Florida Life & Health Online Course (PV)

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When may an insurer may not issue or use any form disapproved by the office, or as to which the office has withdrawn approval?

After the effective date of the order of the office.

If the Current Assumption Whole life policy's cash values grow too quickly then the policy may have its cash values equal the policy's face amount prior to age ___________ thereby causing the policy to mature (or endow).

100 or 121

Double dismemberment benefits are provided at ________% of the rider (2 times the capital sum).

100%

Noncontributory group plans require _________% participation.

100%

Unilateral Contract

A contract in which only one party is legally bound to the contractual obligations.

Bond

A form of credit

Electing a _____________ option for an annuity means that the annuitant will receive an income for life or for a temporary period of time. A-Settlement B-Distribution C-Funding D-Pay-In

A-Settlement

The _______ rider provides level term coverage on the life of all of the insured's children.

Child Rider

This option allows the insurer to use the death benefit to purchase an annuity on behalf of the beneficiary. As with other settlement options, any interest paid is taxed as ordinary income. There are several additional options available:

Life Income Option

If the beneficiary is concerned about a particular amount of cash flow each month, the _______ settlement option should be selected. A-Interest Only B-Life with Period Certain C-Fixed Period D-Fixed Amount

D-Fixed Amount Settlement Option

X is 57 years old, and planning for their retirement. They do not know what their cash flow will look like over the next 10 years, but wants to fund an annuity to provide retirement income. Which of the following premium funding methods would be best for X to consider? A-Variable B-Single C-Periodic D-Flexible

D-Flexible

D-Flexible- With a flexible premium, contributions may be made as often and in whatever amount the contract owner desires. However, most insurers do set a minimum and a maximum dollar amount they will accept.

Permanent insurance is designed to provide coverage ___________. A-For a temporary period of time B-To age 65 C-For a specified period of time D-For an entire lifetime

D-For an entire lifetime

Regarding Medicare Part B, which of the following is not true? A-All recipients pay a monthly premium B-Provides coverage for outpatient services C-It is optional coverage for those eligible for Part A D-For citizens over the age of 65, there is no additional premium or cost

D-For citizens over the age of 65, there is no additional premium or cost

Any employee-paid group life insurance premiums are __________. A-Tax-deferred B-Tax-exempt C-Tax-deductible D-Not tax-deductible

D-Not tax-deductible- Any employee-paid group life insurance premiums are not tax-deductible.

___________ in a policy allow the owner to name the beneficiary, choose a dividend option or settlement option, or borrow against the contract. A-Incontestable Clause B-Consideration Clause C-Insuring Clause D-Ownership Provision

D-Ownership Provision

Variable life characteristics include:

Fixed Premium The policy cash accumulation is split between the insurer's General Account and Separate Account. General Account (Guaranteed Values) Separate Account (Nonguaranteed Values)

The LTC outline of coverage must include: -A statement that the policy has been approved as a LTC insurance policy meeting the requirements of _____________.

Florida law

An agreement enforceable by law in which the insurer agrees to pay a certain amount of money upon the death of the insured, and the policyholder agrees to pay the premium.

Insurance Contract

Payments are guaranteed for the lifetime of the recipient or a specified period of time, whichever is longer. If the recipient dies prior to the end of the period certain, the payments continue to another person until the end of the period certain.

Life Income Period Certain

Determine which of the following statements apply to life insurance or an annuity -Creates an estate

Life Insurance

Determine which of the following statements apply to life insurance or an annuity -Issued as a policy

Life Insurance

Determine which of the following statements apply to life insurance or an annuity -Owner, insured, beneficiary

Life Insurance

Determine which of the following statements apply to life insurance or an annuity -Pays a death benefit

Life Insurance

Determine which of the following statements apply to life insurance or an annuity -Protects against premature death

Life Insurance

Determine which of the following statements apply to life insurance or an annuity -Provides a benefit upon death

Life Insurance

Payments are made for the lifetime of the recipient. Upon death, if a recipient has not received an amount equal to the total death benefit, the balance is refunded to the beneficiary either in a lump sum called Cash Refund, or in installments as in the Installment Refund.

Life Refund

This is the sale of an existing life insurance policy to a third party for more than its cash surrender value, but less than its death benefit.

Life Settlement

Premium payments are for a specified time (20-Pay Life or 30-Pay Life) or to a specified age (Life Paid up at 65).

Limited Payment

Who do RRG's (Risk Retention Groups) insure?

Large groups of members in the same profession, such as real estate agents, or with similar liability exposures such as theme parks, go-cart tracks, or water slides.

Individuals who do not join the group plan when eligible and are required to provide evidence of insurability or wait until the next open enrollment period

Late enrollees

4 elements of a legal contract

Legal Purpose Agreement Consideration Competent party or someone that has the legal capacity to enter into a legal contract.

Requires 4 elements that include competent parties, legal purpose, offer and acceptance, and consideration

Legal contract

______________ delivery occurs when the producer delivers the policy to the owner or insured.

Legal delivery

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Fixed Amount

Settlement Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Fixed Period

Settlement Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Interest only

Settlement Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Life Income Joint and Survivor

Settlement Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Life Income Period Certain

Settlement Options

_________ Options allow for the distribution of the life insurance death benefit, to the named beneficiary or contract owner, as the situation warrants.

Settlement Options

An illness or disease that occurs after a policy is issued

Sickness

Because the selection of a lifetime annuity payment option typically may not be changed, an alternative to annuitization is a ________________.

Systematic Withdrawal Plan.

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Death benefits included in an insured's estate

Taxable

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Interest earned on policy dividends

Taxable

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Interest received from a life insurance death benefit settlement option

Taxable

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Life insurance cash withdrawals or surrenders that exceed the cost basis

Taxable

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Withdrawals, cash surrenders, and policy loans distributed from a MEC up to an amount equal to the earnings

Taxable

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) Interest received from a life insurance death benefit settlement option

Taxable

Term life insurance is primarily a _______ form of life insurance protection.

Temporary

Primary appeal of this insurance: Guaranteed coverage for a specific period and low premium outlay

Term Life

Life insurance with guaranteed premiums

Term Life Insurance

The premium for ______________ insurance is level for the duration of the stated term, which represents the average level of risk over the course of the policy.

Term insurance

If a policy is not approved as applied for and is issued as substandard, the insurer may make a "counteroffer" to the applicant. The insurer may issue a policy with a_____________ or ____________ to the policy.

a surcharge (higher rating) exclusions

In life insurance, __________________ is valid proof of death.

a true certified copy of the death certificate

Aggregate

a whole formed by combining several (typically disparate) elements

When benefits begin within ___________ of the issue date, this is referred to as 'immediate'.

a year

How often may the Office of Financial Regulation make investigations? a. As often as necessary b. Every 2 years c. Every 3 years d. Every 5 years

a. As often as necessary

A trial application is one submitted without ___________. The policy would not take effect until the policy is issued by the insurer, delivered by the agent, and the premium is paid.

a premium

Term life insurance coverage can be written separately or with other types of insurance, in the form of ____________ , to suit individual needs.

a rider

Riders are provided for a specified period of time as stated in the policy. It is typical for a rider to end at _________________.

a specified age

Term insurance offers temporary life insurance protection for ______________ time or ________________.

a specified period of time up to a specified age, such as 65.

The LTC outline of coverage must include: -If the policy is not expected to cover 100% of the cost of services for which coverage is provided, ______________.

a statement clearly describing this limitation

An equity-indexed annuity offers interest rates that are linked to the positive performance of ________________ , typically Standard & Poor's 500 Index.

a stock market-related (equity) index

Which of the following is considered an agent? a. Insurance producer b. Public adjuster c. Customer service representative d. Limited customer representative

a. Insurance producer

The low initial term life insurance premium outlay when the insured is young will ________ at renewal or upon ______________, and as the insured gets older, the policy can become more expensive.

increase conversion

If the actual return is greater than the AIR(Assumed Interest Rate), the monthly annuity payment will _______________________.

increase from the previous month.

In a Variable Life policy the premium is determined by the _________ and remains _____________ throughout the contract.

insurer fixed and level

In a Variable Life policy cash accumulation is split between the ____________ Account and _____________ Account.

insurer's General Account Separate Account.

