Florida Health, Life & Annuity End of Course Exam 1

An insured, returning from a disability, is working part-time. If he qualifies for a partial disability provision, he will receive what percent of his pre-disability wage from disability benefits in addition to his part-time salary? Select one: a. 30% flat with no offsets b. 70% if the part time wage is less per hour than his pre-disability wage c. 60% offset by Social Security d. 50%, but the total wage may not exceed his pre-disability wage

50% of pre-disability wage is usually the maximum for a partial disability. The correct answer is: 50%, but the total wage may not exceed his pre-disability wage

Health Maintenance Organizations are organized as: Select one: a. Individually chartered pre-paid service providers b. Admitted insurance companies allowed to provide health insurance c. Reimbursement plans for medical services d. An additional part of Medicare to provide more comprehensive services to seniors

A Health Maintenance Organization is organized as a pre-paid medical service plan. The correct answer is: Individually chartered pre-paid service providers

A Medicare supplement insurer cannot deny an application for a Medicare supplement policy nor charge a higher premium if the applicant is under 65 and eligible for Medicare due to disability or: Select one: a. Cancer b. Diabetes c. HIV/AIDS d. ESRD

A Medicare supplement insurer cannot deny an application for a Medicare supplement policy nor charge a higher premium if the applicant is under 65 and eligible for Medicare due to disability or end-stage renal disease (ESRD). The correct answer is: ESRD

When presenting long-term care or Medicare Supplement plans, it is necessary to provide the prospect with a: Select one: a. Prefilled application form b. A Shoppers Guide for the product presented c. Illustrations with large print d. Testimonials from other buyers

A Shoppers Guide (Outline of Coverage) is required for many sales to senior citizens. The correct answer is: A Shoppers Guide for the product presented

Edwin's group contract has a $5,000 basic hospital expense allowance with a $500 deductible and 80/20 coinsurance for a supplemental major medical expense. Edwin has a hospital bill of $4,000 and a surgeon bill of $2,000. How much does Edwin owe? Select one: a. $0 b. $500 c. $800 d. $2,500

A basic hospital expense contract will cover hospital expenses, so Edwin will not pay anything on the $4,000 hospital bill. The surgeon's fee will be covered under the supplemental major medical part of the plan. After the $500 deductible, the surgeon fee is covered at 80%. $2,000 - $500 = $1,500. $1,500 _ .20 = $300. $500 + the $300 co-insurance payment = $800. The correct answer is: $800

A gift for the purposes of advertising is allowed if the value is not more than: Select one: a. $20 b. $25 c. $50 d. $100

A gift for the purposes of advertising is allowed if the value is not more than $25.00. The correct answer is: $25

In a health policy, the incontestable provision is referred to as: Select one: a. Exclusion clause b. Time limit for certain defenses c. Probationary Clause d. Elimination Period

A health insurance plan does not have an incontestable clause. The standard clause is called a time limit for certain defenses. The correct answer is: Time limit for certain defenses

A hospital indemnity plan will provide: Select one: a. A specific benefit based on the number of in hospital days b. A benefit only if the insured is hospital confined for a specific disease c. A daily benefit only if admitted for an accident d. A maximum of 10 days hospital coverage

A hospital indemnity plan will pay a daily allowance for each day the insured is in the hospital. The correct answer is: A specific benefit based on the number of in hospital days

In Florida, who of the following cannot be the beneficiary of a life insurance policy? Select one: a. First cousin b. Stepmother c. Half brother d. The life insurance agent

A life insurance agent who is not a family member cannot be the beneficiary of a life insurance policy. The others are all considered "family." The correct answer is: The life insurance agent

A prospective buyer should understand that a disability plan presented as 'non-cancellable' means: Select one: a. The plan is renewable, but premiums can be raised under conditions outlined in the policy. b. The plan may not be cancelled by the insurance company and the premiums are guaranteed never to increase. c. The plan may renew at the option of the insured, but the insurance company can change the occupational classes and premiums in the future. d. The insurance company may modify the policy without permission from the insured.

A non-cancellable policy is guaranteed benefit, guaranteed renewable and guaranteed premium. The correct answer is: The plan may not be cancelled by the insurance company and the premiums are guaranteed never to increase.

A group plan's underwriting varies from individual plan underwriting in all of the following ways, EXCEPT: Select one: a. Claims for the employees of a large company will generally determine the rates for that group. b. Underwriting for groups is generally more liberal than for individual contracts. c. Participants in a group receive individual policies as evidence of coverage. d. Participant in larger plans generally do not have to answer health questions at enrollment.

A participant in a group plan receives a certificate. The correct answer is: Participants in a group receive individual policies as evidence of coverage.

A representation is: Select one: a. Any statement made on the application is absolutely true without any deviation. b. Any statement made is true to the best of the applicant's recollection, but facts may not be exact. c. An insurance company guarantees that all benefits will be paid promptly. d. An insurance company will refund all premiums if the policyholder is not satisfied.

A representation is a statement that the applicant provides that is true to the best of their knowledge. The correct answer is: Any statement made is true to the best of the applicant's recollection, but facts may not be exact.

Which of the following is correct concerning representations? Select one: a. Carla has guaranteed that everything she has put in the application is exactly correct without exception. b. Carla has represented that the information she has furnished is true to the best of her knowledge. c. Carla should not be concerned, since she can change her mind about what she said at any time. d. Carla should be very careful, since she could be fined if any of the statements she made prove to be fraudulent.

A representation is a statement that the insured believes to be true, but the actual facts might vary. The correct answer is: Carla has represented that the information she has furnished is true to the best of her knowledge.

An example of coverage that can be purchased by a husband for his wife along with other dependent family members is: Select one: a. A child term rider b. A family term rider c. An accelerated benefit rider d. A payor rider

A rider that would cover both the spouse and dependent children is called a family term rider. The correct answer is: A family term rider

Why would someone be assessed a tax of 20% when transferring funds from one IRA to a new IRA? Select one: a. The new plan is a Roth IRA. b. The new plan is not qualified. c. It was more than 30 days to complete the transfer. d. It was more than 60 days to complete the transfer.

A rollover requires that funds be deposited in the new IRA within 60 days of distribution from the old IRA - or a 20% tax penalty is assessed. The correct answer is: It was more than 60 days to complete the transfer.

