215 practice exam guide

Whole life insurance can also provide funds, through its cash value, that may be used during the insured's lifetime. What is that feature called? capital accumulation permanent values the money feature living benefits

living benefits

All of the following are standard permanent exclusions found in life insurance policies EXCEPT: war aviation hazardous occupations and hobbies suicide

suicide

Which type of insurer is incorporated, owned by its policyholders, but does not have capital stock? stock insurer mutual insurer authorized insurer domestic insurer

mutual insurer

BBX Insurers terminated Henry's appointment as its life insurance agent on December 1. How long will Henry remain eligible to be appointed as a life insurance agent by another insurer? 12 months 24 months 36 months 48 months

48 months

Into how many categories do dental plans typically group their covered treatment and benefits? 1 2 3 4

3

An employer pays $500 in premiums annually for each employee enrolled in its group medical plan. How much of the contribution is taxable income to the employee? $500 $0 $250 $300

$0

What is the most common elimination period used in disability income policies that are purchased by a company for disability buy-out purposes? 18 to 24 months 6 to 12 months 180 days 0 days

18 to 24 months

A claimant on a health insurance policy must give written notice of the claim to the insurer within how many days following a loss? 7 10 14 20

20

Unless they operate in a state that has additional requirements, employers with fewer than how many employees are exempt from COBRA requirements? 100 75 50 20

20

COBRA applies to employers with how many employees? 10 or more 12 or more 20 or more 100 or more

20 or more

All of the following statements are true with regard to whole life insurance EXCEPT: It provides a guaranteed cash value. Cash value cannot be accessed until the insured's death. It has a level death benefit. The insurer's risk decreases over the life of the policy.

Cash value cannot be accessed until the insured's death.

Franklin is covered by a PPO. If he receives medical treatment from an out-of-network physician, what is the result? The PPO will deny the claim. He will pay a higher amount for the medical care. He must pay a deductible and coinsurance amount. His cost for the medical care will not be affected.

He will pay a higher amount for the medical care.

An insured is chronically ill and receives nursing care at home. The insured's long-term care insurance policy pays a daily benefit of $250, which is equal to the daily expenses incurred. Which statement is correct? The entire benefit is taxable income. Part of the benefit is taxable income. None of the benefit is taxable income. The insured can deduct the benefits from taxable income

None of the benefit is taxable income.

Which of the following statements regarding life insurance policy dividends is correct? Dividends are guaranteed in the policy. Policy dividends are income taxable. Policy dividends are paid only by stock insurance companies. Policy dividends can be paid to policyowners under a variety of different options

Policy dividends can be paid to policyowners under a variety of different options

Which statement about return of premium riders is NOT correct? Return of premium riders are available in all states. They allow the insured to get back part of the premium if the insured's claims are below a certain level. They allow the insured to get back part of his or her premium payments if he or she has no claims against the policy. The policyowner pays an additional premium when a return of premium rider is added to a

Return of premium riders are available in all states

Which of the following statements regarding Social Security disability benefits is correct? Social Security disability benefits are equal to 50 percent of the worker's PIA at the time of disability. Unlike Social Security retirement benefits, disability benefits have no family maximum benefit limitation. Social Security disability benefits are available to fully insured workers at any age. To qualify for disability benefits, a worker must simply be unable to perform the material duties of his or her occupation.

Social Security disability benefits are available to fully insured workers at any age.

Which statement is correct about HMO plans that offer a POS option? Members pay more for them than HMO plans without the POS option. They offer more health care provider options. They are less expensive than other HMO plans. They require a deductible but not a coinsurance payment

They offer more health care provider options.

Disability income insurance is NOT typically provided through: a basic medical expense policy an employer's or association's group insurance policy an individual disability income policy Social Security

a basic medical expense policy

Which of the following policies were initially developed to pay for doctors' visits only while the insured was hospitalized but now covers all routine doctor office visits? basic medical expense plan basic physician expense policy basic surgical expense policy basic hospital expense policy

basic physician expense policy

Newborn children are automatically covered under an insured's individual health insurance policy for how long? from birth to the first birthday from birth to 30 days from birth to the end of the first calendar year from birth to the policy renewal date

from birth to 30 days

An employer establishes flexible spending accounts for its employees. Which expenses will the accounts NOT cover? prescription medicines and medical supplies insurance policy premiums non-prescription medicines and medical supplies durable medical equipment

insurance policy premiums

Which health care professional is NOT a common primary care provider (PCP)? internist general practitioner obstetrician-gynecologist orthopedic surgeons

orthopedic surgeons

Which optional provision in a health insurance policy states how the insurer will limit benefits so that they do not exceed the insured's income? waiver of premium conformity with state regulation relation of earnings to insurance other insurance with this insurer

relation of earnings to insurance

Terry is licensed in Florida as a life and health insurance producer for the past two years. To maintain his license, how many hours of continuing education must he complete every two years? 18 24 30 36

24

With respect to annuity death benefits, all the following statements are correct EXCEPT: Deferred annuities offer the guarantee of a death benefit, which is distributed if the owner or annuitant dies during the accumulation period. If the owner or annuitant dies during the accumulation period, a beneficiary receives as a death benefit an amount at least equal to the amount invested in the contract. Variable annuities guarantee a death benefit equal to at least the premium invested. If the owner of a indexed variable annuity dies during the accumulation period, there is no death benefit.

If the owner of a indexed variable annuity dies during the accumulation period, there is no death benefit.

Zelda, a producer selling health insurance, assures a prospective applicant that the insurance company she represents is backed by the protections of the Florida Life and Health Insurance Guaranty Association. What is true about this kind of assurance? It is recommended when selling health insurance. It is prohibited at all times. It is required when selling to Medicare-eligible individuals. It is highly regulated by the Office of Insurance Regulation.

It is prohibited at all times.

Ted owns a janitorial service business and applies for a life insurance policy on his key employee, Jim. The insurance company will consider all of the following factors when underwriting the policy EXCEPT: Jim's job duties Jim's outdoor hobbies Jim's use of alcohol and tobacco Jim's bank account balance

Jim's bank account balance

Margo, who is 52 years old and in good health, is uninsured. She may get health insurance coverage through all of the following EXCEPT: a commercial insurer government plans a managed care service insurer Medical Information Bureau

Medical Information Bureau

All the following statements regarding about joint life insurance are correct, EXCEPT: It insures two persons under one policy. It pays the death benefit when the first insured dies. Only married couples may buy it. Its premium is less than the premium for two separate policies.

Only married couples may buy it.

While indexed annuities are fairly complex products, the basic concept is best described as which one of the following? The percent of change in the insurer's subaccounts determines the interest rate credited to the funds in the indexed annuity. The insurer's average interest return on its general account assets determines the interest rate credited to the funds in the indexed annuity. The percent of change in the selected stock index determines the interest rate credited to the funds in the indexed annuity. The average percentage of change in the selected stock index over the past ten years determines the percentage interest rate credited to the funds in the indexed annuity

The percent of change in the selected stock index determines the interest rate credited to the funds in the indexed annuity.

All the following statements about the paid-up dividend option with participating life insurance are correct, EXCEPT: The paid-up insurance option lets the policyowner use the dividends to pay up the life insurance policy early. A policyowner who chooses this option could pay up a whole life policy several years early, depending on the policy. After the policy is paid up, the policyowner does not owe any more premiums. The policy benefits will continue in force only until the policyholder reaches age 65.

The policy benefits will continue in force only until the policyholder reaches age 65.

A health insurance policy's waiver of premium provision provides which of the following benefits? The policy's premium will be paid by the insurer if the insured is injured. The policy's premium will be waived if the insured is totally disabled. The policy's premium will be waived if the insured cannot afford it. The policy's premium will be reduced by an amount specified in the contract if the insured is disabled.

The policy's premium will be waived if the insured is totally disabled.

The payor benefit rider for a juvenile insured sets the terms for when and how long the premium waiver stays in effect. If the payor becomes totally disabled or dies before the specified age, which of the following happens? The waiver usually stays in effect until the payor recovers or the child enrolls in college. The waiver usually stays in effect until the payor recovers or the child reaches a certain age. The premiums are waived for the duration of the policy. The premiums are reduced by an amount set in the policy

The waiver usually stays in effect until the payor recovers or the child reaches a certain age.

Agent Holly routinely charges her clients an extra amount in addition to the premium stated in the life insurance policy to cover her own personal administrative expenses. What is true about Holly's actions? They are lawful. They are lawful in most cases. They are unlawful. They are lawful if the client agrees in writing.

They are unlawful.

Which statement about variable life insurance is NOT correct? Variable life insurance offers fixed premiums and a minimum guaranteed death benefit. Variable life insurance premiums can be invested in securities. Variable life insurance offers guaranteed cash values. Variable life insurance is a securities-based insurance product

Variable life insurance offers guaranteed cash values.

An insured is covered by both his employer's group health insurance plan and by his wife's group plan. Which provision ensures that any benefits paid to him will not exceed his expenses? coordination of benefits extension of benefits coinsurance stop-loss

coordination of benefits

An agent's license can be suspended or revoked for all of the following reasons EXCEPT: violating the Florida Code of Ethics selling unregistered securities demonstrating untrustworthiness when transacting insurance paying commissions to a licensed agency

paying commissions to a licensed agency

Which activity is NOT prohibited by the Code of Ethics? misrepresentation replacement rebating defamation

replacement

Who normally owns life insurance used to meet business insurance needs? the business the insured employee the insured employees' beneficiaries a trust maintained on the insured employees' behalf

the business

All the following are common uses for life insurance, EXCEPT: to pay a death benefit to beneficiaries when the insured dies to replace the insured's future income lost upon death to pay ongoing long-term medical and nursing care expenses incurred by the insured to pay final expenses incurred by the insured immediately prior to, and upon, the insured's death

to pay ongoing long-term medical and nursing care expenses incurred by the insured

Brian's required minimum distribution from his traditional IRA was $6,000 this year. However, he only took a $2,000 distribution. What tax penalty will Brian have to pay? $600 $1000 $2000 $3000

$2000 (50% penalty of what is not taken out)

Cal bought a $100,000 universal life policy ten years ago. He has paid $8,000 in premiums into the policy. He now decides to surrender the policy for its full $15,000 cash value. What amount is taxable?

$7,000

Which of the following is NOT an annuity product design? fixed annuities variable annuities equity-based annuities consumer-based annuities

consumer-based annuities

When does the free-look period for a variable life insurance policy end? 7 days after the policy is delivered 30 days after the policy is delivered 21 days after the policy is delivered 10 days after the policy is delivered, or 45 days after the insurance application is completed, whichever is later

10 days after the policy is delivered, or 45 days after the insurance application is completed, whichever is later

A group health insurance policy issued in Florida can exclude a pre-existing condition from coverage for up to how many months? 6 12 21 24

12

ABC Life Insurance Co. sells term and whole life insurance policies through agents. If it sells a policy, it must give the customer the right to examine the policy for at least how long? 14 days 20 days 30 days 31 days

14 days

Charlie was covered under his wife's employer-sponsored health insurance plan before their divorce. Charlie applies for continued coverage through COBRA. How long can he continue coverage? 6 months 12 months 18 months 36 months

36 months

Under the other insured term rider, a person can buy a term life insurance rider to cover the life of a spouse (or other adult). This coverage usually ends sometime before the primary insured reaches which of the following ages? 21 50 70 20

70

Which of the following requirements applies to a life insurance policy issued to a creditor-debtor group? All eligible debtors must be insured, if the creditor pays the entire premium. At least 50 new persons must enter the group each year. The amount of insurance may not exceed $50,000. Proceeds must be paid to the debtors.

All eligible debtors must be insured, if the creditor pays the entire premium.

A group disability income policy has a 90-day elimination period. How does this affect benefit payments? The insured must wait 90 days before filing a claim. Benefits will not begin until 90 days after the insured submits an initial claim. Benefits will be paid for 90 days. Benefits will begin 90 days after the disability occurs.

Benefits will begin 90 days after the disability occurs

Agent Monroe helped her client Brian enter into a viatical settlement agreement with Best Insurers. Which of the following parties will receive the life insurance proceeds at Brian's death? Brian's beneficiaries under his will Agent Monroe Agent Monroe and Best Insurers Best Insurers

Best Insurers

Because states define the scope of their Medicaid coverage, which statement is correct? Every state provides the same benefits and has the same requirements for eligibility. States always offer Medicaid and Medicare services and medical care together. Eligibility for Medicaid assistance is based only on financial need. Medicaid services are never provided with Medicare

Eligibility for Medicaid assistance is based only on financial need.

Life and health insurance companies regulate themselves through each of the following entities or organizations EXCEPT: -National Association of Life Underwriters -American Society of Chartered Life Underwriters -International Association of Health Underwriters -Financial Industry Regulatory Authority

Financial Industry Regulatory Authority

Which organization provides access to comprehensive insurance and health care for uninsured children ages 5 through 18 in Florida? Florida Health Alliance Cover Florida Florida Healthy Kids Florida Kids' Care

Florida Healthy Kids

Hillary purchased a fixed deferred annuity from ABC Insurers and named her daughter, Bess, as annuitant and her husband, Charles, as beneficiary. Which of these parties is specifically authorized to make withdrawals from the annuity prior to annuitization? Hillary Incorrect Bess Charles Hillary, Bess, and Charles

Hillary

Sara has a disability income policy. If she meets the policy's definition of disability, in which of the following cases will coverage apply? Her previously diagnosed muscular dystrophy becomes debilitating. Her alcoholism renders her chronically immobile. She is severely injured while making deliveries at her job. In a freak accident, she is struck by lightning and is paralyzed

In a freak accident, she is struck by lightning and is paralyzed

Which statement accurately describes the MIB (Medical Information Bureau)? It contains the complete medical history of insurance applicants. It collects medical information about insurance applicants and gives that information to member insurance companies. It lists the type of policies denied to applicants due to medical conditions. It makes information from applicants' physicians available to insurance companies

It collects medical information about insurance applicants and gives that information to member insurance companies.

Before delivering a health insurance policy to a client, the agent alters the insuring clause in a way that he believes will benefit the insurance company. What is true about this alteration? It is required of a diligent agent. It is prohibited by the entire contract provision. It is permitted only when it is in the insurer's best interests. It is prohibited unless the insured agrees to it in writing

It is prohibited by the entire contract provision.

If Rick withdraws funds from his universal life insurance policy, what will be the effect on the policy's death benefit? It will be reduced by the amount of the withdrawal, plus interest. It will not change as a result of the withdrawal. It will not change, as long as Rick repays the amount withdrawn. It will be reduced by the amount of the withdrawal.

It will be reduced by the amount of the withdrawal.

Karen bought a life insurance policy at age 23. She added the guaranteed insurability rider to the policy. If Karen buys another policy under the rider at age 39, the premium of that policy will be based on which of the following? Karen's current age Karen's age at the time she bought the original policy Karen's insurability a standard rate for all guaranteed insurability rider premiums

Karen's current age

With respect to the tax treatment of a disability buyout insurance policy, which of the following statements is correct? Policy premiums are tax deductible to the business, and benefit payments are tax-free. Policy premiums are tax deductible to the business, and benefit payments are taxable. Policy premiums are not tax deductible to the business, and benefit payments are tax-free. Policy premiums are not tax deductible to the business, and benefit payments are taxable

Policy premiums are not tax deductible to the business, and benefit payments are tax-free.

