Health/Life Insurance Exam
T send proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits
Immediately
When must insurable interest exist for a life insurance contract to be valid?
Inception of the contract
T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the change of Occupation provision, which of the following actions may her insurance company take?
Increase her policy's coverage amount.
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 of these is NOT an element of Life insurance premiums?
Morbidity Rate
Which of the following is NOT an unfair claim settlement practice?
Needing written documentation of claim details
A life insurance policyowner would like to file a complaint against a life insurance agent. If Florida, the entity that oversees these complaints is called the
Office of Financial Regulation
All of these statements concerning Settlement Options are true, EXCEPT:
Only the beneficiary may select
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
Ordinary income tax and a 10% penalty for early withdraw
Under what system do a group of doctors and hospitals in a designed area contract with an insurer to provide services at a percentage cost to the insured?
PPO
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
PPO's are NOT a type of managed care systems
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
C is the policyowner of a comprehensive individual major medical policy. C pays an annual premium which is due September 1. If C forgets to pay the premium and is hospitalized September 10, how will the insurer handle this claim?
Pay the claim in full minus the premium due
A provision in a life insurance policy that pays the policy owner an amount that does not surpass the guaranteed cash value is called the:
Policy Loan Provision
Which of these characteristics is consistent with a Straight Life policy?
Premiums are payable for as long as there is insurance coverage in force.
The Coordination of Benefits provision:
Prevents an insured covered by two health plans from making profit on a covered loss.
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.
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on investment performance
In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?
The state where they are conducting business
Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?
USA Patriot Act
The Department of Financial Services serves as the receiver of any insurer placed into:
receivership
According to Florida law, group life insurance conversion privileges must NOT
require evidence of insurability
Which of the following services is NOT included under hospitalization expense coverage?
surgical fees
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and
the initial premium
The amount of coverage on a group credit life policy is limited to:
the insured's totals loan value
The Consideration Clause of an insurance contract includes:
the schedule and amount of premium payments
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
An example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
A term life insurance policy matures:
upon the insured's death during the term of the policy
A policy that becomes a Modified Endowment Contract (MEC):
will lost many of its tax advantages
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$2,500
Which of the following types of Term Life policies most likely contains a Renewability feature?
10 Year Convertible Term
G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
10 years
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
An individual participant 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
What is Florida's definition of Life insurance replacement?
A transaction in which a new policy is bought and an old policy is terminated
A "reimbursement policy" pays what amount of covered long-term care expenses?
Actual covered expenses up to the daily maximum
Which of the following situations does NOT apply to the Florida Replacement Rule?
An existing policyholder purchases an additional policy from the same insurer
Which of the following is the best description of "insurer?"
Any person, corporation, or society that writes insurance contracts
Traditional individual retirement annuity (IRA) distributions must start by:
April 1st of the year following the year the participant attains age 70 1/2
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic Policy Loan
Who is NOT required to sign a life insurance policy?
Beneficiary
P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the
Capital Sum
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
Carryover 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
______ can be defined as "using the contract values of an existing policy to purchase a new policy with an existing insurer"
Churring
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
Claim will be denied
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
Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
Conditional
Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?
Conversion
What type of policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing Term
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that charges regularly according to a schedule. What kind of policy is needed?
Decreasing term policy
Which two entities regulate variable annuities?
Department of Financial Services & Securities Exchange Commission
M becomes disabled and is unable to work for six months. M dies soon after from complication arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
Earned, but unpaid benefits.
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that is part of the contract?
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
Which of the following is an important principle of group life insurance?
Everyone must be covered in the group
Taking receipt of premiums and holding them for the insurance company is an example of:
Fiduciary responsibility
All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT
HRA is entirely funded by the employee
A policyowner's rights are limited under which beneficiary designation?
Irrevocable
Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner?
Irrevocable beneficiary
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
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
Level term
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
Life Annuity with Period Certain
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?
Limitation on pre-existing conditions for up to 12mo
In Major Medical Expense policies, what is the objective of a Stop Loss Provision?
Limits an insured's out-of-pocket medical expenses
Which of these is an element of a Single Premium annuity?
Lump-sum payment
A(n) ______ beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary.
Revocable
What does a 401(k) plan generally provide its participants?
Salary-deferral contributions
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
Split-dollar
The insuring clause
States the scope and limits of the coverage
Which of these life insurance riders allows the applicant to have excess coverage?
Term rider
Which statement is TRUE regarding a group accident & health policy issued to an employer?
The employer receives the policy and each employee is issued a certificate
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
The initial premium was NOT submitted with the application
Life & Health insurance policies are:
Unilateral Contracts
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
The free-look provision begins
Upon receipt of the policy by the policyowner
A(n) ________ annuity pays benefits based on units rather than stated dollar amounts.
Variable
An agent that sell ____ Life insurance MUST be registered with the Financial Industry Regulatory Authority (FINRA).
Variable
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 policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
Variable Life
If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations, EXCEPT:
When the state prohibits this by law
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
A contract where one party either accepts of rejects the terms of a contract written by another party is called a contract of
adhesion
In a qualified retirement plan, the yearly contributions to an employee's account:
are restricted to the maximum levels set by the IRS
Additional coverage can be added to a Whole Life policy by adding a(n):
decreasing term rider
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for
experimental and investigative services
In life insurance, the needs approach is used mostly to establish:
how much life insurance a client should apply for
Which of these actions should a producer take when submitting an insurance application to an insurer?
inform insurer of relevant information not included on the application
Medicare Part B does NOT cover:
inpatient hospital services
Which of these needs is satisfied by Adjustable Life insurance?
insured's needs for flexible premium
Defamation occurs when an agent makes a false statement intended to
malign another insurer
Pre-hospitalization authorization is considered an example of:
managed care
Which of the following BEST describes a short-term medical policy?
nonrenewable
B recently died and was insured with a life insurance policy for over 5 years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of the application. In this situation, the insurer will
pay the amount that the premium would have purchased at the correct age
Insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurrence
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
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