Which of the following is not an assignment whereby someone would transfer legal rights as the policy owner of a life contract? Select one: a. Collateral, partial, conditional assignment b. Total, complete, unconditional assignment c. Beneficiaries' assignment d. Absolute, voluntary, complete assignment

A total, complete, unconditional assignment does not exist in the insurance world. The correct answer is: Total, complete, unconditional assignment

Most group contracts contain which of the following major provisions? Select one: a. Coverage amounts and effective date of coverage b. Beneficiaries and settlement options c. Conversion privilege and 31 day continuation coverage d. All of the above

A typical group plan has provisions, selected by the employer, that specify coverage amounts, effective date of coverage, beneficiaries, settlement options, conversion privilege and 31 day continuation of coverage options. The correct answer is: All of the above

Which of the following is not an example of a plausible third party ownership situation? Select one: a. A husband who owns a policy on his wife b. A corporation that owns the policy of an officer of the corporation. c. A woman that owns a policy on an ex-boyfriend d. A parent who is the owner of a policy on their child

A woman owning a policy on an ex-boyfriend would not be allowed, and consequently not be an example of a third party ownership situation. The correct answer is: A woman that owns a policy on an ex-boyfriend

Which of the following is NOT considered to be an activity of daily living that might be used as a "trigger" for the payment of benefits? Select one: a. Toileting b. Eating c. Driving d. Bathing

Activities of daily living will include at least the following: bathing, continence, dressing, eating, toileting, and transferring. Driving is not considered a required daily activity. The correct answer is: Driving

In Florida, what is the rule for coverage of fibrocystic condition? Select one: a. No health insurance policies must cover fibrocystic condition b. Health insurance policies may cover fibrocystic condition at the insurer's discretion c. Health insurance policies may cover fibrocystic condition for an extra cost d. All health insurance policies must cover fibrocystic condition

All health insurance policies must cover fibrocystic condition without exclusions or exceptions. The correct answer is: All health insurance policies must cover fibrocystic condition

Who are the members of the Florida Life and Health Guaranty Association? Select one: a. The CFO and their appointees b. The CFO, the Commissioner of the Office of Insurance Regulation, and their appointees c. Elected representatives of some insurers d. All insurers authorized by the state of Florida

All member insurers must be members of the association as a condition to eligibility to transact insurance in Florida. In addition, member insurers are assessed amounts to contribute to the guaranty fund for insurer insolvency. The correct answer is: All insurers authorized by the state of Florida

Which of the following is a settlement option that a life insurance policy owner can choose? Select one: a. Life income option b. Interest only option c. Fixed period option d. All of the above

All of the choices are settlement options available to policy owners. The correct answer is: All of the above

Which of the following is a duty of the insurer when the transaction involves a replacement of an existing policy? Select one: a. Verify state regulations have been followed b. Keep copies of all replacement paperwork c. Notify insurers of policies to be replaced d. All of the above

All of the duties listed are insurer responsibilities in a replacement transaction. The correct answer is: All of the above

As the owner of a life policy, the insured can expect which of the following? Select one: a. To receive dividends when paid b. Choice of premium mode c. To designate the beneficiary d. All of the above

All of the items listed are owner's rights on a life insurance policy. The correct answer is: All of the above

Amanda provided information to the best of her recollection on her insurance application. This is referred to as a: Select one: a. Consideration b. Warranty c. Representation d. Assignment

All the statements on an insurance application are considered representations. The correct answer is: Representation

Which of the following must an insurer have to be an admitted insurer? Select one: a. A Certificate of Authority b. A Certificate of Insurance c. A Certificate of Compliance d. A Certificate of Licensure

An admitted (authorized) insurer is one duly authorized by holding a certificate of authority issued by the Office of Insurance Regulation to transact insurance in Florida. An unauthorized insurer does not have a certificate of authority, and includes excess and surplus lines insurers. The correct answer is: A Certificate of Authority

When must an agent for a long-term care policy deliver the buyer's guide? Select one: a. Prior to the sales presentation b. Prior to the presentation of the application c. When the application is accepted d. When the policy is delivered

An agent for a long-term care policy must deliver the buyer's guide prior to the presentation of the application or enrollment form. The correct answer is: Prior to the presentation of the application

In Florida, the term "agent" includes which of the following? Select one: a. Customer service representative b. Limited customer representative c. Service representative d. General lines agent

An agent is a general lines agent, life agent, health agent, or title agent. In Florida, the term "agent" does not include a customer service representative, limited customer representative, or service representative. The correct answer is: General lines agent

When must an insurance agent provide a Buyer's Guide to the applicant of a new policy that contains an unconditional refund provision? Select one: a. Prior to the sales presentation b. Prior to accepting the applicant's initial premium c. With the policy delivery d. Within 3 days of the policy delivery

An insurance agent must provide a Buyer's Guide and a Policy Summary no later than the policy delivery if the policy contains an unconditional refund provision for a period of at least 14 days. The correct answer is: With the policy delivery

Oliver has been approved for his new health insurance policy. When will he see a complete outline of coverage? Select one: a. When the application is approved by the insurance company b. When he files his first claim c. When the policy is delivered with all the other papers d. Only if there is adverse underwriting action

An outline of coverage is one of the requirements for delivery of the policy. The correct answer is: When the policy is delivered with all the other papers

An underwriter will consider which of the following conditions in making their decision to approve an application for insurance? Select one: a. A condition that is contracted after the first premium is paid b. A condition that occurs after the policy is issued c. A minor childhood sickness d. A condition that occurs prior to making an application for insurance

An underwriter should be informed about any conditions that existed prior to an application for insurance. The correct answer is: A condition that occurs prior to making an application for insurance

In what type of life insurance policy will premiums increase each policy anniversary based on current age? Select one: a. Guaranteed premium term b. Annual renewable term c. Modified universal life d. Minimum premium life

Annual renewable term will maintain the same face amount, but premiums increase as the policy holder advances in age. The correct answer is: Annual renewable term

A person insured under a group life insurance policy may make an assignment of which of the following? Select one: a. The right to name a beneficiary. b. All of the above. c. Policy proceeds d. Conversion

Any person insured under a group life insurance policy may make an assignment of all or any part of their incidents of ownership under such policy including: conversion, the right to name a beneficiary, assign policy proceeds. All incidents of ownership may be assigned, without prejudice to the insurer on account of any payment it may make or individual policy it may issue. The correct answer is: All of the above.

Which of the following best describes a policy or contract of insurance against injury resulting from accident or accidental means and insures a group of persons? Select one: a. Individual franchise accident and health insurance b. Individual HMO policy c. Blanket accident insurance d. AD&D

Any policy or contract of insurance against death or injury resulting from accident or from accidental means which insures a group of persons will be deemed a blanket accident policy. The correct answer is: Blanket accident insurance

All of the following are true concerning a single premium whole life plan, EXCEPT: Select one: a. The death benefit is level b. The premium is payable when the policy is issued and no further premium is due c. 100% of any withdrawal is tax free d. Cash value grows on a tax deferred basis

Any withdrawal from a life insurance policy is subject to tax rules in effect at the time of withdrawal if the policy value has a gain over deposits, that amount is taxable. The correct answer is: 100% of any withdrawal is tax free

Applicants for an insurance license may take the licensing examination up to how many times in a 12-month period? Select one: a. 2 b. 3 c. 4 d. 5

Applicants for an insurance license may not take the licensing examination more than 5 times in a 12-month period. The correct answer is: 5

Someone should have what maximum number of Medicare supplement policies? Select one: a. 1 b. 2 c. 3 d. 4

Application forms must include questions designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement coverage. An applicant only needs one Medicare Supplement policy. The correct answer is: 1

Applications for long-term care insurance must include questions for all of the following, EXCEPT: Select one: a. Whether an applicant has long-term care insurance b. Whether an applicant has life insurance c. Whether an applicant has long-term care insurance that will be replaced d. Whether an applicant has accident and sickness insurance that will be replaced

