final exam

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

proceeds will be payable to K's estate if P dies within a specified time

a retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:

profit-sharing plan

which of the following is NOT required in the Outline of Coverage for a health insurance policy?

projection of the policy's future costs

what is the consideration given by an insurer in the Consideration clause of a life policy?

promise to pay a death benefit to a named beneficiary

what is the consideration given by an insurer in the consideration clause of a life policy?

promise to pay a death benefit to a named beneficiary

The Legal Actions provision of an insurance contract is designed to do all of the following EXCEPT

protect the producer

what is the purpose of the insurance Guaranty Fund Association?

protects policy owners against insolvent insurance companies

All of these are considered sources of underwriting information about an applicant EXCEPT

rating services

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

reimbursement

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

reinstatement provision

statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:

representations

according to FL law, group life insurance conversion privileges must NOT

require evidence of insurability

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?

residual benefit clause

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

residual disability

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

return of the premium rider

a(n) _______ rider may be used to include coverage for children under their parents' life insurance policy

term

What would the Medical Information Bureau (MIB) identify?

testing positive for marijuana use from a previous screening

which of the following factors is NOT considered when the department of financial services determines if an agent's home is an insurance agency?

the amount of premium collected at this location

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?

the date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

a noncontributory group term life plan is characterized by:

the entire cost of the plan is paid for by the employer

a policy of adhesion can only be modified by whom?

the insurance company

which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

the maximum amount considered eligible for reimbursement by an insurance company under a health plan

according to florida's life insurance replacement laws, a policy owner must be provided with a written comparison and summary statement when it's requested by

the policy owner

Under a Graded Premium Whole Life policy?

the premium increases each year during the early years of the contract and remains the same after that time

W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?

the proceeds would be reduced based on whatever the premium would have been if purchased at age 59

waiting period

the provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date

what is the elimination period of an individual disability policy?

the time period a disabled person must wait before benefits are paid

Association Plans that are designed to provide health benefits to their members are regulated by the state because

they are insured by an authorized insurer

Which of the following statements is true about most Blue Cross Blue Shield organizaitons?

they are nonprofit

How does a typical Variable Life Policy investment account grow?

through mutual funds, stocks, bonds

Which Accident and Health policy provision addresses preexisting conditions?

time limit on certain defenses

Group Life policies in Florida are required to contain a conversion privilege that allows for conversion

to an individual policy for a stated period of time

T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert

to an individual policy upon employment termination

which of the following is considered an accurate statement of an unfair trade practice?

twisting involves an agent using misrepresentation to convince a policy owner to cancel their current policy so they can purchase a new life insurance policy with another company

which of the following is considered an element of a variable life policy?

underlying equity investment

All of these are considered to be a benefit under Social Security, EXCEPT for:

unemployment

life and health insurance policies are:

unilateral contracts

K purchased a life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much higher premium is paid because of falling interest rates. This type of policy is known as a(n) _____ life policy.

universal

R becomes disabled and owns an individual disability income policy. When is R eligible to receive disability benefits?

upon satisfying the elimination period requirement

a business overhead expense policy would cover which of the following if a business owner becomes disabled?

utilities and office rent

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

variable life

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

variable universal life

term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. this conversion period:

varies according to the contract

a life insurance policyowner may sell their policy to a(n) ___________ in order to receive a percentage of the policy's face value

viatical settlement provider

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

void the policy only if it is discovered during the contestable period and proven to be material

what is the primary factor that determines that benefits paid under a disability income policy?

wages

ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has

waived one of its legal rights

a life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

waiver of premium

The part of a life insurance policy guaranteed to be true is called a(n)

warranty

when is the face amount of a whole life policy paid?

when the insured dies or at the policy's maturity date, whichever happens first

If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all situations EXCEPT:

when the state prohibits this by law

What does the ownership clause in a life insurance policy state?

who the policy owner is & what rights they are entitled to

A policy that becomes a Modified Endowment Contract (MEC)

will lose many of its tax advantages

What must an insurer obtain to conduct an HIV test?

written consent

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

59 1/2

Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?