With respect to a policyowner's conversion of a term life insurance policy into a permanent life insurance policy, which one of the following statements is correct? The insured must prove insurability. The face amount of the new policy cannot exceed the amount of the term policy. The premiums for the new policy will be based on the insured's age when he or she applied for the original term policy. The premium of the new policy cannot exceed the premium of the term policy.

The face amount of the new policy cannot exceed the amount of the term policy.

With respect to the interest-only life insurance settlement option, what happens to the death benefit proceeds that the insurer was holding upon request by the beneficiary? The insurer pays the proceeds in a lump sum. The insurer pays the proceeds, either in a lump sum or under one of the other settlement options. The insurer pays the proceeds to the beneficiary. The insurer keeps the interest, thus increasing the death benefit amount.

The insurer pays the proceeds, either in a lump sum or under one of the other settlement options.

If the policy loan amount plus interest owed is greater than the policy's cash value, which of the following will happen? The insurer will cancel the policy. The policy will automatically go on the extended term option. The policy will be surrendered for cash. The policy will remain in effect

The insurer will cancel the policy

What happens when a universal life insurance policy's cash value no longer covers the monthly deductions to cover the policy's insurance and operational costs? The policy goes on the extended term option. The policy goes on the reduced paid-up option. The policy is surrendered for cash. The policy lapses.

The policy lapses.

What guarantee does COBRA provide an individual who voluntarily leaves a job or who is terminated for reasons other than gross misconduct? The right to continue individual health insurance coverage at the individual's own expense for up to 12 months. The right to continue group health insurance coverage at the employer's expense for up to 18 months. The right to continue the former employer's group insurance coverage at the individual's own expense for up to 18 months. The right to buy individual health insurance coverage at group rates for up to 12 months

The right to continue the former employer's group insurance coverage at the individual's own expense for up to 18 months.

In addition to charges for a hospital room, hospital expense policies cover miscellaneous hospital charges up to an amount that is generally defined as: a flat additional daily room and board rate, such as $300 per day a multiple of the daily room and board rate (such as 20 times the daily benefit for hospital room and board), or as a maximum dollar amount. a percentage of the daily room and board rate, such as 50 percent of the daily benefit for hospital room and board. a multiple of the per stay room and board limit, such as ten times the standard per stay benefit for hospital room and board

a multiple of the daily room and board rate (such as 20 times the daily benefit for hospital room and board), or as a maximum dollar amount.

Which of the following is the basis today for determining basic surgical expense policy benefits? a pay-as-you-go method a maximum benefit method a limited benefit method a usual, customary, and reasonable (UCR) method

a usual, customary, and reasonable (UCR) method

Which of the following types of life insurance products lets the policyowner request a change in the fixed premium (within limits) which, upon insurer approval, changes the policy's death benefit? variable life insurance adjustable life insurance universal life insurance level term life insurance

adjustable life insurance

Blackstone Insurers is incorporated in New York, where it also has a certificate of authority to transact insurance. What type of insurer is Blackstone in New York? certified insurer alien insurer foreign insurer admitted insurer

admitted insurer

Which of the following covers surgeons' fees and costs associated with surgery, which can include fees for an assistant surgeon, anesthesiologist, or even the operating room if it is not covered as a miscellaneous hospital item? basic medical expense (indemnity) plan basic physician expense (indemnity) policy basic surgical expense (indemnity) policy basic hospital expense (indemnity) policy

basic surgical expense (indemnity) policy

Which type of Medicare supplement marketing method fails to disclose that the purpose of the contact is the solicitation of insurance? twisting cold lead advertising high pressure sales tactics illegal inducement

cold lead advertising

Conrad obtained a life insurance agent's license primarily to write insurance for his family members and friends. Which unfair trade practice has Conrad engaged in? controlled business coercion rebating misrepresentation

controlled business

Which standard provision in a life insurance policy forbids changes to any policy provision unless it is agreed to and signed by an officer of the insurance company? ownership rights provision entire contract provision consideration clause reinstatement provision

entire contract provision

Sky Corporation applies for a group health insurance plan. During the underwriting process, the insurer examines Sky's past claims experience and the composition of its group. Which rating method is the insurer using? experience rating prospective rating standard rating community rating

experience rating

The Office of Insurance Regulation can examine the business transactions, accounts, and records of domestic insurers as often as necessary, but must do so at least once every how many years? one year four years five years ten years

five years

Which action must a life insurance policyowner take to assign his or her rights in a policy to a third party? notify any revocable beneficiaries under the policy obtain the third party's written consent give written notice to the insurer of the assignment submit the assignment to the Office of Insurance Regulation for prior approval

give written notice to the insurer of the assignment

Another name for traditional or fee-for-service health insurance is: Blue Cross/Blue Shield indemnity insurance doctors and surgeons insurance managed care

indemnity insurance

Stranger-originated life insurance (STOLI) involves a third-party policy ownership arrangement between which of the following parties? investor group and a consumer insurer and a policyowner insured and a business partner agent and the insurer

investor group and a consumer

What are the responsibilities of the Office of Insurance Regulation and the Department of Financial Services? conducting credit checks and licensing agents and insurers writing the state's insurance laws issuing rules and regulations to administer the insurance laws prosecuting criminal violations of the insurance laws

issuing rules and regulations to administer the insurance laws

Before selling an annuity, an agent must make reasonable efforts to obtain information about the prospect with respect to all of the following EXCEPT: financial status investment objectives tax status marital status

marital status

Although the employer sets the standards for employees' eligibility for group health insurance, the insurer may set the: group membership minimum participation standards benefit selection denial of conversion privileges

minimum participation standards

The most common method used in determining a prospective client's life insurance needs today is the: human life value approach how-much-can-you-afford approach actuarial approach needs approach

needs approach

Barbara buys a business overhead expense policy to help ensure that her business will continue if she is disabled. This coverage will pay for: office supplies Barbara's salary the wages of her replacement the wages of family members who volunteer their assistance

office supplies

Andrea owns a participating life insurance policy, which means that the insurer will pay dividends to whom? policyowners every year both policyowners and stockholders policyowners from company surplus policyowners beginning no later than the end of the first policy year

policyowners from company surplus

Jamie is 37 years old, but her friends insist that she looks younger than her age. She applies for a health insurance policy and on the application states that she is 27 years old. When the insurer discovers the truth, what will it probably do? cancel the policy reduce the benefits increase the premium refer the matter to the state's Attorney General's office

reduce the benefits

If Jack takes a new job that is less hazardous than the job he had when he obtained health coverage, what may the insurer do? cancel the policy take no action increase the benefits reduce the premium

reduce the premium

Jennifer purchases an individual health insurance policy on June 1. One week later, she loses her job and decides she can no longer afford the policy. What are her options? returning the policy for a partial refund of premiums returning the policy for a full refund of premiums returning the policy but premiums will not be refunded keeping the policy

returning the policy for a full refund of premiums

To be considered currently insured, a worker must have earned how many quarters of coverage in the 13-quarter period before he or she dies? six eight Incorrect nine ten

six

Which type of health policy offers coverage for treatment of a specified disease or condition, such as heart disease or cancer? fee-for-service pre-paid specified comprehensive

specified

Which of the following activities does not violate the insurance code? telling clients that an agent holds a chartered financial consultant (ChFC) designation offering to share a commission if a client buys several insurance policies charging a fee that is more than the premium stated in the policy telling clients that an agent is certified to provide specialized financial advice to senior citizens

telling clients that an agent holds a chartered financial consultant (ChFC) designation