Applications for long-term care insurance must include questions on whether an applicant has long-term care insurance and whether an applicant is replacing long-term care insurance or accident and sickness insurance. The correct answer is: Whether an applicant has life insurance

An appointing entity must report the termination of an agent to the Florida Department of Insurance within: Select one: a. 15 days b. 21 days c. 30 days d. 31 days

As soon as possible and at all events within 30 days after terminating the appointment of an appointee, other than for failure to continue or renew it, the appointing entity will file written notice of the termination of appointment with the department, together with a statement that it has given the appointee notice and will file with the department the reasons and facts involved in such termination. The correct answer is: 30 days

If Kenneth has the right to assign his benefits on his health contract, this means that he may: Select one: a. Assign his benefits directly to a provider and allow his insurance plan to pay the provider directly b. Pay his medical bills directly from his own funds and then request a reimbursement c. Pre-pay his health premiums to increase his benefits d. Take the benefits received from his health plan and use the money for any purpose he likes.

Assignment is not only a convenient way to settle medical bills, some providers insist on it when a large bill is involved. The correct answer is: Assign his benefits directly to a provider and allow his insurance plan to pay the provider directly

A binding arrangement under which an insured requests that payments under their health plan be made directly to a person or facility that they designate (such as a doctor or hospital) is called: Select one: a. Rights of conversion b. Assignment of benefits c. Managed care d. Coinsurance

Assignment of benefits is a binding arrangement under which an insured requests that payments under their health plan be made directly to a person or facility that they designate (such as a doctor or hospital). The correct answer is: Assignment of benefits

A statement that the insured will not receive more that $100,000 in benefits in any one calendar year is known as: Select one: a. Lifetime maximum b. Annual maximum c. Limited benefit policy d. Major medical maximum

At any time a policy limits payments for one calendar year, it is know as an annual maximum policy. The correct answer is: Annual maximum

Steve bought a 20-year, $200,000 decreasing term policy in 2001 and a $500,000 whole life policy. Steve died in 2006. What were the total benefits payable to his beneficiary? Select one: a. $700,000 b. $650,000 c. $500,000 d. $200,000

Because he died after 5 years, the policy death benefit was worth $150,000. His whole life policy paid the full face value of $500,000 upon his death. The total paid to his beneficiary was $650,000. The correct answer is: $650,000

Universal life policies are similar to whole life in that they: Select one: a. Both provide death protection and cash value b. Both provide flexibility c. Both treat cash withdrawals as a partial surrender d. Both provide fixed and guaranteed benefits

Both a whole life policy and a universal life policy provide death protection and cash value. The similarities end there. The correct answer is: Both provide death protection and cash value

Christopher surrendered his whole life policy, which has a cash value of $50,000. During the life of the policy, he paid $40,000 in premiums. What amount is subject to federal income tax? Select one: a. Nothing b. $10,000 c. $40,000 d. $50,000

Christopher received $50,000. He had paid $40,000 in premiums. $50,000 less the $40,000 he paid in premiums leaves $10,000 of the cash surrender value that will be subject to federal income tax. The correct answer is: $10,000

The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information, EXCEPT: Select one: a. Adverse information about an individual that dates back over seven years b. Tax liens older than seven years c. An individual's character d. An individual's criminal history

Consumer reports are reports about the characteristics of an individual, including the individual's general character and reputation, employment history, living arrangements, and credit worthiness. The correct answer is: An individual's character

According to the Fair Credit Reporting Act, which of the following is contained consumer reports? Select one: a. Tax liens older than 7 years b. An individual's complete criminal history c. Information concerning an individual's character d. Negative information relating to an individual more than seven years old

Consumer reports are reports about the characteristics of an individual, including the individual's general character and reputation, employment history, living arrangements, and credit worthiness. The correct answer is: Information concerning an individual's character

"Take it or leave it" is the basis for insurance policies. Because of this, they are referred to as: Select one: a. Contracts of Adhesion b. Aleatory Contracts c. Unilateral Contracts d. Contracts

Contracts of Adhesion are "take it or leave it". The correct answer is: Contracts of Adhesion

Susan bought an accidental death coverage for her car loan. If Susan dies as a result of an accident, what benefits will be payable? Select one: a. A benefit in the amount of the original loan will be paid to her beneficiary. b. A benefit in the amount of the outstanding balance at the time of death will be paid to her beneficiary. c. A benefit of the original loan amount will be paid to the lender, with any residual amount paid to her beneficiary. d. A benefit of the outstanding balance will be paid to the lender.

Credit insurance is designed to protect the lender. Benefits are paid to the lender in the amount of indebtedness at the time of death. The correct answer is: A benefit of the outstanding balance will be paid to the lender.

Which of the following is not a common premium payment mode for life policies? Select one: a. Yearly b. Quarterly c. Monthly d. Daily

Daily is not a premium payment mode for life insurance. The correct answer is: Daily

Making a false statement about a competing insurer is considered: Select one: a. Discrimination b. Twisting c. Fraud d. Defamation

Defamation is making any oral or written statement that is false, misrepresents, or is maliciously critical of the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance. The correct answer is: Defamation

An annuity contract provides for all of the following, EXCEPT: Select one: a. Safe retirement income tool b. Forced savings account c. Payments for a fixed period or a lifetime d. A health plan

Depending on the type of annuity, it usually provides a safe retirement income tool, acts as a forced savings account, and has payments for a lifetime of a fixed period of time. The correct answer is: A health plan

If the total of a taxpayer's medical expense exceeds 10% of their adjusted gross income, all of the following can be deducted, EXCEPT: Select one: a. Accident insurance premiums b. Disability insurance premiums c. Health insurance premiums d. Long-term care premiums

Disability premiums are not deductible. The correct answer is: Disability insurance premiums

Which of the following would NOT be considered unfair discrimination? Select one: a. Discrimination based on national origin b. Discrimination based on religion c. Discrimination based on blindness d. Discrimination based on hobbies

Discrimination is a necessary part of insurance, including occupation, hobbies, and expectation of life. It is an unfair trade practice to discriminate against individuals of the same class and equal expectation of life in the rates, terms, conditions, benefits, or any policy provision for insurance. It is illegal to discriminate based on sex, race, national origin, or blindness. The correct answer is: Discrimination based on hobbies

All of the following are true statements about life insurance policy dividends, EXCEPT: Select one: a. Dividends are paid because the insurer overcharged on premiums. b. Dividends are paid on an annual basis c. Dividends are taxable d. All of the above

Dividends are not taxable, are usually paid once a year, and are really a return of overcharged premiums. The correct answer is: Dividends are taxable

Domestic insurers must be examined by the Office of Insurance Regulation a minimum of: Select one: a. Once every year b. Once every 2 years c. Once every 4 years d. Once every 5 years

Domestic insurers must be examined by the Office of Insurance Regulation at least once every 5 years. The correct answer is: Once every 5 years

