Florida 2-15

A right of renewability that guarantees insurability, but it does not guarantee premiums is Select one: a. Optionally renewable b. Noncancelable c. Guaranteed insurability d. Guaranteed renewable

A Guaranteed renewable policy does not allow the insurer to cancel the policy, but it allows the insurer to increase the premiums. The correct answer is: Guaranteed renewable

A Medicare supplement insurer cannot deny an application for a Medicare supplement policy if the applicant is both 65 and enrolled in: Select one: a. Medicare Part A b. Medicare Part B c. Medicare Part C d. Medicare Part D

A Medicare supplement insurer cannot deny an application for a Medicare supplement policy if the applicant is both 65 and enrolled in Medicare Part B. The correct answer is: Medicare Part B

Samson has a major medical policy that has a $1,000 deductible, a maximum out of pocket of $2,000 after the deductible, and an 80/20 coinsurance. If his medical bill was $20,000, what will he have to pay? Select one: a. $2,000 b. $3,000 c. $3,800 d. $4,800

$3,000 ($1,000 deductible + $2,000 stop loss ) is what he'll pay. Note in all questions who is paying, the insured or insurer. The calculation is: $20,000 - $1,000 = $19,000 x .20 = $3,800 (coinsurance) + $1,000 (deductible) = $4,800. This is over the total deductible and stop loss so instead of $4,800, he'll pay $3,000. Note that the out of pocket is after the deductible. The correct answer is: $3,000

Who must sign the Notice Regarding Replacement of Accident and Sickness or Long-term Care Coverage? Select one: a. The applicant only b. The replacing agent only c. The applicant and the replacing agent d. The applicant, the replacing agent and the insurer

A Notice Regarding Replacement of Accident and Sickness or Long-term Care Coverage must be signed by the applicant. The correct answer is: The applicant only

What is a managed-care arrangement under which a selected group of independent hospitals and medical practitioners in an area agrees to provide a range of services at a prearranged cost? Select one: a. POS b. EPO c. PPO d. HMO

A PPO is a managed-care arrangement under which a selected group of independent hospitals and medical practitioners in an area, such as a state, agrees to provide a range of services at a prearranged cost. The correct answer is: PPO

How long is the grace period for health insurance policies with other than weekly or monthly-due premiums? Select one: a. 7 days b. 10 days c. 31 days d. 60 days

A grace period of at least seven days for weekly premium policies, 10 days for monthly premium policies and 31 days for all other policies is granted. The correct answer is: 31 days

Giving a client's child a stuffed animal with a company's logo that is valued at less than $25 would be considered: Select one: a. Advertising b. False advertising c. Coercion d. Rebating

A small gift under $25.00 that is used as advertising is not rebating. For example giving a client's child a stuffed animal with your company's logo. The correct answer is: Advertising

Which of the following statements regarding annual renewal term (ART) policies is false? Select one: a. ART premiums increase each time the policy is renewed. b. ART usually has a maximum age after which policies are not renewable. c. ART is guaranteed renewable on an annual basis with proof of insurability. d. ART policies have a level face amount.

ART policies are guaranteed renewable (until a certain age) without proof of insurability. The correct answer is: ART is guaranteed renewable on an annual basis with proof of insurability.

This type of annuity benefit payments start within a year of purchase: Select one: a. Single b. Immediate c. Flexible d. Deferred

An Immediate annuity's benefit payments start within a year of purchase. A Deferred annuity's benefit payments start at a later date, greater than 12 months from of purchase. The correct answer is: Immediate

When must an outline of coverage be given to a prospective applicant for long-term care insurance? Select one: a. Prior to the presentation b. At the time of solicitation c. At the time of application d. When the policy is delivered

An outline of coverage must be given to a prospective applicant for long-term care insurance at the time of initial solicitation. The correct answer is: At the time of solicitation

A person insured under a group life insurance policy may make an assignment of all of the following, EXCEPT: Select one: a. Conversion b. Beneficiary c. Policy proceeds d. Insured

Any person insured under a group life insurance policy may make an assignment of all or any part of his 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: Insured

How much time does an appointing entity have to report a termination to the Florida Department of Insurance? Select one: a. 14 days b. 15 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

What places offer mature adults the ability to _age in place_ without ever needing to move for health reasons? Select one: a. Traditional retirement communities b. Continuing Care Retirement Communities c. Custodial Care Communities d. Hospice Care Communities

Continuing Care Retirement Communities (CCRCs) offer mature adults the ability to _age in place_ without ever needing to move for health reasons. While traditional retirement communities only offer independent living and assisted living, CCRCs provide a continuum of care that includes independent and assisted living to memory care and skilled nursing. The correct answer is: Continuing Care Retirement Communities

How frequently must domestic insurers be examined by the Office of Insurance Regulation? Select one: a. Annually b. At least once every other year c. At least once every 5 years d. Upon the Office's discretion

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

Eligibility for the payment of long-term care benefits may not be more restrictive than requiring a deficiency in the ability to perform not more than: Select one: a. 1 activity of daily living b. 2 activities of daily living c. 3 activities of daily living d. 4 activities of daily living

Eligibility for the payment of long-term care benefits may not be more restrictive than requiring a deficiency in the ability to perform not more than 3 activities of daily living (ADLs). The correct answer is: 3 activities of daily living

Tim has a special savings medical plan whereby the funds do not rollover from year to year. This plan is a: Select one: a. Group health insurance b. HRA c. HSA d. FSA

FSA funds are available on a use-it or lose-it basis, and must be used in the plan year they are contributed to the FSA, or they will be forfeited. The correct answer is: FSA

Florida created the Small Employers Access Program to specifically target employers with up to how many employees? Select one: a. 10 b. 15 c. 20 d. 25

Florida created the Small Employers Access Program to specifically target employers with up to 25 employees. The correct answer is: 25

Which of the following is not an eligible group for group life insurance? Select one: a. Employer b. Labor union c. Credit union d. None of the above

Group life contracts may be issued to employee groups, debtor groups, labor union groups, trustee groups, association groups, credit union groups, dependent groups and other groups approved by the department. The correct answer is: None of the above

HDHPs are most often used with a Select one: a. HMOs b. POSs c. HSAs d. PPOs

HDHPs (High deductible health plans) are frequently used with a HSA (Health Savings Account). The correct answer is: HSAs

The services are provided on a prepaid per person basis, called capitation in a: Select one: a. PPO b. POS c. HMO d. HAS

HMOs pay for services on a prepaid per person basis, which is called capitation. The correct answer is: HMO

If a potential insured does not attach his initial premium payment to the insurance application, he is making a legal: Select one: a. Counteroffer b. Contract c. Inquiry for an offer d. Offer

If the initial premium payment does not accompany the application, legally the application is considered an inquiry for an offer. The correct answer is: Inquiry for an offer

What does a producer do at delivery if, he submits an application with a premium. After underwriting, the insurer sends back the policy, rated, with an impairment rider. Select one: a. Explain that the policy is rated. b. Explain the issue and collect an additional premium. c. Tell the applicant that they were declined. d. Nothing

If the policy is rated, the producer needs to explain the issue and collect an additional premium. The correct answer is: Explain the issue and collect an additional premium.

In Florida, what is the minimum number of employees to be considered a "small employer?" Select one: a. 1 b. 2 c. 5 d. 7

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

Both parents have health plans from work that covers their daughter. Which plan is primary? Select one: a. Father b. The plans split the cost. c. Mother d. The parent with the earliest birthday in the year is primary.

In determining the coordination of benefits, the parent's birthday that is the earliest in the year has primary coverage. In a divorce, whichever parent has custody is primary. The correct answer is: The parent with the earliest birthday in the year is primary.