When deciding whether to issue a policy, the health insurance underwriter will weigh all of the following factors EXCEPT: the applicant's lifestyle the applicant's occupation the applicant's sex the applicant's neighborhood

the applicant's neighborhood

What happens when a whole life insurance policy matures (or endows)? The sum of premiums the owner has paid equals the policy's face amount. the sum of premiums the owner has paid equal the policy's cash value the policy's cash value equals the amount that is available for a policy loan the policy's cash value equals its face amount

the policy's cash value equals its face amount

The other insurance in this insurer provision in a health insurance policy limits: the number of policies a person can own the amount of claims an insurer will pay the total coverage the insurer provides to a particular insured the number of riders in a single policy

the total coverage the insurer provides to a particular insured

Actuaries calculate net single premiums based on which of the following? mortality and dividend assumptions morbidity and expense assumptions mortality and interest assumptions expense and mortality assumptions

mortality and interest assumptions

A life insurance policy that offers coverage for a specified, limited period with no cash value building up is called a: term life insurance policy whole life insurance policy graded premium whole life policy limited pay life insurance policy

term life insurance policy

Jeff is a licensed insurance agent in both New York and Florida. He is was charged with embezzlement in New York, and pleaded guilty to the charge on March 1. He must notify the Florida Department of Financial Services of the charge within how many days? 7 10 14 30

30

Eric fails to pay the annual premium on his major medical insurance policy. The grace period provision allows him to pay the premium within how many days after the due date? 7 14 21 31

31

Charlie was covered under his wife's employer-sponsored health insurance plan before their divorce. Charlie applies for continued coverage through COBRA. How long can he continue coverage? 6 months 12 months 18 months 36 months

36 months

For purposes of group health insurance, a small employer is defined in Florida as any person or entity that employs no more than how many employees? 100 50 20 2

50

Medicare Part A provides reasonable and medically necessary hospital care for how long? 21 days 60 days 30 days Inpatient hospital care is not covered.

60 days

The insured must pay all back premiums plus interest and prove insurability. If the insurer does not act upon the application for reinstatement within 45 days, the policy will be automatically reinstated. After reinstatement, accidents are covered immediately, but a ten-day waiting period is imposed before sickness is covered. A policy may be reinstated for up to five years after it lapsed

A policy may be reinstated for up to five years after it lapsed

Which of the following statements about long-term care underwriting considerations is NOT correct? Underwriters consider an applicant's age; older applicants pay higher premiums. Benefit triggers under a tax-qualified plan are more stringent than those for a non-tax qualified plan, so underwriters must issue tax-qualified plans only to the healthiest applicants. Underwriters assess how well or for how long applicants will be able to perform daily activities without assistance. All long-term care policies must be issued as guaranteed renewable so that the insurer will be required to continue an applicant's coverage for as long as he or she pays the premium

Benefit triggers under a tax-qualified plan are more stringent than those for a non-tax qualified plan, so underwriters must issue tax-qualified plans only to the healthiest applicants.

Variable universal life combines features of variable life and universal life. Variable universal life and universal life are alike in all of the following ways EXCEPT: The premium payments for both are flexible. Both types of policies let the policyowner choose a death benefit from two (or sometimes three) options. For both policies, the insurer deducts insurance and expenses monthly from the cash value . Both are considered securities products as well as life insurance.

Both are considered securities products as well as life insurance.

Morgan loses her job and continues group health coverage through COBRA. Six months later, she begins a new job and is covered by her employer's group health plan. How does this effect coverage under COBRA? COBRA benefits will end. COBRA coverage will end after the 18-month benefit period. COBRA coverage will continue until she cancels it. COBRA benefits will continue for up to six months.

COBRA benefits will end.

Lola buys a Medicare supplement policy on June 15 but decides not to keep it. Two weeks later, she mails the policy back to the insurer. What must the insurer do? Cancel the policy and refund the premium. Cancel the policy and deduct the service fee from the returned premium. Cancel the policy and retain the premium. Keep the policy in force because the free-look period has ended

Cancel the policy and refund the premium.

Which of the following statements correctly describes how premiums for group life insurance are treated for tax purposes? Employers can deduct premiums paid on a group life insurance plan but employees cannot deduct their contributions. Group life insurance premiums are not tax deductible to the employer but employees can deduct their contributions. Group life insurance premiums are tax deductible to the employer only for the coverage provided to key employees but all employees can deduct their contributions. Employers may only deduct premiums paid for rank-and-file participants in a group life insurance plan but all employees can deduct their contributions.

Employers can deduct premiums paid on a group life insurance plan but employees cannot deduct their contributions.

Which statement is NOT correct about group insurance? A master contract is issued. Underwriting is on a group, not an individual, basis. Exclusions and riders are written for the most at-risk members. The cost is lower than it is for individual policies

Exclusions and riders are written for the most at-risk members.

Which statement about maternity coverage in group and individual health plans is correct? Individual and group plans must cover maternity care. Individual and group plans that cover maternity care must cover the services of midwives and birth centers. Individual and group plans must provide up to $10,000 in benefits for maternity care. Individual and group plans that cover maternity care may limit the length of hospital stays.

Individual and group plans that cover maternity care must cover the services of midwives and birth centers.

Which statement about health savings accounts (HSAs) is correct? They avoid the cost of health care. Insurers offer health insurance policies designed specifically for HSAs, with premiums that are much higher than those for standard policies. The premium savings can be deposited into the HSA to pay for health-care costs the policy covers. Instead of paying higher premiums for health insurance, the HSA owner and family can use the HSA to pay for qualified health-care expenses.

Instead of paying higher premiums for health insurance, the HSA owner and family can use the HSA to pay for qualified health-care expenses.

Funds collect within an annuity on a tax-deferred basis. What does this mean? Interest earnings and growth are not taxable to the owner while they accumulate in the contract. Funds accumulated in annuities are exempt from tax. The annuity owner's premiums are not taxed before being paid into the contract. Funds accumulated in annuities are taxed at lower rates than other income

Interest earnings and growth are not taxable to the owner while they accumulate in the contract.

Which statement correctly describes the Medicaid program? It is a medical assistance program funded by federal and state taxes to assist low-income people. It is a welfare program of medical expense insurance funded by state governments alone. It is supplemental medical care insurance for accident and health insurance policies. It is identical to Medicare insurance.

It is a medical assistance program funded by federal and state taxes to assist low-income people

Which of the following presents a situation of pure risk? -Knowing that his family depends on his income, Franklin wants to insure his life. -Wanting to increase his retirement savings, Saul invests his life savings in the stock market. -Ralph takes a second mortgage on his house and uses the proceeds to gamble. -Wanting better job security, Ron cashes in his life insurance policy to start a business.

Knowing that his family depends on his income, Franklin wants to insure his life.

Jaycee's employer pays the $1,500 annual premium for her disability insurance policy. She becomes disabled and receives a monthly benefit. Which statement is correct? She must pay income tax on the benefits. She must include the premium payments in her taxable income. Her employer cannot deduct the premiums it pays from its taxable income. She can deduct the employer's premium payments from her taxable income.

She must pay income tax on the benefits.

Maxine has a basic hospital expense policy that pays a benefit of $250 per day for up to 30 days. If she is hospitalized for more than 30 days, which of the following statements is correct? She will be responsible for all hospital costs beyond the first 30 days. She will be responsible for only the costs that exceed $250 per day beyond the first 30 days. She will be responsible for only the first $250 of costs per day beyond the first 30 days. The policy will pay 100 percent of costs beyond the first 30 days.