6

an insurer may normally delay the payment of a cash value loan or surrender value for up to

6 months

the waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond

6 months

Which required disclosure helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies?

Buyer's Guide

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?

Florida Insurance Guaranty Fund Association

which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

HMO - health maintenance organizations

A life insurance arrangement which circumvents insurable interest statues is called:

Investor-Originated Life Insurance

What is the purpose of a Policy Summary?

It highlights the critical parts of the policy issued

a statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as:

a representation

dread disease policies cover:

a single specific disease or illness

What is Florida's definition of Life insurance replacement?

a transaction in which a new policy is bought and an old policy is terminated

what is FL's definition of Life insurance replacement?

a transactions in which a new policy is bought and an old policy is terminated

All of the following will result in the suspension of an agent's license EXCEPT:

acting with fiduciary responsibility

A "reimbursement policy" pays what amount of covered Long-Term Care expenses?

actual covered expenses up to the daily maximum

a contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of

adhesion

which of the following statements describes what an Accident and Health policy owner may NOT do?

adjust the premium payments

which of the following employer tasks does a professional employer organization normally handle?

administration tasks

under which of the following circumstances will the benefits under COBRA continuation coverage end?

all group health plans are terminated by the employer

J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?

all of the employees must be notified of the cancellation either by the insurance company or through J

which of the following is considered to be misrepresentation?

an agent guaranteeing a policy's dividends

An example of an unfair trade practice is

an agent making a material misrepresentation to the insured

which of the following does NOT apply to the FL Replacement Rule?

an existing policy holder purchases an additional policy from the same insurer

which of the following situation does NOT apply to the FL replacement rule?

an existing policy holder purchases an additional policy from the same insurer

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?

annuity

When an insurance application is taken by a producer, which of these statements is true?

any changes made on the application require the applicant's initials

which of the following is the best description of "insurer"?

any person, corporation, association, or society that writes insurance contracts

when can a policy owner change a revocable beneficiary?

anytime

Any changes made on an insurance application requires the initials of whom?

applicant

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

applicant's monthly income

in a qualified retirement plan, the yearly contributions to an employee's account:

are restricted to maximum levels set by the IRS

Cancer insurance does NOT cover:

arthritis

when is it acceptable to share commissions with another agent?

as long as both agents are licensed for the same lines of insurance

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

at future dates specified in the contract with no evidence of insurability required

When is a Group Health policy required to provide coverage for a newborn child?

at the moment of birth

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

at the time of application

according to FL law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

at the time of application

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

authorize claim payments

all of the following are Nonforfeiture Options EXCEPT

automatic premium loan option

what is considered to be a characteristic of an immediate annuity?

benefit payments start within one payment period of purchase

all of the following statements about Major Medical benefits are true, EXCEPT:

benefits have no maximum limit

all of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT:

bilateral

a variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(n)

broker dealer

which of these is not considered to be a cost connected with an individual's death?

business expenses

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is

business overhead expense

a health reimbursement arrangement MUST be established:

by the employer

P loses an arm in a farm accident & is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the

capital sum

company XYZ offers a group term life insurance plan to its employees. What does each employee covered under the plan receive?

certificate of insurance

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

change of occupation provision

A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT:

change the policy's interest rate

How are surrender charges deducted in a life policy with a rear-end loaded provision?

deducted when the policy is discontinued

which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition?

defamation

Medicare Part A and Part B do NOT pay for

dental work

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

determined by the terms of the policy

In the event of an illness, a(n) __________ _________ policy would reimburse an insured for loss of earnings.

disability income

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

disability income

a characteristic of preferred provider organizations (PPOs) would be

discounted fees for the patient

which of the following statements BEST describes the intent of a coinsurance clause in a major medical policy?

discourages over utilization of the insurance coverage

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?