The entire distribution from a qualified annuity (contributions and earnings) is subject to _____________ taxes.

ordinary income

As with other settlement options, any interest paid is taxed as _______________.

ordinary income.

The cash value continues to grow within the policy and will either be __________________ , or when ______________.

paid out as part of the death benefit the policy matures or endows

Partial withdrawal aka ____________

partial surrender

Mutual insurers typically issue _______________ policies.

participating

PCP

patient care plan

The ___________ phase of an annuity is called the Accumulation Period or Phase.

pay-in

The ___________ phase is the Annuity Period or Phase.

pay-out

Any claim arising in the grace period is ___________________.

payable, but any unpaid premium will be deducted from the claim when paid.

If Money Market rates increase in a Nontraditional Whole Life policy, either the policyowner ___________ or the cash value _______________.

pays a reduced premium will increase at a faster rate

A Buy-Sell Agreement can be funded with __________ insurance.

permanent or term insurance

Liability

personal responsibility

A mutual insurer is owned by ____________, who may be referred to as ___________.

policyholders members

PPO

preferred provider organization

The ____________ by the insured represents their consideration--a required element of a legal contract..

premium paid

Notifying the existing insurer of the planned replacement upon receiving proper notification with the new application is ____________ responsibility.

the Replacing Insurer's

Effectuation

the act of implementing

Disclosure

the act of making something known

It is very likely that if the policyowner is not the insured, the policyowner "owner" will be ______________.

the beneficiary

The premiums paid for decreasing term are lower than the premiums payable for level term since ______________________.

the benefit decreases throughout the term of the policy.

Agent Ethics can be summarized by the principle in the Golden Rule:

"Conduct business with a client as you would want business to be conducted with you."

Insurance Transaction

"Transact" with respect to insurance includes any of the following, in addition to other applicable provisions of this code: -Solicitation or inducement -Preliminary negotiations -Effectuation of a contract of insurance -Transaction of matters subsequent to effectuation of insurance contract and arising out of it

D has an accidental death and dismemberment policy with a $200,000 principal sum and a $100,000 capital sum. While mowing the lawn, D cut off a finger. How much will the policy pay?

Ordinary whole life insurance provides insurance protection to age __________, ____________ to age 100, and fixed level premium payments.

100 cash value accumulation

The Office of Insurance Regulation (OIR) aka

the "Office"

A person may not act as, advertise, or represent to be an insurance agent unless currently licensed by ________________.

the Department and appointed by an appointing entity, such as an insurer.

Fingerprints must be submitted to _______________

the Department of Enforcement and the FBI.

The CFO is a member of the Financial Services Commission, also known as

the Governor's Cabinet.

The Commission established and supervises

the Office of Insurance Regulation and Office of Financial Regulation.

Completing a Notice Regarding Replacement which must be signed by the applicant and producer is ____________ responsibility.

the Producer's

Obtaining information regarding any existing policies, including the names of the existing insurers and policy numbers (this must be provided to the replacing insurer) is ______________ responsibility.

the Producer's

Providing copies of the Notice Regarding Replacement and any sales proposals to the applicant and replacing insurer is _____________ responsibility.

the Producer's

Maintaining copies of the information regarding replacement for a specified period of time is ____________ responsibility.

the Replacing Insurer's

Victoria, age 62, calculated last year's gross income to be $60,000. When she totaled up the cost of individual Medical and Long-term Care insurance, as well as her various out-of-pocket medical costs, she discovered the total was $7,500, which meant she could deduct _______ from her taxable income.

$1,500

FL. Medicare Supplement Insurance -Open Enrollment Periods -65 and Over

- A Medicare supplement insurer cannot deny an application that is submitted during the 6-month open enrollment period that starts the first day of the first month a person turns 65 and is also enrolled for benefits under Part B.

FL. Medicare Supplement Insurance -Open Enrollment Periods -Under 65

- A Medicare supplement insurer must offer the opportunity of enrolling in a Medicare supplement policy without conditioning the issuance of the policy on, and without discriminating in the price of the policy based on, the medical or health status or receipt of health care by the individual to any Florida resident who is under age 65 and eligible for Medicare by reason of disability or end-stage renal disease and is enrolled in Medicare Part B upon the request of the individual during: -The 6-month period beginning with the first month the individual is eligible for Medicare; or -The 2-month period following termination of coverage under a group health insurance policy

Short-term Health Insurance (Florida)- health insurance coverage provided by an insurer with an expiration date specified in the contract that is less than ____________ after the original effective date of the contract and, taking into account renewals or extension, has a duration no longer than ______________ in total.

-12 months - 36 months

Florida Medicare Required Provisions -Minimum Standards

-A Medicare supplement policy filed with the Office must: Have a definition of "Medicare eligible expense" that is not more restrictive than health care expenses covered by Medicare and recognized as reasonable by Medicare Be written in simplified language and be easily understood by purchasers

The outline of coverage must include:

-A statement identifying the applicable category of coverage afforded by the policy -A brief description of the principal benefits and coverage provided in the policy -A summary statement of the principal exclusions and limitations or reductions, including preexisting -conditions, probationary periods, elimination periods, deductibles, coinsurance, and any age restrictions -A summary statement of the renewal and cancellation provisions -A statement that the outline contains a summary only of the details of the policy applied for and that the policy issued should be referred to for the actual contractual governing provisions -When home health care coverage is provided, a statement that such benefits are provided in the policy

FL. Medicare Supplement Insurance Marketing Standards Every insurer, health care service plan, or other entity marketing Medicare supplement insurance coverage in Florida, directly or through its producers, must: -Establish _________ -Establish __________ -Display _________ -Inquire ________

-Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate -Establish marketing procedures to assure excessive insurance is not sold or issued -Display prominently on the first page of the outline of coverage and policy: "Notice to buyer: This policy may not cover all of the costs associated with medical care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations." -Inquire and make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance

If all insurers include a coordination-of-benefits provision, the following rules determine the order in which benefits under the respective health policies or plans will be determined: -First___________ -Second______________ -Third___________

-First, benefits of a plan covering a person as an employee, member, or subscriber -Second, benefits of a plan of an active worker covering a person as a dependent -Third, Medicare benefits

If two or more policies or plans cover a dependent child of divorced or separated parents, benefits for the child are determined in this order: -First,_________ -Second, _____________ -Third, ________ -If the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child, ____________

-First, the policy or plan of the parent with custody of the child -Second, the policy or plan of the spouse of the parent with custody of the child -Third, the policy or plan of the parent not having custody of the child -the benefits of that policy are determined first

Coordination of benefits is not permitted against the following:

-Indemnity-type policy -Excess insurance policy -Policy with coverage limited to specified illnesses or accidents -Medicare supplement policy

The following questions need to be asked when determining which policy should be purchased (5)

-Is protection needed on a short-term or long-term basis? -How much coverage is needed? -How much premium can the policyowner afford to pay? -Does the policyowner have a need to access cash from the policy? -What other types of benefits can be added to the basic coverage to meet all the policyowner's needs?

Florida Medicare Required Provisions

-Pre-existing Conditions -Free Look -Minimum Standards

Distributions on gains withdrawn from a MEC prior to age 59 1/2 are subject to a ________________.

10% penalty in addition to taxation

Typically a policy is designed to mature/endowed when the insured reaches age ________

100

Florida Employee Health Care Access Act PURPOSE -Promote ______________ -Establish ________________ -Establish _______________

-Promote the availability of health insurance coverage to small employers regardless of their claims experience or their employees' health status -Establish rules regarding renewability of that coverage and limitations on the use of exclusions for preexisting conditions -Establish a reinsurance program for coverage of small employers, and to improve the overall fairness and efficiency of the small-group health insurance market

What requirements does a person needs to meet to qualify for Fl. Medicaid?

-Residency -Medical need -Age, disability, or blindness -Financial

What must the agent and insurer take into consideration in order to determine whether the applicant meets the standards by the insurer?

-The applicant's ability to pay -The applicant's goals or needs -The values, benefits, and costs of the applicant's existing insurance

No policy may be advertised, solicited, delivered, or issued for delivery in this state unless it complies with these benefit standards:

-The policy may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents -Provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible and copayment percentages -A Medicare supplement policy may not provide for termination of coverage of a spouse solely because of an event specified for termination of coverage of the insured, other than nonpayment of premium -Each Medicare supplement policy must be guaranteed renewable

What does enforcing the financial institution codes provide for and promote?