She will be responsible for all hospital costs beyond the first 30 days.

Len decides to surrender his policy for its cash value. All the following statements concerning his decision are correct EXCEPT: The insurer may decide to pay the cash value either in a lump sum or monthly installments. The policy is canceled and the insurer's responsibility under the terms of the contract ends. The policy cannot be reinstated. The insurer will send Len a check for the policy's cash surrender value.

The insurer may decide to pay the cash value either in a lump sum or monthly installments.

All the following statements about children's term riders on life insurance policies are correct, EXCEPT: A children's term insurance rider provides a modest amount of coverage Children's term riders often are issued for a specified amount A children's term rider can be issued for a specified percentage of the primary insured parent's base policy The modest amount of coverage in a children's term rider reflects the small amount parents are willing to pay for children's insurance.

The modest amount of coverage in a children's term rider reflects the small amount parents are willing to pay for children's insurance

Steve takes out a life insurance policy on himself, naming his wife, Ellen, as the primary beneficiary, his son Mark as contingent beneficiary and his niece Lucy as tertiary beneficiary. Ellen dies before Steve. Assuming no changes have been made to the policy, how will the policy proceeds be distributed after Steve dies? The proceeds will be split equally between the Mark and Lucy. The proceeds will go directly to Steve's estate because the primary beneficiary is deceased. The proceeds will be paid to Mark. The insurer will determine which of the contingent beneficiaries receives the proceeds

The proceeds will be paid to Mark.

Which type of group life insurance is issued in connection with a specific loan or credit transaction in case the debtor dies or becomes unable to pay the remaining debt? debtor life insurance surplus lines insurance limited life insurance Correct credit life insurance

Which type of group life insurance is issued in connection with a specific loan or credit transaction in case the debtor dies or becomes unable to pay the remaining debt? debtor life insurance surplus lines insurance limited life insurance credit life insurance

After Todd was injured, he received occupational therapy to help him return to work. His disability income policy covered the treatment because it has: a relation-to-earnings provision an elimination period a rehabilitation provision an exclusion provision

a rehabilitation provision

Two months after buying a single premium life insurance policy, Norton kills himself. As a result, what will Norton's family receive from Norton's life insurance policy? nothing a return of premiums paid a return of the premiums paid, plus interest the policy's full death benefit

a return of the premiums paid, plus interest

Which is NOT typically a cause of rising health-care costs? a shortage of hospital beds equipment and instruments specialized surgical procedures malpractice insurance costs

a shortage of hospital beds

A life insurance policy rider that provides an additional amount of insurance if the insured dies as a result of an accident is called a(n): guaranteed insurability rider accidental death benefit rider waiver of premium rider term rider

accidental death benefit rider

U.S. tax law requires that retirees begin taking distributions from their qualified plans no later than April 1 of the year following the year the participant turns age 59' age 65 the retiree's Social Security full retirement age age 70'

age 70'

If Ken becomes eligible (by a medical reason) for payments under his life insurance long-term care rider, he must be certified as unable to perform which of the following? at least two activities of daily living for at least 90 days any activity of daily living for at least 30 days at least five activities of daily living for at least 60 days any activities of daily living for at least 30 days

at least two activities of daily living for at least 90 days

To avoid any appearance that the life settlement involves stranger-originated life insurance (STOLI), life settlement providers typically require that the policy being purchased: have an irrevocable beneficiary be assigned to the insured policyowner's next of kin have an outstanding policy loan be past its contestability period

be past its contestability period

Regardless of unique differences, every state's workers' compensation program offers all of the following, EXCEPT: compensation to a worker's spouse and dependents if the worker is killed in an industrial accident employer funding for the plan employer liability for work-related disabilities a worker may suffer benefits that are payable even if an injured worker sues for additional compensation

benefits that are payable even if an injured worker sues for additional compensation

A person eligible for Medicare Part A or Part B who misses the initial enrollment period (IEP) can enroll during an annual enrollment period (AEP) that occurs: six months after the IEP one year after the IEP between January 1 and March 31 each year 60 days after the end of the IEP

between January 1 and March 31 each year

Group long-term disability plans generally provide coverage for which of the following disabilities? non-occupational disabilities only occupational disabilities only both non-occupational and occupational disabilities sickness-related disabilities only

both non-occupational and occupational disabilities

Workers' compensation plans offer all of the following benefits to covered workers EXCEPT: wage replacement benefits for disability medical treatment vocational rehabilitation business overhead expenses

business overhead expenses

What is the term for the money that builds within a whole life insurance policy over the policy's life? cash value death benefit accrued value policy reserve

cash value

Rob presents an individual health insurance policy to a prospective insured and collects data to help his insurance company decide whether to accept the risk. What role is Rob performing? offering insurance field underwriting prospecting for insurance business soliciting insurance

field underwriting

Which type of health plan covers a variety of conditions or medical services? any provider plan limited choice of providers plan specified plan comprehensive plan

comprehensive plan

Acme Insurance Company wants to employ Anthony as an agent. To do so, what must Acme must do? file an appointment application with the Department of Financial Services verify that Anthony is eligible for appointment have Anthony sign a non-compete and exclusive agency agreement submit a notice of appointment to the NAIC's national database

file an appointment application with the Department of Financial Services

Which of the following cannot be excluded from coverage under an individual accident and health insurance policy? an injury that is covered by workers' compensation cosmetic surgery to repair the insured's face that was scarred by fire an injury sustained while trying to rob a bank an injury sustained while attempting suicide

cosmetic surgery to repair the insured's face that was scarred by fire

Before a Medicare Part A beneficiary receives benefits, the beneficiary must pay an annually adjusted: co-payment coinsurance amount utilization fee deductible

deductible

Harvey's health insurance policy covers only treatment for cancer. What type of insurance policy does he have? basic medical expense policy restricted policy dread disease policy major medical policy

dread disease policy

In a modified endowment contract, the life insurance policy's cash value grows more quickly than is permitted by the Tax Code, which results primarily from which of the following? the policy's death benefit shrinking the policyowner buying two or more policies and combining them the issuance of a variable life policy excessively large premiums being deposited into the contract within the first seven policy years

excessively large premiums being deposited into the contract within the first seven policy years

Agent Adams met with Shirley, an elderly client, to discuss variable annuities and other insurance products. For how long must he keep records of the information he collects from Shirley that he uses to make annuity recommendations? five years four years three years two years

five years

If a group health insurance policy terminates, an employee can elect to convert coverage provided he or she has been insured under the plan for how long before it terminates? two years three years five years six years

five years

John's life insurance policy guarantees a level death benefit amount and a cash value of a specified amount. What type of life insurance does John have? variable life policy fixed whole life policy level term life policy universal life policy

fixed whole life policy

The HMO point-of-service (POS) option allows members to get: medical care outside of the U.S. for treatment that is not approved by the FDA get treatment outside the HMO network get a discounted deductible if paid at the time of service a discount for every in-network visit

get treatment outside the HMO network

Roy's health insurance policy pays him a fixed sum for each day he is hospitalized. What type of insurance policy does he have? basic medical expense policy major medical policy comprehensive policy hospital indemnity policy

hospital indemnity policy

Which of the following protects businesses against loss if the owner or other key employee becomes disabled? business overhead expense insurance qualified long-term care insurance disability buy-out insurance key person disability income insurance

key person disability income insurance

The basic purpose for the bailout provision found with some annuities is to: let an annuitant terminate annuity income payments and receive a lump-sum payment of the undistributed contract value if diagnosed with a terminal illness let a deferred annuity owner make surrender charge-free withdrawals if the interest rate credited to the accumulated value drops below a specified level

let a deferred annuity owner make surrender charge-free withdrawals if the interest rate credited to the accumulated value drops below a specified level

