Final Exam Florida Life & Health Insurance SF 8/17

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

10 days

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?

2

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

24

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?

25000

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

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

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

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

What is Florida's definition of Life insurance replacement?

A transaction in which a new policy is bought and an old policy is terminated

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

Actual covered expenses up to the daily maximum". A "reimbursement policy" pays the actual covered expenses up to the daily maximum.

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

An existing policyholder purchases an additional policy from the same insurer

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicant's initials

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?

Automatic Policy Loan

Who is NOT required to sign a life insurance application?

Benificiary

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

Bilateral

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

Cash value provision

The difference between group insurance and blanket health policies is:

Certificates are not issued in blanket policies.

The Bureau of Unclaimed Property is overseen by the

Chief Financial Officer

The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the:

Cost of insurance". The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the cost of insurance.

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

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 tax-deductible

Which of the following does Social Security NOT provide benefits for?

Dismemberment

n a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period

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 Provision Assignment

Entire Contract Provision

Which of the following is NOT a limited benefit plan?

life insurance policies

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid:

mandatory income tax withholding on the transfer amount

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: mandatory income tax withholding on the transfer amount paying transfer fees paying trustee fees ever paying income taxes on the distributions

mandatory income tax withholding on the transfer amount

The Notice of Claims provision requires a policyowner to:

notify an insurer of a claim within a specified time

A Renewable Term Policy is renewable at the option of the

nsured

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:

partial withdrawal features beyond a surrender charge period"

The benefits under a Disability Buy-Out policy are:

payable to the company or another shareholder

Which of these do NOT constitute policy delivery?

policy issued with a rating

What is the Suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide". The purpose of a Suicide provision is to protect the insurer against the purchase of a policy in contemplation of suicide.

Which of these factors does NOT influence an applicant's need for life insurance?

self maintenance expenses

Credit Life insurance is:

ssued in an amount not to exceed the amount of the loan

An agent selling Medicare Supplement policies must provide every applicant with a(n)

suitability form

Under a Renewable Term policy,

the renewal premium is calculated on the basis of the insured's attained age

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?

variable life

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

variable universal life

A Return of Premium life insurance policy is:

whole life and increasing term

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

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 a notice to the MIB

Which of the following is NOT considered rebating?

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

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

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

Term Rider

Which statement regarding a Key Employee Life policy is NOT true?

The beneficiary is named by the key employee

Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?

Universal Life

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

According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

a Buyer's Guide and Policy Summary

What do Dread Disease policies cover?

a specific disease or illness

A qualified profit-sharing plan is designed to:

allow employees to participate in the profits of the company

Which of the following factors affects the amount of monthly disability benefits payable under Social Security?

amount of benefits from outher sources

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

avoid duplication of benefit payments

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

Florida's 14-day free-look period for life insurance policies begins at the

date of delivery

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

decreasing term rider

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

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

everyone must be covered In the group

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

Which of these is an element of a Variable Life policy?

fixed premium level

What kind of special need would a policyowner require with an Adjustable Life insurance policy?

flexible premiums

Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

he correct answer is "Joint Life". A joint life policy covers two or more people. Using some type of permanent insurance (as opposed to term), it pays the death benefit at the first insured's death.

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

health information

Which of the following is TRUE about a qualified retirement that is "top heavy"?

More than 60% of plan assets are in key employee accounts

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

Entire Contract provision

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

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

First degree misdemeanor

The Financial Services Commission may hold hearings

For any reason deemed necesaary

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?

Full benefits are payable under the Master contract

Which of the following statements is CORRECT about accelerated death benefits?

Must have a terminal illness to qualify

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

Insurance

All of these statements about the Waiver of Premium provision are correct, EXCEPT:

Insured must be eligible for Social Security disability for claim to be accepted

Which plan is intended to be used by a sole proprietor and the employees of that business?

Keogh Plan

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?

Life annuity with period certain

The Accelerated Death Benefit provision in a life insurance policy is also known as a(n):

Living Benefit

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

Marital status

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

Medicaid

Periodic health claim payments MUST be made at least:

Monthly

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

Monthly

What type of renewability guarantees premium rates and renewability?

Noncancelable

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

An accident policy will most likely pay a benefit for a(n):

Off the job accident

Which entity approves the insurance policy forms used in Florida?

Office of Insurance Regulation (OIR)

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends

The provision that defines to whom the insurer will pay benefits to is called:

Payment of Claims

Which of these is considered a mandatory provision?

Payment of Claims

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

Projection of the policy's future costs

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?

Reinstatement

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?

The correct answer is "Distribution is subject to federal income tax withholding". A participant must complete a rollover to another qualified plan within 60 days or the distribution is considered a nonqualified distribution and is subject to taxes and penalties. A plan sponsor must withhold 20% of the distribution for federal taxes on a rollover. Once the rollover takes place to the new custodian, the remainder of the distribution is released.

Which of these provisions require proof of insurability after a policy has lapsed? Insuring Conversion Reinstatement Consideration

The correct answer is "Reinstatement". Most insurers require evidence of insurability be provided upon reinstatement of a lapsed policy.

Which of the following provisions is NOT required in HMO contracts/certificates?

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.

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

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

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

The correct answer is "Waiver of Premium rider". If a policyowner covered under an accident and health policy wanted to ensure the policy will continue if they ever become totally disabled, they would want to add a waiver of premium rider.

Credit Life Insurance is

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.

A term life insurance policy matures:

The correct answer is "upon the insured's death during the term of the policy". Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

The employee

Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT?

The income from the TSA is received income tax-free

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?

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

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 maximum amount considered eligible for reimbursement by an insurance company under a health plan

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

The premiums can be lowered or raised, based on investment performance

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:

Time Limit on Certain Defenses