Who is employee group life insurance designed to benefit? Select one: a. Employer only b. Employee and employer c. Employee only d. Employee or employer

Employee life insurance insures the lives of a group of individual employees of an employer for the benefit of persons other than the employer, under a group policy issued to the employer. The correct answer is: Employee only

Florida Healthy Kids provides health insurance to children who are eligible for assistance under: Select one: a. Florida's poverty definition b. Florida Requirement LH-123 c. Title XXI of the Social Security Act d. Medicaid

Florida Healthy Kids provides health insurance to children who are eligible for assistance under Title XXI of the Social Security Act. The correct answer is: Title XXI of the Social Security Act

Which of the following is NOT a life insurance policy non-forfeiture option in Florida? Select one: a. Reduced paid-up life insurance b. Extended term life insurance c. Enhanced life benefit option d. Cash surrender value

Florida life insurance policies must contain the following non-forfeiture options: reduced paid-up life insurance, cash surrender value, and extended term life insurance. The correct answer is: Enhanced life benefit option

Which of the following is NOT a requirement for a policy in Floridas Long-term Care Partnership Program? Select one: a. Issued with inflation protection coverage b. Annual inflation coverage for individuals age 61 to age 75 c. Issued to Florida residents only d. Qualified policy

Florida's Long-term Care Partnership policies must meet the following requirements: qualified policy, issued to a Florida resident or another state that has entered into a reciprocal agreement with Florida, issued with inflation protection coverage and annual inflation coverage for individuals age 61 to age 75. The correct answer is: Issued to Florida residents only

If someone covered by a group health plan loses their employment, how many days do they have to convert to an individual policy? Select one: a. 21 days b. 30 days c. 31 days d. 45 days

Group health plans must contain a conversion privilege for individual insureds, which allows them to convert their group certificate to an individual medical expense policy with the same insurer within the conversion period of 31 days. The correct answer is: 31 days

A group long-term disability plan may contain all of the following features, EXCEPT: Select one: a. The benefits will coordinate with Workers' Compensation benefits. b. The benefit is not usually stated as a percent of income. c. Benefits will be coordinated with Social Security disability benefits. d. Benefits will not be paid for on-the-job losses.

Group plans are generally designed to prevent 'over insurance'. That is why the benefit is usually a maximum of payroll not to exceed a total amount, such as 60% of pay not to exceed $7,500 per month. The correct answer is: The benefit is not usually stated as a percent of income.

HMO contracts must provide coverage for newborn children of a family member from the moment of birth for at least: Select one: a. 1 month b. 3 months c. 9 months d. 18 months

HMO contracts that provide coverage for a family member of the insured must also provide coverage for the insured's newborn children from the moment of birth. Coverage must be also be provided for the newborn child of a covered family member (such as the newborn of a daughter) for 18 months after the birth. The correct answer is: 18 months

What is the primary difference between a flexible spending account and a health savings account? Select one: a. Health savings accounts can be carried over from year to year. b. Flexible spending accounts are available either individually or through an employer. c. Money not used in a health savings account is forfeit at the end of the year. d. Money withdrawn from a flexible spending account may have a tax penalty.

Health savings accounts may be carried over from year to year. Flexible spending accounts are a 'use or lose it' proposition. The correct answer is: Health savings accounts can be carried over from year to year.

What is any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, or threat? Select one: a. High pressure tactics b. Twisting c. Fraud d. Cold lead advertising

High pressure tactics employ any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance. The correct answer is: High pressure tactics

What is the maximum percentage of employees that an employer is allowed to require to participate in a noncontributory group health insurance plan? Select one: a. 25% b. 50% c. 75% d. 100%

However, a noncontributory plan, allows the employer to require 100% of all eligible employees. The correct answer is: 100%

Joshua bought a straight life contract knowing that when it matures the cash value is equal to the death benefit. Before he died, Joshua borrowed the cash value of the policy. How were the proceeds of the policy handled when he died? Select one: a. The cash value is paid back with interest. b. The cash value is paid back. c. The beneficiary keeps the entire death benefit. d. The beneficiary pays back the cash, and receives the death benefit.

If Joshua dies before he repays the cash borrowed against his policy, upon his death the cash value would be paid back, with interest. The correct answer is: The cash value is paid back with interest.

How much time does an individual have to convert to a new individual life policy after the termination of their group life policy? Select one: a. 28 days b. 30 days c. 31 days d. 60 days

If a group life policy is terminated, the members and dependents may convert their group coverage to individual life coverage. The individual must apply for individual coverage within 31 days after the date of group coverage termination. The correct answer is: 31 days

If a person is covered by 2 health policies, one of which is Medicare, when does Medicare pay? Select one: a. First always b. First if the person is over 65 c. First if the person is still working d. Second always

If a person is covered by 2 health policies, one of which is Medicare, then Medicare is always secondary. The correct answer is: Second always

Which of the following is true when a policy is written as cancellable? Select one: a. Only the policy holder is allowed to cancel the coverage b. The insurance company may choose not to renew at the anniversary date c. The insurance company may cancel only if the policyholder fails to pay the premium within the grace period. d. The insurance company may cancel at any time by returning the unearned premiums.

If a policy is written as cancellable, the insurance company may cancel at any time by refunding any unearned premiums. The correct answer is: The insurance company may cancel at any time by returning the unearned premiums.

Claudia cannot change the beneficiary on her life policy by: Select one: a. Designating the change of beneficiary in her will b. Creating an endorsement to the policy itself c. Contacting the insurer by phone and requesting the change d. Contacting the insurer by mail and requesting the change

If a policy owner wishes to change a beneficiary on a life insurance policy, the policy owner must contact the insurer, by mail, phone or endorsement. The correct answer is: Designating the change of beneficiary in her will

Marsha left her company and died during the period allowed for her to convert her life insurance to an individual policy. What happens to the benefits of the policy? Select one: a. The insurer is no longer liable. b. The insurer pays the death benefit in full. c. The insurer discounts the death benefit because she had left the company. d. Her beneficiaries sue the insurance company for the benefits.

If an employee covered under a group policy dies during the conversion period, the insurer pays the death benefit, in full. The correct answer is: The insurer pays the death benefit in full.

What rider excludes coverage for a specific condition on a health insurance policy? Select one: a. Impairment rider b. Multiple indemnity rider c. Guaranteed insurability rider d. Waiver of premium rider

Impairment riders exclude coverage for a certain medical condition. The correct answer is: Impairment rider

In Florida, what is the maximum number of employees to be considered a "small employer?" Select one: a. 20 b. 25 c. 50 d. 62

In Florida, a "small employer" has at least 1 and not more than 50 employees. The correct answer is: 50

In Florida, what is the minimum number of employees for a small employer health plan to be guaranteed issuer? Select one: a. 1 b. 2 c. 5 d. 7

In Florida, all small employer health plans must be guaranteed issue to every small employer with 2 to 50 employees. The correct answer is: 2

In Florida, insurance is regulated by how many different parties? Select one: a. 1 b. 2 c. 3 d. 4

In Florida, insurance is regulated by 4 parties: Department of Financial Services and CFO, Commissioner of the Office of Insurance Regulation, Florida state legislature, and the Florida state court system. The correct answer is: 4

In Florida, what is the minimum number of members required for a group policy? Select one: a. 2 b. 5 c. 7 d. There is no minimum.