-The safe and sound conduct of the business of financial institutions Prudent conservation of the assets of financial institutions -Maintenance of public confidence -Protection of the public interest in the safety, soundness, and preservation of financial institutions -Protection of the interests of the depositors and creditors of financial institutions

When the initial premium is not paid with the application, the producer must collect the premium before coverage can begin and must also obtain ________________ at the time of policy delivery.

-a signed Statement of Good Health from the applicant/insured that verifies that the insured has remained in the same health status continuously since the time of the application.

What 2 health plans will Florida's Statewide Medicaid Managed Care Long-Term Care Program offer?

-an HMO and a PSN or provider service network.

Florida Employee Health Care Access Act A small employer employs _____________ -Eligible employees are anyone who works full time, has a normal workweek of _________________________. -____________________ each have one employee, himself, and qualify as small employers eligible for small group insurance.

-from 1 to 50 employees, and the majority work in Florida. -at least 25 hours, and has met any other applicable requirements. -Sole Proprietors, Independent Contractors, and Self-employed Individuals

Regarding any examination, investigation, or hearing being conducted under this code, the Department or Office: May administer __________________. Will have the power to __________________.

-oaths, examine and cross-examine witnesses, receive oral and documentary evidence -subpoena witnesses, compel attendance and testimony, and require by subpoena the production of books, papers, records, files, correspondence, documents, or other evidence which is relevant to the inquiry

The Accidental Death portion of the Accidental Death and Dismemberment rider pays out a ____________ sum. The dismemberment part pays out a __________ sum.

-principal sum -capital sum

The purpose of the Florida statutes regarding long-term care policies is to: -Promote _________. -Protect ___________. -Establish ____________. -Facilitate ___________. -Facilitate ___________.

-the public interest and the availability of LTC insurance policies -applicants for LTC insurance from unfair or deceptive sales or enrollment practices -standards for LTC insurance -public understanding and comparison of LTC insurance policies -flexibility and innovation in the development of LTC insurance coverage

3 License Types

1-Agent 2-Insurance Agency 3-Unaffiliated Agent

Purchases a single premium, 1-year term benefit. Premiums are calculated at the insured's attained age; also referred to as the fifth dividend option. This is the ___________ Dividend Option.

1-Year Term

The free look period is usually _________ days, unless state law specifies otherwise.

10 days

Premiums for "qualified" long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed ______% of the insured's adjusted gross

10%

A person is considered chronically ill if a licensed health care professional has determined within the last ________months that person is unable to perform at least ______ activities of daily living for at least _____ days without substantial assistance.

12 months 2 90 days

Fiscal Year (FY) time period

12-month planning cycle in business and government (October 1 through September 30 for government)

2001 CSO Mortality tables endow at age

121

This Child Rider is usually offered at one premium rate and will cover newborns after _________ days of life and adopted children who can be added to the coverage without increasing the premium.

14 days

The Time Limit on Certain Defenses (Incontestable) period is _____ years under individual health and disability contracts.

Long-Term Care Rider provides up to 100% of the policy benefits if the insured qualifies for long-term care benefits as defined in the rider, such as the inability to perform ______ out of ________ activities of daily living.

2 out of 6

The Suicide Clause states if the insured commits suicide, while sane or insane, within typically _____ years from the issue date, the insurer's liability is limited to ____________.

2 years a refund of premium.

A Medicare Supplement Policy must include, as a core benefit, Medicare Part B coinsurance in the amount of _______.

20%

If the Division of Consumer Services requests information from a licensee to address allegations raised from a complaint, an administrative penalty may result if the licensee fails to respond to the request in writing within ____ days of receipt.

20- Upon receiving a consumer complaint, the Division may request information from a person licensed or issued a certificate of authority to address the issues and allegations raised in the complaint. Failure to respond to the request in writing within 20 days of receipt may result in an administrative penalty.

The Child Rider allows children to have coverage to a specified age (______ to _______) and are usually given the option to convert to a permanent policy without ___________.

21 to 25 evidence of insurability

An agent licensed within the past 5 years must complete ______ hours of continuing education every ______ year(s).

24 hours 2 years An agent licensed within the past 5 years must complete 24 hours of continuing education every 2 years.

A person is considered terminally ill when a physician has certified that person has a condition which is expected to result in death within _____ months.

24 months

Insurance company appointments are valid for __________ if effective in a licensee's birth month

24 months

New appointments which became effective IN a licensee's birth month will expire this many months later on the last day of the birth month and are subject to renewal by the appointing entity at that time (and every _______ months thereafter).

24 months later (for both)

The Guaranteed Insurability rider allows the insured to purchase stated amounts of additional insurance every ____ years based on certain ages. (specifically ______, ___, ___, ___, ___, and ___), events, or specified dates without __________ up to a maximum age, usually _______.

3 25, 28, 31, 34, 37, and 40 evidence of insurability 40

Core Benefits of Medicare Supplement policies cover ____ pints of blood.

3 Pints

A licensee must keep books, accounts, and records pertaining to premium payment for at least how many years after payment

3 years

A licensee must keep books, accounts, and records pertaining to premium payment for at least how many years after payment?

3- A licensee must preserve books, accounts, and records pertaining to premium payment for at least 3 years after payment.

To qualify for the Waiver of Premium, the insured must be disabled for a waiting period of _________ months.

3-6 months.

A licensee must report any administrative action taken against them to the Department of Financial Services within ___ days after disposition?

30- A licensee must report any administrative action taken against them to the DFS within 30 days after disposition.

A change of address must be reported to the DFS within how many days after the change?

30- A new residence address, principal business street address, mailing address, contact telephone numbers, including a business telephone number, or e-mail address must be reported to the Department of Financial Services within 30 days after the change.

An insurer must file written notice of termination of an appointment to the Department within how many days after terminating the appointment?

30- An insurer may terminate an appointment at any time by giving 60 days' advance notice to the appointee and must file a written notice of termination of the appointment to the Department within 30 days after the termination.

The insurer must maintain a complete file of advertisements for a period of at least:

4 years- All advertisements must be maintained in the file at the insurer's home office for a period of 4 years or until the filing of the next regular report or examination of the insurer, whichever is longer.

The Guaranteed Insurability rider drops at age _______.

40.

Accidental Death and Dismemberment is a rider that provides an additional benefit in addition to the base of the policy. The rider pays __________% of the rider amount (capital sum) for accidental dismemberment losses, such as the loss of a limb, or eyesight.

50%

If the insured is receiving regular disability income payments, the insurer can require notice of continuance of claim every ______ months.

6 months

There is usually a maximum _________month elimination period before premiums are waived.

6-month

The Legal Actions provision preserves the insured's right to bring suit against his/her own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action.

A policy can avoid being deemed a MEC if the policyowner receives a refund of excess premiums by the insurer within _________ of the end of the contract year.

60 days

60- The insured must wait at least 60 days following the filing of a proof of loss before pursuing any legal action against the insurer.

Within how many days must the first premium be paid for the converted policy after the group policy was terminated?

63 days

Within how many days must the first premium be paid for the converted policy after the group policy was terminated?

63- Written application for the converted policy must be made and the first premium must be paid to the insurer, not later than 63 days after termination of the group policy.

Unless the insured is disabled, the Waiver of Premium rider drops at age ________.

What are the grace periods for each premium mode?

7 days for weekly, 10 days for monthly, 31 for all others- According to the Grace Period Provision (a Mandatory Uniform Provision), this is the correct response.

Policies with fixed interest loan rates usually have a maximum interest rate of ______%

8%.

Double dismemberment benefits are only payable if the loss is accidental and occurs within ___________ days of the accident.

90 days

Assures the continuation of the business by providing benefits to the surviving business partners to buyout a business partner's interest in the event one of them dies unexpectedly

A Buy-Sell Agreement

Corridor Deductible

A Major Medical deductible that applies between benefits paid by the Basic plan and the start of the Major Medical benefits

A plan of coverage for health benefits under Medicare Part C

A Medicare Advantage Plan

Coordinated care plans which provide health care services, including HMO, PPO, and provider-sponsored organizations

A Medicare Advantage Plan

A ______________ policy does not include Medicare Advantage Plans.

A Medicare supplement

Florida Medicare Required Provisions -Free Look

A Medicare supplement policy or certificate must have a notice prominently displayed with a no-loss cancellation clause enabling the applicant to return the policy within 30 days after receiving the policy or the certificate, with return in full of any premium paid.

Florida Medicare Required Provisions -Pre-existing:

A Medicare supplement policy or certificate must not exclude benefits based on a preexisting condition if the individual has a continuous period of creditable coverage of at least 6 months as of the date of application for coverage.

A ____________rider waives the policy premium in the event of the death or total disability of the premium payor. Usually found in policies covering children to the child's age 21 or 25.

A Payor benefit

When a firm purchases a policy at 60 to 80% of the face amount, expecting to profit as the new policyowner at the time of claim. The insured is provided with tax exempt discounted value during the terminal illness, relinquishing all ownership rights to the buyer.

A Viatical Settlement

Rating Manual

A book containing classifications and rates for a given line of insurance

Insurance Agency

A business location at which an individual, firm, partnership, corporation, association, or other entity, but not an employee, that engages or employs individuals to engage in any activity which by law may be performed only by a licensed insurance agent.

Unaffiliated Agent

A licensed agent, except a limited lines agent, who is self-appointed and practices as an independent consultant in the business of analyzing insurance policies, providing insurance advice or counseling or making specific recommendations of insurance policies for a fee in advance by a written contract signed by the parties.

What is the difference between a loan and a partial withdrawal?

A loan is taken against cash value remaining in the policy and a partial withdrawal is a permanent deduction of the cash value and cannot be reversed

Any individual who willfully obstructs the Department, the Office, or the Examiner in the examinations or investigations authorized by this part is guilty of?

A misdemeanor

Beneficiary

A person who derives advantage from something, especially a trust, will, or life insurance policy.

Annuitant

A person who receives an annuity.

______________ is an added benefit attached to the policy that supplements existing coverage.

A rider

Conditional Contract

A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.

current assumption whole life insurance

A type of whole life insurance where the cash values are based on the insurer's current mortality, investment, and expense experience. An amassment account is credited with a current interest rate, which changes over time.

With this type of contract, only the insurer makes a promise of future performance, and only the insurer can be charged with breach of contract. The policyowner can cancel the policy at any time without legal obligation.

A unilateral contract

Indexed Universal Life Insurance

A variation of universal life insurance with certain key characteristics; there is a minimum interest rate guarantee; additional interest is credited to the policy based on the investment gains of a specific stock market index; and a formula determines the amount of enhanced (additional) interest credited to the policy.

If Alvin purchases a Variable Universal Life Policy with a face amount of $250,000, and chooses death benefit Option B, upon his death the amount of the benefit payable to the beneficiary would be _________ if the policy had $25,000 in cash values. A-$275,000 B-Nothing C-$250,000 D-$225,000

A-$275,000

A-$275,000- With an Option B death benefit, the beneficiary will receive the face amount plus the cash value as of the date of death.

The mortality rate is based on mortality tables which show life expectancy and the death rate per _______ people living in the U.S. A-1,000 B-100,000 C-10,000 D-100

A-1,000- A unilateral contract is a one-sided contract.

A Medicare Supplement Policy must include, as a core benefit, Medicare Part B coinsurance in the amount of _______. A-20% B-10% C-15% D-25%

A-20%

A-20- Upon receiving a consumer complaint, the Division may request information from a person licensed or issued a certificate of authority to address the issues and allegations raised in the complaint. Failure to respond to the request in writing within 20 days of receipt may result in an administrative penalty.

An agent licensed within the past 5 years must complete ______ hours of continuing education every ______ year(s). A-24 hours/2 years B-20 hours/1 year C-30 hours/3 years D-30 hours/2 years

A-24 hours/2 years- An agent licensed within the past 5 years must complete 24 hours of continuing education every 2 years.

A policy is applied for on September 2, accepted as an insurable risk on September 20, mailed to the producer on September 22, and delivered by the producer in-person to the policyowner on September 25. The free look begins September ___. A-25 B-22 C-2 D-20

A-25- The free look period begins on the date the policyowner takes possession of the policy.

A licensee must keep books, accounts, and records pertaining to premium payment for at least how many years after payment? A-3 B-5 C-4 D-6

A-3- A licensee must preserve books, accounts, and records pertaining to premium payment for at least 3 years after payment.

A licensee must report any administrative action taken against them to the Department of Financial Services within ___ days after disposition. A-30 B-15 C-60 D-20

A-30- A licensee must report any administrative action taken against them to the DFS within 30 days after disposition.

An insurer must file written notice of termination of an appointment to the Department within how many days after terminating the appointment? A-30 B-45 C-60 D-90

A-30- An insurer may terminate an appointment at any time by giving 60 days' advance notice to the appointee and must file a written notice of termination of the appointment to the Department within 30 days after the termination

An insurer must file written notice of termination of an appointment to the Department within how many days after terminating the appointment? A-30 C-60 D-90

The insurer must maintain a complete file of advertisements for a period of at least: A-4 years B-3 years C-18 months D-2 years

A-4 years- All advertisements must be maintained in the file at the insurer's home office for a period of 4 years or until the filing of the next regular report or examination of the insurer, whichever is longer.

The Market Investigation division must examine domestic insurers at least once every: A-5 years B-7 years C-3 years D-2 years

A-5 years- Each domestic insurer must be examined at least once every 5 years, but the market conduct division may examine an insurer at any time if it's in the public's best interest.

The Market Investigation division must examine domestic insurers at least once every: A-5 years. B-7 years C-2 years D-3 years

A-5 years- Each domestic insurer must be examined at least once every 5 years, but the market conduct division may examine an insurer at any time if it's in the public's best interest.

Within how many days must the first premium be paid for the converted policy after the group policy was terminated? A-63 B-90 C-49 D-26

A-63- Written application for the converted policy must be made and the first premium must be paid to the insurer, not later than 63 days after termination of the group policy.

T has some heart health issues, but needs some additional life insurance coverage. What options should T consider? A-A group life insurance plan B-Universal Life Option B C-Adjustable Life D-A group health insurance plan

A-A group life insurance plan

A-A group life insurance plan- For those who don't qualify for an individual policy because of age or health reasons, group life coverage might be a good option.

Which of the following is correct regarding the Life and Health Insurance Guaranty Association? A-A person cannot use the existence of the Association in an advertisement in order to sell, solicit or induce the purchase of any insurance covered by the Association B-Membership to the Association is optional for insurers authorized to conduct business in Florida C-The Association is funded by the federal government D-The purpose of the Association is to provide insurance coverage to those who are unable to obtain insurance elsewhere

A-A person cannot use the existence of the Association in an advertisement in order to sell, solicit or induce the purchase of any insurance covered by the Association- The purpose of the Association is to protect the insured public against the failure of an insurer to per-form its contractual obligations due to impairment or insolvency; membership is mandatory for insurers authorized in Florida; and the Association is funded through member dues, or assessment fees, used to carry out the duties of the Association.

Which of the following best describes an Annual Renewable Term Policy? A-A policy with a level death benefit, but with increased premium at each renewal B-A policy with decreasing premium at each renewal C-A policy with an increased face value at each renewal D-A policy with increasing cash value at each renewal

A-A policy with a level death benefit, but with increased premium at each renewal

A-A policy with a level death benefit, but with increased premium at each renewal- Whether the policy period is 1 year, 5 years, 10 years, etc., the premium will increase at each renewal to sustain the same specified death benefit that was purchased when the policy was written. At renewal the premium is based upon attained age.

When can a policyowner make a change in the policy's coverage or other benefits if an irrevocable beneficiary has been named? A-After the irrevocable beneficiary dies B-At any time C-After obtaining a court order D-After obtaining the insurer's consent

A-After the irrevocable beneficiary dies- The policyowner may not change an irrevocable beneficiary unless the beneficiary dies or provides written consent for the change. If an irrevocable beneficiary is named, the owner may not make changes to the policy that affect the coverage or benefits without consent of the beneficiary.

A long-term care policy can exclude from coverage all of the following, except: A-Alzheimer's disease B-Hospitalization (acute care) C-Rest cures D-Intentionally self-inflicted injuries

A-Alzheimer's disease

A long-term care policy can exclude from coverage all of the following, except: A-Alzheimer's disease B-Hospitalization (acute care) C-Rest cures D-Intentionally self-inflicted injuries

A-Alzheimer's disease- Alzheimer's disease cannot be excluded from long-term care coverage.

G is concerned about the future and living a comfortable retirement. Which of the products listed below is ideally suited to help G prepare for his retirement goal? A-An annuity B-A bank certificate of deposit C-A U.S. savings bond D-A variable whole life insurance policy

A-An annuity-An annuity is designed to provide a steady stream of income to an individual, typically upon retirement. It protects against outliving one's retirement income by providing an income for life.

Open enrollment periods are offered on a(n) ______ basis that allows individuals to enroll without evidence of insurability or to make changes. A-Annual B-Bi-annual C-Quarterly D-Semi-annual

A-Annual

Open enrollment periods are offered on a(n) ______ basis that allows individuals to enroll without evidence of insurability or to make changes. A-Annual B-Bi-annual C-Quarterly D-Semi-annual

A-Annual- Open enrollment periods are offered on an annual basis that allows individuals to enroll without evidence of insurability or to make changes.

Which of the following policies is used in estate planning to fund irrevocable trusts? A-Joint Survivorship Life Policy B-Juvenile Insurance C-Variable Life D-Joint Life

A-Joint Survivorship Life Policy

All of the following statements regarding a group Accidental Death and Dismemberment policy are incorrect, EXCEPT: A-Any benefits received are not taxable to the recipient B-The premiums paid by the employer are considered part of the employee's income C-The premiums paid by the employer are not deductible as a business expense to the employer D-Accidental Death and Dismemberment Insurance is not available on a group basis, only on an individual basis

A-Any benefits received are not taxable to the recipient- The benefits received are not taxable to the recipient. All of the other answers are false.

For life and health insurance, insurable interest must exist at the time of: A-Application B-Loss C-Policy delivery D-Application and loss

A-Application

Which of the following statements is NOT correct about insurance company appointments? A-Appointments are subject to renewal every 48 months B-Appointments are valid for 24 months if effective in a licensee's birth month C-An agent must be appointed for all lines of insurance to be transacted D-To transact insurance on behalf of an insurer, an agent must be licensed by the Department and appointed by an insurer or appointing entity

A-Appointments are subject to renewal every 48 months

A-Appointments are subject to renewal every 48 months- Appointments are valid for 24 months (up to 36 if effective in any month other than birth month) and renew every 24 months.

How are employer paid premiums on a group life insurance plan treated for tax purposes? A-As an ordinary and necessary business expense B-As a personal expense paid on behalf of the employee C-A barter transaction D-As compensation in lieu of cash

A-As an ordinary and necessary business expense- Employer paid premiums on a group life insurance plan are treated as an ordinary and necessary business expense which is why it qualifies for tax deductibility.

The Medicare Outline of Coverage must be delivered to the applicant at which of the following times? A-At the time the application is completed B-Within 30 days after the application is completed C-Prior to completing the application D-When the policy is delivered

A-At the time the application is completed- The outline must be delivered to the applicant at the time application is made, however, if the policy is direct response, acknowledgment of receipt or certification of delivery of the outline of coverage must be provided to the insurer.

All of the following are nonforfeiture values, EXCEPT: A-Automatic premium loan B-Extended term C-Reduced paid-up D-Cash surrender

A-Automatic premium loan

K owns a variable annuity with an assumed interest rate of 4%. If the actual performance of the separate account(s) is 5%, the effect on this month's income benefit check will be such that it: A-Becomes Higher B-Remains the Same C-Becomes Lower D-All Depends on the Separate Account(s) Selected

A-Becomes Higher

Which of the following is TRUE concerning reinstatement of a life insurance policy? A-Companies have the right to require medical examinations B-Reinstatement may be completed at any time after the policy has lapsed C-Back premiums need not be paid prior to granting reinstatement D-Proof of insurability is not required

A-Companies have the right to require medical examinations

A-Companies have the right to require medical examinations- To reinstate a lapsed policy, back premiums plus interest need be paid and proof of insurability is required. The right to request reinstatement has a time limit, typically 3 to 5 years from policy lapse.

If a home office underwriter obtains MIB codes inconsistent with information provided on the application, what is the underwriter required to do? A-Conduct further investigation to obtain more information prior to making a decision B-Refer the case to the state Insurance Department for possible insurance fraud C-Issue the policy at a higher premium due to the undisclosed higher risk D-Automatically reject the application and order any premium paid refunded

A-Conduct further investigation to obtain more information prior to making a decision- When the home office underwriter receives MIB codes that are inconsistent with information provided on the application, the underwriter is required to conduct a further investigation to obtain more information prior to making an underwriting decision. Underwriting decisions cannot be based solely on MIB codes since there could be a reasonable explanation for the discrepancy.

In a legal sense, premium functions as the insured's _______. A-Consideration B-Fee C-Tender D-Credit

A-Consideration

All of the following are examples of insurance transaction, EXCEPT: A-Creating advertising materials on behalf of the insurance company B-Soliciting an interested party to purchase an insurance policy C-Delivering an insurance contract to a policyowner D-Taking an insurance application and collecting premium from an applicant

A-Creating advertising materials on behalf of the insurance company- Insurance transaction includes soliciting, negotiating, and effectuating contracts of insurance, including activities necessary to effectuate contracts. Creating advertising materials on behalf of the insurer is not considered an insurance transaction.

The ___________ branch writes and passes state insurance laws, or statutes, to protect the insuring public. A-Legislative B-Executive C-Electoral D-Judicial

A-Legislative

All of the following are examples of insurance transaction, EXCEPT A-Creating advertising materials on behalf of the insurance company B-Soliciting an interested party to purchase an insurance policy C-Delivering an insurance contract to a policyowner D-Taking an insurance application and collecting premium from an applicant

Before the replacement of an annuity contract, the agent must provide information to the consumer regarding the existing contract and the recommended annuity contract to determine suitability, which is included on which of the following forms? A-Disclosure and Comparison of Annuity Contracts B-Annuity Suitability Questionnaire C-Buyer's Guide D-Notice Regarding Replacement

A-Disclosure and Comparison of Annuity Contracts- Before executing a replacement of an annuity contract to a consumer, the agent or insurer must provide contract comparison information to the consumer by using form DFS-H1-1981, known as the Disclosure and Comparison of Annuity Contracts.

Which annuity product offers interest rates linked to the positive performance of the S&P 500? A-Equity-indexed annuity B-Indexed Universal Life C-Variable Universal Life D-Variable annuity

A-Equity-indexed annuity

A federal regulation called the ______________ protects consumer privacy. A-Fair Credit Reporting Act B-Privacy Protection Act C-Consolidated Omnibus Budget Reconciliation Act D-Fraudulent Insurance Act

A-Fair Credit Reporting Act

The Florida Health Insurance Coverage Continuation Act applies to any person who employs: A-Fewer than 20 employees B-Members of an association with 25 or more employees C-Not less than 25 individual members D-More than 20 employees

A-Fewer than 20 employees- The act is designed to ensure continued access to affordable health insurance coverage for employees of small employers, their dependents, and other qualified beneficiaries not currently protected by COBRA. A small employer, according to the Act, is any person who employees fewer than 20 employees.

The _________ is the time period provided after the premium due date before a policy lapses. A-Grace period B-Automatic premium loan period C-Premium mode D-Reinstatement period

A-Grace period

Each of the following pertaining to group life insurance is true, EXCEPT: A-Group members are required to prove insurability B-The insured receives a Certificate of Insurance C-Group life insurance is term insurance D-The group sponsor receives a Master Policy

A-Group members are required to prove insurability

A-Group members are required to prove insurability- The primary benefit of group coverage is that proof of insurability on the part of the group participant is not required.

All of the following statements regarding group life insurance issued in Florida are correct, EXCEPT: A-If a person insured under a policy dies during the 31-day conversion period before any individual policy has become effective, there is no death benefit payable B-Each insured must receive an individual certificate containing the group number C-Dependent coverage may not exceed the amount of coverage provided to the insured member or employee D-There is no minimum number of lives that must be covered under a group life insurance policy

A-If a person insured under a policy dies during the 31-day conversion period before any individual policy has become effective, there is no death benefit payable- If a person insured under a policy dies during the 31-day conversion period before any such individual policy has become effective, the amount of life insurance the person would have been entitled to under the individual policy will be payable as a claim under the group policy.

All of the following are true of the Coordination of Benefits Provision under a group plan, EXCEPT: A-In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary B-In a spousal situation, the insurer for the claim of an employee is primary, with the spouse's plan being secondary C-It is a method of determining primary and secondary coverage when an insured is covered by more than one group policy D-Secondary carriers will only pay claims that are in excess of the primary carrier's responsibility

A-In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary- Under the Coordination of Benefits Provision, the insurer for the parent whose birthday is first in the calendar year is primary, not the plan for the parent who is oldest.

A(n) ________ report is a general report of the applicant's finances, character, morals, work, hobbies, and other habits. A-Inspection B-Motor vehicle C-Attending physician's D-Agent's

A-Inspection

Which best describes how an indemnity plan works? A-Insured pays a fixed dollar amount up front and files a claim for reimbursement C-Plan provides basic health services on a prepaid fixed-sum basis D-Plan provides comprehensive medical services on a prepaid basis in its own facility

A-Insured pays a fixed dollar amount up front and files a claim for reimbursement- An indemnity plan pays a fixed dollar amount generally required up front without regard to the actual expense incurred, and the insured files a claim for reimbursement after the services are rendered.

Optional Uniform Provisions are included in the contract at the _______ option. A-Insurer's B-Commissioner's C-Beneficiary's D-Insured's

A-Insurer's- The Optional Uniform Provisions are included at the insurer's option. However, if used, they must conform to that state's insurance code.

Regarding COBRA, which of the following is not true? A-It covers participants who have resigned for 36 months following the date of their resignation B-It provides continuation of coverage for 36 months for a surviving spouse C-It provides continuation of coverage for 29 months for workers on Social Security Disability D-It provides continuation of coverage for 36 months for an individual losing dependent status

A-It covers participants who have resigned for 36 months following the date of their resignation- Termination of employment other than for gross misconduct allows former employees and their dependents a maximum of 18 months of continuation.

Ralph has selected an annuity benefit or payment option where, upon annuitization, the annuity will pay a benefit for as long as either Ralph or a co-annuitant are alive. Ralph has elected which of the following benefit or payment options? A-Life Income Joint and Survivor B-Life Income Period Certain C-Joint Life D-Straight Life

A-Life Income Joint and Survivor

Jasmine has deposited $100,000 into a single premium immediate annuity. If Jasmine were to die before receiving $100,000 in payments, the balance of the $100,000 would be paid to her sister. Jasmine has selected the: A-Life Income with Refund Option B-Life Income Joint and Survivor Option C-Life Income Period Certain Option D-Joint Life Option

A-Life Income with Refund Option

A-Life Income with Refund Option- If Jasmine dies prior to receiving an amount equal to the total of all payments made into the annuity and the balance of that amount is refunded to a beneficiary either in a lump sum or in installments, she has chosen Life Income with Refund.

Which of these annuity distribution options promises the largest possible payment to a single annuitant? A-Life income only B-Lump sum refund C-Life income with period certain D-Installment refund

A-Life income only

Which of the following statements regarding unlicensed entities is NOT correct? A-Mail order solicitations are permitted through unlicensed entities B-Unlicensed entities are nonadmitted insurers and are not regulated by the state of Florida C-A person acting as an agent for an unlicensed entity will be personally liable for any unpaid claims D-All transactions must be completed by a licensed and appointed agent in Florida

A-Mail order solicitations are permitted through unlicensed entities- It is prohibited for unlicensed entities to solicit mail order insurance (completed without personal agents) in Florida. All transactions must be completed by a licensed and appointed agent in Florida.

H has an individual standalone vision plan, in addition to his health insurance. During an annual examination, it is discovered that H has cataracts. Which plan will cover the cost of the treatment for cataracts? A-Medical expense insurance B-Cataract treatment is not covered and must be paid out-of- pocket C-Individual vision plan D-The medical expense plan will pay out first and the vision plan will pay the balance

A-Medical expense insurance- Medical expenses incurred from disease or injuries to the eye, such as cataracts, are excluded from coverage under this policy but are covered under medical expense insurance.

What Act was implemented in order to protect consumers from questionable Medicare Supplement Policy marketing practices? A-NAIC Model Law B-OASDHI C-HIPAA D-COBRA

A-NAIC Model Law

Which of the following is included in Part I of a Life Insurance Application? A-Name and Occupation B-Present health C-Family health history D-Hospitalizations and surgeries

A-Name and Occupation.

An insurer NOT authorized to do business within this state is considered what type of insurer? A-Non-Admitted B-Domestic C-Alien D-Foreign

A-Non-Admitted

Which of the following term policies cost the least (all other factors being the same)? A-Nonrenewable and non-convertible B-Nonrenewable and convertible C-Renewable and convertible D-Renewable and non-convertible

A-Nonrenewable and non-convertible.

Contributions to a nonqualified plan are: A-Not tax-deductible B-Fully tax-deductible C-Tax-deductible up to $50,000 D-Partially tax-deductible

A-Not tax-deductible

Which state entity oversees the regulation of securities representatives and mortgage brokers within the state? A-Office of Financial Regulation- The Office of Financial Regulation is responsible for overseeing the regulation of banking, mortgage, and securities representatives in this state. B-State legislature C-Department of Financial Services Division D-Office of Insurance Regulation

A-Office of Financial Regulation

Which state entity oversees the regulation of securities representatives and mortgage brokers within the state? A-Office of Financial Regulation B-State legislature C-Department of Financial Services Division D-Office of Insurance Regulation

A-Office of Financial Regulation- The Office of Financial Regulation is responsible for overseeing the regulation of banking, mortgage, and securities representatives in this state.

Frank has a life insurance policy in which he chooses to have the dividends increase the death benefit. Which Dividend Option did he select? A-Paid-Up Additions B-Acceleration of Endowment C-Fixed Amount D-Paid-Up Option

A-Paid-Up Additions-

The grace period in a life insurance policy is typically 31 days and provides for the: A-Payment of the premium to be received after its due date without a penalty or lapse in coverage B-Policyowner to reinstate the policy before it lapses C-Insurance company to delay payment of the death benefit until it can determine the validity of the proof of death D-Payment of the premium to be received after its due date with a maximum 5% penalty

A-Payment of the premium to be received after its due date without a penalty or lapse in coverage

An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision? A-Physical Exam & Autopsy B-Proof of Disability or Death C-Proof of Loss D-Intoxicants and Narcotics

A-Physical Exam & Autopsy

Which party to a health insurance contract is responsible for making the premium payments? A-Policyowner B-Producer C-Insured D-Beneficiary

A-Policyowner- By definition, the policyowner is responsible for making all decisions regarding the policy and maintaining the policy by paying the premiums. The insured may also be the owner, but it is not a requirement.

The following statement is true concerning the income received from an individually owned disability income policy: A-Premiums paid with after tax dollars, Income benefit not taxable B-Premiums paid with after tax dollars, Income benefit taxable C-Premiums are tax sheltered, Income benefit taxable D-Premiums are tax sheltered, Income benefit not taxable

A-Premiums paid with after tax dollars, Income benefit not taxable

A-Premiums paid with after tax dollars, Income benefit not taxable- The premiums are not tax deductible and the benefits are not subject to federal income or FICA tax.

An insurer must provide the life insurance Buyer's Guide and Policy Summary to every applicant: A-Prior to accepting the initial premium B-Within 60 days after the policy is issued C-14 days after the policy is delivered D-When the application is signed

A-Prior to accepting the initial premium- The insurer will provide the life insurance buyer's guide and policy summary to every applicant prior to accepting the initial premium. In the case of an unconditional refund offer, it must be delivered with the policy or prior to policy delivery.

The LTC Shopper's Guide must be delivered to the applicant at which of the following times? A-Prior to the presentation of the application- An agent must deliver the Shopper's Guide prior to the presentation of an application or enrollment form, and in the case of direct response solicitations, the Shopper's Guide must be presented in con-junction with any application or enrollment form. B-At the time the application is completed C-Any time before a loss occurs and claim is filed D-When the policy is delivered

A-Prior to the presentation of the application

New rates and forms must be filed and approved by the Office of Insurance Regulation: A-Prior to use B-Within 30 days after delivery of the policy form C-After a subpoena is issued by the Circuit Court D-Only if considered unfair or discriminatory

A-Prior to use- All new rates and forms must be filed with and approved by the Office of Insurance Regulation prior to use. The OIR has 30 days to approve or disapprove.

What is the purpose of the LTC Partnership policy? A-Protect some assets from Medicaid spend down B-Diversify the inflation protection options C-Temporary fix for tax exempt policies D-To replace qualified LTC policies

A-Protect some assets from Medicaid spend down- The LTC Partnership policy is designed to help protect the assets of LTC insurance policyholders who subsequently seek Medicaid benefits.

An advantage of key person life insurance is to: A-Provide the owner of the policy with funds to recruit and train a replacement employee upon the death of an employee who contributes substantially to the success of a company B-Provide the family of the deceased employee with up to ten years of the employee's lost future income C-Provide life insurance benefits to all eligible employees and their dependents D-Protect a partnership against the death of a partner by providing benefits to buyout a deceased partner's share of the business

A-Provide the owner of the policy with funds to recruit and train a replacement employee upon the death of an employee who contributes substantially to the success of a company- The death of a key person can negatively impact business operations. The owner of a key person policy is the company and it may use the death benefit proceeds to cover the expense of recruiting, hiring, and training a replacement, which may take months to accomplish.

A mandatory participation rate for noncontributory group plans is designed to: A-Reduce adverse selection B-Achieve economies of scale C-Allow the employer to obtain the greatest premium discount D-Maximize the premium an insurer collects

A-Reduce adverse selection

A-Reduce adverse selection- Requiring 100% of eligible employees to participate in a noncontributory employer group life insurance plan reduces the risk of adverse selection.

Guaranteed Renewable means: A-Renewable with adjustable premiums, by classification only B-Renewable only at the option of the insurer C-Renewable with adjustable premiums determined by frequency of claim D-Renewable with guaranteed premium

A-Renewable with adjustable premiums, by classification only

A-Renewable with adjustable premiums, by classification only- The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by class only, not on an individual basis. A class of insureds is based on age or other uniform, nondiscriminatory method.

All of the following are agent requirements when soliciting life insurance to an applicant, EXCEPT: A-Representing him/herself as an investment advisor in order to gain the applicant's trust B-Informing the prospective purchaser of the full name of the insurance company which the agent is representing C-Stating that policy dividends are not guaranteed D-Informing the applicant that he/she is acting as a life insurance agent

A-Representing him/herself as an investment advisor in order to gain the applicant's trust- Terms such as "financial planner," "investment adviser," "financial consultant," or "financial counseling" must not be used to imply that the insurance agent is generally engaged in an advisory business unless such is actually the case.

In a STOLI/IOLI transaction, what are the insureds basically doing? A-Selling their mortality to another for up-front cash B-Overinsuring themselves C-Borrowing the necessary funds from a third party in order to acquire the amount of insurance they need D-Committing a misdemeanor punishable by monetary fine and forfeiture of the policy issued

A-Selling their mortality to another for up-front cash- The insureds are basically selling their mortality to another for up-front cash.

The replacing insurance company must do all of the following regarding a replacement of an existing policy, except: A-Send the applicant a completed Comparative Information Form within 5 days after the application is signed when requested B-Provide a copy of the buyer's guide to the applicant prior to accepting the initial or at or prior to the policy delivery if the policy has at least a 10-day unconditional refund provision C-Maintain copies of the notice, comparative information form, all sales proposals, and a replacement register for at least 3 years D-Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery

A-Send the applicant a completed Comparative Information Form within 5 days after the application is signed when requested

If an annuity is purchased in December and monthly benefits begin in January of the following year, what type of annuity is it? A-Single Premium Immediate Annuity B-Single Premium Fixed Annuity C-Flexible Premium Tax Sheltered Annuity D-Variable Retirement Annuity

A-Single Premium Immediate Annuity

A-Single Premium Immediate Annuity- The question addresses when the actual receipt of benefits from an annuity begins. When benefits begin within a year of the issue date, this is referred to as 'immediate'.

A warranty is defined as which of the following? A-Statement in the application that is guaranteed to be true B-A false statement in the application C-Intentional misrepresentation on the application D-A substantially true statement

A-Statement in the application that is guaranteed to be true

As part of the qualification process to become licensed in Florida, an applicant must do all of the following, except: A-Submit fingerprints to the Department of Financial Services B-Secure a detailed credit and character report made by an independent reporting service C-Pass a written examination within 1 year of submitting an application for license D-Successfully complete any required prelicensing coursework within 4 years immediately preceding the date of application

A-Submit fingerprints to the Department of Financial Services

Which of the following is not a requirement to obtain an insurance license in Florida? A-Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for B-File a written application made under oath and signed by the applicant C-Include a statement on the application indicating the method used to meet any prelicensing requirements D-Pay all applicable nonrefundable fees in advance

A-Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for- An applicant must complete at least 40 hours of coursework for one area of insurance (such as life-only or health-only) and 60 hours for multiple areas of insurance (life and health combined).

Which of the following is not a requirement to obtain an insurance license in Florida? A-Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for. B-File a written application made under oath and signed by the applicant C-Include a statement on the application indicating the method used to meet any prelicensing requirements D-Pay all applicable nonrefundable fees in advance

Bert is the owner and insured of a permanent life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage? A-Take a policy loan from the insurer B-Surrender part of the policy and for the balance take a policy loan C-Reduce the policy's face amount which will reduce his premium payment D-Surrender the policy back to the insurer

A-Take a policy loan from the insurer- A permanent life insurance policy cannot be partially surrendered or have its face amount reduced. To keep the coverage in force the only option feasible is to take a policy loan.

Which of the following two documents always constitutes part of the entire contract? A-The application and policy B-Application and Agent's Report C-Policy illustration and Agent's Report D-Policy and Attending Physician's Statement

A-The application and policy

Which of the following two documents always constitutes part of the entire contract? A-The application and policy B-Application and Agent's Report C- Policy illustration and Agent's Report D-Policy and Attending Physician's Statement

A-The application and policy- The entire contract is comprised of the policy itself, the application and any riders attached. The Agent's Report and APS are not included.

In order to convert a term policy to a permanent policy as of the original issue age, all of the following must occur, EXCEPT: A-The cash values will have to be paid out first before the conversion can be effected B-Back premiums will have to be paid at the time of conversion C-The request for conversion must be made on a timely basis D-Interest will be charged and have to be paid at the time of conversion

A-The cash values will have to be paid out first before the conversion can be effected

Which of the following is not an acceptable reason for denying coverage? A-The claims experience of the small employer is excessive B-Carrier is unable to offer coverage due to obligations to existing contracts C-Small employer is not physically located in the carrier's service area D-Employee does not work or reside in the service area

A-The claims experience of the small employer is excessive- A small employer carrier does not need to offer coverage to small employers who are not physically in their service area, or employees who do not live or work in the service area, or the carrier cannot deliver proper service in the area.

All of the following are characteristics of traditional health insurance plans, except: A-The insured must see a network provider B-The insured submits a claim for reimbursement C-A deductible and coinsurance feature apply D-Benefits are paid directly to the insured

A-The insured must see a network provider

If an incomplete application is accepted by the underwriter and a policy is issued without requesting the missing information, which of the following statements applies? A-The insurer waives its right to contest a claim based on the incomplete application B-The producer will be personally responsible out of pocket for any claims filed based on the missing information in the application C-The policy can be contested if a loss occurs within 2 years of the policy being issued D-The insurer can void the contract at any time since this is considered fraudulent

A-The insurer waives its right to contest a claim based on the incomplete application- If the insurer issues a policy based on an incomplete application, it waives the right to contest a claim based on any missing information.