distribution is subject to federal income tax withholding

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company:

does NOT have to make any further payments

a variable insurance policy:

does not guarantee a return on its investment accounts

in Florida, an insurer domiciled and incorporated in this state is called a(n)

domestic company

in a disability income policy, which of these clauses acts as a deductible?

elimination period

the federal income tax treatment of employer-provided group medical expense insurance can be accurately described as:

employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure

P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

endowment at age 70

which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

entire cash surrender value is taxable

"a producer does not have the authority to change a policy or waive any of its provisions". the health provision that best describes this statement is called the

entire contract

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

entire contract

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

entire contract provision

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

equity index insurance

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

ex-wife

which of these statements describe a Modified Endowment Contract (MEC)?

exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

which of these statements describe a modified endowment contract (MEC)?

exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

exclusion

The sections of an insurance contract which limit coverage are called

exclusions

long term care policies will usually pay for eligible benefits using which of the following methods?

expense incurred

D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop & D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?

extended term

an underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. This policy may be issued with a(n):

extra premium

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

face amount plus the policy's cash value

Which Federal law allows an insurer to obtain an inspection report on a potential insured?

fair credit reporting act of 1970

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

family maintenance policy

this type of deductible provision waives the deductible for all family members after some of them ave satisfied individual deductibles within the same year:

family maximum deductible

Taking receipt of premiums and holding them for the insurance company is an example of

fiduciary responsbility

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

fiduciary responsibility

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

first degree misdemeanor

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expenses

in Florida, an insurer licensed to conduct business in Florida, but domiciled in New Jersey, is called a(n)

foreign company

Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called

fraternal life insurance organizations

Under an individual Health Insurance policy, the Time Limit of Certain Defenses provision states that non fraudulent misstatements first become incontestable two years

from the date that the policy was issued

which of the following employees may NOT be excluded from a group life plan?

full-time employees after the probationary period

which of these is considered a true statement regarding Medicaid?

funded by both state and federal governments

Which of the following provisions specifies how long a policy owner's health coverage will remain in effect if the policy owner does not pay the premium when it is due?

grace period

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase

the FL Employee Health Care Access Act was established to make

group health insurance available to employees with up to 50 employees

Which of the following is a standard provision of the conversion privileges in a Group Life policy?

group life coverage can be converted to an individual policy at a regular rates on an attained-age basis

which of the following is a standard provision of the conversion privileges in a group life policy?

group life coverage can be converted to an individual policy at regular rates on an attained-age basis

Basic Medical Expense Insurance

has lower benefit limits than Major Medical insurance

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

high-deductible health plan to be eligible for a health savings account, one must be covered by high-deductible health plan (HDHP), not covered by other health insurance, not eligible for medicare and not claimed as a dependent on someone's tax return

which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?

if the employee paid for qualified medical expenses, the reimbursements may be tax-free

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

if the primary beneficiary dies before the insured

all of the following statements regarding a tax sheltered annuity (TSA) are true EXCEPT

income derived from the TSA is received income tax-free

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

inspection report

A life insurance policy would be considered a wagering contract WITHOUT:

insurable

a multiple employer welfare arrangement (MEWA) provides what type of benefits?

insurance benefits

If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?

insured

Who has the option to renew a Renewable Term policy?

insured the renewal premium is calculated on the basis of the insured's attained age

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

insured's contingent beneficiary

an insurance company normally has 2 years to contest information provided on an accident and health application. this 2 year period begins on the date that the:

insurer dates the policy

variable annuities may invest premium in each of the following EXCEPT

insurer's corporate business account

variable annuities may invest premiums in each of the following, EXCEPT:

insurer's corporate business account

which healthy policy clause specifies the amount of benefits to be paid?

insuring

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

interest only

Quarterly premium payments increase the annual cost of insurance because

interest to the insurer is decreased while the admin costs are increased

Which of these arrangements allows one to bypass insurable interest laws?