In Florida, there is no minimum number of members required for a group policy. The correct answer is: There is no minimum.

In a group life policy, an insured's dependent children may be covered up to what percentage of the amount of insurance for which the employee is insured? Select one: a. 50% b. 75% c. 90% d. 100%

In a group life policy, an insured's dependent spouse and children may be covered up to an amount not to exceed the amount of insurance for which the employee or member is insured. The correct answer is: 100%

Which of the following is a true statement about the waiver of premium rider? Select one: a. The disability must be permanent and total. b. The disability cannot be the result of an accident. c. The disability must not be permanent. d. The disability must not be total

In order for the waiver of premium rider to take effect, the disability of the policyholder must be permanent and total. The correct answer is: The disability must be permanent and total.

Which of the following is required in order for Mr. Johnson to be eligible for Medicaid? Select one: a. He must sell his home. b. He must not have any income. c. He must not have any personal property. d. None of the above

In order to qualify for Medicaid, Mr. Johnson does not need to sell his home. He can have a small amount of income and can have personal property within certain limits. The correct answer is: None of the above

When the only logical beneficiary is a minor, all of the following options are available, EXCEPT: Select one: a. The benefits can go directly to the estate of the insured. b. A trust can be established. c. The insurance company can hold the proceeds until the minor comes of age. d. A guardian can be appointed.

In the event that the only logical beneficiary for a life policy is a minor, the guardian, trust and insurance company holding the proceeds are all options available. The correct answer is: The benefits can go directly to the estate of the insured.

When Mr. Sanders dies, the death benefit is paid to Diane. If Diane dies before Mr. Sanders, the benefits would go to Jane. Which of the following is true? Select one: a. Diane is the primary beneficiary, Jane is the contingent beneficiary. b. Jane is the primary beneficiary, Mr. Sanders is the contingent beneficiary. c. Diane is the primary beneficiary, Jane is the tertiary beneficiary. d. Diane is the primary beneficiary, Mr. Sanders is the contingent beneficiary.

In this scenario, Mr. Sanders is the insured, Diane is the primary beneficiary and Jane is the contingent beneficiary. The correct answer is: Diane is the primary beneficiary, Jane is the contingent beneficiary.

What plans provide insurance that compensates the beneficiaries of the policies for their actual economic losses, up to the limiting amount of the insurance policy? Select one: a. SELECT Insurance Plans b. Indemnity Insurance Plans c. Extended Coverage Plans d. Dread Disease Plans

Indemnity Insurance Plans provide insurance that compensates the beneficiaries of the policies for their actual economic losses, up to the limiting amount of the insurance policy. The correct answer is: Indemnity Insurance Plans

Insurance advertisements may not imply that dividends or divisible surplus is: Select one: a. Guaranteed b. Legal c. Included d. Not guaranteed

Insurance advertisements may not imply that dividends or divisible surplus is guaranteed. The correct answer is: Guaranteed

All of the following are duties of insurers when selling annuities, EXCEPT: Select one: a. Informing the consumer of the benefit to the consumer of certain features b. Informing the consumer of various features c. Informing the consumer that the particular annuity as a whole is suitable d. Informing the consumer of the cost comparison to competitors

Insurers must determine the suitability of annuity products for applicants by reasonably informing the applicants of various features and the benefit of those features, that the particular annuity as a whole is suitable and considerations if the annuity is a replacement. Insurers are under no obligation to discuss their competitors. The correct answer is: Informing the consumer of the cost comparison to competitors

When can someone designate a secondary addressee for a life policy? Select one: a. Only at the time of application b. Only after the policy is in force c. At the time of application or at anytime the policy is in force d. After the policy is in force for at least 1 year and the policy owner is over 65

Insurers must notify the applicant of their right to designate a secondary addressee at the time of application or at anytime the policy is in force. The correct answer is: At the time of application or at anytime the policy is in force

What life insurance policy provides a blend of the benefits of traditional whole life and universal life? Select one: a. Credit life b. Interest-sensitive whole life c. Variable whole life d. Industrial life

Interest-sensitive whole life is a mixture of traditional whole life and universal life. The correct answer is: Interest-sensitive whole life

What type of care is nursing care and rehabilitation needed on an occasional basis that is performed by a medical professional under a physician's orders? Select one: a. Skilled care b. Intermediate care c. Custodial care d. Hospice care

Intermediate care is nursing care and rehabilitation needed on an occasional basis, performed by a medical professional under a physician's orders. The correct answer is: Intermediate care

What kind of policy provides the option for the policyowner to pay for the entire policy over a specific and usually shorter period of time and grows cash value faster than ordinary life and matures when the insured reaches age 100 or dies? Select one: a. A limited-payment whole life b. Single premium whole life c. Endowment policy d. Economatic policy

It is the limited-payment whole life that has a shorter premium payment schedule and grows cash value faster. The correct answer is: A limited-payment whole life

How many hours of continuing education in law and ethics are required every 2 years for Florida life and health agents? Select one: a. 3 hours b. 4 hours c. 5 hours d. 6 hours

Life and health agents must complete 24 hours of continuing education every 2 years. At least 5 of the hours must be in law and ethics. The correct answer is: 5 hours

Life insurance policy proceeds are exempt from: Select one: a. Beneficiaries b. Creditors c. Dividends d. Overdue premiums

Life insurance policy proceeds are exempt from creditors claims unless the proceeds have been assigned to creditors. The correct answer is: Creditors

In Florida, what is the maximum interest rate that may be charged for late payments for individual insurance polices? Select one: a. 5% b. 7% c. 8% d. 10%

Maximum percentage rate that may be charged by an insurance company on late payments for individual insurance polices is 8%. The correct answer is: 8%

Medicare Advantage plans are a type of Medicare health plan offered by: Select one: a. The state government b. A private company with no government intervention c. A private company that contracts with Medicare d. Medicare that contracts with a private company

Medicare Advantage plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all the Part A and Part B benefits. The correct answer is: A private company that contracts with Medicare

A Medicare Supplement plan is written on which of the following bases? Select one: a. Guaranteed renewable b. Optionally renewable c. Conditionally renewable d. Cancellable

Medicare Supplement plans must be guaranteed renewable. The correct answer is: Guaranteed renewable

Individuals may purchase long-term care benefits from all of the following sources, EXCEPT: Select one: a. Individual long-term care policies b. Group policies through an employer c. Medicare Part B d. Life Insurance policy with a long-term care rider

Medicare does not provide benefits for long-term care on any basis. Benefits for long-term care must be purchased separately. The correct answer is: Medicare Part B

All of the following plans may provide home health care, assisted living and custodial benefits, EXCEPT: Select one: a. A long-term care policy with the appropriate options b. A life insurance policy with a long-term care rider c. An annuity with long-term care waivers d. Medicare Part A and B

Medicare does not provide benefits for long-term care. To have these benefits available, an individual must have some form of independent long-term care coverage. The correct answer is: Medicare Part A and B

After Michelle filed her income taxes, she received a check from the insurance company that reimbursed her for some of the expenses she deducted. What is the tax situation for these benefits? Select one: a. Michelle can ignore any tax issues, since health insurance benefits are paid on a tax free basis. b. Michelle should consult with her tax adviser to see if she can avoid further tax. c. Michelle should file an amended return, since reimbursed medical expenses do not count toward the 10% threshold. d. Michelle should return the check to the insurance company to have it reissued in the correct tax year.

