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

Gross income 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.

Dividends paid to the policy owner are...

Guaranteed

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Guaranteed Insurability Option Rider

Which of the following statements about Health Reimbursement Arrangements (HSA's) is correct?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free.

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

If the primary beneficiary dies before the insured.

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

Naturopaths

Which of the following is NOT an unfair claim settlement practice?

Needing written documentation of claim details

Which of the following characteristics is associated with a large group disability income policy?

No medical underwriting

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

Nonoccupational Coverage

Which of these statements concerning an individual Disability Income Policy is True?

Normally includes an Elimination period

K made a fraudulent statement on her health insurance policy application. In the event of a claim on this policy, the insurance company is required to pay

Nothing

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

Nothing

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

The ability to periodically increase the amount of coverage without evidence of insurance.

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?

The contingent beneficiary

Which of the following statements is correct regarding an employer/employee group Health plan?

The employer receives a master policy and the employees receive certificates.

What type of reinsurance involves two companies automatically sharing their risk exposure?

Treaty

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

Twisting

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

Twisting

In an insurance contact, the insurer is the only party who makes a legally enforceable promise. What kind of contact is this?

Unilateral

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?

Upon Completion of the Application

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

Upon satisfying the elimination period requirement

Which of the following phrases refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses.

What is the primary factor that determines the benefits paid under a disability income policy?

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:

Waiting period

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:

Waiver of Premium

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

The part of a life insurance policy guaranteed to be true is called a(n)...

Warranty

At what point does an informal agreement becomes a binding contact?

When consideration is provided by one of the parties to the contact

What must an insurer obtain to conduct and HIV test?

Written Consent

If an agent combines premiums collected with their personal funds, they have engaged in:

commingling

Basic Medical Expense Insurance:

has lower benefit limits than Major Medical insurance

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

misrepresentation

In Florida, deceptive advertising is a form of....

misrepresentation

An example of rebating would be:

offering a client something of value not stated in the contract in exchange for their business

Upon reaching the limiting age, a disabled child may extend their health insurance coverage as a dependent

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

Deductibles are used in health policies to lower:

overuse of medical services

The department of Financial Services serves as the receiver of any insurer placed into:

receivership

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

18th months

What year was the McCarren-Ferguson Act enacted?

1945

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

2

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

20

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?

20 Days

Eligibility for coverage under the Florida Healthy Kids Corporation required a family to be within____ of the federal poverty level.

200%

In what year was The Florida Office of Financial Regulation (OFR) created?

2003

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

30 days

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

30 days

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

31 Days

An applicant who pays the initial premium at the time of application is typically given a(n)

Conditional receipt

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?

$1250

Which is NOT a type of agent authority?

-Implied- -Express- -Apparent- (principal)

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

0%

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

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

A ___ day notice to the policyholder is required for any health insurer that wished to cancel a health insurance policy:

45

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

45 days

Florida required that an insurance agent must complete___ hours of continuing education on the subject of law and ethic every two years:

5 hours

Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.

6 months

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

64 years or older

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

A 68 y/o male covered by Medicare

All students attending a large university could be covered by

A blanket policy

The situation ins which a group of physicians are salaried employees and conduct business in an HMO faciality is called..

Closed Panel

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

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?

Coercion

Which of the following areas of a state regulation is NOT protected by the savings clause of ERISA?

Commerce.... PROTECTED: banking, securities and insurance.

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

Commercial Insurer

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

Commercial Insurers

Insurance Contracts are known as____ because certain future conditions or acts must occur before any claims can b paid.

Conditional

Dividends payable to the policy owner are..

Declared by the insurance company

Medicare Part B does NOT cover

Dental Work

Any violations of the Florida financial institutions code may be investigated by the

Department of Financial Services ( DFS)

In Florida, which agency is responsible for the rehabilitation or liquidation of insurers?

Department of Financial Services (DFS)

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

Disability Income

B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?

Disability Income

In the event of an illness, a(n) _______ _______ policy would reimburse an insured for loss of earnings.

Disability Income

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

A characteristic of Preferred Provider Organizations (PPO's) would be:

Discounted fees for patients

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but unpaid benefits.

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?

Entire Contract

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

Expense Incurred

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:

Experimental and investigative services.

What is required in the outline of coverage for a health insurance policy?

Explanation of policy's benefits, listing the policy's exclusions and limitations and explanation of the policy's renewal and cancellation provisions.

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

An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the

Fair Credit Reporting Act

What is the name of the law that requires insurers to disclose information fathering practices and where the information is obtained?

Fair Credit Reporting Act

Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated?

Fair Credit Reporting Act

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

First degree misdemeanor

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

First degree misdemeanor CONSEQUENCES INCLUDE: Third Degree Felony, Insurance License Revoked, Responsible for unpaid claims.

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

Florida Insurance Guaranty Fund Association

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

Fraternal life insurance organizations.

