Florida Agent’s Health & Life (including Annuities & Variable Contracts)
All of the following are examples that illustrate 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.
An insurance provider would pay accelerated benefits under which of the following circumstances?
An insured is diagnosed with cancer and needs assistance paying for medical treatment
Which premium payment mode will have the lowest overall payment?
Annual
What is the term used for an applicant's written request to an insurance provider for the company to issue a contract based on the information provided?
Application
Concerning a $100,000 20-year level policy, which of the following is INCORRECT?
At the end of 20 years, the policy's cash value will equal $100,000
To comply with Fair Credit Reporting Act, when must a producer inform an applicant that a credit report can be requested?
At the time of application
Which of the following medical personnel will NOT be covered by occasional visits by long-term care's home health care?
Attending physician
What type of policy allows the insurance company to cancel a policy at any time?
Cancelable
An insured has a policy with his ex-wife as its beneficiary. What provision allows the insured to change the beneficiary to his new wife?
Change of beneficiary
What is the size of companies eligible for Health Reimbursement Accounts (HRAs)?
Companies of all sizes
Since an insurance policy is a legal contract, it has to conform to the state laws governing contracts which require all of the following contract elements EXCEPT
Conditions.
An insured pays an annual premium to their insurance provider. In return, the insurer promises to pay benefits according to the terms of the contract. This example is known as
Consideration
Which of the following is NOT a feature or a service of an HMO plan?
Contracting with insurers
Which of the following is NOT usually excluded from life insurance policies?
Death because of a plane crash for a fare-paying passenger
A person has just borrowed $10,000 from her bank on an installment loan requiring monthly payments over five years. What type of life insurance policy would be the most suitable for this situation?
Decreasing term
Which of the following is NOT a term for the period when the beneficiary or the annuitant receives income?
Depreciation period
What is an essential feature of a dental expense insurance plan that is NOT usually found in a medical expense insurance plan?
Diagnostic and preventive care
If an annuitant dies before annuitization occurs, what does the beneficiary receive?
Either the cash value of the plan or the amount paid into the plan, whichever is the greater amount
All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
Elective cosmetic procedures are covered.
An insured is hospitalized with a neck injury. Upon checking her disability income policy, she discovers that she will not be eligible for benefits for at least 30 days. This stipulation indicates that her policy is written with a 30-day
Elimination period.
Under a disability income insurance policy, the time between the onset of a sickness or injury and when benefits begin is called the
Elimination period.
The provision in a health insurance policy that ensures the insurance provider cannot refer to any document that is not found in the contract is the
Entire contract clause.
The insurance policy, together with the policy application and any attached riders form what is called
Entire contract.
If a change needs to be made to the insurance application, producers can do all of the following EXCEPT
Erase the first answer and record the correct answer..
In decreasing term insurance, which policy component decreases?
Face amount
How are the funds transferred from one plan to the new plan in a direct rollover?
From trustee to trustee
A person is obtaining a permanent life insurance policy with a face value of $25,000. While this is all the insurance she can afford now, she wants to be certain that additional coverage will be available in the future. Which of the following options would be found in the policy?
Guaranteed insurability option
Concerning the free-look provision, the insurer
Has to allow the policy owner to return the policy for a full refund.
The three basic coverages for medical expense insurance are
Hospital, Surgical, Medical
A lucky person won the state lottery, and the state will send her a monthly check for the next 25 years. What type of annuity products are they more than likely to use to provide these benefits?
Immediate annuity
Which of the following entities can legally bind coverage?
Insurance provider
Who has to pay for the cost of a medical exam that is required in the underwriting process?
Insurer
A guaranteed renewable disability insurance policy
Is renewable at the insured's option to a specified age.
In insurance policies, what is the purpose of a free-look period?
It lets the insured reject the policy with a full refund
What is NOT a benefit of a POS plan?
It permits guaranteed acceptance of all applicants
In a group health policy, a probationary period is meant for individuals who
Join the group after the effective date.
What type of health policy gives an employer the necessary funds to train a replacement employee if a valued employee becomes disabled?
Key Person Disability
Which of the following benefits are NOT included under workers compensation?
Legal benefits
In insurance policies, the insured is not legally bound to any particular action in the insurance contract. However, the insurance provider must legally pay losses covered by the policy. What contract element does this describe?
Unilateral
Which of the following characteristics does NOT describe managed care?
Unlimited access to providers
A medical expense policy that sets forth the amount of benefit paid based upon the prevailing charges that fall within the standard range of fees typically charged for a specific procedure by a physician of similar training and experience in that geographic area is known as
Usual, reasonable, and customary.
During the formation of an insurance contract, when does acceptance typically occur?
When an insurance provider's underwriter approves coverage
When is the earliest a policy can go into effect?
When the application is signed and a check is given to the producer
When would a 20-pay whole life insurance policy endow?
When the insured reaches age 100
Which of the following policy types would perform the cash accumulation function?
Whole life
An insured owns a $50,000 whole life policy. At age 47, the insured cancels her policy and decides to exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the new term policy's face amount?
$50,000
What percentage of a company's employees are required to participate in a noncontributory group life plan?
100%
Which of the following disability income policies would have the highest premium?
15-day waiting period/ 10-year benefit period
How long is a Medicare supplement policy's open enrollment period?
6 Months
In life insurance policies, what is the waiting period on a Waiver of Premium rider?
6 months
According to the Entire Contract provision, a policy must contain
A copy of the original insurance application.
As it applies to life insurance, which of the following statements is NOT true regarding insurable interest?
