2-15 Exam
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
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
$720
____ of personal life insurance premiums is usually deductible for federal income tax purposes.
0%
what is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida law?
0%
In Florida, monthly-premium health insurance policies must provide a grace period of at least
10 days
which of the following types of term life policies most likely contains a renewability feature? increasing term 10 year convertible term decreasing term variable term
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? 5 years 10 years 15 years 20 years
10 years
Premature IRA distributions are assessed a penalty tax of
10%
a life policy loan in Florida cannot charge a fixed rate of interest higher than
10%
all of the following statements about traditional individual retirement accounts are false EXCEPT
10% penalty is applied to withdrawals before age 59 1/2
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
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)
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15
the minimum age at which a person can sign a life insurance application is
15 years
A 15-year mortgage is best protected by what kind of life policy? Modified whole life 15-year level term 15-year decreasing term Adjustable life
15-year decreasing term
Florida requires that coverage for newborns begins "from the moment of birth" and continues for
18 months
What year was the McCarran-Ferguson Act enacted? 1944 1945 1946 1947
1945
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated 1970 - Fair Credit Reporting Act 1959 - Intervention by (SEC) 1999 - Financial Services Modernization Act 1945 - The McCarran-Ferguson Act
1970 - Fair Credit Reporting Act
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?
2
An insurance company can contest a life insurance contract due to application fraud within
2 years
in Florida, most life insurance policies have a contestability period of
2 years
An insured must notify an insurer of a medical claim within ____ days after an accident
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 _____if their policy is rejected
20 days
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
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 than Straight Life
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? life paid-up at age 70 20-pay life increasing term to age 65 straight life
20-pay life
What type of policy would offer a 40-year old the quickest accumulation of cash value? Paid-up at 65 20-pay life 30-pay life Straight whole life
20-pay life
One becomes eligible for Social Security disability benefits after having been disabled for
5 months
In Florida, what is the maximum percentage of controlled business an agent may produce?
50%
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
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? 100k 50k refund of premiums paid plus interest no claim will be paid because cause of death was from natural causes
50k
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?
59 1/2
Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage
6
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 how many months? 2 months 4 months 6 months 8 months
6 months
the waiting period for a pre-exisiting condition under a medicare supplement policy may NOT go beyond
6 months
how long does an individual have to "rollover" funds from an IRA or qualified plan?
60 days
According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age
64 years or older
The individual most likely to buy a Medicare Supplement policy would be a(n)
68-year old male covered by Medicare
Which of these is an element of a Variable Life policy? A fixed, level premium Insurer assumes the investment risk No investment risk to the policyowner Rate of returns are guaranteed
A fixed, level premium
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as A fraternal benefit society A stock insurer A mutual insurer The life and health insurance guaranty association
A fraternal benefit society
Which statement is TRUE regarding a Variable Whole Life policy? A minimum guaranteed Death benefit is provided It is a combination of an Endowment and a Increasing Term policy Its premiums and benefits are variable It has guaranteed dividends
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
which of these is not a reason for a business to buy key person life insurance?
A pension deficiency if the key employee dies
What do families pay that are covered by the Florida Healthy Kids Corporation?
A portion of the premium
P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?
A recurrent disability
What do Dread Disease policies cover?
A 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
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
S is covered by a whole life policy. Which insurance product can cover his children? Assignment provision Payor benefit Accelerated benefit rider Child term rider
Child term rider
Insurance policies are offered on a "take it or leave it" basis, which make them? Conditional contracts Aleatory contracts Unilateral contracts Contracts of adhesion
Contracts of adhesion
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
all of the following are eligibility requirements for an association group EXCEPT
Contributory plans require a minimum of 25 participants
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? Owner's Rights clause Incontestable Period Insuring Agreement Conversion privilege
Conversion privilege
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? Endowment policy Limited-Pay Whole life Convertible Term Decreasing term
Convertible Term
which of the following BEST describes a hospital indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization
Which statement regarding the Misstatement of Age provision is considered to be true?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
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
which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual accident and health insurance?
Disability income policy premiums are tax-deductible
a characteristic of preferred provider organizations (PPOs) would be
Discounted fees for patients
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
How are Roth IRA distributions normally taxed?
Distributions are received tax-free
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
Dread disease insurance
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
Each partner owns a $500,000 policy on their partner's life
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
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
"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
Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Policy Exclusion Incontestable Entire Contract Provision Assignment
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 Endowment Graded whole life policy Return of premium policy
Equity index insurance
when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. what exactly does needs analysis involve?
Establishes the needs of the individual and his dependents
which of the following is an important underwriting principle of group life insurance?
Everyone must be covered in the group
Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? Coverage can be added at specific events such as marriage or having a child Evidence of insurability is not required when the option is exercised Evidence of insurability is required when the option is exercised Coverage can be added at specific ages
Evidence of insurability is required when the option is exercised
Which of these statements describe a Modified Endowment Contract (MEC)? Falls below the minimum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract The 7-pay test is used to determine the minimum death benefit of the policy The 7-pay test is used to determine the maximum death benefit of the policy
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
A Universal Life Policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the Inherent risk Commission rate Inflation factor Expense charges
Expense charges
Term insurance has which of the following characteristics? Expires at the end of the policy period Builds cash value Has nonforfeiture options Endows at the end of the policy period
Expires at the end of the policy period
In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the
Florida Replacement Rule
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
Full benefits are payable under the Master contract
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 this Grace Period? refunds of all premiums paid, plus interest refund of all premiums paid Full face amount minus any past due premiums full face amount
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
which of these is considered a true statement regarding medicaid?
Funded by both state and federal governments
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Gives the policyowner additional time to pay overdue premiums
all of these are a prerequisite for becoming a licensed agent EXCEPT
Graduate from high school
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
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
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
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?
Guaranteed Insurability Option rider
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed insurability rider
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
All of these are characteristics of a health reimbursement arrangement (HRA) EXCEPT
HRA is entirely funded by the employee
A medical care provider which typically delivers health services at its own local medical facility is known as a
Health Maintenance Organization
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?
Health Maintenance Organization
Which type of provider is known for stressing preventative medical care and routine physical examinations?
Health Maintenance Organizations (HMO's)
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
Variable Life products require a producer to Guarantee not more than a 12% return per annum Hold a life and health insurance license Hold a life insurance license and a securities license Be regulated solely by State law
Hold a life insurance license and a securities license
for which of the following expenses does a basic hospital policy pay?
Hospital room and board
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds could be forfeited
In regards to representations or warranties, which of these statements is TRUE? Warranties are statements considered to be true to the best of the applicant's belief If material to the risk, false representations will void a policy Representations are statements guaranteed to be true in every respect If material to the risk, false representations will NOT void a policy
If material to the risk, false representations will void a policy
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
w is an 39-year old female who just purchased an annuity to provide income for life starting at age 60. all of these would be acceptable annuity choices, EXCEPT a(n):
Immediate annuity
When must insurable interest exist for a life insurance contract to be valid? Inception of the contract Throughout the entire length of the contract When the insured dies During the contestable period
Inception of the contract
at the age of 45, an individual withdraws $50,000 from his qualified profit- sharing plan and then deposits this amount into a personal savings account. this action would result in:
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan
T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner
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.
