Exam Questions recap

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

$50,000

The minimum age for purchasing life insurance policy in Florida is

15

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

In life policies issued in this state, insurers are permitted to charge interest dyring the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?

8%

How often must domestic insurance companies be examined by the Chief Financial Officer in Florida

At least every 5 years

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

What is the typical deductible for basic surgical expense insurance?

$0

In order for a debtor group to qualify for group life insurance, what should be the minimum number of participants joining the plan every year?

100

When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?

5 years

A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitle elects another available option within how many days after the due date of the premium in default?

60 days

Regulations for annuity recommendations would apply when a consumer is at least what age?

65 years

A hospital indemnity policy will pay

A benefit for each day the insured is in the hopital

In insurance, an offer is usually made when

An application is submitted

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

When an annuity is written, whose life expenctancy is taken into account?

Annuitant

In a long-term care policy, pre-existing condition limitations must

Appear as a separate paragraph and be clearly labeled.

How long does an insurer have to contest fraudulent misstatements made in a health insurance application?

As long as the policy is in force

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?

Basic information about supplementary policies

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

Capitation basis

Which of the following is true regarding inpatient hospital care for HMO members?

Care can be provided outside of the service area

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

Churning

When Ken purchased his health policy he was a window washer. He has since changed occupations and now manages a library. Upon notifying the insurer of his change of occupation, the insurer should

Consider decreasing the premium

Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as

Contracts of adhesion

Which of the following is NOT an exclusion in medical expense insurance policies

Coverage for dependents

When a life insurance policy is canceled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount

Equal to the original policy for as long a period of time that the cash value will purchase

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

Excess

Fixed annuities provide all of the following except

Hedge against inflation

HSAs are designed to

Help individuals save for qualified health expenses

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity; a hospital indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses

What are the two components of universal policy?

Insurance and cash amount

During a partial withdrawal from a universal life policy, which portion will be taxed?

Interest

Which of the following best describes annually renewable term policy?

It is a level term insurance

Which of the following is TRUE regarding a risk retention group?

It is a liability insurance company owned by its members

What is the special significance of a conditional receipt?

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

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

Joined the group after the effective date

In an individual long-term care insurance plan, the insured is able to deduct the premiums from the taxes. What income taxation will be imposed on the benefits received?

No tax

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

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

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

On-year term option

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

Outline of coverage

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Payment of Claims

Which of the following features of a variable live policy may be fixed?

Premium

Which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group life insurance plan for employees

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

Purchase a single premium policy for a reduced face amount

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal

A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all the rights of ownership. The policyowner should have her husband named as the

Revocable beneficiary

Roland had $500 left in his Health Reimbursement Account when he quit his job. What happens to that money?

Roland can have access to the $500 at his previous employer's discretion

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risks

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. her insurer no longer bills her for medical expenses. What term best describes the conditions she has met?

Stop-Loss limit

Which if the following should help prevent a universal life policy from lapsing?

Target premium

If an applicant does not receive his or her policy, who would be held responsible?

The Agent

Insurable interest can be best described by which of the following?

The applicant must experience a financial loss due to an accident or sickness that befalls the insured

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is true?

The beneficiary will receive the greater of the money paid into the annuity or cash value

An individual applied for an insurance policy and paid the initial premium. the insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what should be the policy's effective date?

The date of medical exam

In which of the following situations should Social Securtiy Disability benefits NOT cease?

The individual's son get a part-time job to help support the family

Which of the following is NOT a feature of a guaranteed renewable provision

The insurer can increase the policy premium on an individual basis

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action.

The old policy should stay in force until the new policy is issued

Which of the following is true regarding underwriting for a person with HIV?

The person may not be declined

All of the following are true regarding the guaranteed insurability rider EXCEPT

The rider is available for all insureds with no additional premium

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the policy on a child where the parent is the policyowner?

Third-party ownership

Under what circumstances can an agent's appointment be transferred to another person?

Under no circumstances

An insured submits a proof of loss form within 10 days of loss. the insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?

Unfair claims settlement

The Waiver of Cost of Insurance rider is found in what type of insurance?

Universal Life

When do HMOS file reports of their activities to the Department?

Within 3 months of the end of each fiscal year

Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from

Work-related disabilities

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

$50,000

Which of the following is TRUE regarding the agents appointments?

A person may hold several appointments at one time

Which of the following is an eligibility requirement for Social Security disability income benefits?

Fully insured status

What are the personal uses of life insurance?

Survivorship, estate creation and conservation, cash accumulation and liquidity

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competennt. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policyand learns of his history 1 year later. What will probably happen?

The policy will not be affected