When Terry applied for his life insurance policy four years ago, he omitted any information in the application related to treatment he had received several years earlier for a serious chronic illness. Which of the following actions can the insurance company take when it learns of the omission? cancel the policy reduce the benefits impose additional exclusions nothing

nothing (after two year incontestable period)

Dr. Jack provides services to HMO subscribers along with other nonmember patients. He is not an employee of the HMO and treats subscribers in his own office. Under which type of HMO does Dr. Jack work? open-panel HMO closed-panel HMO network HMO licensed HMO

open-panel HMO

Sanjay applied for an individual health insurance policy in Florida. The agent gave him a document at the time of application that summarizes the type of coverage provided, the exceptions and limitations, and the conditions for renewal. Which document did Sanjay receive? outline of coverage suitability letter Buyer's Guide shopper's guide

outline of coverage

From an insured's perspective, which of the following is the preferred definition of total disability? own occupation any occupation presumptive disability all occupation

own occupation

The Commissioner of the Office of Insurance Regulation issued an order prohibiting Agent Theo from describing himself as a financial planner and senior insurance expert in his advertising materials. Agent Theo continues to use the marketing materials, despite the order. Which penalty may the Commissioner NOT impose? a fine of up to $50,000 license suspension or revocation restitution license suspension or revocation and a fine

restitution

Variable life and variable universal life insurance policies are regulated by whom? the Office of Insurance Regulation only the Department of Financial Services only the Securities and Exchange Commission only the Office of Insurance Regulation and the Securities and Exchange Commission

the Office of Insurance Regulation and the Securities and Exchange Commission

A basic purpose for a life insurance policy's spendthrift clause is to make sure: the beneficiary puts the death benefit into a savings account the beneficiary does not spend the death benefit on frivolous expenditures the beneficiary uses the death benefit to pay off personal debts before any other expenditures the death benefit is paid to the beneficiary regardless of the claims of the insured's or the beneficiary's creditors

the death benefit is paid to the beneficiary regardless of the claims of the insured's or the beneficiary's creditors

Aaron purchased a variable annuity two years ago and receives an annual report from the insurer. Which of the following pieces of information must be included in Aaron's report? the number of units credited to the contract and the dollar value of a unit the annuity's cash surrender value the annuity's death benefit the value of the annuity's fixed account and the value of the guaranteed death benefit

the number of units credited to the contract and the dollar value of a unit

When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. What has Melanie engaged in? twisting rebating unfair discrimination defamation

twisting

Transacting insurance includes all of the following EXCEPT: negotiating insurance contracts soliciting insurance contracts transacting matters after an insurance contract has been issued that are related to the policy underwriting insurance contracts

underwriting insurance contracts

Acme Insurance and Apogee Insurance agree to offer different premium rates for persons of equal risk within a particular class. They also agree to limit benefits paid to insureds within this class if the insureds live in certain towns in Florida. What are Acme and Apogee engaging in? acceptable marketing and underwriting practices unfair and prohibited business practices insurance fraud false advertising

unfair and prohibited business practices

For those who are not disabled, the Medicare Part A enrollment period is: any time after they turn age 62 the month they turn age 65 up to three months before or up to three months after the month they turn age 65 up to three months before or up to three months after their Social Security full retirement age (FRA)

up to three months before or up to three months after the month they turn age 65

A health plan that provides specific coverage is NOT likely to cover: visits to doctors' offices hospital care vision care dental care

visits to doctors' offices

A life insurance policy matures or endows when its guaranteed cash value equals its face amount. With an endowment contract, when does the policy endow? when the insured dies at age 120 after age 120 well before age 120, usually at age 65

well before age 120, usually at age 65

The NAIC's model law sets forth certain optional provisions that insurers can but are not required to add to a health insurance policy. How many optional provisions are on the list? 5 6 11 12

11

Dental plans group their covered treatment and benefits into three classes or categories, and cover all expenses for which category? 1 only: diagnostic and preventive care 1 and 2: diagnostic and preventive care, and periodontal treatment 2 only: periodontal treatment 3 only: oral surgery

1 only: diagnostic and preventive care

Life insurers are prohibited from requiring disgruntled policyowners who want to sue the insurer from doing so within (that is, no later than): 30 days after the triggering event is noted 90 days after the triggering event is noted 6 months after the triggering event is noted 1 year after the triggering event is noted

1 year after the triggering event is noted

How much advance notice must the insurer of a group health plan give the sponsor before terminating coverage? 30 days 45 days 60 days 90 days

90 days

If an applicant for health insurance includes the first premium with the application , which of the following statements is correct? The applicant has made an offer to the insurer. The applicant is inviting the insurer to make an offer. The applicant is inviting the insurer to make a counteroffer. The insurer must make a counteroffer

The applicant has made an offer to the insurer.

In-network HMO coverage requires what kind of deductible? annual deductible of $500 to $1,000 annual deductible of $1,000 to $5,000 annual deductible of $5,000 to $10,000 no annual deductible

no annual deductible

Which of the following policies puts the insurer at the greatest risk? noncancelable guaranteed renewable conditionally renewable optionally renewable

noncancelable

Which of the following provides enrollees with access to limited health-care services through an exclusive panel of providers? HMO prepaid limited health service organization (PLHSO) prepaid health clinic discount medical plan

prepaid limited health service organization (PLHSO)

Individual and group health insurance policies must provide coverage for all of the following EXCEPT: supplies needed to treat diabetes emergency care treatment for osteoporosis treatment for alcoholism and drug addiction

treatment for alcoholism and drug addiction

All the following statements regarding annuity death benefits are correct EXCEPT: All deferred annuity contracts include a death benefit provision. Annuity death benefits are income tax-free. Variable annuity death benefits equal the greater of the account value or the total sum of premiums minus withdrawals. Fixed annuity death benefits equal the annuity's accumulated value at the time of death.

Annuity death benefits are income tax-free.

The payment of claims provision in a health insurance policy states that: The company has six months to pay a claim. If the insured dies, health insurance claims are paid to the beneficiary. Benefits are only paid to the provider. Health insurance claims cannot be assigned.

If the insured dies, health insurance claims are paid to the beneficiary.

All the following statements regarding the tax treatment of disability income and medical expense insurance are correct, EXCEPT: Major medical insurance policy premiums may be deductible but premiums for HMO and PPO plans are not deductible under any circumstances. A person may be able to deduct medical expenses that insurance does not reimburse. Premiums for disability income policies cannot be deducted under any circumstances. Medical expenses that are not covered or reimbursed by insurance may be deductible to the extent they exceed 10 percent of a person's adjusted gross income (AGI).

Major medical insurance policy premiums may be deductible but premiums for HMO and PPO plans are not deductible under any circumstances.

All of the following statements regarding Blue Cross and Blue Shield (BC/BS) plans are correct EXCEPT: Members pay a monthly fee in exchange for a broad range of plan services. Members submit claim forms to seek reimbursement of covered medical expenses. BC/BS plans are administered by a network of independent commercial and fraternal medical insurance companies that are linked under the national BC/BS trade association. BC/BS plans use community rating to set premiums

Members submit claim forms to seek reimbursement of covered medical expenses

Question 1 of 1 Harry is 67 years old and covered by his employer's group health plan. When Harry files a claim, how will it be paid? Medicare will pay the entire claim. Medicare will not pay any portion of the claim. Medicare is the primary payor, and the group plan is the secondary payor. The group plan is the primary payor, and Medicare is the secondary payor

The group plan is the primary payor, and Medicare is the secondary payor

Which statement about the right to continue group health insurance under COBRA is NOT correct? The right to continue coverage extends to covered dependents who, because of divorce or the death of a participant, would otherwise lose coverage. The younger spouse of a participant who becomes eligible for Medicare benefits is not eligible for continued group coverage. The younger spouse of a participant who becomes eligible for Medicare benefits is eligible for continued group coverage if he or she is not old enough for Medicare. In case of divorce or legal separation, if the participant is entitled to Medicare, the spouse and dependent children are eligible for COBRA for a maximum of 36 months.