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
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
Inspection report
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: All statements be warranties Insurable Interest in the proposed insured The agent complete a third-party application All those involved be family- related
Insurable Interest in the proposed insured
A life insurance policy would be considered a wagering contract WITHOUT? Insurable interest Premium payment Agent solicitation Constructive delivery
Insurable interest
what would be an accurate definition of "controlled business"?
Insurance business that is written on the agent's own life, property, or interests
which of the following situations are NOT subject to Florida life insurance laws?
Insurance companies' day-to-day operations
Who makes the legally enforceable promises in a unilateral insurance policy? Beneficiary Insurance company Insured Applicant
Insurance company
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? Insurer Beneficiary Reinsurer Insured
Insured
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
If the insured any 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
which of these needs is satisfied by adjustable life insurance? Insured's needs for level premiums Insured's needs for flexible premiums Insured's needs for flexible nonforfeiture options Insured's needs for level death benefits
Insured's needs for flexible premiums
variable annuities may invest premiums in each of the following, EXCEPT:
Insurer's corporate business account
the clause in an accident and health policy which denies the benefit amounts the insurer will pay is called the
Insuring clause
which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring clause
which of the following claims are typically excluded from medical expense policies?
Intentionally self-inflicted injuries
Which of these arrangements allows one to bypass insurable interest laws?. Concealment Indemnity contract Contract of adhesion Investor-Originated Life Insurance
Investor-Originated Life Insurance
A life insurance arrangement which circumvents insurable interest statutes is called: A contract of adhesion An indemnity contract Key person insurance Investor-Originated life insurance
Investor-Originated life insurance
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?
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
what is the purpose of a policy summary?
It highlights the critical parts of the policy issued
which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
According to Florida law, which of the following statements accurately describes an admitted mail order insurance company?
It may solicit insurance business by mail without the assistance of a licensed agent
Who is a mutual insurance company owned by?
Its policyholders
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
Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? Survivorship life Family plan Joint Life Whole life and level term rider
Joint life
What type of life policy covers 2 lives and pays the face amount after the first one dies? Group life Joint life policy Family income policy Last Survivor policy
Joint life policy
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 it's project manager. Which type of policy should the firm purchase on its project manager? Universal life insurance Key Person insurance Graded insurance Executive insurance
Key Person insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? Consideration Competent Parties Offer/ Acceptance Legal Purpose (Insurable Interest)
Legal Purpose (Insurable Interest)
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? Increasing Decreasing Adjustable Level
Level
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? Limited-pay life Graded Premium Level term Endowment
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 of these would be considered a Limited-Pay Life policy? 10-year renewable and convertible term Life Paid-Up at Age 70 straight whole life renewable term to age 100
Life Paid-Up at Age 70
If an agent would like to sell Variable annuities, which state examination must the agent pass?
Life and Variable contracts
Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?
Limitation on pre-existing conditions for up to 12 months
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called. Adjustable Life Renewable Term Limited Pay Life Joint Life
Limited Pay Life
which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate
Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?
Long-Term Care
An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?
Loss of eyesight due to an accidental injury
which of the following types of health coverage frequently uses a deductible?
Major Medical policy
comprehensive major medical policies usually combine
Major Medical with Basic Hospital/Surgical coverage
Pre-hospitalization authorization is considered an example of
Managed care
which type of plan normally includes hospice benefits?
Managed care plans
The health insurance program which is administered by each state and funded by both the federal and state governments is called
Medicaid
which of the following are NOT managed care organizations?
Medical Information Bureau (MIB)
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare Supplement
Which type of policy is considered to be overfunded, as stated by IRS guidelines? modified whole life Modified Endowment Contract variable universal life interest-sensitive whole life
Modified Endowment Contract
When a life insurance policy exceeds certain IRS table values, the result would create which of the following? 1035 Exchange An investment Modified Endowment Contract (MEC) Endowment
Modified Endowment Contract (MEC)
Which of these life products is NOT considered interest-sensitive? Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life
Modified Whole Life
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for: Variable life modified whole life universal variable life variable annuity
Modified whole life
Which of these is NOT considered to be a right given to a policyowner? Surrendering the policy's cash value Modify a provision in the insurance contract Assignment of ownership Change the beneficiary, if revocable
Modify a provision in the insurance contract
what are adjustable rates for life policy loans in Florida based on?
Moody's corporate bond index
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 is TRUE about a qualified retirement that is "top heavy"?
More than 60% of plan assets are in key employee accounts
Which of the following statements is CORRECT about accelerated death benefits? The full face amount is available as an accelerated benefit Those on Social Security disability automatically qualify for this benefit This provision is usually provided with an increase in premium Must have a terminal illness to qualify
Must have a terminal illness to qualify
which of the following professional organizations has its code of ethics incorporated into Florida law?
National Association of Insurance and Financial Advisors (NAIFA)
in Florida, 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
Which of these is NOT considered to be an element of an insurance contract? The offer Acceptance Negotiating Consideration
Negotiating
which of the following characteristics is associated with a large group disability income policy?
No medical underwriting
a disability income policy that only the policyowner can terminate and which the rates will never go up is considered to be
Noncancelable
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
the provision that defines to whom the insurer will pay benefits to is called
Payment of Claims
which of these is considered a mandatory provision?
Payment of Claims
which of these statements concerning an individual straight life annuity is accurate?
Payments are made to an annuitant for life
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? family maintenance clause payor clause assignment provision automatic premium loan provision
Payor Clause
Which life insurance rider typically appears on a Juvenile life insurance policy?
Payor benefit rider
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 Accelerated benefits provision Assignment provision Waiver premium provision
Payor provision
Insurance policies are considered aleatory contracts because They are " take it or leave it" contracts Both parties consent to the contract Performance is conditioned upon a future occurrence The contract is voidable upon proof of fraud
Performance is conditioned upon a future occurrence
which action could result in a hearing being ordered by the Department of Financial Services?
Performing insurance transactions without a license
Which of these do NOT constitute policy delivery?
Policy issued with a rating
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
Which of the following information is NOT required to be included in a whole life policy? Policy's loan interest rate Policy's guaranteed dividend table Policy's premium Policy's cash value table
Policy's guaranteed dividend table
Who elects the governing body of a mutual insurance company Chairman of the board Bondholders Stockholders Policyholders
Policyholders
What is the consideration given by an insurer in the Consideration clause of a life policy? Promise to never cancel coverage Promise to pay a death benefit to a named beneficiary Promise to not raise premiums Promise to accept an insured's assignment of benefits
Promise to pay a death benefit to a named beneficiary
What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?
Reinstatement
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
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? Renewable Increasing Level Decreasing
Renewable
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called: Representations Considerations Warranties Guarantees
Representations
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
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: Credits Reserves Surplus Retention
Reserves
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
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 time?
Restoration of used benefit
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 out to the insurance company
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: Treaty insurer Risk retention group Risk assumption group Captive insurer
Risk Retention Group
Post-tax dollar contributions are found in
Roth IRA investments
A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast?
Stock company is owned by its shareholders. Mutual company is owned by its policyholders
The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):
Straight Life annuity
k is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs? Endowment Straight life 10-year renewable term Joint life
Straight life
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 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
which of the following costs would a basic hospital/surgical policy likely cover?
Surgically removing a facial birthmark
What type of life policy covers two people and pays upon the death of the last insured? Shared Survivorship Adjustable Joint
Survivorship
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? Interest-Sensitive whole life Ten-Year Endowment Verbal universal life Ten-Year Renewable term
Ten-Year Endowment
What type of life insurance are credit policies issued as? Whole Variable Term Universal
Term
What kind of life insurance products covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit
Term rider
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 is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?
