FL 0215 Health and Life Ins
A Hospital/Surgical Expense policy was purchased for a family of four in March 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out of pocket medical expenses for 2013?
$1,000
In Florida, monthly-premium health insurance policies must provide a grace period of at least
10 days
A life policy loan in Florida cannot charge a fixed rate of interest higher than
10%
Florida requires that coverage for newborns begins "from the moment of birth" and continues for
18 months
An insurance company can contest a life insurance contract due to application fraud within
2 years
In Florida, most life insurance policies have a contestability period of
2 years
Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA)
20
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for his transaction?
20% is withheld for incomes taxes
Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their license for at least how long?
5 years
In Florida, what is the maximum percentage of controlled business an agent may produce?
50%
What is Medicare?
A hospital and medical expense insurance program
What do Dread Disease policies cover?
A specific disease or illness
What is Florida's definition of Life insurance replacement?
A transaction in which a new policy is bought and an old policy is terminated
What type of employee welfare plans are not subject to ERISA regulations?
Church plans
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
What kind of life insurance starts out as temporary coverage but can be later modified to permanent overage without evidence of insurability?
Convertible Term
Which statement regarding the Misstatement of Age provision is considered to be true?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
Determined by the terms of policy
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 policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?
Entire Contract
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract provision
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?
Ex-wife
A(n) __ contained in a life insurance policy states that the policy will NOT cover certain risks.
Exclusion
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)
Exclusion
Term insurance has which of the following characteristics?
Expires at the end of the policy period
D owns a Whole Life policy that was purchased 20 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?
Extended Term
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 requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than acquiring insurance
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
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
Her group health plan
All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT
Income derived from the TSA is received income tax-free
Which of these actions should a producer take when submitting an insurance application to an insurer?
Inform insurer of relevant information not included on the application
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
Insuring Clause
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring Clause
Which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance
According to Florida law, which of the following statements accurately describes an admitted mail order insurance company?
It may solicit insurance business by mail without the assistance of a licensed agent
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should be the firm purchase on its project manager?
Key Person Life Policy
Which of the following situations does a Critical Illness plan cover?
Leukemia
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
Level
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
Which of the following is NOT a limited benefit plan?
Life insurance policy
Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?
Long-Term Care
The health insurance program which is administered by each state and funded by both the federal and state governments is called:
Medicaid
Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?
Misrepresentation
Which of these is NOT an element of Life insurance premiums?
Morbidity rate
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
In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies?
Naturopaths
K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?
Pay monetary restitution to the client
Which action could result in a hearing being ordered by the Department of Financial Services?
Performing insurance transactions without a license
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the:
Policy Loan provision
Which of these do NOT constitute policy delivery?
Policy issued with a rating
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
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
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Renewable
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
Which of these is NOT a legal entity for selling life insurance in Florida?
Risk management advisers
Which of these factors does NOT influence an applicant's need for life insurance?
Self-maintenance expenses
A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast?
Stock company is owned by its shareholders. Mutual company is owned by its policyholders
The annuity that represents the largest possible monthly payment to an individual annuitant is a(n)
Straight Life annuity
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
What type of life policy covers two people and pays upon the death of the last insured?
Survivorship
A(n) __ rider may be used to include coverage for children under their parents life insurance policy.
Term
Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?
The account can be rolled into the surviving spouse's IRA
The reason for backdating a policy is
To obtain a premium rate based on an earlier age.
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
All of the following are Nonforfeiture Options EXCEPT
Automatic Premium Loan Option
A pilot applies for Life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n)
Aviation Exclusion
According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with
Buyer's Guide and Policy Summary
The insurer must provide a prospective buyer with a(n)
Buyer's Guide and Policy Summary
Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?
Buyer's guide
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
The Coordination of Benefits provision:
prevents an insured covered by two health plans from making a profit on a covered loss
A major medical policy typically
provides benefits for reasonable and necessary medical expenses, subject to policy limits
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called:
reinstatement
The advantage of reinstating an original life policy is
the premiums are based on a younger age
Under a Renewable Term policy,
the renewal premium is calculated on the basis of the insured's attained age
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?
twenty
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
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has
waived one of its legal rights
A policy that becomes a Modified Endowment Contract (MEC)
will lose many of its tax advantages
An agent's license can be suspended or revoked by
writing primarily controlled business
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.
Universal
Which of the following policies is characterized by flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?
Variable universal life
A life insurance policyowner may sell their policy to a(n) __ in order to receive a percentage of the policy's face value.
Viatical settlement provider
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
Which of these is considered a statement that is assured to be true in every respect?
Warranty
Which parts of a life insurance policy are guaranteed to be true?
Warranty
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?
Wavier of Premium Rider
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adheasion
How long does the coverage normally remain on limited-pay life policy?
age 100
Insurance companies that are organized outside the United States are referred to as
alien
To be eligible for Social Security disability benefits, an employee must be unable to perform:
any occupation
What action can a policyowner take if an application for a bank loan requires collateral?
assign policy ownership to the bank
The coordination of benefits (COB) provision exists in order to
avoid duplications of benefit payments
Medicaid was designed to assist individuals who are
below a specific income limit
S would like to use dividends from her life insurance policy to purchased paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
beneficiary's age
Variable Whole Life Insurance can be described as
both an insurance and securities product
The guarantee of insurability option provides a long-term care policyowner the ability to:
buy additional coverage at a later date
A policy loan is made possible by which of these life insurance policy features?
cash value provision
Under an Interest Sensitive Whole Life policy,
cash values are determined by interest rates
An individual covered under a Group Life insurance policy is considered to be a(n)
certificate holder
An example of sliding would be
charging for an additional product without the applicant's consent
If an agent combines premiums collected with their personal funds, they have engaged in:
commingling
The policy summary contains specific information on all of the following, EXCEPT:
commission
The Consolidated Omnibus Budget Reconciliation Act (COBRA) give workers (and their families) whose employment has been terminated the right to:
continue group health benefits
What type of group insurance plan involves employees sharing the cost?
contributory plan
The sections of an insurance contract which limit coverage are called:
exclusions
The Financial Services Commission may hold hearings
for any reason deemed necessary
A life insurance application may be rejected on the basis of all of these factors EXCEPT
gender
T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits
immediately
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)
internal limit
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
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
An accident policy will most likely pay a benefit for a(n)
off-the-job accident
Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract
once each year
Generally how long is a benefit period for Major Medical Expense?
one year
Deductibles are used in health policies to lower:
overuse of medical services
M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the
policy proceeds
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?
$25,000
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
$3,000
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000
The USA Patriot Act was enacted in:
2001
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 pay life
Which of the following employer tasks does a Professional Employer Organization normally handle?
Administration tasks
J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?
All of the employees must be notified of the cancellation either by the insurance company or through J
When an insurance application is taken by a producer, which of these statements is true?
Any changes made on the application require the applicants initials
Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
Applicant's monthly income
Traditional individual retirement annuity (IRA) distributions must start by:
April 1st of the year following the year the participant attains age 70 1/2
According to Florida Law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?
At the time of application
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
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
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
Blanket Accident policy
In Florida, which of the following is considered an Unfair Trade Practice?
Coercion
Which of the following is an example of an Unfair Trade Practice?
Coercion
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
Collateral assignment
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing Term
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing term
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
Fair Credit Reporting Act
Which of these is NOT a source of funding for Social Security benefits?
Federal Government
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
What does Medicare Parts A and B cover?
Part A covers hospitalization; Part B covers doctor's services
Which statement is TRUE in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt
A policyowner is able to choose the frequency of premium payments through what policy feature?
Premium mode
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Which of the following provisions is NOT required in HMO contracts/certificates?
Seven-day grace period
What is required in the Florida Employee Health Care Access Act?
Small group benefit plans are to be issued on a "guarantee-issue" basis
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
Split dollar plan
Whole Life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase?
The duration of premium payments
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
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 amount considered eligible for reimbursement by an insurance company under a health plan
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
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 these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable Life
In Florida, deceptive advertising is considered to be
a form of misrepresentation
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the:
initial deductible
Medicare Part B does NOT cover
inpatient hospital services
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
inspection report
The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as:
Employee's premium paid by the employer is tax-deductible to the employer as a business expenditure
A life insurance policyowner would like to file a complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the
Office of Financial Regulation
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?
Owner's Rights
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
Which is true concerning a Variable universal Life policy?
Policyowner controls where the investment will go and selects the amount of the premium payment
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?
Premiums may increase at time of renewal
Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?
Premiums normally increase at time of renewal
Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness?
Probationary Period
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 payable to K's state if P dies within a specified time
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
Restoration of used benefit
An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:
insurer dates the policy
When does a life insurance contract become effective if the initial premium is not collected during the application process?
when the producer delivers policy and collects initial premium
What must an insurer obtain to conduct an HIV test?
written consent
According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase?
Marital Status
With a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?
Monthly
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):
closed panel
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay Life accumulates cash value faster than Straight Life
A ___ day notice to the policyholder is required for any health insurer that wishes to cancel a health insurance policy.
45
K is insured under a Group Life insurance policy. K is considered to be a(n):
Certificate holder
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
Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?
HMO
The type of annuity that can be purchased with one monetary deposit is called a(n):
Immediate Annuity
T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
Increase her policy's coverage amount
Which of these needs is satisfied by Adjustable Life Insurance?
Insured's need for flexible premiums
What type of life policy covers 2 lives and pays the face amount after the first one dies?
Joint Life Policy
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 clause
T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?
The insurer will rescind the policy, deny the claim, and recover all payments made
W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?
The proceeds would be reduced based on whatever the premium would have been if purchased at age 59
How does a typical Variable Life Policy investment account grow?
Through mutual funds, stocks, bonds
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
What does the ownership clause in a life insurance policy state?
Who the policyowner is and what rights the policyowner is entitled to
Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which if these policies did Y purchase?
Whole Life policy with an Other Insured Rider
A life insurance policy that provides a policyowner with cash value along with a level face amount is called:
Whole life
All of the following will result in the suspension of an agent's license EXCEPT
acting with fiduciary responsibility
Additional coverage can be added to a Whole Life policy by adding a(n):
decreasing term rider
T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as
fiduciary responsibility
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 employees with up to 50 employees
In life insurance, the needs approach is used mostly to establish:
how much life insurance a client should apply for
How does group insurance differ from individual insurance?
premiums are lower
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
the employee
An individual who purchases a Life annuity is given protection against:
the risk of living longer than expected
An example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
All of these are considered to be a benefit under Social Security EXCEPT for:
unemployment