Michelle had taken a deduction for medical expenses for which she was later reimbursed. She will be required to file an amended return to reflect this reimbursement. The correct answer is: Michelle should file an amended return, since reimbursed medical expenses do not count toward the 10% threshold.

All of the following programs quell the fear that some people have of losing their investment if they were to die after only receiving a few payments from their annuity, EXCEPT: Select one: a. Life with period certain b. Installment refund c. Period certain d. Deferred annuity

Minimum guaranteed payouts are benefits of the life, refund and temporary annuities. The deferred annuity postpones benefits until a later, specified date, such as a retirement date. The correct answer is: Deferred annuity

What is the rule on Medicare supplement policies duplicating benefits provided by Medicare? Select one: a. Benefits must always be duplicated. b. Some benefits may be duplicated. c. Benefits may be duplicated, at the insured's discretion. d. Benefits must never be duplicated.

No Medicare supplement policy issued in Florida may duplicate benefits provided by Medicare. The correct answer is: Benefits must never be duplicated.

A rebate is allowed for people based on which of the following? Select one: a. Place of residence b. Actuarial class c. Age d. Marital status

No insurance agency agent shall rebate any portion of a commission unless the rebate is available to all insureds in the same actuarial class and the age, sex, place of residence, race, nationality, ethnic origin, marital status, or occupation of the insured or location of the risk is not utilized in determining the percentage of the rebate or whether a rebate is available. The correct answer is: Actuarial class

Agents are paid by which of the following? Select one: a. Salaries only b. Commissions only c. Counseling service fees only d. Commissions and counseling service fees

Only licensed and appointed insurance agents may transact life and health insurance policies in Florida. Agents are paid by commissions, which are apportioned from policy premiums. Agents are permitted to charge additional amounts if they provide counseling services for insurance, and a written contract is signed between the agent and client before the additional fee is charged. The correct answer is: Commissions and counseling service fees

A policyowner can change a beneficiary unless the beneficiary is: Select one: a. A relative b. Estopped c. Indeterminate d. Irrevocable

Policyowner's have the right at all times to change the beneficiary or beneficiaries unless the policyowner waives this right in writing by stating that the beneficiary is irrevocable. The correct answer is: Irrevocable

When Sidney passed away, it was discovered that he had always been listed as female. How did this discovery affect the policy benefits? Select one: a. The death benefit was increased. b. The death benefit was decreased. c. There was no impact. d. None of the above

Rates for men are typically higher than for women. The death benefit would be decreased to compensate for the underpayment of premiums over the years. The correct answer is: The death benefit was decreased.

The acceptance by insurers of a portion of the risk underwritten by another insurer is: Select one: a. Risk retention b. Reinsurance c. Insurance transaction d. Fiduciary

Reinsurance is the acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage. The correct answer is: Reinsurance

If an agent states that certain coverage is required by law when it isn't, this would be: Select one: a. Coercion b. Churning c. Sliding d. Twisting

Sliding includes representing to an applicant that a specific ancillary coverage or product is required by law in conjunction with the purchase of insurance when such coverage or product is not required. The correct answer is: Sliding

What is a key difference between a stock insurer and a mutual insurer? Select one: a. Stock insurers can only issue life insurance; mutual insurers can issue both life and health insurance. b. Stock insurers are regulated by the SEC; mutual insurers are regulated by the state Insurance Department. c. Stock insurers are owned by investors; mutual insurers are owned by policyholders. d. Stock insurers can operate in more than one state; mutual insurers can only operate in one state.

Stock insurers are owned by investors (stockholders); mutual insurers are owned by policyholders. The correct answer is: Stock insurers are owned by investors; mutual insurers are owned by policyholders.

A couple has created a large estate during their marriage. Their tax attorney has designed a plan that will have no impact when one of the partners dies, but there will be a substantial liability when the second partner dies. An economical solution for funding the estate tax liability with life insurance is: Select one: a. A joint life plan b. Separate whole life policies c. Modified endowment contracts d. Survivorship life

Survivorship life or a second to die policy would most likely fit their needs best. The correct answer is: Survivorship life

Which of the following statements is not true about non-qualified retirement plans? Select one: a. Benefits are paid at retirement age in the form of an annuity. b. Annuities are taxed as ordinary income. c. Retirees are allowed to take a lump sum payment. d. Taxes cannot be deferred on a lump sum payment.

Taxes on a non-qualified plan can be deferred by transferring the money received in a lump sum payment into an IRA. The correct answer is: Taxes cannot be deferred on a lump sum payment.

The AD&D (accidental death and dismemberment) rider provides additional benefits if: Select one: a. The insured is involved in an accident and loses two toes b. The insured loses a finger in a drill press at work c. The insured slices his wrists d. The insured loses the sight in an eye as a result of an accident

The AD&D policy rider covers the loss of a limb, or eyesight due to an accident. The correct answer is: The insured loses the sight in an eye as a result of an accident

Which of the following is not true about the accelerated benefit rider? Select one: a. The insured must have a terminal illness to receive the benefit. b. Confinement in a nursing home sometimes suffices for payments to be made. c. The benefit is not subject to tax. d. Provides a monthly check when you become disabled.

The Accelerated benefit rider does not provide a monthly check when the insured becomes disabled. The correct answer is: Provides a monthly check when you become disabled.

Who supervises the Division of Insurance Agents and Agency Services in Florida? Select one: a. The Commissioner b. The Insurance Superintendent c. The Chief Financial Officer d. The Florida Attorney General

The Chief Financial Officer (CFO) is heads the Department of Financial Services and supervises the Division of Insurance Agents and Agency Services. The correct answer is: The Chief Financial Officer

What defines proper business practices expected of agents? Select one: a. The Marketing Practices Act b. The Code of Ethics c. The Code of Commerce d. The Fair Practices Act

The Code of Ethics defines proper business practices expected of agents. The correct answer is: The Code of Ethics

What law requires that an applicant be notified that an insurance underwriter may request a report from an investigative agency? Select one: a. Freedom of information Act b. Medical Information Bureau Disclosure Act c. Uniform Provision Law d. Fair Credit Reporting Act

The Fair Credit Reporting Act, also known as Insurance Information and Privacy Protection Act, requires that the insurance company inform you that they might order a report. The correct answer is: Fair Credit Reporting Act

The Insurance Department may place on probation, suspend, revoke or refuse to issue or renew an insurance producer license for all of the following reasons, EXCEPT: Select one: a. Failing to pay property tax b. Having committed twisting c. Failing to pay child support d. Having committed rebating

The Insurance Department may place on probation, suspend, revoke or refuse to issue or renew an insurance producer license for failing to pay child support or committing twisting or rebating. The correct answer is: Failing to pay property tax

All of the following are common methods to obtain medical information, EXCEPT: Select one: a. Contacting the Medical Information Bureau b. An exam by a physician in his office or clinic c. A consumer credit report d. Having medical technologist take samples for lab work.

The Medical Information Bureau (MIB), an exam by a doctor and lab work are all consistent with methods used by insurers to gather medical information. The correct answer is: A consumer credit report

Which of the following best describes the duties of the Office of Insurance Regulation? Select one: a. Regulation of the insurance industry in Florida b. Enforcing criminal penalties c. Interpreting insurance laws for conflict resolution d. Repealing ineffective insurance laws

The Office of Insurance Regulations primary duty is to regulate insurance activities in Florida. The correct answer is: Regulation of the insurance industry in Florida

If an agent told a client an HMO was a form of insurance and implied that the policy being offered included shares of stock, those actions would be characterized as: Select one: a. Twisting b. Defamation c. Discrimination d. Misrepresentation

The agent was engaged in misrepresentation by presenting the policy as something it was not. Statements are considered to be misrepresentations if, when taken in the context of the whole presentation, may tend to deceive a person. The correct answer is: Misrepresentation

Which of the following is not necessary for a policy to take effect? Select one: a. The initial premium was collected b. The policy was reviewed by the applicant c. The policy was delivered d. The policy was issued by the insurer

The applicant reviewing the policy is not a necessary step for a policy to take effect. The policy can take effect when it is issued by the insurer, delivered and the first premium collected. The correct answer is: The policy was reviewed by the applicant

As the beneficiary of his dad's life insurance policy, Nick tried to collect benefits when his dad died 21 months after the policy inception. What is the most likely reason that the claim could be denied? Select one: a. Nick's dad had failed to divulge a serious medical condition when he applied for the insurance. b. The contestable period was no longer in effect. c. Nick was not the natural son. d. The premium payments were in arrears.

The contestable period is in effect for two years. It is most likely that the insurance company discovered facts were misrepresented when application was made, and denied the claim for that reason. The correct answer is: Nick's dad had failed to divulge a serious medical condition when he applied for the insurance.

Which provision prevents an agent or a company from changing the insurance contract after it is issued? Select one: a. The insuring clause b. The entire contract clause c. The legal actions clause d. Time limit for certain defenses

The entire contract clause protects the insured from a unilateral contract change by either the producer or the underwriting company. The correct answer is: The entire contract clause

The insuring clause in a health policy includes all of the following, EXCEPT: Select one: a. The insurer's promise to pay benefits for defined losses b. A definition of losses not covered by the policy c. Specifies that benefits are subject to policy provisions d. Identifies the insurance company and the insured

The exclusion clause defines what is not covered by the policy. The insuring clause outlines the terms of coverage and the promise to pay in the event of a covered loss. The correct answer is: A definition of losses not covered by the policy

Which of the following does not have to be included in the outline of coverage? Select one: a. A statement of the renewal and cancellation provisions b. The principal benefits contained in the policy c. The principal exclusions contained in the policy d. The fees and costs of the policy

The following must be contained in the outline of coverage:" A statement identifying the applicable category of coverage afforded by the policy based on the minimum basic standards." A brief description of the principal benefits and coverage provided in the policy." A summary statement of the principal exclusions and limitations or reductions contained in the policy including preexisting conditions, probationary periods, elimination periods, deductibles, coinsurance, and any age limitations or reductions." A summary statement of the renewal and cancellation provisions, including any reservation of the insurer of a right to change premiums. The correct answer is: The fees and costs of the policy

What is also referred to as the future increase option and can be attached to disability income policies because the benefit amount is fixed, so costs remain level? Select one: a. Waiver of cost of insurance rider b. Guaranteed insurability c. Term rider d. Impairment rider

The guaranteed insurability rider can be attached to disability income policies and costs remain level. The correct answer is: Guaranteed insurability

In the claims payment provisions in a health policy, the standard time for a company to deliver a claim form once it has been notified of a loss is: Select one: a. 15 days b. 20 days c. 45 days d. 60 days

The insurance company has 15 days to provide a claim form under the uniform claims provision clause. The correct answer is: 15 days

Len's hospital and surgical expense policy pays $100 daily room and board and $1,000 for ancillary expenses. The surgical expense pays a maximum of $500. Len was hospitalized for 10 days with a $200 room and board charge. His ancillary expenses were $1,500 and his surgeon charged $2,000. How much will the insurance company pay? Select one: a. $1,000 b. $2,500 c. $3,500 d. $5,500

The maximum that is paid for hospital is $1,000 ($100 _ 10). Ancillary is also $1,000 maximum and the surgeon is $500 maximum. That adds up to $2,500. The correct answer is: $2,500

How does being a stunt pilot impact a woman's ability to get life insurance? Select one: a. A policy could be written with an aviation exclusion. b. She is not able to get life insurance. c. She can get insurance, but her premiums would be exorbitant. d. She could have a rider that would cover her stunt flying.

The most likely outcome of her occupation is that a policy would be written with an aviation exclusion. The correct answer is: A policy could be written with an aviation exclusion.

If an insurer has the right to refuse to renew a policy, the policy has which of the following provisions? Select one: a. Conditionally renewable b. Optionally renewable c. Non-renewable d. Cancellable

The optionally renewable provision allows an insurer to refuse to renew for no reason. The correct answer is: Optionally renewable

Which of the following must take place in order for a policy to be in effect? Select one: a. The insurer must approve the application b. The agent must deliver the policy c. The initial premium must be collected d. All of the above

The policy is not in effect until the insurer approves the application, the agent delivers the policy and the initial premium is collected. The correct answer is: All of the above

When Jack and Jill divorced, the court ordered that Jack name Jill beneficiary of his insurance. He may not change this, even if he remarries unless Jill gives her permission. Jill is: Select one: a. A court ordered beneficiary b. An irrevocable beneficiary c. A primary beneficiary d. A special class of beneficiary

The policy owner may not change an irrevocable beneficiary without the beneficiary's written consent. The correct answer is: An irrevocable beneficiary

All of the following are true about the probationary clause on a health policy, EXCEPT: Select one: a. Accidents are covered immediately b. Sicknesses are not covered until the probationary period has expired c. The probationary clause is one of the 12 mandatory clauses d. The probationary clause will be found in the insuring clause

The probationary clause is usually added to limit or modify a contract to protect against pre-existing conditions. The correct answer is: The probationary clause is one of the 12 mandatory clauses

Which of the following is not expected from a producer as part of the field underwriting? Select one: a. The producer should make sure the application is filled out completely. b. The producer should note the applicant's physical appearance (weight, build, etc.) c. The producer should note how many children the applicant has in the house. d. The producer should note the habits and lifestyle of the applicant.

The producer is not expected to note how many children the applicant has in the house. The correct answer is: The producer should note how many children the applicant has in the house.