investor-originated life insurance

A license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation

Dividends paid from a life insurance policy are

issued by the insurer

credit life insurance is:

issued in an amount not to exceed the amount of the loan

In Florida, an element of an insurance transaction would be

issuing an insurance contract

which of the following combinations plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

joint life

What type of life policy covers 2 lives and pays the face amount after the first one dies?

joint life policy

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?

legal purpose (insurable interest)

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

level

in major medical expense policies, what is the objective of a stop loss provision?

limit an insured's out-of-pocket medical expenses

under FL law, which of the following provisions is NOT required in a medicare supplement policy?

limitation on pre-existing conditions for up to 12 months

which of these is NOT relevant when determining the amount of personal life insurance needed?

local unemployment rates

An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?

long term care

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

long-term care

basic hospital and surgical policy benefits are

lower than the actual expenses incurred

what is the main reason for regulating the insurance industry?

maintain the solvency of insurance companies

the individual health insurance policy that offers the broadest protection is a(n) ________ ________ policy

major medical

Pre-hospitalization authorization is considered an example of

managed care

which type of plan normally includes hospice benefits?

managed care plans

according to FL law, which of the following info does NOT need to be obtained by an agent recommending an annuity purchase?

marital status

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?

misrepresentation

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

misrepresentation

A policy owner is allowed to pay premiums more than once a year under which provision?

mode of premium

Which type of policy is considered to be overfunded, as stated by IRS guidelines?

modified endowment contract

Which of these life products is NOT considered interest-sensitive?

modified whole life

under an Individual Disability policy in FL, what is the minimum schedule of time in which claims must be made to an insured?

monthly

with a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?

monthly

which of the following BEST describes how a preferred provider organization (PPO) is less restrictive than a health maintenance organization (HMO)?

more physicians to choose from

which of the following statements is CORRECT about accelerated death benefits?

must have a terminal illness to qualify

In FL, which of the following practitioners normally do NOT receive payment from health insurance policies?

naturopaths

which of the following is NOT an unfair claim settlement practice?

needing written documentation of claim details

according to FL law, a Group Life insurance policy requires a minimum of how many insureds?

no minimum

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

nonoccupational coverage

Which of the following BEST describes a short term medical expense policy?

nonrenewable

which of these statements concerning an individual disability income policy is TRUE?

normally includes an elimination period

which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?

notice to existing and replacing insurers of intention to replace

An accident policy will most likely pay a benefit for a(n)

off-the-job accident

under FL law, a variable annuity policy owner must be notified of the accumulated value of the contract

once each year

How can an agent-in-charge have more than one location?

only if the agent in charge is present when insurance activity occurs

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

only if the child is incapable of employment and chiefly dependent on the policy owner

Deductibles are used in health policies to lower

overuse of medical services

K owns a whole life policy. If K wants an increasing Death Benefit to protect against inflation, which dividend option should she choose?

paid up additional insurance

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:

partial withdrawal features beyond a surrender charge period

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?

pay monetary restitution to the client

which of these is considered a mandatory provision?

payment of claims - directs where the claim benefits will go insurance with other insurers, misstatement of age & change of occupation are considered optional provisions

Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?

people that smoke

The underwriting process involves all of these EXCEPT for

policy loan

On a life insurance policy, who is qualified to change the beneficiary designation?

policy owner

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

which statement is correct regarding the premium payment schedule for whole life policies?

premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured

which of these statements accurately describes the waiver of premium provision in an accident and health policy?

premiums are waived after the insured has been totally disabled for a specified time period

what benefit does the payor clause on a juvenile life policy provide?

premiums are waived if the payor becomes disabled

which of the following actions is NOT possible with a universal life policy?

premiums may be applied as a credit against income tax

which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

premiums normally increase at the time of renewal

Incontestable Clause

prevents the insurer from canceling the contract even for a material misrepresentation

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

primary carrier

a Medical Information Report (MIB) report may disclose which of the following?

prior use of marijuana

consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:

probability of making timely premium payments

What do families pay that are covered by the Florida Healthy Kids Corporation?

a portion of the premium

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

$0

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

decreasing term

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in Sept 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expense for 2013?