Insurance advertisements may not refer to premiums as: Select one: a. Remittances b. Amounts c. Deposits d. Payments

Insurance advertisements may not refer to premiums as deposits. The correct answer is: Deposits

A contract prepared by only one party is called: Select one: a. Conditional b. Adhesion c. Unilateral d. Aleatory

Insurance contracts are contracts of adhesion. In a contract of adhesion there is only one author, the insurance company. The correct answer is: Adhesion

Miranda has stopped paying her premiums, but a provision in her policy provides for continuation of coverage. What is that provision called? Select one: a. Nonforfeiture option b. Waiver of premium option c. Insuring clause d. Consideration clause

It is the nonforfeiture option. The correct answer is: Nonforfeiture option

Shane and Casey bought a life policy in which both are insured. If it pays the death benefits after both die, it is a: Select one: a. Convertible term b. Guaranteed renewable c. Survivorship life d. Joint life

Joint life pays the death benefits after the first person dies. A survivorship life policy pays after the second person or last survivor dies. The correct answer is: Survivorship life

Which of the following is NOT a duty or power of the Office of Insurance Regulation? Select one: a. Examine insurers b. Conduct investigations of insurance matters c. Write and amend insurance statutes d. Enforce the Insurance Code

Legislators write insurance laws. The Office of Insurance Regulation may adopt insurance rules (regulations), but may not alter or write insurance statutes (laws). The correct answer is: Write and amend insurance statutes

In Florida, what is the maximum percentage rate that may be charged on a fixed rate policy loan? Select one: a. 5% b. 7% c. 8% d. 10%

Maximum percentage rate that may be charged by an insurance company on a fixed rate policy loan is 10%. The correct answer is: 10%

Which of the following is a difference between the level premium annuity and the flexible premium annuity? Select one: a. The amount of the annuity benefit can be guaranteed. b. Premiums can be made over time. c. The purchaser can make premium payments annually. d. The premium payment amounts can vary.

One of the disadvantages of the flexible premium annuity is that the annuity benefit amount is not determined in advance. The correct answer is: The amount of the annuity benefit can be guaranteed.

In order to transact insurance policies in Florida, insurance agents must be: Select one: a. Licensed only b. Appointed only c. Licensed and appointed d. Licensed, appointed and approved

Only licensed and appointed insurance agents may transact life and health insurance policies in Florida. The correct answer is: Licensed and appointed

What is an entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers? Select one: a. EPO b. MEWA c. PLHSO d. DMPO

Prepaid limited health service organization (PLHSO) is defined as any person, corporation, partnership, or any other entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers. The correct answer is: PLHSO

Who of the following is NOT on the Financial Services Commission? Select one: a. The Florida Commissioner of Insurance b. The Florida Commissioner of Agriculture c. The Florida Attorney General d. The Governor of Florida

The Financial Services Commission includes the governor of Florida, the CFO, the attorney general and the Commissioner of Agriculture. The correct answer is: The Florida Commissioner of Insurance

Preston tells the insurer to keep the dividend and use it to invest. He is using which dividend option? Select one: a. Cash payment b. Paid-up addition c. Reduction of premium d. Accumulate at interest

The accumulate at interest dividend option allows the insurer to keep the dividend and use it to invest. Remember dividends are not taxed. The correct answer is: Accumulate at interest

Angela is now 65 years old. The cash value of her 20-pay endowment at age 65 policy is equal to: Select one: a. The sum of premiums paid plus interest and dividends. b. None of the above c. The guaranteed cash value plus interest. d. The face amount of the policy.

The cash value is equal to the face amount of the policy. The correct answer is: The face amount of the policy.

Nick has a policy that the insurer can cancel when he turns 65. They can also increase his premiums. Which type is it? Select one: a. Conditionally renewable b. Optionally renewable c. Noncancelable d. Cancelable

The conditionally renewable policy allows the insurer to cancel a policy if certain conditions that are stated in the contract. Examples of conditions are losing a job or reaching a specified age such as 65. The correct answer is: Conditionally renewable

An annuity is a kind of contract uses periodic payments as a way to systematically liquidate assets. Which of the following is not true about annuities? Select one: a. The contract owner is not necessarily the annuitant. b. The annuitant has the right to name the beneficiary. c. The purchaser of the annuity pays the premiums. d. The accumulation phase is the pay-in period.