A debtor has an insurable interest in a lender's life
Both Universal Life and Variable Universal Life policies include
A flexible premium.
Which of the following can make a fully deductible contribution to a traditional IRA?
A person not covered by an employer sponsored plan with earned income
A deductible is
A specified dollar amount that the insured has to pay first before the insurance company pays the policy benefits.
The health policy of an insured only covers medical costs related to accidents. Which of the following types of health policies does this insured have?
Accident-only
Under a disability income insurance policy, if the insured changes to a more hazardous occupation after the policy has been issued and a claim is filed, the insurer should do which of the following?
Adjust the benefit according to the increased risk
An insured misstated their age on an individual health insurance policy application. The insurer found the mistake after the contestable period had expired. The insurance provider will take which of the following actions concerning any claim that has been issued?
Adjust the claim benefit to reflect the true age of the insured
When an insured obtained his disability income policy, he misstated his age to the producer. He told the producer that he was 30 years old when he was 37. If the policy includes the optional misstatement of age provision
Amounts payable under the policy will reflect the correct age of the insured.
A policy owner has a life insurance policy that requires her only to pay premiums for a specific number of years until the policy is paid up. What type of life policy does the insured have?
Limited-pay Life
Which of the following programs expands public assistance programs for individuals with insufficient resources and income?
Medicaid
A student studies in England for a semester. While there, he is involved in a train accident that leaves him disabled. If the student owns a general disability policy, what will be the extent of benefits that he receives?
None
Which provision concerns the insured's responsibility to provide the insurer with reasonable notice in the event of a loss?
Notice of Claim
Which option for Universal life lets the beneficiary collect the cash value and death benefit upon the insured's death?
Option B
Certificates of coverage are issued to
Participants in a group plan.
An insured pays his Major Medical Insurance premium each year on March 1. Last March, he forgot to mail his premium to the insurer. On March 19, he had an accident and broke his arm. The insurer would
Pay the claim.
Which of the following provisions would prevent an insurer from paying a reimbursement claim to someone besides the policy owner?
Payment of Claims
Which of the following allows the insurance provider to relieve a minor insured from premium payments if the minor's parents have become disabled or died?
Payor Benefit
Which of the following statements is TRUE concerning irrevocable beneficiaries?
Policy owners can change them only with that beneficiary's written consent
What is another name for a substandard risk classification?
Rated
Insurance providers can change which of the following on a guaranteed renewable health insurance policy?
Rates by class
The policyholder pays for his life insurance yearly. Until now, he has collected a nontaxable dividend check every year. Instead, he has decided to use the dividends to help pay his next premium. What option would allow him to do this?
Reduction of premium
Insurance is the transfer of
Risk.
Methods used to pay the death benefits to a beneficiary upon the death of an insured are known as
Settlement options.
Upon policy delivery, the agent can be required to obtain any of the following EXCEPT
Signed waiver of premium.
Which type of life insurance policy creates an immediate cash value?
Single Premium
What is the best way to change an insurance application?
Start over with a new application
Which of the following would NOT be covered under basic medical expense coverage?
Surgeon's services
Which of the following will be included in a policy summary?
Surrender values and premium amounts
In a business life insurance policy, the premiums paid by the employer are
Tax-deductible by the employer.
An employee becomes insured under a PPO plan provided by her employer. What will happen if the insured decides to go to a doctor who is not a PPO provider?
The PPO will pay reduced benefits.
Before a client's agent delivers her policy, the insurance provider makes a last-minute change to the policy. The agent notifies the customer of this change, and she accepts it. What must the agent do next?
The agent should ask the customer to sign a statement confirming that she is aware of the change.
Which of the following is covered under a key person insurance policy?
The costs associated with training a replacement
Concerning group health insurance, which of the following statements is CORRECT?
The employer is the policyholder
Concerning a noncancelable policy, which of the following is NOT a feature?
The insurance provider can terminate the contract only at renewal for certain conditions
When an insured suffered a broken hip, he notified his agent, in writing, within 12 days of the loss. However, his agent did not inform the insurer until 60 days after the loss. Which of the following statements correctly explains how the insurer would handle this claim?
The insurance provider is considered to be notified because notification to the agent equals notification to the insurer
Under a health insurance policy, benefits other than death benefits that have not been assigned will be paid to
The insured.
Which is true regarding the obtaining of underwriting sources?
The insurer must inform the applicant of the sources contacted and how the information is gathered.
In a Long-Term Care policy, all of the following are the most common variations EXCEPT
The number of family dependents.
If an insurance provider issued a policy based on the application that contained unanswered questions, which of the following will be TRUE?
The policy interpretation will be as if the insurance provider waived its right to have an answer on the application
Regarding the Change of Beneficiaries Provision, which of the following statements is FALSE?
The policy owner has the right to change beneficiaries in any circumstance
On an application for health insurance, a signature is required from all of the following EXCEPT
The policy owner's spouse.
A policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due
In health insurance policies, which of the following will vary the length of the grace period?
The premium payment mode
Which provision specifies that the insurer is required to pay Medical Expense claims immediately?
Time of Payment of Claims
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain period
A mother takes out a life insurance policy on her teenage son and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the premium payment?
if the mother is disabled for more than six months
Which of the following statements about the reinstatement provision is true?
it requires the policy owner to pay all overdue premiums plus interest before the insurer can reinstate the policy
What would be an advantage to designating a secondary (or contingent) beneficiary in a life insurance policy?
it specifies who receives policy benefits when the primary beneficiary dies
In life insurance policies, the term "illustration" refers to
presentation of a policy's nonguaranteed elements.