When does an agent have to inform a proposed insured that a credit report may be pulled? Select one: a. It should be covered during the first contact. b. It should only be covered if the underwriter actually orders the report. c. There should be a statement with the policy when it is delivered. d. The proposed insured should be informed at the time of application.

The proposed insured must be informed that a report may be requested at the time of application. The correct answer is: The proposed insured should be informed at the time of application.

Which of the following is not true about insurable interest? Select one: a. For life and health, it must exist at the time of application. b. The purchaser cannot also be the person insured. c. Marriage or blood relationship are valid for insurable interest. d. Business partners can have insurable interest in each other.

The purchaser can also be the person insured. The correct answer is: The purchaser cannot also be the person insured.

What Florida statute ensures coverage for employees of small businesses not covered by COBRA 1985? Select one: a. Flori-COBRA b. Mini-COBRA c. Small Business-COBRA d. VIPER

The purpose of the Florida Health Insurance Coverage Continuation Act (Mini-COBRA) is to ensure coverage for employees of small businesses not covered by COBRA 1985. The correct answer is: Mini-COBRA

What are the two perils addressed by health insurance? Select one: a. Accidental injury and sickness b. Premature death and damage to property c. Liability for bodily injury and premature death d. Damage to property and dependency during old age

The two perils of health insurance are accidental injury and sickness. Accidental injury is an unforeseen and unintentional bodily injury resulting from an accident. Sickness is a medical condition, disease or illness. The correct answer is: Accidental injury and sickness

What is the minimum free look period for a fixed annuity in Florida? Select one: a. 14 days b. 21 days c. 30 days d. 31 days

The unconditional refund time (free look period) for a fixed annuity in Florida is at least 21 days. The correct answer is: 21 days

If a company fails to respond to a request for reinstatement, the policy will automatically reinstate in how many days? Select one: a. 10 days b. 30 days c. 45 days d. 60 days

The uniform code will force a reinstatement if the company fails to act in 45 days. If the company requests additional information, that extends the period. The correct answer is: 45 days

What steps should 3 equal partners in a company valued at $300,000 do to be prepared in case 1 or more of the partners becomes disabled? Select one: a. Have their attorney draft an agreement to eliminates the partnership for the disabled partner b. Purchase individual disability plans in the amount of the partner's salary c. Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement d. Have their attorney draft an agreement that allows the continuing partners to pay the disabled partner's spouse

There are two elements to a good buy-out agreement. First, there needs to be a written agreement that is binding on the partners. Second, the agreement should be funded with disability policies to insure the disabled partners receive fair value for his share of the business. The correct answer is: Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement

Which of the following is true about immediate annuities? Select one: a. They cannot be purchased with one payment. b. They can begin payouts within two years of the first premium payment. c. They have annuity periods that are sometime (defined in the contract) in the future d. They do not have an accumulation period.

They do not have an accumulation period, and payouts must begin within one year of the first premium payment. The correct answer is: They do not have an accumulation period.

In order to continue coverage for a newborn, when must the insurer be notified of the birth? Select one: a. Within 7 days b. Within 14 days c. Within 30 days d. Within 31 days

To continue coverage for a newborn, the insurer must be informed of the birth within 30 days of the birth. The correct answer is: Within 30 days

Which type of policy generally requires an elimination period to qualify for benefits? Select one: a. A disability plan b. A dental plan c. Dread disease policy d. A major medical plan

To qualify for benefits for a disability plan, an insured is required to serve an elimination period before benefits will begin. The correct answer is: A disability plan

Inducing a policyholder to switch insurance companies without regard to bad consequences is: Select one: a. Defamation b. Churning c. Boycott d. Twisting

Twisting is knowingly making misleading representations or incomplete or fraudulent comparisons of insurance policies in order to induce a person to lapse, forfeit, surrender, terminate, retain, assign, or convert a policy in order to sell a policy for another company. The correct answer is: Twisting

What does "surgery will be reimbursed on a usual and customary basis at the 80th percentile" mean: Select one: a. Surgery fees are paid at 80% in all cases. b. The doctor's fee will be paid in full up to 80%. c. The insurance company will pay a benefit that is equivalent to what 80% of the surgeons in that geographical area charge most of the time for a given procedure. d. The insurance company will set fees without regard to what is charged.

Usual, customary and reasonable allows the insurance company to reimburse fees based on where the patient is treated, what is actually performed and base the reimbursement on what peer doctors in the area usually charge for that procedure. The correct answer is: The insurance company will pay a benefit that is equivalent to what 80% of the surgeons in that geographical area charge most of the time for a given procedure.

Which of the following is not true about variable universal life policies? Select one: a. The cash value is based on investment in a separate account. b. They have flexible premiums. c. They have no provision for policy loans and withdrawals. d. The death protection is deducted from the cash value.

Variable universal life DOES provide with the policy owner with access to cash values via policy loans and withdrawals. The correct answer is: They have no provision for policy loans and withdrawals.

All of the following are mandatory provisions for health policies, EXCEPT: Select one: a. Grace period b. Reinstatement c. Misstatement of age d. Waiver of Premium

Waiver of premium is an optional feature. The correct answer is: Waiver of Premium

Under Medicare Part A, a spell of illness begins again and is subject to a new deductible for another admission when: Select one: a. The patient has been discharged from a prior stay and 30 days have elapsed b. The patient has been discharged from a prior stay and 45 days have elapsed c. The patient has been discharged from a prior stay and 60 days have elapsed d. The patient has been discharged from a prior stay and 90 days have elapsed

When there is a separation of at least 60 days between hospital days, a new deductible applies. The correct answer is: The patient has been discharged from a prior stay and 60 days have elapsed

Where replacement is involved, when is the latest the replacing insurance company must provide a Buyer's Guide to the applicant of a policy that contains an unconditional refund provision? Select one: a. Prior to the sales presentation b. Prior to accepting the applicant's initial premium c. With the policy delivery d. Within 3 days of the policy delivery

Where replacement is involved, the replacing insurance company must provide a Buyer's Guide and a Policy Summary prior to or with policy delivery if the policy contains an unconditional refund provision for a period of at least 10 days. The correct answer is: With the policy delivery

When must an insurance agent give an applicant a copy of all sales proposals for a presentation involving replacement? Select one: a. Prior to the presentation b. After to the presentation c. Within 3 days of the presentation d. When the prospective policy is delivered

Where replacement is or may be involved, the agent will leave with the applicant the original or a copy of all sales proposals used for presentation to the applicant. The correct answer is: After to the presentation

An exclusion that always appears in a health policy is: Select one: a. No coverage for drug or alcohol related illness b. Hernia from an accident c. Injury in the act of committing a felony d. Travel outside of the USA

While there may be some other exclusion, losses incurred while in the act of committing a felony is always an exclusion. The correct answer is: Injury in the act of committing a felony

With the exception of nonpayment of premium, a group life insurance policy is incontestable after: Select one: a. 6 months b. 1 year c. 2 years d. 3 years

With the exception of nonpayment of premium, a group life insurance policy is incontestable after 2 years. The correct answer is: 2 years