The younger spouse of a participant who becomes eligible for Medicare benefits is not eligible for continued group coverage.

Which one of the following statements about variable life insurance is correct? With a variable life insurance policy, the insurer assumes most of the investment risk. Variable life insurance policies do not guarantee a minimum death benefit. Variable life insurance policyowners can transfer funds between subaccounts and the insurer's general account. The death benefit under a variable life insurance policy will never be more than the stated minimum.

Variable life insurance policyowners can transfer funds between subaccounts and the insurer's general account.

Individual long-term care insurance policies are generally available to persons in which of the following age groups? those between the ages of 30 and 65 those between the ages of 40 and 85 those between the ages of 20 and 60 those between the ages of 55 and 70

those between the ages of 40 and 85

When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. What has Melanie engaged in? twisting rebating unfair discrimination defamation

twisting

Which of the following is NOT a characteristic of an HMO? emphasizing preventive medicine reducing costs by using managed care and case management typically providing more health-care services than major medical plans providing comprehensive health care

typically providing more health-care services than major medical plans

Statements that are guaranteed to be true are known as: -warranties -representations -petitions -declarations

warranties

Which statement is correct about representations and warranties in insurance contracts? -A warranty is guaranteed to be true. -A misrepresentation will void a contract. -Insurers cannot void a contract for a material misrepresentation. -A representation is guaranteed to be true

A warranty is guaranteed to be true

All of the following statements regarding deferred annuities are True EXCEPT: Premiums can be paid in a lump sum or a series of payments. Accumulated funds are nonforfeitable. Deferred annuities have surrender charges. Accumulated funds cannot be accessed until the payout period.

Accumulated funds cannot be accessed until the payout period.

Ann is the beneficiary of an annuity owned by Jim. Jim intended to annuitize the contract at retirement but died shortly before retiring and selecting a payout option. What benefits will Ann receive from the annuity? Ann will receive the annuity's accumulated value and may select a payout option. Ann's right to any funds will be based on the income payout option that Jim selected. Ann will receive income for life. Ann will receive the contract's funds in a lump sum.

Ann will receive the annuity's accumulated value and may select a payout option.

All the following are federal tax incentives intended to encourage employers to set up qualified plans and employees to participate in them EXCEPT: Employer contributions are not taxable to the employee when made. Benefits are tax-free if withdrawn after the employee's full retirement age. Employee contributions are made with pre-tax dollars. Plan earnings grow tax deferred until distributed.

Benefits are tax-free if withdrawn after the employee's full retirement age.

Which of the following statements regarding the tax treatment of endowment contracts is correct? Endowment contracts no longer get the good tax treatment given to life insurance policies. Endowment contracts are treated like other life insurance policies for tax purposes. Congress has given endowment contracts the best tax status of all types of insurance policies. Endowment contracts are still popular today because of their good tax treatment.

Endowment contracts no longer get the good tax treatment given to life insurance policies.

Ross collects a policy's first premium with an application for insurance. The next day he learns that the customer canceled the policy. What must Ross do with the premium? -He should put it in his personal bank account immediately and try to earn a little interest. -He should hold onto them until the end of the free-look period. -He should hold onto them as long as possible to compensate for his time and inconvenience. -He should see that the funds are remitted to the customer as soon as possible

He should see that the funds are remitted to the customer as soon as possible

Which statement about group life insurance is correct? A master policy is given to each insured member. A group member cannot assign his or her rights in the policy. The group policyholder, not the members, must pay the entire premium. Individual insureds are typically not required to undergo a medical exam or provide evidence of insurability.**

Individual insureds are typically not required to undergo a medical exam or provide evidence of insurability.**

Tandy Enterprises pays $25,000 in premiums each year for its group term life insurance plan, which covers all of its rank-and-file employees. When filing its income tax return, what can (or cannot) Tandy Enterprises do? It can take a partial deduction for the premiums. It can take a deduction for the entire premium paid. It cannot take a deduction for the premium. It can take a deduction only if it also pays the premium for a group plan covering highly compensated employees.

It can take a deduction for the entire premium paid

Derek buys an individual life insurance policy after he loses his job and is no longer covered by his former employer's group plan. However, he dies during the conversion period and before the policy takes effect. Which of the following statements about the death benefit is true? It will not be paid. It will be paid under the group plan. It will be paid under the individual plan. It will be paid by both the group and individual plans

It will be paid under the group plan. If a person dies during the conversion period and before an individual policy takes effect, the amount of life insurance to which the person would be entitled under an individual policy is paid as a death benefit under the group plan.

Which of the following statements about a disability income insurance policy's waiver of premium rider is correct? Older disability income policies provided premium waivers as a clause in the policy rather than as a rider. Most modern policies include a waiver of premium provision in the policy itself. Today, insureds must buy a waiver of premium rider for an additional premium. Waiver of premium riders are uncommon in modern disability income policies

Most modern policies include a waiver of premium provision in the policy itself.

Sasha, Kendall, Adam, and Julio are licensed agents in Florida. The Department of Financial Services would NOT be able to suspend or revoke which agent's license for engaging in the following acts? Sasha, who sold insurance policies to family members and friends this year Kendall, who intentionally violated an order issued by the Office of Insurance Regulation Adam, who offered season football tickets to prospects who purchased policies Julio, who used insurance premiums he collected to renovate his business office

Sasha, who sold insurance policies to family members and friends this year

Arianna owns several industrial life insurance policies and wishes to convert them into an ordinary life insurance policy. Which of the following is required to convert the policies? The combined face value of Arianna's policies must exceed $3,000. Arianna must own at least three industrial life insurance policies. Arianna must provide evidence of insurability. Arianna must agree to a premium change and provide evidence of insurability.

The combined face value of Arianna's policies must exceed $3,000.

With respect to an employee's participation in an employer qualified plan, which of the following statements is correct? The employee-participant must pay federal income tax on the earnings in the year earned. Employer contributions are taxable to the employees in the year when they are made. The employee's contributions are made with after-tax dollars. The employee's account grows tax deferred until funds are distributed.

The employee's account grows tax deferred until funds are distributed.

All the following statements about family term riders with life insurance are correct, EXCEPT: A family term rider is an alternative to either a separate spousal rider or separate children's rider. The family term rider covers multiple family members (spouse plus children) with term insurance based on their ages. The policyowner can add or drop insureds on this type of policy at any time but must prove insurability if adding insureds. Children covered by this rider can convert their coverage to permanent coverage at age 21 without proof of insurability.

The family term rider covers multiple family members (spouse plus children) with term insurance based on their ages.

self-insuring businesses

The federal Risk Retention Act of 1986 applies to which businesses? self-insuring businesses re-insurers credit life insurance companies high-risk business insurers

Which of the following will happen if a traditional IRA owner dies before all of the tax-deducted funds in his or her account have been paid out? The owner forfeits the balance. The funds will be paid to the beneficiary but taxed to the owner's estate. The funds will be paid and taxed to the beneficiary. The funds will be excluded from the deceased owner's estate for estate tax purposes.

The funds will be paid and taxed to the beneficiary.