The account can be rolled into the surviving spouse's IRA
which of the following statements is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application
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
The investment gains from a Universal Life Policy usually go toward: The death benefit The dividends The cash value Paying off a policy loan
The cash value
Why is an applicant's signature required on a life insurance application?
To attest that the statements on the application are accurate to the best of the applicant's knowledge
What type of reinsurance contract involves two companies automatically sharing their risk exposure? Arbitrage Facultative Excess Treaty
Treaty
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?
Twenty
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 accurate statement of an unfair trade practice?
Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company
In an insurance contract, the insurer is the only party who makes a legally enforceable promise., what kind of contract is this? Subrogation Unenforceable Adhesion Unilateral
Unilateral
Life and health insurance policies are: Multi-lateral contracts Bilateral contracts Unilateral contracts Non-lateral contracts
Unilateral contracts
all of the following are nonforfeiture options EXCEPT
Automatic Premium Loan Option
G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is
Business overhead expense
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
Business owner becoming disabled
which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?
Buyer's guide
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: policy-loan provision automatic premium loan provision accelerated benefits provision consideration clause
policy-loan provision
The____ has the right to change a life insurance policy's beneficiary.
policyowner
The____ is authorized to assign a life insurance policy as collateral for a loan.
policyowner
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? beneficiary insured policyowner insurer
policyowner
Who has the right to change a revocable beneficiary?
policyowner
on a life insurance policy, who is qualified to change the beneficiary designation?
policyowner
on an accidental death and dismemberment (ad&d) insurance policy, who is qualified to change the beneficiary designation?
policyowner
If a policyowner does not pay the premium by the due date, the
policyowner can make the premium payment during the grace period
a policyowner is able to choose the frequency of premium payments through what policy feature?
premium mode
A Limited-Pay Life policy has: graded death benefits no cash value premium payments limited to a specified number of years premium payments that are paid to age 100
premium payments limited to a specified number of years
How does group insurance differ from individual insurance?
premiums are lower
which of these statement 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 period of time.
what benefit does the payor clause on a juvenile life policy provide?
premiums are waived if the payor becomes disabled
what is considered to be a characteristic of a conditionally renewable health insurance policy?
premiums may increase at time of renewal
the coordination of benefits provision
prevents an insured covered by two health plans from making a profit on a covered loss
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the
primary carrier
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
which of the following is considered to be the time period after a health policy is issued, during which no benefits are provided for illness?
probationary period
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) 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 paid to P's estate
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 primary beneficiary has died before the insured in a life insurance policy. a contingent beneficiary is also named in the policy. which of the following will occur when the insured dies?
proceeds will go to the contingent beneficiary
a retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:
profit-sharing plan
the fundamental reason for regulation of insurance is to
protect consumers
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 policyowners against insolvent insurance companies
a major medical policy typically
provides benefits for reasonable and necessary medical expenses, subject to policy limits.
All of these are considered sources of underwriting information about an applicant EXCEPT:
rating services
the department of financial services serves as the receiver of any insurer placed into
receivership
When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?
recurrent Disability
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?
reduced paid-up
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
reimbursement
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called reinstatement grace period automatic premium loan waiver of premium
reinstatement
Which of these provisions require proof of insurability after a policy has lapsed? Insuring Conversion Reinstatement Consideration
reinstatement
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
according to Florida 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
When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?
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? accelerated death benefit rider return of premium rider family income rider term rider
return of premium rider
With Optionally Renewable Health policies, the insurer may
review the policy annually and determine whether or not to renew it
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
revocable
M purchased an accidental death and dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
revocable
a(n)_____beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary.
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
which of these is NOT a legal entity for selling life insurance in Florida?
risk management advisers
which of the following are equity indexed annuities typically invested in?
s&p 500
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 long-term care lapse notice must be delivered to both the applicant and
secondary addressee
which of these factors does NOT influence an applicant's need for life insurance?
self-maintenance expenses
typically a life insurance death benefit is paid by a lump sum payment. A(n)____ option is a method of distributing a life insurance policy's death other than by a lump sum payment. settlement dividend conversion aleatory
settlement
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
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
Which mode of payment is NOT used by health insurance policies?
single premium
which of the following types of permanent life insurance policies offers highest initial cash value? single premium limited pay straight whole interest-sensitive
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
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
social security
An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT
spouse's occupation
which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
subrogation
which of the following services is NOT included under hospitalization expense coverage?
surgeon's fees
the premiums paid by an employer for his employee's group life insurance are usually considered to be:
tax-deductible to the employer
which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? partially taxable tax deductible nontaxable taxed as ordinary income
taxed as ordinary income
a(n)____rider may be used to include coverage for children under their parents' life insurance policy. payor term conversion parent
term
What type of life insurance gives the greatest amount of coverage for a limited period of time? term life graded premium whole life whole life endowment policy
term life
Which of these life insurance riders allows the applicant to have excess coverage?
term rider
What would the Medical Information Bureau (MIB) identify?
testing positive for marijuana use from a previous screening
which statement regarding a key employee life policy is NOT true?
the beneficiary is named by the key employee
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?
the cost
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is: the cost the health of the insured the amount of coverage being converted who will be beneficiary
the cost
a contract owner terminates an annuity before the income payment period begins. the owner will then receive
the current contract surrender value
Whole life insurance is sometimes referred to as "straight life". What does the word "straight" indicate when using this phrase? The incontestable period the ability to borrow against the cash value the grace period the duration of premium payments
the duration of premium payments
What is the underlying concept regarding level premiums?
the early years are charged more than what is needed
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
the employee
which of the following statements is correct regarding an employer/employee group health plan?
the employer receives a master policy and the employees receive certificates
which statement is TRUE regarding a group accident & heath policy issued to an employer?
the employer receives the policy and each employee is issued a certificate
a noncontributory group term life plan is characterized by:
the entire cost of the plan is paid for by the employer
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
the gross premium is higher on a monthly payment mode as compared to being paid annually
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
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and the initial premium agreeing to a physical examination delivery of policy disclosure of any medical conditions
the initial premium
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
during the application process, the agent's primary responsibility is to
the insurance company
The amount of coverage on a group credit life policy is limited to: half of the insured's total loan value the insured's total loan value 75% of the insured's total loan value $25,000
the insured's total loan value
Who does an agent represent during the solicitation of insurance?
the insuring company
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
the policy will be returned within the free-look period, premium will be fully refunded.
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?
the policy will pay $300,000
according to Florida's life insurance replacement laws, a policyowner must be provided with a written comparison and summary statement when it's requested by
the policyowner
which statement regarding the change of beneficiary provision is true?
the policyowner can change the beneficiary
when replacing or exchanging an annuity, the agent must disclose to the annuitant
the possible tax ramifications as a result of the transaction
All of these statements about Equity Indexed Life Insurance are correct Cash value has a minimum rate of accumulation If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index the premium can be lowered or raised, based on investment performance Tied to an equity index such as the S&P 500
the premium can be lowered or raised, based on investment performance
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 the premium decreases each year during the early years of the contract and remains the same after that time the premium can be adjusted by the policyowner at anytime the premium always remains the same while the death benefit increases during the early years
the premium increases each year during the early years of the contract and remains the same after that time
a level premium indicates:
the premium is fixed for the entire duration of the contract
The advantage of reinstating an original life policy is
the premiums are based on a younger age
Under a Renewable Term policy, the face amount is automatically adjusted at the time of renewal evidence of insurability must be provided at each renewal the renewal premium is calculated on the basis of the insured's attained age a new application must be completed at each renewal
the renewal premium is calculated on the basis of the insured's attained age
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
stranger-owned life insurance (STOLI) is when a person purchases life insurance only to sell to a(n): underwriter sole proprietor with insurable interest third-party with no insurable interest relative with insurable interest
third-party with no insurable interest
the common disaster clause provides that if both the insured and the named beneficiary were to die in a common accident, which of the following is true?
this clause provides the payment of proceeds to the insured's estate
a disability elimination period is best described as a
time deductible
what is the elimination period of an individual disability policy?
time period a disabled person must wait before benefits are paid
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
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
a business disability buyout plan policy is designed:
to pay benefits to the corporation or other shareholders
an example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed
twisting
Which of the following is considered an element of a variable life policy? underlying equity investment little or no risk to insured guaranteed dividends insurer assumes all the risk
underlying equity investment
a variable annuity has which of the following characteristics?
underlying equity investments
all of these are considered to be a benefit under social security, EXCEPT for:
unemployment
S, age 40, is looking to buy a life insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for s would be Straight life universal life an endowment modified whole life
universal life
What type of life insurance incorporates flexible premiums and an adjustable death benefit? Endowment Policy Modified Whole Life Decreasing Term Universal Life
universal life
Which of the following life insurance policies combine term insurance with an investment element? increasing term life decreasing term life universal life graded life
universal life
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 endowment of the contract upon death of the insured when the cash value equals the death benefit upon the insured's death during the term of the policy
upon the insured's death during the term of the policy
a business overhead expense policy would cover which of the following if a business owner becomes disabled?
utilities and office rent
a life insurance policyowner would like to take out a policy loan against the cash value in his whole life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) ______rate loan. fluctuation fixed variable increasing
variable
a(n)_____annuity pays benefits based on units rather than stated dollar amounts.
variable
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as: adjustable life graded-premium life variable life modified whole life
variable life
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 credit life universal life interest-sensitive whole life
variable life
A(n)______ ______ life policy combines investment choices with a form of term coverage Straight whole variable universal variable term adjustable universal
variable universal
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? joint life adjustable life variable universal life universal life
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 may be altered by the policyowner is controlled by the NAIC is the same in all contracts varies according to the contract
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 if found during the contestable period void the policy, no matter when it is discovered void the policy, at any time only if it is found to be material void the policy only if it is discovered during the Contestable period and proven to be material
void the policy only if it is discovered during the Contestable period and proven to be material
what is the primary factor that determines the benefits paid under a disability income policy?
wages
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 is referred to as the:
waiting period
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 provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the
waiver of premium
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
waiver of premium rider
Disability policies do NOT normally pay for disabilities arising from which of the following?
war
Which parts of a life insurance policy are guaranteed to be true?
warranty
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
at what point does a whole life policy endow? at age 65 when premium paid equals the death benefit when the cash value equals the death benefit in 30 years or age 65, whichever comes first
when the cash value equals the death benefit
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
when the conditions of the receipt are met
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
What does the ownership clause in a life insurance policy state? who the policyowner is and what rights the policyowner is entitled to who the beneficiary is and what rights the beneficiary is entitled to ownership cannot be assigned after the incontestable period allows the policyowner to adjust the death benefit and premium amount at anytime
who the policyowner is and what rights the policyowner is entitled to
A life insurance policy that provides a policyowner with cash value along with a level face amount is called: whole life level term credit life ordinary life
whole life
A Return of Premium life insurance policy is a nonforfeiture option whole life and increasing term interest-sensitive variable life
whole life and increasing term
Y purchased $100,000 worth of permanent protection on himself and $50,000 of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase? endowment with extended rider endowment with a payor benefit whole life policy with an other insured rider family income policy
whole life policy with an other insured rider
a policy that becomes a modified endowment contract (MEC): will no longer allow for policy loans must be placed in an irrevocable trust can never be reinstated after a lapse will lose many of the tax advantages
will lose many of the tax advantages
If a 10-year term life policy contains a renewability provision, the policy will renew along with a decrease in premium at the option of the insurer only with evidence of insurability without evidence of insurability
without evidence of insurability
an agent's license can be suspected or revoked by
writing primarily controlled business
The cash value in a(n)________life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors. Universal Graded Term Endowment
Universal
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? Universal life Variable life Fixed annuity Modified endowment contract
Variable life
Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? Variable life Universal life Variable universal life Adjustable life
Variable universal life
A life policy contains a monthly mortality charge as well as self-directed investment choices is called a(n) Joint life policy Endowment Variable universal life policy Universal life policy
Variable universal life policy
The part of a life insurance policy guaranteed to be true is called a(n): Representation Exclusion Warranty Waiver
Warranty
Which of these is considered a statement that is assured to be true in every respect? Estoppel Warranty Guarantee Representation
Warranty
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
additional whole life coverage at specified times
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will
adjust the death benefit to a reduced amount
which of the following employer tasks does a professional employer organization normally handle?
administration tasks
How long does the coverage normally remain on a limited-pay life policy? age 65 age 100 when premium payments stop at the discretion of the insurer
age 100
Under a long-term care insurance policy, which benefit would be typically excluded or limited?
alcohol rehabilitation
insurance companies that are organized in countries outside the United States are referred to as
alien
what type of insurance company is domiciled in England, but conducts business in Florida?
alien
common exclusions to continuation of group coverage include:
all of the above
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 though J
which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
all proceeds are income tax free in the year they are received
A qualified profit-sharing plan is designed to
allow employees to participate in the profits of the company
the amount of monthly disability benefits payable under social security is affected by which of the following factors?
amount of the benefits available from other sources
an example of an unfair trade practice is
an agent making a material misrepresentation to the insured
which of the following situations does NOT apply to the Florida Replacement Rule?
an existing policyholder purchases an additional policy from the same insurer
P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?
an immediate annuity
all of the following statements regarding group health insurance is true, EXCEPT:
an individual policy is given to each member
what does the insuring agreement in a life insurance contract establish?
an insurer's basic promise
Which premium schedule results in the lowest cost to the policyowner?
annual
group life insurance policies are generally written as:
annually renewable term
Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?
annuity
which type of contract liquidates an estate through recurrent payments?
annuity
to be eligible for social security disability benefits, an employee must be unable to perform:
any occupation
where can a policyowner 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
what us the initial source of underwriting for an insurance policy?
application containing statements from the insured
in Florida, the underwriting and issuance of a master group health policy requires that all employees
are eligible to participate, regardless of individual health history
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
in a qualified retirement plan, the yearly contributions to an employee's account:
are restricted to maximum levels set by the IRS
which of the following medical expenses does cancer insurance NOT cover?
arthritis
a(n)_________ of benefits of a health policy transfers payments to someone other than the policyowner
assignment
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
When does a Probationary Period provision become effective in a health insurance contract?
at the policy's inception
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
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 assignment grace period waiver of premium
automatic policy loan
What action will an insurer take if an interest payment on a policy loan is not made on time?
automatically add the amount of interest due to the loan balance
Medicare part c is
available to those who are enrolled in Medicare part A and part B
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
aviation exclusion
a pilot applies for life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. the pilot declines the additional premium modification. the insurer will then likely issue the coverage with a(n)
aviation exclusion
automatic premium loan provision is designed to:
avoid a policy lapse
the coordination of benefits (COB) provision exists in order to
avoid duplication of benefit payments
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
be established by the employer
Who is NOT required to sign a life insurance application?
beneficiary
a life insurance application must be signed by all of these, EXCEPT:
beneficiary
t is the policyowner for a life insurance policy with an irrevocable beneficiary designation. if t wishes to change the beneficiary, t must obtain permission from the
beneficiary
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?
beneficiary will be paid the death benefit
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
beneficiary's age
the difference between group insurance and blanket health policies is:
blanket health policies do not issue certificates
Variable Whole Life Insurance can be described as
both an insurance and securities product
Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk
both an insurance and securities product
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
G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is
business overhead expense
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
The guarantee of insurability option provides a long-term care policyowner the ability to
buy additional coverage at a later date
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
The insurer must provide a prospective buyer with a(n)
buyer's guide and policy summary
Health reimbursement arrangement MUST be established
by the employer
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
a policy loan is made possible by which of these life insurance policy features?
cash value provision
under a interest sensitive whole life policy, premiums are determined by the policyowner no cash value are accrues the policy normally renews every 10 years cash values are determined by interest rates
cash values are determined by interest rates
What is issued to each employee of an employer health plan?
certificate
all individuals covered under a group contract will receive a(n)
certificate
an individual covered under a Group life insurance policy is considered to be a(n)
certificate holder
company xyz offers a group term life insurance plan to its employees. what does each employee covered under this plan receive?
certificate of insurance
a whole life insurance policyowner does NOT have the right to
change the grace period
a company that owns a life insurance policy on one of its key employees may do all of the following except borrow against cash value change beneficiary cancel policy change the policy's interest rate
change the policy's interest rate
An example of sliding would be
charging for an additional product without the applicant's consent
the bureau of unclaimed property is overseen by the
chief financial officer
Whose life is covered on a life insurance policy that contains a payor benefit clause?
child
which rider provides coverage for a child under a parent's life insurance policy? spouse term rider base insured rider payor benefit rider child term rider
child term rider
What type of employee welfare plans are not subject to ERISA regulations?
church plans
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 claim will be paid in full claim will be partially paid claim will be decided by an arbitrator
claim will be denied
P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?
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
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
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
coercion
In Florida, which of the following is considered an Unfair Trade Practice?
coercion
J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?
coercion
which of the following is an example of an unfair trade practice?
coercion
a major medical policy typically contains a provision that requires the insurer to pay only part of the loss, while the balance is paid by the insured. this provision is called
coinsurance
which of the following areas of state regulation is NOT protected by the savings clause in ERISA?
commerce
which of the following reimburses its insureds covered medical expenses?
commercial insurers
the policy summary contains specific information on all of the following, EXCEPT
commission
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 and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company
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
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, assuming that T is an acceptable risk. What item is given to T?
conditional receipt
an applicant who pays the initial premium at the time of application is typically given a(n)
conditional receipt
major medical policies typically
contain a deductible and coinsurance
The incontestable clause allows an insurer to
contest a claim during the contestable period
A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, 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
the consolidated omnibus budget reconciliation act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
continue group health benefits
when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
contributory
what type of group insurance plan involves employees sharing the cost?
contributory plan
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
conversion
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? modification conversion exchange adjustable
conversion
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? extended term option conversion provision 1035 exchange incontestable period
conversion provision
An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be:
converted to an individual permanent policy at an individual rate
a business overhead expense policy:
covers business expenses such as rent and utilities
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
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? modified whole life 20-year paid up policy endowment decreasing term
decreasing term
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? modified whole life 20-pay life decreasing term endowment
decreasing term
Additional coverage can be added to a Whole Life policy by adding a(n) payor rider accelerated benefit rider decreasing term rider automatic premium loan rider
decreasing term rider
Additional coverage can be added to a Whole Life policy by adding a(n): payor rider accelerated benefit rider decreasing term rider automatic premium loan rider
decreasing term rider
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
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
deferred
Medicare Part A and Part B do NOT pay for
dental work
what is the purpose of the U.S.A Patriot Act?
detect and deter terrorism
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
determine if the applicant is an acceptable risk by completing standard underwriting procedures
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
disability buy-sell
A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?
disability income
B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?
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
in the event of an illness, a(n)______ ______ policy would reimburse an insured for loss of earnings
disability income
which of the following statements BEST describes the intent of a coinsurance clause in a major medical policy?
discourages overutilization of the insurance coverage
which of the following does social security NOT provide benefits for?
dismemberment
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: guarantees a minimum rate of return does not allow the policyowner to assume the investment risk does not guarantee a return on its investment accounts does not guarantee an assignment provision
does not guarantee a return on its investment accounts
an insurance company incorporated under the laws of the state in which its income office is located is called a(n)____ company
domestic
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
Under a trustee group life policy, who would be eligible for a certificate of coverage?
employee
non-occupational disability coverage is designed for
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
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? straight life modified life whole life paid-up at age 70 endowment at age 70
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
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 health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
entire contract
which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?
entire contract
What provision in a life insurance policy states that the application is considered part of the contract?
entire contract provision
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
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
health insurance benefits NOT covered due to an act of war are
excluded by the insurer in the contract provisions
In a life insurance policy, which feature states that the policy will not cover certain risks? exception exclusion ejection expulsion
exclusion
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? misrepresentation exclusion collateral assignment concealment
exclusion
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): elimination exclusion limitation exception
exclusion
a(n)____contained in a life insurance policy states that the policy states that the policy will NOT cover certain risks.
exclusion
the sections of an insurance contract which limit coverage are called
exclusions
which of the following is NOT included in the policy face?
exclusions
long-term care policies will usually pay for eligible benefits using which of the following methods?
expense incurred
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
D owns a whole life policy that was purchased 10 years ago. if the premium payments suddenly stop and D takes no additional action, which nonforfeiture option will the insurer likely proceed with? extended term loan provision reduced paid-up cash surrender
extended term
which of the following nonforfeiture options offers the highest death benefit?
extended term
as 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
All of these are characteristics of an Adjustable Life policy EXCEPT: adjustable premiums adjustable premium payment period combination of term and whole life insurance face amount can be adjusted using policy dividends
face amount can be adjusted using policy dividends
an example of an unfair claims practice would be
failing to effectuate prompt, fair, and equitable settlements of a claim
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
fair credit reporting act
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? family benefit policy family maintenance policy family income policy family survivor policy
family maintenance policy
this type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:
family maximum deductible
which of these is NOT a source of funding for social security benefits?
federal government
the reason for a business having a business overhead expense disability plan is to cover:
fixed business expenses
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?
fixed deferred
the payments on q's annuity are no less than $250 quarterly. which of the following annuities does q own?
flexible installment deferred
the financial services commission may hold hearings
for any reason deemed necessary
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
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT:
free-look period has expired
under an individual health insurance policy, the time limit of certain defenses provision states that nonfraudulent 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
the insurance guaranty fund association is
funded by admitted insurance companies through assessments
a life insurance application may be rejected on the basis of all these factors EXCEPT
gender
The purpose of the_________ period clause is to avoid an unintentional lapse of a life insurance policy.
grace
Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
grace period
The Florida Employee Health Care Access Act was established to make
group health insurance available to employers with up to 50 employees
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 for the overall risk class?
guaranteed renewable
a nonforfeiture clause gives the policyowner lifetime income guaranteed values even if the policy has lapsed unemployment benefits cost of living allowances
guaranteed values even if the policy has lapsed
Basic Medical Expense Insurance
has lower benefit limits than Major Medical insurance
the health insurance portability and accountability act (HIPPA) gives privacy protection for:
health information
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
her group health plan
which of the following will a long term care plan typically provide benefits for?
home health care
under a basic medical expense policy, what does the hospitalization expense portion cover?
hospital room and board
in life insurance, the needs approach is used mostly to establish:
how much life insurance a client should apply for
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
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 can be purchased with one monetary deposit is called a(n)
immediate annuity
t sends proof of loss to her insurer for an acceptable medical expense under her individual health insurance policy. upon receipt, the insurer must pay the benefits
immediately
a long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
when determining the monthly benefit amount for a disability income policy, the factor that limits the amount a prospective insured may purchase is:
income
all of the following statements regarding a tax sheltered annuity (TSA) are true EXCEPT
income derived from the TSA is received income tax-free
Which health policy clause specifies the amount of benefits to be paid?
insuring
the______ clause identifies which losses resulting from an accident or sickness are insured by the policy
insuring
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n) entire contract provision consideration clause insuring agreement assignment agreement
insuring agreement
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the insuring clause consideration clause entire contract owner's rights
insuring clause
How are policyowner dividends treated in regards to income tax? dividends are not taxable interest on accumulations is taxed taxed as ordinary income taxed as capital gains
interest on accumulations is taxed
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT fixed period interest only fixed amount life income
interest only
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
which of these types of coverage is best described as a short term medical policy?
interim coverage
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
a policyowner would like to change the beneficiary on a life insurance policy and make the change permanent. which type of designation would fulfill this need?
irrevocable
a policyowner would like to change the beneficiary on an accidental death and dismemberment (ad&d) insurance policy and make the change permanent. which type of designation would fulfill this need?
irrevocable
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
a foreign insurance company doing business in Florida
is a company that was formed under the laws of another state
the accidental death and dismemberment (AD&D) provision in the life insurance policy would pay additional benefits if the insured:
is blinded in an accident
A license may be denied, suspended, or revoked if the licensee
is found guilty of misrepresentation
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?
is less restrictive
Stock Insurance Company
is owned exclusively by its shareholders
Dividends paid from a life insurance policy are guaranteed non-taxable issued by the insurer issued by the department of insurance
issued by the insurer
Credit Life insurance is: issued in any amount at the discretion of the applicant used in the event of loss of income issued in an amount not to exceed the amount of the loan coverage that waives the premiums on a loan payment in the event of total disability
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
who owns a stock company?
its stockholders
k , age 45, and his wife, age 43, have three children. they purchase a family policy that covers k's wife to the age of 65. All of these situations will pay a death benefit except k's wife dies at age 60 k's wife dies at age 66 a child dies at age 15 a child dies at age 18
k's wife dies at age 66
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 life policy
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
less than $5,000 per month benefit regardless of the cause
which of the following situations does a critical illness plan cover?
leukemia
What kind of premium does a Whole Life policy have? decreasing adjustable level deferred
level
Which of these are not an example of nonforfeiture option?
life income
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
which of the following is NOT a limited benefit plan?
life insurance policy
a whole life insurance policyowner does not wish to continue making premium payments. which of the following enables the policyowner to sell the policy for more than its cash value?
life settlement contract
in major medical expense policies, what is the objective of a stop loss provision?
limits an insured's out-of-pocket medical expenses
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n) 1035 exchange inter vivos gift non-forfeiture option living benefit
living benefit
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?
long term care
dental care coverage is designed to cover the costs of all of the following EXCEPT:
loss of income
basic hospital and surgical policy benefits are
lower than the actual expenses incurred
which of these is an element of an single premium annuity?
lump-sum payment
what is the main reason for regulating the insurance industry?
maintain the solvency of insurance companies
a catastrophic illness would be best covered by which of the following health insurance plans?
major medical
the individual health insurance policy that offers the broadest protection is a(n)______ _______ policy
major medical
An employer that offers a qualified retirement plan to its employees is eligible to
make tax-deductible contributions to the plan
Defamation occurs when an agent makes a false statement intended to
malign another insurer
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the transfer amount
Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on
march 1
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the:
marital deduction
According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase?
marital status
which of these factors do NOT play a role in the underwriting of a life insurance policy?
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 an agent telling a prospective client that a policy's dividends are guaranteed?
misrepresentation
Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?
misrepresentation
convincing a prospective insured to buy an insurance policy based on exaggerations is called
misrepresentation
during the course of an insurance transaction, if an agent makes a false or incomplete statement, he/ she could be found guilty of
misrepresentation
a policyowner is allowed to pay premiums more than once a year under which provision?
mode of premium
J is issued a life insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of life insurance policy is this? endowment graded premium life straight life modified premium life
modified premium 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? variable life adjustable life graded premium whole life modified whole life
modified whole life
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
monthly
Periodic health claim payments MUST be made at least
monthly
Under an individual disability policy in Florida, what is the MINIMUM schedule of time in which claims must be made to an insured?
monthly
which of these is NOT an element of life insurance premiums?
morbidity rate
which type of insurance company allows their policyowners to elect a governing body?
mutual
according to Florida law, a group life insurance policy requires a minimum of how many insured?
no minimum
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called
noncancelable
What type of renewability guarantees premium rates and renewability?
noncancelable
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
none
which of the following BEST describes a short-term medical expense policy?
nonrenewable
which statement is true regarding a minor beneficiary?
normally, a guardian is required to be appointed in the beneficiary clause of the contract
In an individual retirement account (IRA), rollover contributions are:
not limited by dollar amount
the notice of claims provision requires a policyowner to
notify an insurer of a claim within a specified time
An accident policy will most likely pay a benefit for a(n)
off-the-job accident
in Florida, agents are allowed to engage in rebating if
offered to all insureds in the same actuarial class
An example of rebating would be
offering a client something of value not stated in the contract in exchange for their business
An example of unfair discrimination would be
offering different terms of coverage for different policyowners having the same risk classification
Which entity approves the insurance policy forms used in Florida?
office of insurance regulation (OIR)
Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract
once each year
generally, how long is a benefit period for a major medical expense plan?
one 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 policyowner
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
ordinary income tax and a %10 tax penalty for early withdrawal
Deductibles are used in health policies to lower
overuse of medical services
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? non-forfeiture entire contract insuring clause owner's rights
owner's rights
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
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
k owns a whole life policy. if k wants an increasing death benefit to protect against inflation, which dividend option should she chose? paid-up additional insurance cash option reduced premiums accumulate with interest
paid-up additional insurance
what does medicare part a and part b cover?
part a covers hospitalization; part b covers doctor's services
Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: cash value that will ultimately replace the death benefit nonforfeiture benefit options premiums that remain fixed for the life of the policy partial withdrawal features beyond a surrender charge period
partial withdrawal features beyond a surrender charge period
All of the following statements are true regarding a policy's Grace period EXCEPT past due premiums are waived policy loans may still be made full coverage continues grace period terms are stated in the policy
past due premiums are waived
which statement is TRUE in regards to a policy loan?
past-due interest on a policy loan is added to the total debt
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
the benefits under a disability buy-out policy are
payable to the company or another shareholder
which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?
people that smoke
which of the following best describes a contingent beneficiary?
person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
the underwriting process involves all of these, EXCEPT for:
policy loan
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
a cost of living rider gives the insured
additional death benefits
a term life rider offers the insured
additional life coverage
An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
$7,000
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 September 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 expenses for 2013?
$1,000
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is
$1,250
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?
$1,250 3.5 months - 1 month elimination period = 2.5 months. 2.5 months X $500 monthly indemnity = $1,250.
M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
$1,600 In this situation, $2,200 - $200 deductible x 80% = $1,600.$2,000 x 80% = $1600$2,000 - $400 (20% of $2000) = $1600
Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:
$10,000
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 (In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100)
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
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? return of premiums paid cash value plus interest $20,000 death benefit face amount plus interest
$20,000 death benefit
Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client
$25
J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?
$25,000
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
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay
$3,600
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000
P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask 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
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? straight life accumulates faster than limited pay life 20-pay life accumulates cash value faster than straight life cash value accumulation of both 20-pay life and straight life depend on the insurer's financial rating 20-pay life straight life accumulate cash value at the same rate
20-pay life accumulates cash value faster than straight life
The usa patriot act was enacted in:
2001
Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.
24
how many hours of continuing education must a newly licensed agent complete every two years?
24
within how many days after policy delivery can a Medicare supplement policy be returned for a 100% premium refund?
30
within how many days must a licensee notify the department of financial services of a change in address?
30
how long is the typical free look period for long term care insurance policies?
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 term to age 70 universal life adjustable life
30 pay life
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
A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination?
31 days
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
in Florida, a health policy that is paid on a quarterly basis requires a grace period of
31 days
S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?
36
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
how many days does an insurance company have to reject a reinstatement application before it is automatically reinstated?
45
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
Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.
5
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5
According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?
At the time of application
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary
Which of the following types of policies pays a benefit if the insured goes blind? universal life AD&D endowment adjustable life
AD&D
all are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n) term rider Accidental Death and Dismemberment rider (AD&D) family rider annuity
Accidental Death and Dismemberment rider (AD&D)
a "reimbursement policy" pays what amount of covered long-term care expenses?
Actual covered expenses up to the daily maximum
which of the following types of care is typically not covered in a long-term care policy?
Acupuncture
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of Adherence Assimilation Aleatory Adhesion
Adhesion
which of the following statements describes what an accident and health policyowner may NOT do?
Adjust the premium payments
in health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments
After an insured has become totally disabled as defined in the policy
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? Aleatory Adhesion Unilateral Consideration
Aleatory
Under which of the following circumstances will the benefits under COBRA continuation coverage end?
All group health plans are terminated by the employer
which of the following acts is an agent NOT authorized to do on behalf of an insurer?
Authorize claim payments
Which two entities regulate variable annuities?
Department of Financial Services; and Securities Exchange Commission
The Consideration clause in a life insurance contract contains what pertinent information?
Amount of premium payments and when they are due
which of the following is considered to be misrepresentation?
An agent guaranteeing a policy's dividends
all of the following entries are classified under the four principal areas of Florida insurance law EXCEPT
An agent's commission
which of the following statements BEST describes what the legal actions provision of an accident and health policy requires?
An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed
An example of false advertising would be
An insurer exaggerating its dividends in a magazine advertisement
When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n)
Anti-Money Laundering violation
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
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the:
Applicant's physician
Before a life insurance policy is issued, which of these components of the contract is required?
Applicant's signature on application
An incomplete life insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing agent
Traditional individual retirement annuity (IRA) distributions must start by:
April 1st of the year following the year the participant attains age 70 1/2
Under a graded premium policy, the premiums Are higher during the policy's early years Are lower during the policy's early years Are constant throughout the length of the policy Can be adjusted by the insured
Are lower during the policy's early years
which of the following medical expenses does cancer insurance NOT cover?
Arthritis
what action can a policyowner take if the application for the bank loan requires collateral?
Assign policy ownership to the bank
which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?
Business Overhead Expense
Medicaid was designed to assist individuals who are
Below a specific income limit
what is considered to be a characteristic of an immediate annuity?
Benefit payments start within one payment period of purchase
T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?
Benefits are taxable to T
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? Unilateral Adhesion Aleatory Bilateral
Bilateral
accidental death coverage is provided to commercial airline passengers in which of the following types of policies?
Blanket Accident policy
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
Which statement about whole life policy is true? Beneficiary may be changed only with the consent of the premium payor Death benefit can usually be adjusted Cash value may be borrowed against Premiums are flexible
Cash value may be borrowed against
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
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? revocable assignment beneficiary change irrevocable assignment Collateral assignment
Collateral assignment
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 organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?
Commercial insurer
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 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 customer's signature, then send the application off to the insurance company
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 customer's signature, then send the application off to the insurance company
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. Consideration Unilateral Aleatory Conditional
Conditional
An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?
Consideration Clause
Which of the following consists of an offer, acceptance, and consideration? Warranty Estoppel Contract Representation
Contract
Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation
Contract
Dividends payable to a policy owner are: Guaranteed Declared by the state Declared by the insurance company Strictly regulated
Declared by the insurance company
A (n)_______ term life policy is normally used when covering an insured's mortgage balance. Increasing Decreasing Level Variable
Decreasing
The combination of whole life and _______ term insurance is referred to as a family income policy Decreasing universal variable level
Decreasing
Credit life insurance is typically issued with which of the following types of coverage? Annual renewable term Decreasing term Individual whole life Group term
Decreasing term
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing term
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? Level term policy Whole life policy Limited-pay policy Decreasing term policy
Decreasing term policy
E and F are business partners. Each steaks out $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business and four months later E dies. Although he wasn't married with three children at the time of death the primary beneficiary is still F. However on insurable interest no longer exist. Where will the proceeds from E's life insurance policy be directed to? F The dissolved partnership E's family E's estate
F
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 Face amount plus the policy's dividends The greater amount of the policy's death benefit or the cash value Face amount plus total premium paid throughout the life of the policy
Face amount plus the policy's cash value
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the? State Guaranty Association Fair Labor Standards Board Fair Credit Reporting Act National Association of Insurance Commissioners
Fair Credit Reporting Act
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? State Guaranty Association Fair Labor Standards Board Fair Credit Reporting Act National Association of Insurance Commissioners
Fair Credit Reporting Act
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
Fair Credit Reporting Act
The act of an insurance company publishing misleading information about its policy's provisions is called
False advertising
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? Family Lump Sum Policy Family Maintenance Policy Family Survivor Policy Family Income Policy
Family Maintenance Policy
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Family maintenance policy family income policy survivor policy family survivor policy
Family maintenance policy
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
Taking receipt of premiums and holding them for the insurance company is an example of: Commingling Misappropriation Theft Fiduciary responsibility
Fiduciary responsibility
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
which of the following is NOT a consequence for placing business with an unauthorized insurer?
First degree misdemeanor
which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?
Florida Insurance Guaranty Fund Association
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 these statements concerning an individual disability income policy is TRUE?
Normally includes an Elimination period
which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
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
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning
November 1
All of these statements concerning Settlement Options are true EXCEPT: Increased proceeds can be provided through accumulation of interest Rapid depletion of proceeds can be avoided Proceeds can be administered by the insurance company Only the beneficiary may select
Only the beneficiary may select
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?
P will receive declared dividends
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
which of these statements is INCORRECT regarding a preferred provider organization (PPO)?
PPO's are NOT a type of managed care systems
When a policy pays dividends to its policyholders, it is said to be Profitable Mutual Nonparticipating Participating
Participating
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 is true concerning a Variable Universal Life policy? Policyowner controls where the investment will go and selects the amount of the premium payment Policyowner has no say where the investment will go but can choose the premium mode The investment vehicle for this type of policy is held in the insurer's general portfolio The death benefit can vary but the policyowner has no say in the premium amount paid
Policyowner controls where the investment will go and selects the amount of the premium payment
Which of these describe a participating life insurance policy? Policyowners are entitled to receive dividends Policyowners pay assessments for company losses Stock companies allow their policyowners to share in any company earnings Policyowners are not entitles to vote for members of the board of directors
Policyowners are entitled to receive dividends
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
Which Long Term Care insurance statement is true?
Pre-existing conditions must be covered after the coverage has been in force for six months
Which of these characteristics is consistent with a Straight Life policy? Owner can adjust both premium and death benefit Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner has the option of converting to term insurance Premiums are payable for as long as there is insurance coverage in force
Premiums are payable for as long as there is insurance coverage in force
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 Premiums are payable for a set period/ coverage expires at that point Premiums are payable until age 65/ coverage lasts a lifetime A single premium is paid at time of application/ coverage lasts until retirement
Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured
Which of the following actions is NOT possible with a Universal Life policy? Policy's cash value may be used to pay premiums Premium payments may be made at unscheduled times Premiums may be applied as a credit against income tax Face amount may be adjusted
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 time of renewal
Which of these options can an individual use their medical flexible spending account to pay for?
Prescription drugs
what is the purpose of the time of payment of claims provision?
Prevents delayed claim payments made by the insurer
the individual who provides general medical care for a patient as well as the referral for specialized care is known as a:
Primary Care Physician
what determines the full amount of social security retirement benefits a qualified individual is entitled to receive?
Primary Insurance Amount (PIA)
Which of these is NOT a type of agent authority? Express Implied Principal Apparent
Principal
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 paid to P's estate
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
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 statements BEST describes dental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
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 is NOT considered rebating?
Sharing commissions with an agent licensed in the same line of business
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
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT:
Signed HIPAA disclosure
An immediate annuity consists of a:
Single Premium
Which mode of payment is NOT used by health insurance policies?
Single premium
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 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 plan
Which of the following BEST describes a warranty? Guarantees that an insurance company will pay a benefit Statement believed to be true to the best of one's knowledge Cannot be used to void the contract Statement guaranteed to be true;p
Statement guaranteed to be true
the insuring clause
States the scope and limits of the coverage
which of the following is NOT included in an annuity contract?
ad&d rider
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
D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?
The full face amount
A policy of adhesion can only be modified by whom? The agent The applicant The primary beneficiary The insurance company
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
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?
The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
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
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 Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?
The premiums for the handicapped child are not paid
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
The Consideration clause of an insurance contract includes: The buyer's guide A summary of the coverage provided The named beneficiary The schedule and amount of premium payments
The schedule and amount of premium payments
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
which of the following statement is true about most blue cross/ blue shield organizations?
They are nonprofit organizations
Medicare is intended for all of the following groups EXCEPT
Those enrolled as a full-time student
how does a typical variable policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to treasury bills
Through mutual funds, stocks, bonds
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 Defenses
Which Accident and Health policy provision addresses preexisting conditions?
Time Limit on Certain Defenses
the policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is
Time Limit on Certain Defenses
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. Whole Universal Graded Increasing
Universal
Which of the following life insurance policies combined term insurance with an investment element? Increasing term life Decreasing term life Universal life Graded life
Universal life
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Before the appointment is scheduled Upon completion of the application At the policy's delivery When the insurer receives the MIB report
Upon completion of the application
When is the face amount paid under a Joint Life and Survivor policy? When policy reaches maturation Upon death of the first insured Upon death of the last insured When one of the insureds becomes disabled and no longer able to make premium payments
Upon death of the last insured
which of the following BEST describes how pre-admission certification is used?
Used to prevent nonessential medical costs
which of the following phrases refers to the fees charged by a health care professional?
Usual, customary, and reasonable expenses
A(n) ______ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities Adjustable Term Universal Variable
Variable
In order to sell a(n)_______ life policy, a producer is required to register with the financial industry regulatory authority (FINRA). Variable adjustable straight term
Variable
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?
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? Modified Whole Life Variable Life Universal Life Adjustable Life
Variable Life
At what point does an formal contract become binding? When one party makes an invitation and the other makes an offer When an offer is made by one party and the other party rejects the offer and makes a counteroffer When one party makes an offer and the other party accepts that offer When one part makes the required payment
When one party makes an offer and the other party accepts that offer
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
When must insurable interest be present in order for a life insurance policy to be valid? When the insured dies Within the incontestability period When the application is made Before the insured dies
When the application is made
When is the face amount of a Whole Life policy paid? At the policy's maturity date only When the insured dies or at the policy's maturity date, whichever happens first Only when the insured dies When the policy is surrendered
When the insured dies or at the policy's maturity date, whichever happens first
If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations EXCEPT
When the state prohibits this by law
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term life Whole life Credit life Universal life
Whole life
What type of insurance offers permanent life coverage with premiums that are payable for life? Credit life Renewable term life Whole life Endowment
Whole life
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? joint policy joint survivor policy whole life with other insured rider whole life policy with guaranteed insurable option
Whole life policy with other insured rider
which of the following activities will NOT result in the suspension of an agent's license?
Working for a foreign insurer
according to Florida's rules on disclosure, a life insurance applicant is expected to be provided with
a Buyer's Guide and Policy Summary
All students attending a large university could be covered by
a blanket policy
in Florida, deceptive advertising is considered to be
a form of misrepresentation
What is Medicare?
a hospital and medical expense insurance program
A stock life insurance company that issues both participating and nonparticipating policies is doing business on
a mixed plan
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
an individual who purchases a life annuity is given protection against:
a risk of living longer than expected
Which provision is NOT a requirement in a group life policy?
accidental
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
accidental death and dismemberment clause
a policyowner may generate taxable income from which of the following dividend options?
accumulation at interest
all of the following will result in the suspension of an agent's license EXCEPT
acting with fiduciary responsibility
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
income taxes plus a 10% penalty tax on $30,000
Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? increase face amount decrease face amount increase premium-paying period decrease premium payment
increase face amount
how does an indexed annuity differ from a fixed annuity?
indexed annuity owners may receive credited interest tied to the fluctuations of the linked index
Which of these retirement plans can be started by an employee, even if another plan is in existence?
individual retirement account (IRA)
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the
initial deductible
Medicare Part B does NOT cover
inpatient hospital services
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
inspection report
k is an annuitant currently receiving payments. if she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. this is called a(n)
installment refund annuity
a multiple employer welfare arrangement (MEWA) provides what type of benefits?
insurance
In a Key Employee life insurance policy, the third-party owner can be all of the following EXCEPT
insured
who has the option to renew a renewable term policy? agency agent insured beneficiary
insured
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
T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards. How will the insurer likely consider this condition?
insurer will likely treat as a pre-existing condition which may not be covered for one year