$1,000

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?

$1250

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

$2,100

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a

$25,000 individual whole life policy

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

$3,000

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

$300,000

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

$50,000

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

5 hours

One becomes eligible for Social Security disability benefits after having been disabled for:

5 months

In FL, monthly-premium health insurance policies must provide a grace period of at least

10 days

Premature IRA distributions are assessed a penalty tax of

10%

a life policy loan in FL cannot charge a fixed rate of interest higher than

10%

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

a non-contributory plan requires _____ participation of all eligible employees

100%

what percentage of eligible persons must a policy cover in a noncontributory group?

100%

what is the maximum Social Security Disability benefit amount an insured can receive?

100% of the insured's primary insurance amount (PIA)

A 15-year mortgage is best protected by what kind of life policy?

15-year decreasing term

FL requires that coverage for newborns begins "from the moment of birth" and continues for:

18 months

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

20

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA).

20

insurers may request a hearing within ______ days if their policy is reject

20 days

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?

20-pay life

the USA Patriot Act was enacted in:

2001

in what year was the FL office of financial regulation (OFR) created?

2003

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.

24

Within how many days must a licensee notify the Department of Financial Services of a change in address?

30

within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund?

30 days

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 pay life

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

31 days

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?

4 months

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time?

48 months

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

AD&D clause - accidental death & dismemberment

which of the following is NOT included in an annuity contract?

AD&D rider

All are true statements regarding the underwriting process, EXCEPT:

AIDS and HIV virus exams can be conducted in a discriminatory fashion

on January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

January 26

a sole proprietor may use this plan ONLY if the employees of this business are included

Keogh Pension Plan

an architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?

Key person insurance

which of the following professional organizations has its code of ethics incorporated into FL law?

National Association of Insurance and Financial Advisors (NAIFA)

Additional coverage can be added to a Whole Life policy by adding a(n)

decreasing term rider

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to

P only

Post-tax dollar contributions are found in

Roth IRA investments

according to Florida's rules on disclosure, a life insurance applicant is expected to be provided with

a buyer's guide and policy summary

in FL, deceptive advertising is considered to be

a form of misrepresentation

a Disability Income policy owner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

claim will be paid and coverage will remain in force

the situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

one definition of replacement is "the act of replacing an existing insurance policy with another". replacement is

closely regulated and requires full disclosure

On August 6, D submitted an application for a $50,000 life insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

collect initial premium along with a signed health statement

which of the following areas of state regulation is NOT protected by the savings clause in ERISA?

commerce

this type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.

common accident deductibles

an applicant who pays the initial premium at the time of application is typically given a(n)

conditional receipt

The incontestable clause allows an insurer to

contest a claim during the contestable period

which of the following consists of an offer, acceptance, and consideration?

contract

when policy owner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

conversion provision

a Universal Life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges, and the

cost of insurance

a universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges, and the

cost of insurance

Florida's 14-day free-look period for life insurance policies begins at the

date of delivery

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

return to the customer, collect a new check made out to the insurance company, and send the new check to the insurance company

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?

revocable

which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

risk classification

which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

risk classification

what is the suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide

What does a 401(k) plan generally provide its participants?

salary-deferral contributions

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

send a notice to the MIB that the applicant was declined

which of the following provisions is NOT required in HMO contracts/certificates?

seven-day grace period

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

sign an enrollment card

which of the following types of permanent life insurance policies offers the highest initial cash value?

single premium

what is required in the Florida Employee Health Care Access Act?

small group benefit plans are to be issued on a "guarantee-issue" basis

the percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

social security disability income

which of the following statements about the classification of applicants is INCORRECT?

substandard applicants are never declined by underwriters

An agent selling Medicare Supplement policies must provide every applicant with a(n)

suitability form

The premiums paid by an employer for his employee's group life insurance are usually considered to be

tax-deductible to the employer

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20% is withheld for income taxes

All of these statements about the Waiver of Premium provision are correct EXCEPT

insured must be eligible for Social Security disability for claim to be accepted

What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?

insured must be under a physician's care

Which of these types of coverage is best described as a short term medical policy?

interim coverage

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

issue the policy with an altered Time of Payment of Claims provision

which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

less restrictive

Which of these is an element of a Single Premium annuity?