If an individual employer offers group life insurance on a non-contributory basis, how much of the group must be covered? The plan must cover at least 25 percent of the group. The plan must cover at least 50 percent of the group. The plan must cover at least 75 percent of the group. The plan must cover 100 percent of the group.

The plan must cover 100 percent of the group.

Tim applies for a life insurance policy. His agent gives him a receipt conditioned on Tim's passing a physical exam to meet underwriting standards. Tim passes the physical exam but dies before the policy is issued. Which of the following is correct? -The policy will pay the death benefit. -The policy will not pay the death benefit. -The policy will pay a fraction of the death benefit. -The policy will be voided and any premiums Tim paid will be refunded to his estate.

The policy will pay the death benefit.

Gina owns a $200,000 five-year renewable term insurance policy and wants to renew the policy at the end of the term. In this case, which of the following statements is correct? Gina must prove insurability before the insurer can renew the policy. The insurer will base the premium for the renewal coverage on Gina's age when the policy was first issued. If Gina had become uninsurable during the initial coverage term, she would not be allowed to renew the policy. The premium for this policy is higher than it would be for a non-renewable term life policy of the same face amount.

The premium for this policy is higher than it would be for a non-renewable term life policy of the same face amount.

Under the Uniform Simultaneous Death Act, what is the result if the insured and the primary beneficiary of a life insurance policy die at the same time? The proceeds will be paid to the insured's estate. The proceeds will be paid as if the insured survived the beneficiary. The proceeds will be paid to the primary beneficiary. One-half of the proceeds will be paid to the primary beneficiary and the remaining one-half to the insured's estate.

The proceeds will be paid as if the insured survived the beneficiary.

If a worker chooses to retire early under Social Security, what will happen to his or her benefits? The worker will receive higher benefits than those retiring at full retirement age (FRA). The worker will receive lower benefits than those retiring at full retirement age (FRA). The worker's benefit will be the same as those retiring at full retirement age (FRA). The worker will receive the same benefits as all other retirees, but for a shorter period

The worker will receive lower benefits than those retiring at full retirement age (FRA).

All the following statements comparing variable life insurance (VLI) and variable universal life insurance (VUL) are correct EXCEPT: VLI policies have fixed premiums while VUL policies feature premium flexibility. VLI policy cash values are accessible only through policy loans while VUL policy cash values are accessible only through partial surrenders. VLI policies generally offer a wide variety of subaccounts to choose from while VUL policies are typically based on a single investment account of mixed stocks. VLI policies provide a minimum guaranteed death benefit while VUL policies have no death benefit amount guarantees.

VLI policies generally offer a wide variety of subaccounts to choose from while VUL policies are typically based on a single investment account of mixed stocks.

Which of the following best describes a life insurance policy's contingent beneficiary? a beneficiary who is paid the death benefit when the insured dies a beneficiary who is paid the death benefit if the primary beneficiary is removed or dies before the insured a beneficiary who is paid the death benefits if the insurance company disqualifies the primary beneficiary a beneficiary who is paid the death benefits if the secondary beneficiary is removed or dies before the insured

a beneficiary who is paid the death benefit if the primary beneficiary is removed or dies before the insured

At age 49, Caleb took a $20,000 distribution from his deferred annuity, of which $9,000 represents interest earnings. In addition to paying income tax, what else will Caleb probably have to pay? nothing a penalty tax of $900 a penalty tax of $1,100 a penalty tax of $2,000

a penalty tax of $900

Jeremy has had an individual health insurance policy for many years because of his family's history of cancer. The tendency of someone like Jeremy to buy and maintain insurance is known as: -implied selection -adverse selection -exposure reduction -risk avoidance

adverse selection

Due to a significant drop in sales this year, Agent Smith has been soliciting current clients and encouraging them to use the policy values in their existing life insurance policies to purchase new policies in order to increase his commissions. Which unfair trade practice has Agent Smith committed? sliding misrepresentation churning fraud

churning

All of the following exclusions are normally found in health insurance policies, EXCEPT: self-inflicted injuries war and military actions sickness or injury while on active duty in the armed forces commercial airline travel

commercial airline travel

Employee contributions to a 401(k) plan are known as: voluntary contributions tax-free installments elective deferrals catch-up payments

elective deferrals

A life insurance arrangement in which an employer rewards an executive by paying some or all of the premiums on a life insurance policy owned by the executive is called a(n): key person insurance plan executive bonus plan salary continuation plan split-dollar plan

executive bonus plan

Which of the following is NOT a type of employer-sponsored qualified retirement plan? defined benefit pension plan SEP plan Keogh plan executive bonus plan

executive bonus plan

To make legal delivery of a health policy with an exclusion rider, a producer must: ask the client if the rider is acceptable. If the client rejects it, the producer may remove it. compel the client to accept the rider. contact the client's doctor to determine whether the rider is appropriate. explain the rider to the client and have the client accept the rider in writing.

explain the rider to the client and have the client accept the rider in writing.

Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Florida? failing to promptly acknowledge communications about claims failing to promptly settle a claim for which liability is uncertain offering to settle claims for less than due to encourage litigation raising policy defenses to reduce a claim

failing to promptly settle a claim for which liability is uncertain

Liza is guaranteed to receive annuity payments for 15 years from a $150,000 annuity. Payments end in 15 years, but if she dies before the end of 15 years, income will be distributed to her beneficiary for the rest of the period. Under which annuity settlement option is Liza receiving payments? straight life fixed period fixed amount life with refund guarantee

fixed period

What type of organization is a non-profit entity that operates on the lodge system, has no capital stock, and sells insurance mainly to its members? fraternal benefit society self-insurer reciprocal insurer mutual insurer

fraternal benefit society

Besides giving the producer the opportunity to explain policy benefits, terms, and riders, policy delivery begins which of the following periods? reinstatement period free-look period grace period policy cancellation period

free-look period

Patty worked full-time for the past 20 years and has obtained 40 quarters of coverage for Social Security benefit purposes. She is now eligible for full death, retirement, and disability benefits under Social Security, which means that she is considered which of the following? completely insured fully insured currently insured partially insured

fully insured

Whittier Insurance Company is a newly incorporated insurer in Florida. In which of the following investments would it typically NOT be allowed to invest? gold and currencies real estate securities common stock of subsidiaries

gold and currencies

ABC Company operates as a viatical settlement provider in Florida. For which of the following reasons can the Office of Insurance Regulation suspend or revoke ABC's license? receiving life insurance proceeds at a viator's death issuing viatical settlement contracts that were approved in Texas but not Florida using life expectancies from life expectancy providers that are registered in Florida entering into more than 500 viatical settlement contracts per year

issuing viatical settlement contracts that were approved in Texas but not Florida

A life insurance settlement option that pays a monthly benefit with no reduction until the second of two people dies is the: joint and one-half survivor option joint and two-thirds survivor option joint and 100 percent survivor option straight life income option

joint and 100 percent survivor option

Oliver's variable annuity has a subaccount in which each accumulation unit is currently valued at $10. This value is known as which of the following? unit value net surrender value net asset value annuitization value

net asset value

For a life insurance policy to be valid, an insurable interest must exist: anytime the policy is transferred to a new owner at all times only when the policy is issued only at the time of the insured's death

only when the policy is issued

Payment of a life insurance claim requires all of the following, EXCEPT: a policy in force at the time of death a living or designated beneficiary proof the insured's death did not result from an excluded activity the beneficiary's report of the cause of death

the beneficiary's report of the cause of death

Stanley is licensed as a life insurance agent and also sells variable annuities in Florida. He is taking several continuing education courses to renew his license. How many hours must he complete in courses covering suitability in annuity and life insurance transactions? one two three five

three