The contract owner/purchaser has the right to name the beneficiary, and that is not necessarily the annuitant. The correct answer is: The annuitant has the right to name the beneficiary.

What is the minimum grace period for group life insurance policies in Florida? Select one: a. 14 days b. 21 days c. 30 days d. 31 days

The grace period for group life insurance policies in Florida is at least 31 days. The correct answer is: 31 days

An insured must wait how many days after providing proof of loss to an insurance company before filing a legal suit against the company? Select one: a. 45 days b. 60 days c. 30 days d. 90 days

The legal action provision prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss. The correct answer is: 60 days

The highest total premium is a result of which premium payment mode? Select one: a. Quarterly b. Annual c. Monthly d. Semi annual

The monthly payment mode is the highest payment. The annual payment mode is the least expensive payment mode. The correct answer is: Monthly

Samson has a policy that allows the insurer to cancel the policy at any date specified in the contract, and allows them to raise his premiums. Which type is it? Select one: a. Optionally renewable b. Noncancelable c. Cancelable d. Conditionally renewable

The optionally renewable policy allows the insurance company to cancel the policy for any reason, on dates set in the contract. The insurer can also increase the premiums. The correct answer is: Optionally renewable

What is the purpose of the Florida Life and Health Guaranty Association? Select one: a. To protect policy holders and insureds from insurers who cannot fulfill their financial obligations b. To protect insurers from fraudulent claims c. To protect insurers from various market conditions d. To protect policy holders and insureds from illegal or unethical insurers

The purpose of the Florida Life and Health Guaranty Association is protect policy owners, insureds, beneficiaries, annuitants, payees, and assignees of life and health insurance contracts against the failure of an insurer issuing such policies or contracts to perform its contractual obligations due to its impairment or insolvency. The correct answer is: To protect policy holders and insureds from insurers who cannot fulfill their financial obligations

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

The unconditional refund time (free look period) for life insurance policies in Florida is at least 14 days. The correct answer is: 14 days

What is the minimum number of employees that must be insured under contributory employer-sponsored group health insurance plans? Select one: a. 5 b. 50 c. 100 d. There is no minimum

There is no minimum number of employees that must be insured under contributory (employer and employees share in the cost of premiums) employer-sponsored group health insurance plans. The correct answer is: There is no minimum

How much time does an individual have to convert to a new individual life policy after they are terminated from employment covered by a group life policy? Select one: a. 28 days b. 30 days c. 31 days d. 60 days

Under a group life policy, if a member's coverage is terminated, the member 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 their coverage termination. The correct answer is: 31 days

On the death of an insured, settlement of a life insurance policy is made when: Select one: a. Proof of death is received b. Surrender of the policy c. Proof of death and surrender of the policy d. Proof of death, surrender of the policy and a notarized request

When an insured dies and a claim is submitted, settlement must be made upon receipt of proof of death and surrender of the policy. The correct answer is: Proof of death and surrender of the policy

An employee is usually eligible for what type benefits, if they are disabled due to an accident at work? Select one: a. Individual disability b. Workers Compensation c. Group disability d. Major medical

Workers compensation covers injuries that happen while at work. The correct answer is: Workers Compensation

Harold was injured falling off a scaffold at work. Why was his claim denied under his employer's group disability plan? Select one: a. Workers' Compensation is the primary benefit provider in this case. b. A group disability plan coordinates with Workers' Compensation. c. The employer's experience is better for Workers' Compensation that it is for the group disability plan. d. Benefits are higher on Workers' Compensation.

Workers' Compensation pays for on the job incidents. The correct answer is: Workers' Compensation is the primary benefit provider in this case.