Lump-sum payment

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

Which entity approves the insurance policy forms used in Florida?

Office of Insurance Regulation

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO - Preferred Provider Organization

what determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Primary Insurance Amount (PIA)

which of the following are Equity Indexed annuities typically invested in?

S&P 500

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?

Whole Life Policy with other insured rider

all of these statements concerning Settlement options are true EXCEPT:

only the beneficary may select increased proceeds CAN be provided through accumulation of interest rapid depletion of proceeds can be avoided proceeds can be administered by the insurance company

which mode of payment is NOT used by health insurance policies?

single premium

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

claims are denied under the suicide clause of the policy

the policy summary contains specific info on all of the following EXCEPT:

commission

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called

Time Limit on Certain Defences

all students attending a large university could be covered by:

a blanket policy issued to cover a group who my be exposed to the same risks, but the composition of the group are constantly changing

Which statement is TRUE regarding a Variable Whole Life policy?

a minimum guaranteed Death benefit is provided

which of the following statements about noncontributory employee group life insurance is FALSE?

a minimum number of employees is required to participate

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

a mixed plan

a mutual insurance company and a stock insurance company have one main difference - what is it?

a stock company is owned by its shareholders mutual company is owned by its policy holders

Under a Long Term Care policy, which benefit would be typically excluded or limited?

alcohol rehab

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and

are less costly as compared to individual long term care coverage

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

company X

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

complete the application & review the info with the customer prior to obtaining a signature, then send the application off to the insurance company

omitting information that affects the issuance or the rate of an insurance contract is called:

concealment

major medical policies typically

contain a deductible and coinsurance

a prospective insured completes and signs an application for health insurance but intentionally conceals info about a pre-existing heart condition. The company issues the policy. Two months late, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will:

continue coverage but exclude the heart condition

which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?

conversion

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered

guaranteed renewable

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate?

guaranteed renewable

which of these is NOT a reason for purchasing life insurance on the life of a minor?

if both parents were to die, it would provide death benefits to the child

according to FL law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?

if the premiums for the handicapped child are not paid

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

payor provision

X owns a Disability Income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four month span. Which of the following provisions allows X's second disability to be covered without a new elimination period?

recurrent disability

Which of these Nonforfeiture Options continue a build-up of cash value?

reducded paid-up

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?

restoration of used benefit

Which of these is NOT a legal entity for selling life insurance in FL?

risk management advisers

a long-term care lapse notice must be delivered to both the applicant and:

secondary addressee

Which of the following statements BEST describes dental care indemnity coverage?

services are reimbursed after insurer receives the invoice

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA benefits, which of the following statements is TRUE?

she DOES need to provide evidence of insurability

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT:

spouse's occupation

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

submit the claim in any form

which statement regarding a Key Employee Life policy is NOT true?

the beneficiary is named by the key employee

Who does an agent represent during the solicitation of insurance?

the insurance company

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?

the insured

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?

the insurer will rescind the policy, deny the claim, and recover all payments made

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

upon satisfying the elimination period requirement

a term life insurance policy matures:

upon the insured's death during the term of the policy

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

waiver of premium

Which parts of a life insurance policy are guaranteed to be true?

warranty

when does a life insurance contract become effective if the initial premium is not collected during the application process?

when producer delivers policy and collects initial premium

A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?

when the applicant receives the policy and pays the initial premium