Insurance 215 Test
Traditional individual retirement annuity (IRA) distributions must start by
April 1st of the year following the year the participant attains age 70 1/2
All of the following are Nonforfeiture Options EXCEPT
Automatic Premium Loan Option
Medicare part C is:
Available to those who are enrolled in Medicare Part A and Part B
All of the following statements about Major Medical benefits are true, EXCEPT:
Benefits have no maximum limit
K is insured under a Group Life Insurance policy. K is considered to be a(n)
Certificate holder
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
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than acquiring insurance
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
Health Maintenance Organizaition
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
The type of annuity that must be purchased with one monetary deposit it called an
Immediate annuity
Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy
Increase face amount
A life insurance policy would be considered a wagering contract WITHOUT:
Insurable interest
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Reimbursement
What is the initial source of underwriting for an insurance policy
Application containing statements from the insured
P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?
$0
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
In Florida, monthly-premium health insurance policies must provide a grace period of at least
10 days
A life policy loan in Indiana cannot charge a fixed rate of interest higher than
10%
Premature IRA distributions are assessed a penalty tax of
10%
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay life accumulates cash value faster then Straight life
The USA Patriot Act was enacted in:
2001
Within how many days must a licensee notify the Department of Financial Services of a change in address
30
In Florida, a health policy that is paid on a quarterly basis requires a grace period of
31 days
An insurance company must act on an Accident and Health insurance application for reinstatement within __________ days
45 days
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
The individual most likely to buy a Medicare Supplement policy would be a(n)
68 year old male covered by Medicare
What type of insurance company is domiciled in England, but conducts business in Florida?
Alien
Which of the following is considered to be misrepresentation?
An agent guaranteeing a policy's dividends
Which of the following does NOT apply to the Florida Replacement Rule?
An existing policyholder purchases an additional policy from the same insurer
When can a policyowner change a revocable beneficiary?
Anytime
A Disability Income policyowner 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 (past two years (sometimes 3) it enters incontestable period
Which of the following areas of state regulation is NOT protected by the savings clause 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 deductible
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 and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
An applicant who pays the initial premium at the time of application is typically given a(n)
Conditional receipt
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply
Conversion provision
Florida's 14-day free-look period for life insurance policies begins at the
Date of delivery
K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
Daughter
K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
Daughter
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing term
In the event of an illness an __________ ___________ policy would reimburse an insured for loss of earnings
Disability income
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
Dread disease insurance
M becomes disabled and is unable to work for six months. M dies soon after from complications 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
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
Which of the following nonforfeiture options offers the highest death benefit?
Extended term
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during Grace Period.
Full face amount minus any past due premiums
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Fund a buy-sell agreement
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Gives the policyowner additional time to pay overdue premiums
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
Insureds contingent beneficiary
The ____________ clause identifies which losses resulting from an accident or sickness are insured by the policy
Insuring
J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)
Internal limit
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
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
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
In Major Medical Expense policies, what is the intent of a Stop Loss provision?
Limits an insured's out-of-pocket medical expenses
An employer that offers a qualified retirement plan to its employees is eligible to
Make tax -deductible contributions to the plan
Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer
Misrepresentation
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for
Modified Whole Life
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 considered to be a right given to a policyowner?
Modify a provision in the insurance contract
What type of insurance company allows their policyowners to elect a governing body
Mutual
Which of the following professional organizations has its code of ethics incorporated into Florida law?
National Association of Insurance and Financial Advisors (NAIFA)
Which of these is NOT considered to be an element of an insurance contract?
Negotiation
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
A life insurance policyowner would like to file complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the
Office of Financial Regulation
Which of these is considered a mandatory provision?
Payment of claims
If a policy owner does not pay the premium by the due date, the
Policyowner can make the premium payment during the grace period
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?
Portion of the premiums paid for by the employer may be a tax deduction
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?
Premiums may increase at a time of renewal
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?
Proceeds will go to the contingent beneficiary
Which of the following is NOT required in the Outline of Coverage for a health insurance policy?
Projection of the policy's future costs
Which of the following is an example of a nonforfeiture option?
Reduced Paid-Up option
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
Revocable
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Which of the following provisions is NOT required in HMO contracts/certificates?
Seven-day grace period
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 laws, which of the following statements is TRUE?
She DOES need to provide evidence of insurability
An immediate annuity consists of a
Single Premium
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
Single premium
A mutual insurance company and a stock insurance company have one main difference between them. What is the major contrast.
Stock company is owned by its shareholders. Mutual company is owned by its policyholders.
Which of the following services is NOT included under hospitalization expense coverage?
Surgical fees
What does a Guaranteed Insurability rider provide a Disability Income policyowner?
The ability to periodically increase the amount of coverage without evidence of insurability
Which of the following factors is NOT considered when the department of financial services determines if an agents home is an insurance agency
The amount of premium collected at this location
In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and
The initial premium
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
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
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
Medicare is intended for all of the following groups EXCEPT
Those enrolled as a full-time student
A disability elimination period is best described as a
Time deductible
J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?
Twisting
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
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
When is the face amount paid under a joint life and survivor policy?
Upon death of the last insured
An agent that sells ____________ Life insurance MUST be registered with the Financial Industry Regulatory Authority (FINRA)
Variable
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal Life
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
An example of unfair discrimination would be
offering different premiums for individuals of the same risk classification
A major medical policy typically:
provides benefits for reasonable and necessary medical expenses, subject to policy limits
