FL Health and Life Insurance Exam

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

$120 a day

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

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

10%

Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of

12 months

Continuing education requirements must be met every

2 years

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

25

Which of the following is a feature of a disability buyout plan?

A lump-sum benefit payment option

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

A person may hold several appointments at one time.

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

Adjust the benefit in accordance with the decreased risk.

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?

Amount paid with accelerated benefit, plus the earnings lost by insurance company in interest income from accelerated benefit

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

As of the application date

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

When must the Medicare Supplement Buyer's Guide be presented?

At the time of application

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

Which of the following would NOT be considered a misrepresentation on the part of the insurer?

Backdating policies to secure a lower premium for the insured

Which of the following statements regarding Business Overhead Expense policies is NOT true?

Benefits are usually limited to six months.

A life insurance policy used to fund an agreement that contractually establishes the intent of someone to purchase a business upon the insured business owner's death is a

Buy-sell agreement.

HMOs that contract with outside physicians to provide health care service to their subscribers compensate those providers on a

Capitation basis

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

Churning

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

Critical illness.

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

Deferred

Which of the following statements about occupational vs. nonoccupational coverage is TRUE?

Disability insurance can be written as occupational or nonoccupational.

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

Elimination Period

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

Elimination period.

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws

Long-term care coverage may be available as any of the following options EXCEPT

Endorsement to a health policy.

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity.

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as

Excess

Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in

Expiration of the license.

An agent selling variable annuities must be registered with

FINRA.

A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of policy do they have?

Family

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

Family term rider

Both Universal Life and Variable Universal Life have a

Flexible premium.

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits?

Have accumulated 6 work credits in the past 3 years

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

If the employee enrolls within a certain time period

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

Illegal under any circumstances

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

Insurable interest.

When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?

Insurer

Who must pay for the cost of a medical examination required in the process of underwriting?

Insurer

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

Insuring clause.

A child is dependent upon her parents for support because of a physical disability. Coverage may be continued beyond the normal limiting age when the child

Is incapable of self-sustaining employment.

Which of the following statements is NOT true concerning Medicaid?

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

Which statement is NOT true regarding a policy summary?

It must be combined with a sales illustration.

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

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

Which of the following is true of a PPO?

Its goal is to channel patients to providers that discount services.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint Life Policy

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor.

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key employee disability insurance.

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal actions.

A policy will pay the death benefit if the insured dies during the 20 year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the

Major medical coverage.

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

All of the following statements concerning medicaid are correct EXCEPT

Medicaid is a state funded program that provides health care to persons over age 65, only.

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

Metal level classification

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the

Notice Regarding Replacement.

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

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

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?

Outline of Coverage

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

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

Pay the claim.

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

Which of the following has the right to convert the existing term coverage to permanent insurance?

Policyowner

What is the term for the fee a policyowner must pay to the insurance company to maintain coverage?

Premium

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT

Premiums always stay the same.

Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

Which of the following is NOT among the goals of a Medicare supplement application?

Presuming the applicant is eligible for Medicaid, based on the nature of the policy

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount.

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

Rebating

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates.

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

What is the best way to change an application?

Start over with a fresh application

Which of the following groups would most likely be covered under a blanket accident policy?

Students at a public school

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

Subrogation

Which of the following types of risk will result in the highest premium?

Substandard risk

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period of years and covered thereafter.

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

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

Survivorship Life

The interest earned on policy dividends is

Taxable.

An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step?

The agent must provide a replacement notice to the applicant.

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

The applicant

Which is true regarding obtaining underwriting sources?

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

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary.

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

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

The benefit is received tax free.

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

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

What type of information is NOT included in a certificate of insurance?

The cost the company is paying for monthly premiums

Which of the following dates must be contained in a policy summary?

The date the summary was prepared

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary.

Under a health insurance policy, other than death benefits, that have not otherwise been assigned, will be paid to _______________

The insured

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to

The insured's estate.

An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims?

The insurer

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

A person insured under a group life insurance policy can make an assignment of all or any part of the incidents of ownership conferred on the insured by the policy or by law, to any of the following EXCEPT

The policyholder.

If a life insurer holds the proceeds of any policy it issues, which of the following is true?

The proceeds may be exempt from any creditor's claims against a beneficiary other than the policy owner.

Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?

They are tax free to terminally ill insured.

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract.

An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true?

This practice is illegal.

An agent transacts business for Insurer A and Insurer B, both selling life insurance, and for Insurer C, selling health insurance. How many appointments must the agent hold?

Three - one for each insurer

Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

What is the purpose of COBRA?

To protect the insureds against insolvent insurers

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

An absolute assignment is a

Transfer of all ownership rights in a policy.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

When does a free-look period begin on a life insurance policy?

When the policy is delivered to the insured

In a group health policy, a probationary period is intended for people

Who joined the group after the effective date.

All of the following are examples of third-party ownership of a life insurance policy EXCEPT

an insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan