Florida Health, Life & Annuity End of Course Exam 2

A medical policy that states that in no case will the insurance company's liability exceed $1,000,000 has: Select one: a. A per illness maximum b. Is an HMO plan c. Has a lifetime maximum d. Has an indemnity schedule

A lifetime maximum is the only feasible answer. The correct answer is: Has a lifetime maximum

In Florida, group life insurance contracts must cover at least: Select one: a. 1 person b. 2 people c. 10 people d. 25 people

Group life insurance contracts must cover at least 1 individual. The correct answer is: 1 person

HMOs are based on all of the following, EXCEPT: Select one: a. Volume discount b. Prevention care c. Fee-for-service d. Early detection

HMOs are based on early detection, prevention care and volume discount, not fee-for-service. The correct answer is: Fee-for-service

An insured filed a claim with her insurance company and submitted all the proof of loss requested. The insurer is non-responsive. How many days must the insured wait before beginning legal action to recover her money? Select one: a. 15 days b. 20 days c. 30 days d. 60 days

If a claim has not been paid after all proof of loss has been submitted, the insured must wait 60 days before instituting legal action. The correct answer is: 60 days

In Florida, if a long-term care policy lapses unintentionally, it may be reinstated if the insured had a continuous confinement for more than: Select one: a. 30 days b. 45 days c. 60 days d. 90 days

In Florida, if a long-term care policy lapses unintentionally, it may be reinstated if the insured had a continuous confinement for more than 60 days. The correct answer is: 60 days

The return of premium rider is actually: Select one: a. Return of cash value b. Living benefits provision c. Increasing term insurance d. Dividend option

In actuality, the return of premium rider is an increasing term insurance that will be equal to the total of premiums paid. The correct answer is: Increasing term insurance

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

A contractual stipulation defining the amount and timing of payments due for a specified level of coverage under an insurance policy is called the: Select one: a. Payment of premium clause b. Spendthrift clause c. Consideration clause d. Beneficiary clause

It is the consideration clause grants coverage when application has been made and the first premium paid. The correct answer is: Consideration clause

How many hours of continuing education are required every 2 years for Florida life and health agents who have been licensed for at least 6 years, but less than 25 years? Select one: a. 16 hours b. 20 hours c. 24 hours d. 32 hours

Life and health agents who have been licensed for at least 6 years must complete 20 hours of continuing education every 2 years. The correct answer is: 20 hours

Which of the following are commercial companies owned by policyholders? Select one: a. Mutual insurers b. Surplus insurers c. Government insurers d. Stock insurers

Mutual insurers are commercial companies owned by their policyholders. The correct answer is: Mutual insurers

In addition to moral hazards, an underwriter will be very concerned about what physical conditions? Select one: a. Obesity b. Too many loan applications c. Speeding tickets d. Grade point average in school

Obesity or overweight is a primary concern in health insurance underwriting. The correct answer is: Obesity

On applications for long-term care insurance, agents must list: Select one: a. All other insurance policies sold to an applicant b. All other health insurance policies sold to an applicant c. All other long-term policies sold that are similar to the one being sold d. All other long-term policies sold in the previous 6 months

On applications for long-term care insurance, agents must list all other health insurance policies sold to an applicant. The correct answer is: All other health insurance policies sold to an applicant

How are agents' commissions paid? Select one: a. Commissions are added to the policy premiums. b. Commissions are apportioned from policy premiums. c. Commissions are paid entirely by insurers. d. Commissions are paid from policy premiums and by insurers.

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 are apportioned from policy premiums.

If an agent states that there is no charge for a certain coverage when there is, this would be: Select one: a. Churning b. Coercion c. Twisting d. Sliding

Sliding includes representing to an applicant that a specific ancillary coverage or product is included in the policy applied for without an additional charge when such charge is required. The correct answer is: Sliding

A health insurance policy that covers family members must cover adopted children: Select one: a. Retroactively from the moment of birth b. From the signing of the adoption papers c. From the moment of placement in the residence d. 30 days after placement in the residence

A health insurance policy that covers family members must cover adopted children from the moment of placement in the residence of the insured. The correct answer is: From the moment of placement in the residence

Which of the following plans is subject to all of the PPACA requirements? Select one: a. Inherent health insurance plan b. Catastrophic health insurance plan c. Nondescript health insurance plan d. Nongrandfathered health insurance plan

A nongrandfathered health insurance plan is one that is subject to all of the PPACA requirements. Under the PPACA, catastrophic health insurance plans are banned. The other 2 are fictitious. The correct answer is: Nongrandfathered health insurance plan

All of the following are true about personal contracts, EXCEPT: Select one: a. A personal contract is between the individual and the insurer. b. Personal contracts cannot be transferred without written consent of the insurer. c. Life insurance is not a personal contract because a policyowner has no stake in the risk. d. Life insurance contracts cannot be assigned.

A policyowner has ownership of their life insurance contract and can give it away (a process called assignment), if they so choose. The correct answer is: Life insurance contracts cannot be assigned.

A mutual insurance company formed to insure people in the same business is: Select one: a. An alien insurer b. A reinsurance group c. An excess and surplus lines insurer d. A risk retention group

A risk retention group is a mutual insurance company formed to insure people in the same business, occupation, or profession, such as a group of doctors or engineers. The correct answer is: A risk retention group

In what type of HMO are all the doctors employed directly by the HMO and housed in the same building? Select one: a. Independent Practice Association (IPA) b. A closed network of physicians c. A closed panel association (CPA) d. A staff model HMO

A staff model HMO employs all physicians, and they usually work from a central location. The correct answer is: A staff model HMO

Which of the following is true about the waiver of premium rider on an insurance policy? Select one: a. The premiums are waived during the period of the disability b. There is usually a waiting period for the benefit to kick in. c. There is an additional premium charged for this coverage. d. All of the above

After the waiting period (usually 3-6 months) the premiums are waived retroactively to the date of the disability. The additional premium charged does not increase the policy's cash value. The correct answer is: All of the above

Agents must keep premium transaction records for a minimum of: Select one: a. 1 year b. 2 years c. 3 years d. 4 years

Agents must keep premium transaction records for a minimum of 3 years. The correct answer is: 3 years

Which of the following would be a routine exclusion in a life policy? Select one: a. A military pilot dies flying a fighter plane b. A stunt rider dies trying to leap 25 buses on a motorcycle c. A medic dies in a war zone d. All of the above

All of the activities listed would routinely be excluded. That means the insurer would not pay a death benefit claim under these circumstances. The correct answer is: All of the above

Typical health policies do not provide benefits for which of the following? Select one: a. A condition covered by Workers' Compensation b. An injury covered under a government plan c. An injury sustained in the commission of a felony d. All of the above

All of the items listed are typically excluded from health policies. The correct answer is: All of the above

In the event an insured has elected the waiver of premium benefit he/she will receive which of the following benefits? Select one: a. Waiver of premium extends the grace period for the duration of disability. b. Waiver of premium will allow the insurance company to adjust premiums upward as soon as disability is confirmed. c. Waiver of premium allows the insured to maintain an in force policy while disabled. d. Waiver of premium permits the insurance company to deduct premiums from benefits while the insured is disabled.

As long as the insured meets the qualifications for being disabled, the insurance company will 'waive' premiums due until the insured is no longer disabled. The correct answer is: Waiver of premium allows the insured to maintain an in force policy while disabled.

What is the sequence of filing a claim? Select one: a. Insured notifies the company of loss, company furnishes claim form, Insured provides proof of loss and the company pays claim within prescribed time limit b. Insured sends in medical bills, the company sends a claim form to be completed, the insured's claim is denied if he does not return the form is the prescribed time limit c. Insured sends medical bills to insurance company, the insurance company does not respond, the insured contacts the insurance commissioner for assistance d. Insured notifies company of loss, insurance company contacts medical providers directly to make sure loss is legitimate, Insurance Company requires duplicate copies of all records, Insurance Company takes 6 months to settle claim

All of the parts of a claim have time limits attached, but the rule of what is reasonable applies in all cases. The correct answer is: Insured notifies the company of loss, company furnishes claim form, Insured provides proof of loss and the company pays claim within prescribed time limit

What happens if the age of an insured person has been misstated on a life policy? Select one: a. An equitable adjustment of premiums or benefits will be made. b. The policyowner will be fined. c. Nothing, any changes must be done before the policy is issued. d. The policy will be cancelled.

An equitable adjustment of premiums or benefits will be made if the age of an insured person has been misstated on a life policy. The correct answer is: An equitable adjustment of premiums or benefits will be made.

Which of the following is NOT an unfair claim practice? Select one: a. Asking for further information b. Knowingly misrepresenting to claimants pertinent facts c. Offering to settle claims for an amount less than the amount reasonably due d. Failing to affirm or deny coverage of claims

Any of the following acts, if committed without just cause and performed frequently, constitute improper and unfair claim practices: knowingly misrepresenting to claimants pertinent facts, failing to affirm or deny coverage of claims, offering to settle claims for an amount less than the amount reasonably due and many others. The correct answer is: Asking for further information

Which of the following is not an example of a basic medical expense plan? Select one: a. Hospital expense b. Disability income c. Surgical expense d. Physicians' expense

Basic plans are sometimes supplemental plans and include all of those listed, except disability. The correct answer is: Disability income

Assets deposited into a fixed annuity are invested in: Select one: a. A separate account earmarked for annuities b. A bond portfolio that is designated for annuities c. The insurance company's general account d. Options against various stock market indices

Deposits from fixed annuities are placed in the company's general account. The correct answer is: The insurance company's general account

Which of the following would result in a premium increase for an adjustable life insurance policy? Select one: a. Converting a whole life policy to a term policy with a greater face value b. Converting a whole life policy to a term policy with the same face value c. Converting a term policy to a whole life policy with the same face value d. Converting a term policy to a whole life policy with a lesser face value

Because term insurance is generally less expensive than whole life insurance, if the policyowner converted a term policy to a whole life policy - with the same face value - the premiums would increase. The correct answer is: Converting a term policy to a whole life policy with the same face value

Which of the following is a major difference between a variable life policy and a universal policy? Select one: a. The cash values of a variable life policy are not guaranteed. b. A variable life contract is regulated as a security. c. The insurer is required to establish a separate account for variable products. d. All of the above

Because the cash values are linked to equity investments and securities, they are not guaranteed. This linking results in regulation as a security, and regulation by the SED. Premiums paid for a variable life policy must be placed in a separate account containing securities-based investments. The correct answer is: All of the above

All of the following statements are true about decreasing term, EXCEPT: Select one: a. Decreasing term policies are sometimes convertible b. When the policy period expires, the term insurance is worth 0-. c. Decreasing term is useful for people wishing to purchase life insurance for an investment. d. Decreasing term is often used to protect (i.e. pay off) a mortgage if the insured dies.

Because the policy is worth-0- at the end of the policy period, it is not a type of insurance that would be considered useful for someone looking to fund an investment. The correct answer is: Decreasing term is useful for people wishing to purchase life insurance for an investment.

All of the following are typical managed care providers, EXCEPT: Select one: a. Blue Cross b. HMOs c. PPOs d. POSs

Blue Cross is one of the largest provides of health care in the US. Although they do contract with hospitals and doctors, they are not considered a managed care provider in the same light as an HMO, PPO, or POS. The correct answer is: Blue Cross

Which of the following is not an element of the nonforfeiture value of a whole life insurance policy? Select one: a. The policyowner can withdraw some or all of the cash value from the policy. b. Cash withdrawn does not reduce the face value of the policy. c. Cash withdrawn reduces the cash value of the policy. d. The policyowner owns the cash value in the policy.

Cash withdrawn from a whole life policy DOES reduce the face value of the policy as well as the cash value of the policy. The correct answer is: Cash withdrawn does not reduce the face value of the policy.

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

Agent Uma has completed an application for insurance on a new customer. When she returns to the office, she notices that a few items have been left blank. Uma should: Select one: a. Submit the application and let the underwriters correct it b. Initial the application where she made changes c. Go back to the customer to have them initial changes d. Have her manager initial the changes

Contacting the customer to verify the information is the first step. Modifying an application without the customer's initials or signature is a violation of rules. The correct answer is: Go back to the customer to have them initial changes

Controlled business is usually written on all the following, EXCEPT: Select one: a. Friends b. Employees c. The licensee d. Relatives

Controlled business is using an insurance license principally to procure insurance for the licensee, relatives, personal business, or employees. The correct answer is: Friends

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

Except for direct response policies, when must a Medicare supplement policy Buyer's guide be delivered to an applicant? Select one: a. Prior to the presentation b. At the time of application c. When the policy is delivered d. Within 3 days of the policy delivery

Except for direct response policies, a Medicare supplement policy Buyer's guide must be delivered at the time of application. The correct answer is: At the time of application

Securities licenses must be obtained through: Select one: a. FINRA b. SSA c. SEC d. State insurance department

FINRA (Financial Industry Regulatory Authority) was formerly known as the NASD (National Association of Securities Dealers). Securities licenses are obtained through FINRA. The correct answer is: FINRA

Mr. Blankman intentionally left a prior medical treatment off his insurance application because of embarrassment. He is not guilty of: Select one: a. Fraud b. Concealment c. Misrepresentation d. All of the above

Failure to disclose a procedure is only fraud if there was intent to gain some value (i.e., collect on a false claim.) The correct answer is: Fraud

If an insurance agent offers to split their commission with a prospective applicant, this would be considered: Select one: a. Twisting b. Boycott c. Intimidation d. Rebating

Giving any part of a commission to an applicant to entice them to buy a policy, is rebating and is illegal. The correct answer is: Rebating

When a new policy is returned under the free look provision, a company is required to do all of the following, EXCEPT: Select one: a. Cancel the policy b. Reimburse the agent for lost commissions c. Refund all premiums paid to Harold d. Handle the transaction promptly

If a policy is returned within the free look period, the insurance company is required to refund full premiums promptly. The correct answer is: Reimburse the agent for lost commissions

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

Which of following is not true of the return of premium rider? Select one: a. If the insured dies at any time during the term period, he / she forfeits the benefits of the policy. b. The insured is refunded the premiums paid at the end of the term. c. The premiums are higher than for conventional term insurance. d. The rider is a good idea if the insured thinks he/she will not outlive the term.

If the insured dies during the term period, the beneficiaries receive a lump sum payment of the death benefit of the policy. The correct answer is: If the insured dies at any time during the term period, he / she forfeits the benefits of the policy.

All of the following are characteristics of a long-term care rider, EXCEPT: Select one: a. Payment of benefits could be related to impaired daily living activities. b. Prior hospitalization is not required c. The benefits are similar to those in a long-term care policy. d. The payment of benefits does not affect the cash value of the policy.

In order for a long-term care rider to kick in, prior hospitalization is often required. The correct answer is: Prior hospitalization is not required

All of the following are typical health policy exclusions, EXCEPT: Select one: a. Injuries caused by acts of war b. Injuries that are self-inflicted c. Injuries that are the result of foolishness d. Injuries that are the result of a preexisting condition

Injuries that are caused by acts of war, are self-inflicted or the result of a preexisting condition are typically excluded from coverage - as are injuries resulting from piloting a private plane. The correct answer is: Injuries that are the result of foolishness

Which of the following would not be considered a rebate? Select one: a. A return of premium of $25 not specified in contract b. An advantage of dividends not specified in contract c. Any article of merchandise that is less than $25 not specified in contract d. An increase of benefits of $100 not specified in contract

Insurers, employees, or producers can give insureds or prospective insureds, for advertising purposes, any article of merchandise that has an invoice value of not more than $25. This is not considered a rebate. The correct answer is: Any article of merchandise that is less than $25 not specified in contract

Tax-sheltered annuities (TSA) provide retirement income for employees who work for: Select one: a. The government b. A nonprofit organization c. A Fortune 500 company d. A small business.

Tax-sheltered annuities (TSA) are a pension plan available to employees of companies that are qualified as nonprofit by the IRS. The correct answer is: A nonprofit organization

Which of the following allows uninsurable individuals to obtain coverage through pool coverage? Select one: a. Florida Health Care and Insurance Reform Act of 1993 b. Florida Health Insurance Coverage Continuation Act c. Florida Employee Health Care Access Act d. Florida Comprehensive Health Association

The Florida Comprehensive Health Association allows individuals otherwise uninsurable by traditional open market health insurers due to preexisting conditions to receive health insurance coverage through the high risk pool. The correct answer is: Florida Comprehensive Health Association

What act is meant to promote the availability of health insurance coverage to small employers in Florida? Select one: a. Florida Access to Health Care Act b. Florida Employee Health Care Access Act c. Florida Small Employer Health Care Act d. Florida Life and Health Guaranty Act

The Florida Employee Health Care Access Act is meant to promote the availability of health insurance coverage to small employers. The correct answer is: Florida Employee Health Care Access Act

How frequently may the CFO examine an insurer? Select one: a. As often as necessary b. No more than once in any 1-year period c. No more than once in any 2-year period d. No more than once every 5 years

The Office of Insurance Regulation and CFO may examine the affairs, transactions, accounts, records, and assets of each authorized insurer and of the attorney in fact of a reciprocal insurer as to its transactions affecting the insurer as often as it deems advisable. The correct answer is: As often as necessary

Which of the following is an option that would help the Olsens to adequately protect their minor child? Select one: a. They could set up a trust. b. They could allow the company to designate a beneficiary. c. They could allow the child to designate a beneficiary. d. None of the above

The Olsens could set up a trust to protect their minor child. The correct answer is: They could set up a trust.

The provision that states when both the insured and the beneficiary died in the same accident, it is presumed that the insured survived the beneficiary is called: Select one: a. The change of beneficiary clause b. The uniform simultaneous death act c. The common disaster provision d. None of the above

The Uniform Simultaneous Death Act states when both the insured and the beneficiary died in the same accident, it is presumed that the insured survived the beneficiary. The correct answer is: The uniform simultaneous death act

Which of the following is not one of the daily living activities that can trigger long-term care benefits? Select one: a. Transferring b. Continence c. Dressing d. Reading

The activities of daily living used to determine benefits are: bathing, continence, dressing, eating, toileting, and transferring. Reading is not considered a required daily activity. The correct answer is: Reading

A health insurance underwriter may deny coverage for which of the following reasons? Select one: a. The sex or gender of the applicant b. The applicant's marital status c. Genetic traits of the applicant d. The applicant's history of alcohol abuse

The applicant may be denied coverage on the basis of personal habits. The correct answer is: The applicant's history of alcohol abuse

What is the maximum liability of the Florida Life and Health Guaranty Association for death benefits or health insurance claims? Select one: a. $100,000 b. $300,000 c. $500,000 d. $1,000,000

The association's liability for the contractual obligations of the insolvent insurer will be no more than the contractual obligations of the insurer in the absence of such insolvency. Listed below are the maximum amounts the association will pay for covered insolvent policies: Life insurance death benefit: $300,000 per insured life, Life insurance cash surrender: $100,000 per insured life, Health insurance claims: $300,000 per insured life, Annuity cash surrender: $100,000 per contract owner, Annuity benefits: $300,000 per contract owner The correct answer is: $300,000

Which of the following is not a requirement of a group policy? Select one: a. Beneficiaries are covered under the master contract. b. Group plans can be contributory or noncontributory. c. Each member of the group is underwritten individually. d. Beneficiaries have conversion privileges.

The group is underwritten as a whole, not each individual. Beneficiaries are covered under the master contract, and have conversion privileges. The correct answer is: Each member of the group is underwritten individually.

The statement that the insurer agrees/promises to provide life insurance protection for the payment of a premium by the insured is called: Select one: a. The insuring clause b. The contract clause c. The consideration clause d. The applicant control or ownership clause

The insuring clause is the promise by the insurance company to pay benefits in exchange for receiving premium payments. The correct answer is: The insuring clause

Who of the following would NOT be considered a family member? Select one: a. Brother-in-law b. Sister-in-law c. Cousin-in-law d. First cousin

The phrase "not a family member," with respect to a life agent, means an individual who is not related to the agent as father, mother, son, daughter, brother, sister, grandfather, grandmother, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half brother, or half sister. The correct answer is: Cousin-in-law

When renewals come up each year for a one-year renewable term policy, which of the following is required? Select one: a. He must fill out a new application. b. The insurer must issue a new policy. c. His premium must go up d. He must submit to a physical to guarantee his insurability.

The premium will go up each year because Gregory will be another year older. The correct answer is: His premium must go up

The standard nonforfeiture credit for a long-term care policy is what percentage of the sum of all premiums paid? Select one: a. 50% b. 75% c. 80% d. 100%

The standard nonforfeiture credit for a long-term care policy is equal to 100% of the sum of all premiums paid. The correct answer is: 100%

What is the minimum free look period for a variable 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 variable annuity in Florida is at least 21 days. The correct answer is: 21 days

People going to a band camp would be covered by a: Select one: a. Blanket insurance policy b. Accident only policy c. Travel accident policy d. Hospital fixed rate

Typically participants in a camp, or athletic event are covered by a blanket insurance policy. The correct answer is: Blanket insurance policy

The insurance company can adjust the policy premium and/or the policy benefits under the: Select one: a. Misstatement of age or gender provision b. The modification provision c. The policy change provision d. Substitute insured rider

Under the misstatement of age or gender provision, the insurance company could adjust the benefits up or down depending on whether the age was represented higher or lower than the actual age of the insured. The correct answer is: Misstatement of age or gender provision

All of the following are long-term care policy exclusions, EXCEPT: Select one: a. Self-inflicted injury b. Alcohol dependency c. Alzheimer's d. Drug dependency

Until recently Alzheimer's and organic-based mental illnesses were excluded, but they are no longer excluded. The correct answer is: Alzheimer's

Because Sylvia paid the initial premium when her policy was delivered, in order for the policy to be in effect, the agent is required to obtain: Select one: a. A binding receipt b. A statement of good health c. An inspection report d. All of the above

When the initial premiums is not paid until policy delivery, the agent needs to obtain a statement of good health, signed by the insured, stating that the insured's health has not changed. The correct answer is: A statement of good health

How is the grace period in a health policy generally determined? Select one: a. By the kind of policy b. By the insuring clause c. By the benefit payments d. By the premium mode

While the general grace period for policies is 31 days, the grace period may be shorter if the premium frequency is less than monthly. A weekly premium has a grace period of 7 days, etc. The correct answer is: By the premium mode

Which of the following is not an accurate comparison of group and individual plans? Select one: a. Individual - all accidents are covered, Group - no accidents are covered b. Individual - health is evaluated, Group - no individual underwriting c. Individual - coverage is renewable, Group - coverage stops when insured leaves the group d. Individual - each person has a policy, Group - one master policy

With an individual disability policy, virtually all accidents are covered. With a group disability policy, generally only accidents that happen when the insured is NOT on the job are covered. The correct answer is: Individual - all accidents are covered, Group - no accidents are covered

A Medicare supplement policy cannot exclude benefits for a pre-existing condition for a person who had how many months of continuous creditable coverage prior to their application? Select one: a. 3 months b. 6 months c. 9 months d. 12 months

A Medicare supplement policy cannot exclude benefits for a pre-existing condition for a person who had 6 months of continuous creditable coverage prior to their application. The correct answer is: 6 months

If a small business owner becomes disabled, what expenses will not be reimbursed by the Business Overhead Expense Policy? Select one: a. Lease payments for his personal automobile b. Lease payments for the copy machine c. Salaries for the clerical staff d. Lease payments for the office space

A business overhead expense policy will not reimburse personal expenses or the owner's salary. The correct answer is: Lease payments for his personal automobile

Which of the following types of policies combine multiple benefits and provides a broader range of coverage? Select one: a. 1st Dollar plan b. Hospital Expense c. Comprehensive Major Medical d. Hospital Indemnity

A comprehensive major medical plan will cover all medical events without the need for several policies. The correct answer is: Comprehensive Major Medical

A conditional contract depends on which of the following circumstances? Select one: a. Payment of benefits is predicated on a specific event or events occurring as outlined in the contract provisions. b. Payment of benefits is dependent on the condition of the insured at the time of claim. c. Payment is subject to the financial condition of the insurance company. d. All of the above

A conditional contract will not pay unless a specific condition is met or occurs. The correct answer is: Payment of benefits is predicated on a specific event or events occurring as outlined in the contract provisions.

Guaranteed renewable means: Select one: a. The insurance company must renew the policy each year at the same premium. b. The insurance company must renew the policy each year, but they may increase premiums on policies with excessive claims. c. The insurance company must renew the policy each year, but they may eliminate certain classes of insureds. d. The insurance company must renew the policy each year, but they may increase premiums for all policies in a specified group, but they may not increase premiums on single individuals.

A guaranteed renewable policy does allow the insurance company to increase premiums on a like group of policies. The correct answer is: The insurance company must renew the policy each year, but they may increase premiums for all policies in a specified group, but they may not increase premiums on single individuals.

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

What type of insurer is formed under the laws of anyplace outside the United States? Select one: a. Mutual b. Alien c. Domestic d. Foreign

An alien insurer is one formed under the laws of any place outside the United States. The correct answer is: Alien

How frequently must domestic insurers licensed for less than 3 years be examined by the Office of Insurance Regulation? Select one: a. At least once every 6 months b. At least once every year c. At least once in the 3 years d. At least twice in the 3 years

An examination must be conducted at least once every year with respect to a domestic insurer that has continuously held a certificate of authority for less than 3 years. The correct answer is: At least once every year

What is the rule on an individual obtaining both Medicare supplement coverage and Medicaid coverage? Select one: a. An individual can never have both. b. An individual can have both in certain situations. c. An individual can have both dependent on the insurer. d. An individual can always have both.

An individual is prohibited from obtaining both Medicare supplement coverage and Medicaid coverage, except in certain situations. The correct answer is: An individual can have both in certain situations.

Which of the following cannot be an insurance agency? Select one: a. Individual b. Insurer c. Association d. Corporation

An insurance agency is a business location where an individual, firm, partnership, corporation, association, or other entity engages in activities that may only be performed by a licensed insurance agent. An "agency" does not include an insurer or adjuster. The correct answer is: Insurer

Which insurers are NOT required to have a Certificate of Authority? Select one: a. Disability insurers b. Admitted insurers c. Health insurers d. Excess and surplus lines insurers

An unauthorized insurer does not have a certificate of authority, and includes excess and surplus lines insurers. The correct answer is: Excess and surplus lines insurers

To remain in force, appointments must be renewed every: Select one: a. Year b. 2 years c. 3 years d. 4 years

Appointments continue in force until suspended, revoked, or terminated. To remain in force, appointments must be renewed every 24 months. The correct answer is: 2 years

Inducing a policyholder to change policies within the same insurance company without regard to bad consequences is: Select one: a. Twisting b. Churning c. Boycott d. Defamation

Churning 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 the same company. The correct answer is: Churning

What type of marketing fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance? Select one: a. Cold lead advertising b. Hot lead advertising c. Solicitation advertising d. High pressure advertising

Cold lead advertising is making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company. The correct answer is: Cold lead advertising

What type of care is provided to assist an individual with ADLs, performed by a medical non-professional under a physician's orders? Select one: a. Skilled care b. Intermediate care c. Custodial care d. Hospice care

Custodial care is provided to assist an individual with ADLs, performed by a medical non-professional under a physician's orders. The correct answer is: Custodial care

Direct response life insurance advertisements may contain which of the following phrases? Select one: a. "No agent will call" b. "No salesman will call" c. "Save money" d. "We can offer this low cost plan"

Direct response life insurance advertisements may not contain the phrases: "no salesman will call", "no agent will call", or "by eliminating the agent and/or commission, we can offer this low cost plan," or similar wording. The correct answer is: "Save money"

What is a medical provider who has negotiated with healthcare professionals to accept a discounted fee at the time the service is performed? Select one: a. MEWA b. DMPO c. EPO d. PLHSO

Discount Medical Plan Organizations (DMPOs) are medical providers who have negotiated with healthcare professionals to accept a discounted fee at the time the service is performed. The correct answer is: DMPO

Except for direct response policies, when must a Medicare supplement policy outline of coverage must be delivered to an applicant? Select one: a. Prior to the presentation b. At the time of application c. When the policy is delivered d. Within 3 days of the policy delivery

Except for direct response policies, a Medicare supplement policy outline of coverage must be delivered at the time of application. The correct answer is: At the time of application

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

Florida life insurance policies must contain the following nonforfeiture options: reduced paid-up life insurance, cash surrender value, and extended term life insurance. The correct answer is: Included health extension benefit

Capitation is used in: Select one: a. PPOs b. HSAs c. HMOs d. HRAs

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

Health insurance policies issued in Florida cannot exclude coverage for which of the following? Select one: a. Multiple sclerosis b. Asthma c. Cancer d. HIV

Health insurance policies issued in Florida cannot exclude coverage for HIV or AIDS, or contain benefit limitations for HIV or AIDS which are different than those that apply to any other sickness or medical condition. The correct answer is: HIV

What type of care focuses on providing pain management and comfort, rather than curing an individual's ailments? Select one: a. Respite care b. Intermediate care c. Custodial care d. Hospice care

Hospice care focuses on providing pain management and comfort, rather than curing an individual's ailments. Hospice care is typically for individuals with terminal illnesses. The correct answer is: Hospice care

If a dependent child is covered by 2 health policies from divorced or separated parents, which policy pays first? Select one: a. The policy of the parent with custody b. The policy of the spouse of the parent with custody c. The policy of the parent without custody d. The policy of the parent whose birthday falls earlier in the year

If a dependent child is covered by 2 health policies from divorced or separated parents, the policy of the parent with custody pays first, the policy of the spouse of the parent with custody pays second, and the policy of the parent without custody pays third. The correct answer is: The policy of the parent with custody

Which of the following is the classification for an individual that would pose the least amount of risk to the insurer? Select one: a. Preferred b. Premium c. Standard d. Substandard

If a person has above average physical condition, a safe and secure lifestyle, they would be classified as preferred because they represent a lower risk to the insurer. The correct answer is: Preferred

If death benefits are paid in installments, when must the amount and period be determined? Select one: a. In the life insurance policy. b. At the time of death c. After receipt of the proof of death d. Within 60 days after the date the insurer died

If death benefits are paid in installments, a table showing the amount and period of installments must be included in the life insurance policy. The correct answer is: After receipt of the proof of death

What is the first action the Office of Financial Regulation will take for violation of any law relating to the operation of a financial institution? Select one: a. An estoppel order b. A judicial writ of disclosure c. An arrest warrant d. A cease and desist order

If the Office of Financial Regulation finds that a state financial institution has violation of any law relating to the operation of a financial institution, it may issue a cease and desist order. The correct answer is: A cease and desist order

All of the following are considerations on whether to include life insurance proceeds in determination of federal estate taxes, EXCEPT: Select one: a. The estate is the named beneficiary of the proceeds of the policy. b. The deceased was not the policyowner. c. The policy was transferred to another person within 3 years of death. d. None of the above

If the deceased WERE the policyowner, it would be a consideration for federal estate taxes. The correct answer is: The deceased was not the policyowner.

Agents issue a conditional receipt to the applicant after the application and premium have been collected. If an insurer accepts the coverage as applied for, when does coverage begin? Select one: a. When the agent collects the first premium b. When the premium and application are presented to the insurer c. The date of the application or medical exam d. The date the policy is delivered

If the insurer accepts the coverage as applied for, the coverage would take effect the date of the application or the medical exam whichever is later. The correct answer is: The date of the application or medical exam

In Florida, insurance is regulated by all the following, EXCEPT: Select one: a. Department of Financial Services and CFO b. Commissioner of the Office of Insurance Regulation c. Florida state legislature d. U.S. court system

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: U.S. court system

In a group life policy, an insured's dependent spouse and children may be covered up to what percentage of the amount of insurance for which the employee is insured? Select one: a. 66% b. 80% c. 100% d. 102%

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 usually sold as a cost-of-living rider to another policy? Select one: a. Increasing Term b. Reentry Term c. Interim Term d. Renewable Term

Increasing term provides an increasing face amount. The premiums are level. It is often sold as a cost-of-living rider to another policy. The correct answer is: Increasing Term

What is a person who can also receive information for a policyholder's life policy? Select one: a. A beneficiary b. A contingent assignee c. A designated addressee d. A secondary addressee

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: A secondary addressee

All of the following are commonly used when investigating the insurability of an applicant, EXCEPT: Select one: a. An attending physician's statement b. A credit report c. Contacting the Medical Information Bureau (MIB) d. Talking to the neighborhood watch

Insurers typically utilize the physician's statement, credit report and MIB when determining insurability of an applicant. They do not talk to the neighborhood watch. The correct answer is: Talking to the neighborhood watch

An underwriter has determined that a person will not qualify for a standard issue policy. The underwriter may choose any of the following actions, EXCEPT: Select one: a. Decline the risk outright b. Issue the policy with a probationary period allowing the company to cancel the policy at a later date at their option c. Charge a higher premium than for the standard risk d. Attach a rider that excludes coverage for specific conditions

Issuing a policy under these conditions would be the same as offering insurance at the company's whim. This would give the company the right to cancel the policy if a claim occurred. The correct answer is: Issue the policy with a probationary period allowing the company to cancel the policy at a later date at their option

One common exclusion for short-term disability policies is: Select one: a. Benefits are generally paid weekly. b. On the job injuries are not covered. c. Only accidents qualify for benefits. d. Pre-existing exclusions are not allowed.

It is usual for both company sponsored and state sponsored short-term disability plans to exclude on the job injuries. The correct answer is: On the job injuries are not covered.

Medicare Advantage Plans include all the following, EXCEPT: Select one: a. HMOs b. PPOs c. EPOs d. Private Fee-for-Service Plans

Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. The correct answer is: EPOs

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

What consist of 2 or more employers or labor unions seeking group health insurance coverage by joining together to form a larger group? Select one: a. DMPO b. PLHSO c. EPO d. MEWA

Multiple Employer Welfare Arrangements (MEWAs) consist of 2 or more employers or labor unions seeking group health insurance coverage by joining together to form a larger group. The correct answer is: MEWA

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

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

A policy issued on a non-cancellable basis means: Select one: a. The policy may not be cancelled by the insurance company, but the premiums may increase. b. The policy may not be cancelled by the insurance company, and the premiums are guaranteed for the term of the policy. c. The policy may only be cancelled by the insurance company if they cancel the entire block of policies of this type. d. The insured may make changes in the policy without regard to current insurability rules.

Non-cancellable means that premiums are guaranteed and the company will not be allowed to cancel the policy. The correct answer is: The policy may not be cancelled by the insurance company, and the premiums are guaranteed for the term of the policy.

Who is the only one who can change the beneficiary on a life policy? Select one: a. Policyowner b. Agent c. Insurer d. The CFO

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: Policyowner

Ramon recently purchased a Life Insurance policy from Acme Insurance Company. Upon reading the terms of the policy, Ramon finds the policy contains a package for Legal Defense insurance, he did not request. What illegal trade practice is this? Select one: a. Skimming b. Churning c. Sliding d. Twisting

Ramon has fallen victim to the Unfair Trade practice of sliding. Charging an applicant for a specific ancillary coverage or product, in addition to the cost of the insurance coverage applied for, without the informed consent of the applicant is sliding. The correct answer is: Sliding

Medicare Part B offers benefits for all of the following, EXCEPT: Select one: a. Psychiatric care b. Skilled nursing facilities c. Physician's services d. Health care aids

Skilled nursing facilities are covered on a limited basis under Medicare Part A. Part B will cover physician services, diagnostic, X-ray and lab and durable medical equipment. The correct answer is: Skilled nursing facilities

What type of rating method are small employer health policy carriers in Florida required to use for establishing premium rates? Select one: a. Historical rating b. Modified community rating c. Effective community rating d. Extended individual rating

Small employer health policy carriers in Florida must use a _modified community rating_ method for establishing premium rates. The correct answer is: Modified community rating

A producer gave a prospective client a visual presentation of the principal benefits of an insurance policy and mentioned that it had the usual conditions, but did not include those in the presentation. The producer was engaging in: Select one: a. Misrepresentation b. Rebating c. Coercion d. Twisting

Statements are deemed to be misrepresentations if, when taken in the context of the whole presentation, they may tend to mislead or deceive a person. By detailing only the benefits, the producer was not giving a fair representation of the policy. The correct answer is: Misrepresentation

Which of the following is not an issue in which an insurance contract would normally be voided? Select one: a. Misrepresentations and warranties b. Concealment and fraud c. Rescission and representations d. Subrogation and representations

Subrogation occurs when the insurer assumes rights of the insured and sues a responsible third party for damages inflicted on the insured. The correct answer is: Subrogation and representations

A life insurance producer can use which of the following terms? Select one: a. Investment advisor b. Financial planner c. Financial consultant d. Insurance agent

Terms such as financial planner, investment advisor, financial consultant, or financial counseling will not be used in such a way as to imply that the insurance agent is generally engaged in an advisory business. The correct answer is: Insurance agent

The proper business practices expected of agents are defined in the: Select one: a. Responsibility Code b. Code of Conduct c. Insurance Code d. Code of Ethics

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

The Insurance Department may place on probation, suspend, revoke or refuse to issue or renew an insurance producer license for which of the following reasons? Select one: a. Having any controlled business b. Accidental misrepresentation of a life or annuity contract. c. Failing to pay child support d. Failing to pay a traffic ticket

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. Failing to pay a traffic ticket and accidental misrepresentation of a policy would not be cause for a suspension. An agent may have controlled business, however if an agent sells more controlled business than policies to the general public in a 12 month period, they have violated the controlled business law. The correct answer is: Failing to pay child support

All of the following are good reasons to deliver a life insurance policy in person, EXCEPT: Select one: a. The agent can conduct a policy review. b. The agent can change the date of the coverage, if necessary. c. The agent can explain coverage and answer questions. d. The agent can ask for referrals.

The agent does not have the power or authority to change the effective date of the policy. The correct answer is: The agent can change the date of the coverage, if necessary.

When completing an application for insurance, an agent is allowed to do which of the following: Select one: a. Bind the coverage after reviewing all statements b. Order the Medical Information Bureau Report c. Sign for the applicant if he is out of state d. Witness the applicant's signature

The agent must be present to witness signatures. The other actions are either prohibited or functions for others in the underwriting process. The correct answer is: Witness the applicant's signature

Which of the following could be used to prevent a lapse in the payment of life insurance premiums? Select one: a. Automatic premium loan b. Cash loan c. Partial Surrender d. Waiver of premium

The automatic premium loan allows the insurer to tap into the cash value of a policy to pay an overdue premium. The correct answer is: Automatic premium loan

With an accidental death and dismemberment policy, the payment of a specified amount, usually a percentage of the principal sum, which varies according to the severity of the injury, is called: Select one: a. Capital sum b. Indemnity payment c. Disability payment d. Additional monthly benefit

The capital sum pays a specified amount, varying with the severity of the injury. The correct answer is: Capital sum

What portion of the cash surrender value of a life policy is subject to garnishment by a creditor? Select one: a. Nothing b. The amount owed to any creditor c. All of the cash value may be subject to garnishment by a creditor. d. The amount in favor of a creditor.

The cash surrender value of a life insurance policy is not subject to garnishment or legal process in favor of a creditor. The correct answer is: Nothing

The children's rider is not: Select one: a. A rider to cover only the children b. A form of term insurance c. Part of the life policy of an insured. d. A family rider

The children's rider covers only the children. It is a form of term insurance and is part of the life policy of the insured. It is not a family rider. The correct answer is: A family rider

Which of the following is not a nonforfeiture option? Select one: a. Extended term insurance b. Conversion option c. Cash surrender value d. Reduced paid-up insurance

The conversion option is not a nonforfeiture option. All of the others are nonforfeiture options. The correct answer is: Conversion option

Bob is leaving his employer for another position. He has a health problem and wishes to continue his life insurance on an individual basis. What should Bob do to continue his coverage? Select one: a. The underwriting company will issue a term policy like his group policy on request. b. Bob must make a written request within 31 days and the company will issue the policy outlined in the plan at his current age. c. Bob can buy an individual term policy from the company at his current age with no health questions. d. Bob is out of luck, as his group plan does not have a conversion feature.

The conversion process is outlined in the group certificate. It usually requires that the participant notify the company in writing within in a set time frame, usually 31 days from termination. The correct answer is: Bob must make a written request within 31 days and the company will issue the policy outlined in the plan at his current age.

In a life insurance policy, the entire contract clause provides that all statements made by the insured, in the application are: Select one: a. Representations b. Warranties c. Permission to amend the policy d. All of the above

The entire contract clause provides that statements made by the insured, in the application are considered representations. The correct answer is: Representations

What is the tax liability for taking more than 60 days to transfer funds from one IRA to another qualified plan? Select one: a. 5% b. 10% c. 15% d. 20%

The funds must be deposited within 60 days or incur a 20% tax liability. The correct answer is: 20%

What rider allows someone to purchase additional disability income insurance at a later date, regardless of insurability? Select one: a. A guaranteed insurability rider b. An impairment rider c. A waiver of premium rider d. A double indemnity rider

The guaranteed insurability rider allows the insured to purchase additional disability income coverage at future dates regardless of insurability. The correct answer is: A guaranteed insurability rider

Which of the following is not a rider that increases the policy's base premium? Select one: a. Riders do not increase the policy's premium. b. Guaranteed insurability rider c. Triple indemnity rider d. Impairment rider

The impairment rider excludes coverage; therefore, the premium would not increase. The correct answer is: Impairment rider

Statements made in an insurance application are held to a principle of: Select one: a. Rescission b. Subrogation c. Warranties d. Representation

The insured's statements on an application are considered representations, i.e. they are not guaranteed to be true. The correct answer is: Representation

What clause in an insurance contract identifies the contracting parties and the scope and limits of coverage? Select one: a. Time limit on certain defenses clause b. Benefit outline clause c. Renewability Clause d. Insuring Clause

The insuring clause is one that sets the basic terms of the contract and prevents any unilateral changes by the insurance company. The correct answer is: Insuring Clause

How are a revocable and irrevocable beneficiary designations similar? Select one: a. The policyowner can change the beneficiary without knowledge or consent. b. The policy owner pays the premiums. c. The policyowner can borrow without consent of the beneficiary. d. The policyowner can cancel the policy without consent.

The only way that the revocable and irrevocable beneficiaries are similar in these statements is that the policyowner pays the premiums. The correct answer is: The policy owner pays the premiums.

What defines the timing of the payments on a life insurance policy? Select one: a. Premium payment mode b. Payor benefit c. Owner's rights d. Settlement options

The premium payment mode determines the timing of premium payments, i.e., how often do you want to pay your premiums. Examples: monthly, quarterly, semi-annual (twice a year) or annually (once a year). The correct answer is: Premium payment mode

The principal losses related to accident and health insurance are: Select one: a. Loss of income from disability and medical expenses. b. Loss of earning power caused by premature death c. Loss of retirement income caused by prolonged life d. All of the above

The principal types of losses dealt with in accident and health insurance are medical expenses and loss of income caused by disability. The correct answer is: Loss of income from disability and medical expenses.

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 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.

Which of the following is true about the 80/20 coinsurance provision in a major medical policy? Select one: a. Co-insurance will limit the deductible as well as the overall claim payment b. Premiums are higher when a co-insurance provision is included in the policy. c. Co-insurance will help control excess utilization of the policy d. Co-insurance amounts will change at the option of the insurance company after the policy is issued.

The theory of co-insurance is that insured will not seek the doctor's help each time they have any indication of a health problem. The correct answer is: Co-insurance will help control excess utilization of the policy

Premiums paid for long-term care policies are deductible from income tax under what circumstances? Select one: a. The plan must be a qualified plan and only a portion of the premiums is deductible. b. Under no circumstances are premiums deductible. c. Deduction of premiums may create taxable income when benefits are paid. d. A plan can be converted to a deductible plan on any policy anniversary.

There are two basic types of plans: qualified and non-qualified. Once a plan is issued as one or the other, it may not be changed. Premiums for long-term care fall under the medical deduction rules. The correct answer is: The plan must be a qualified plan and only a portion of the premiums is deductible.

Which of the following is not an element of insurable risks? Select one: a. Large number of heterogeneous units b. Loss must be predictable c. Loss is definite and measurable d. Loss is not catastrophic.

This element of risk should read large number of homogenous units. The correct answer is: Large number of heterogeneous units

What type of disability policy states that a policy can be renewed beyond age 65 if the insured is actively at work? Select one: a. Non-cancellable contract b. Guaranteed renewable contract c. Optionally renewable contract d. Conditionally renewable contract

This example shows that a condition must exist for a contract to be renewable. If someone continues to work beyond age 65, they will be able to continue the policy. The correct answer is: Conditionally renewable contract

When Claire's father took out a policy on her life, he was the policy owner and Claire was the insured. This is an example of: Select one: a. Third party ownership b. Maximum benefit rider c. Dependent coverage d. Variable life

This is an example of third party ownership of a policy. When someone other than the insured is the owner of the policy. If Claire was a minor child, it could be dependent coverage. The correct answer is: Third party ownership

Susan was admitted to the hospital. She failed to pay her premium prior to admission, but is within the grace period. Under the unpaid premium provision the company is entitled to: Select one: a. Deny the claim outright b. Subtract the unpaid premium from the claim payment c. Delay the claim until the premiums are current d. Terminate the policy and deny the claim

This provision allows the insurance company the opportunity to do the right thing without violating the terms of the contract. The correct answer is: Subtract the unpaid premium from the claim payment

Which of the following statements is true regarding the assignment clause in life insurance? Select one: a. Policyowners can transfer rights to another person. b. The insurer must be notified. c. An absolute assignment is usually not reversible. d. All of the above.

Under the assignment clause policyowners can transfer rights to another person, the insurer must be notified, and if it is an absolute assignment it is usually permanent. The correct answer is: All of the above.

Which of the following provisions is one that recognizes rights of ownership in a policy? Select one: a. Payment of claims b. Change of beneficiary c. Time limit for legal actions d. Waiver of Premiums

When a beneficiary arrangement is present, it is a right of ownership. The correct answer is: Change of beneficiary

Which of the following words can be used in health insurance policy advertisement? Select one: a. More b. All c. Full d. Complete

When advertising health insurance policies in Florida, no advertisement may use words or phrases such as _all,_ _full,_ _complete,_ _comprehensive,_ or _unlimited_ in a manner that exaggerates policy benefits. The correct answer is: More

Suitability information for a prospective client would include all the following, EXCEPT: Select one: a. Liquidity needs b. Age c. Sex d. Race

When selling an annuity, an agent is required to have a reasonable basis for believing the recommendation is suitable for the consumer based on facts provided by the consumer. The agent must attempt to collect the consumer's suitability information that includes: age, sex, investment objectives, source of funds, annual income, intended use, liquid net worth, liquidity needs, financial situation, financial needs, and risk tolerance. The correct answer is: Race

Where replacement is involved, it is the duty of the replacing insurance company to maintain all related records for at least: Select one: a. 2 years b. 3 years c. 4 years d. 5 years

Where replacement is involved, the replacing insurance company must maintain copies of the Notices to Applicant Regarding Replacement of Life Insurance, Comparative Information Forms, and all sales materials for at least 3 years or until the next examination, whichever is later. The correct answer is: 3 years

All of the following are true about group health policies, EXCEPT: Select one: a. Groups must exist naturally. b. The contract is issued to the employer or union, etc. c. The policyholder is the employee. d. Each employee receives a certificate of coverage.

With a group contract, the policyholder is the employer, union, or association that contracts with the insurer for the coverage. The correct answer is: The policyholder is the employee.

All of the following are characteristics of variable annuities, EXCEPT: Select one: a. They variable interest rates b. They have variable benefits c. The insurer cannot guarantee a benefit d. The insurer chooses where to invest the funds

With a variable annuity, the policy owner chooses where their premiums are to be invested. The correct answer is: The insurer chooses where to invest the funds