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider.

Which of the following types of organizations are prepaid group health plans, where members pay in advance for services of participating physicians and hospitals that have agreements?

HMO

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT:

HRA is entirely funded by the employee

A 66 year-old 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?

Her group health plan.

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

High-Deductible Health Plan

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

Home health care

Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?

Hospital room and board

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

Inception of the contact

When determining the monthly benefit amount for a Disability Income policy , the factor that limits the amount a prospective insured may purchase is:

Income

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.

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

Insurance.

Stranger-Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?

Legal Purpose

Which of the following actions may NOT be taken by an insurance company to insure a substandard applicant for disability income coverage?

Lengthen the contestability period

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than 5,000 per month benefit regardless of the cause

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on pre-existing conditions for up to 12-months.

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

Long-Term Care

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury

What is the main reason for regulating the insurance industry?

Maintain the solvency of the insurance companies.

A catastrophic illness would best be covered by which of the following health insurance plans?

Major Medical

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

Major Medical

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on

March 1st

Asset protection can be provided by a long-term care partnership policy if the policyholder qualifies for :

Medicaid

The Health insurance program which is administered by each state and funded by both the federal and state governments is called..

Medicaid

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement

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

Misrepresentation

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

More physicians to choose from

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

Mutual

Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care?

Obtain prior approval from the insurer for the medical service

Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care?

Obtains prior approval from the insurer for the medical service

In Florida, agents are allowed to engage in rebating if:

Offered to all insureds in the same actuarial class

Generally, how long is a benefit period for a Major Medical Expense Plan?

One year

How can an agent-in-charge have more than one location?

Only if the agent in charge is present when insurance activity occurs.

Which of these describe a participating insurance policy?

Policy owners are entitled to received dividends.

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:

P only

Which of these statements is INCORRECT regarding a preferred Provider Organization?

PPOS are not a type of managed care system.

Which action could result in a hearing being ordered by the Department of Financial Services?

Performing insurance transactions without a license.

Who elects the governing body of a mutual insurance company?

Policyholders

Which Long Term Care insurance statement is true?

Pre-existing conditions must be covered after the coverage has been in force for six months

Which of these options can an individual use their medical flexible spending account to pay for?

Prescription Drugs

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

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

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

Projection of the policy's future costs. Required: Explanation of the policy's benefits, Listing the policy's exclusions and limitations, explanations of the policy renewal and cancellation provisions.

What is the consideration given by an insurer in the Consideration clause of a life policy?

Promise to pay a death benefit to a named beneficiary

What is the purpose of the Insurance Guaranty Fund Association?

Protects policyowners against insolvent insurance companies

X owns a Disability Income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows X's second disability to be covered without a new elimination period?

Recurrent Disability

Statements made on an insurance application that are believed to be true to the best of the applicants knowledge are called...

Representations..

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

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

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability

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

Risk Management Advisors is NOT. Personal Producing General Agency, Independent agency system and career agency systems are.

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as...

Risk Retention Groups

An application for Medicare Supplement coverage may NOT be denied by the insurer if the application was submitted within____ months after the applicant reaches the age of 65.

SIX

A long-term care lapse notice must be delivered to both the applicant and the

Secondary Addressee

Which of the following provision is NOT required in HMO contacts/certificates?

Seven-Day Grace Period. Required: Enrollment, Rates Shall not be excessive, pre-existing exclusions for children.

Which of the following is NOT considered rebating?

Sharing commissions with an agent licensed in the same line of business.

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

Sign an enrollment Card

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

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

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

Spouses Occupation

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

The Applicants Monthly Income

In a disability income provision, which of the clauses acts as a deductible?

The Elimination Period

Who makes the legally enforceable promises in a unilateral contract?

The Insurance Company

Which of the following MUST be included in the Medicare Supplement policy's Outline of Coverage?

The policy's limitation and exceptions

Which of the following MUST be included in the Medicare Supplement policy Outline of Coverage?

The policy's limitations and exceptions.

The Consideration clause of an insurance policy contract includes...

The schedule and amount of the premiums paid

What is the elimination period of an individual disability policy?

The time period a disabled person must wait before benefits are paid.

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

Medicare is intended for all of the following EXCEPT...

Those enrolled as a fulltime student.

A disability elimination period is best described as a

Time Deductible

Which of the following is NOT required on every insurance application sold in Florida?

address and phone number of the agent. Required: insurers name, agents license number, agents name.

Medicare Part C is:

available to those who are enrolled in Medicare Part A and Part B

Medicaid was designed to assist individuals who are

below a specific income limit

A health Reimbursement Arrangement MUST be established:

by the employer

Defemination occurs when an agent makes a false statement intended to

malign another insurer

Medicare Part B does NOT cover:

inpatient hospital services

A foreign insurance company doing business in Florida

is a company that was formed under the laws of another state

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

is found guilty of misrepresentation