If a child is covered under more than one group health insurance plan how is it determined which carrier is primary? A-The plan covering the parent whose birthday occurs first in the calendar year will be the children's primary coverage B-The date of birth of the child that is closest to either parent becomes primary C-The parent whose date of birth is closest to the end of the year determines which is primary D-The younger parent's plan will become primary

A-The plan covering the parent whose birthday occurs first in the calendar year will be the children's primary coverage- In the event children are covered by more than one group plan, the 'birthday rule' which says the plan covering the parent whose birthday occurs first in the calendar year will be the children's primary coverage.

Which statement is true for BOTH Universal Life and Whole Life? A-The policy is supported by the insurer's general account B-The death benefit is adjustable C-A guaranteed minimum interest rate is determined at policy issuance D-Policy loans and partial withdrawals are allowed

A-The policy is supported by the insurer's general account-Both are supported by the insurer's general account--in other words, neither uses a separate account. The other answer options are only true for Universal Life, not Whole Life.

On a variable universal life policy what is the difference between the cash value and the cash surrender values? A-The surrender charge B-The amount of any outstanding policy loan C-The investment performance D-The interest earned

A-The surrender charge

Which of the following is the reason why premiums paid on personal life insurance are not deductible? A-They are considered a personal expense B-They rarely exceed 10% of a taxpayer's AGI C-They are considered to produce a guaranteed source of income D-It makes the deductibility of employer-paid premiums more attractive

A-They are considered a personal expense- For individuals, premiums are considered a personal expense and are not deductible. They are paid with after-tax dollars. This establishes a cost basis in the policy for tax purposes.

All of the following are true regarding annuities, except: A-They are similar to life insurance B-They can liquidate an estate C-They are used primarily to provide a steady stream of income D-They are designed to protect against outliving one's income

A-They are similar to life insurance- Annuities are used primarily to provide a steady stream of income to an individual, typically upon retirement. They are designed to protect against outliving one's retirement income by providing lifetime income. And they can liquidate an estate over the lifetime of an annuitant. Although both annuities and life insurance are mortality-based products, they have opposite purposes: annuities are designed to distribute an estate, while life insurance is designed to create an estate.

Which provision states that the insurance company must pay claims immediately? A-Time of Payment of Claims B-Payment of Claims C-Relation of Earnings to Insurance D-Legal Actions

A-Time of Payment of Claims- Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.

How long would a policyowner have to pay premiums on a term life policy to age 65 that was taken out at age 35? A-To the earlier of the insured's death, or to age 65 B-30 years C-Whenever the insured dies D-To age 65

A-To the earlier of the insured's death, or to age 65

Which term refers to a contract in which only one party is legally bound to contractual obligations after the premium is paid? A-Unilateral Contract B-Aleatory Contract C-Conditional Contract D-Contract of Adhesion

A-Unilateral Contract

Upon the death of the insured, payment of proceeds of a lump sum will be made: A-Upon receipt of proof of death and surrender of the policy B-The date any investigations by the insurance company are complete C-A date determined by a probate judge D-The actual date of death listed on the death certificate

A-Upon receipt of proof of death and surrender of the policy- Payment of proceeds are made upon the receipt of proof of death and surrender of the policy.

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A-Waiver of Premium B-Time Limit on Certain Defenses C-Payment of Claims D-Proof of Loss

A-Waiver of Premium

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A-Waiver of Premium B-Time Limit on Certain Defenses C-Payment of Claims D-Proof of Loss

A-Waiver of Premium- The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included.

An applicant completes the application and submits it to the insurer along with a premium check. When is the applicant's offer considered accepted? A-When the insurer issues a policy B-Only after the policyowner completes any required medical exams C-Upon cashing the premium check D-When the application and premium check arrive at the insurer's home office

A-When the insurer issues a policy- An application accompanied by a premium check is a legal offer. Policy issuance is a legal acceptance. In other words, the offer is not accepted until the insurer issues a policy.

P has had some health issues over the years and is not confident he will qualify for standard issue insurance. If P completes an application and submits it to the insurance company without paying the premium up-front, coverage will take effect? A-When the policy is delivered to P and the premium is paid B-Once the medical exam is completed C-When the insurer mails the policy to the agent for delivery D-At the time of application

A-When the policy is delivered to P and the premium is paid

Which statement regarding Social Security benefits is FALSE? A-Widows and widowers cannot receive survivor's benefits before age 62 B-Fully insured workers can receive benefits as early as age 62 C-Dependent children of a deceased worker can receive survivor's benefits until age 18 (19 if still in school) D-Spouses of fully insured workers can receive benefits as early as age 62

A-Widows and widowers cannot receive survivor's benefits before age 62

A-Widows and widowers cannot receive survivor's benefits before age 62- Widows/widowers of a fully insured deceased worker may begin receiving benefits at age 60.

In __________ Assignment, the original owner, the assignor, will name a new owner, the assignee, of the policy. Since a new owner is named, this is considered a ___________ assignment. The full amount of the policy is assigned, and this is referred to as a transfer of ownership.

Absolute Assignment permanent

This provides tax free access to policy benefits based on an insured qualifying as terminally ill or chronically ill.

Accelerated Death Benefits

A spontaneous unforeseen and unintended event resulting in injury

Accidental bodily injury

The dividends are retained by the insurer and the interest rate paid the policyowner is compounded annually. This is the ___________ Dividend Option.

Accumulate at Interest

Features of a Universal Life (UL) policy include:

Adjustable Face Amount Mortality charges are deducted monthly from the policy's cash value Expense charges to cover administrative costs are also deducted monthly from the cash value Interest is credited to the cash value on a monthly basis at the current interest rate, but will never be less than the guaranteed minimum rate established at the time the policy was issued. Flexible Premium

When can a policyowner make a change in the policy's coverage or other benefits if an irrevocable beneficiary has been named?

After the irrevocable beneficiary dies

Based on the uncertainty of a loss, there will likely be an unequal exchange of consideration by either party

Aleatory Contract

Insurance with premium flexibility

All but Term Life and Whole Life

Insurance with coverage duration that is flexible

All but Term Life insurance and Whole Life

Life insurance with Guaranteed death benefits

All but Variable Life Insurance

Misstatement of Age

Allows the insurer to go back and make changes to the benefits so that they match the correct age an benefits will be adjusted accordingly

Certificate of Authority

Allows you to legally conduct business outside the state where you initially filed your company

__________________ is used in cases in which the individual application and/or medical reports reveal conditions for which further information is necessary to determine insurability.

An Attending Physician Statement (APS)

An insurer that is authorized to do business in this state MUST be _____.

An admitted insurer

Substandard Risk

An applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium.

Indemnitor

An indemnitor is a company or person agreeing to take on the obligation that would typically be placed on a surety if an individual defaults on a bond issued to him.

What might be necessary if an applicant doesn't qualify for reasons of risk by the standards of the surety?

An indemnitor might be necessary for the bond process.

Distributions received from a MEC (Modified Endowment Contract) are subject to a ________ tax treatment

LIFO

Endowment policy

An insurance product that pays out a lump sum after a specified term or if the insured person dies before the end of the term. Endowment policies are often used as a way of saving over the long term.

Which agent may not hold an appointment with an insurer for any licenses held and must appoint themselves (self-appointed).

An unaffiliated agent.

Type of insurance written for group plans

Annual renewable term

While it is very inexpensive initially compared to other types of life insurance, over time it can become cost prohibitive.

Annually Renewable Term

Issued by an insurance company and is designed to help protect you from the risk of outliving your income.

Annuities

What is the difference between an annuity and life insurance?

Annuities are designed to provide a stream of income for the LIFETIME of an individual. Life insurance policies such as whole life, variable life, and term insurance are designed to provide DEATH benefits.

What are annuities?

Annuities are essentially insurance contracts. You pay a set amount of money today, or over time, in exchange for a lump-sum payment or stream of income in the future.

Determine which of the following statements apply to life insurance or an annuity -Issued as a contract

Annuity

Determine which of the following statements apply to life insurance or an annuity -Liquidates an estate

Annuity

Determine which of the following statements apply to life insurance or an annuity -Owner, annuitant, beneficiary

Annuity

Determine which of the following statements apply to life insurance or an annuity -Pays a living benefit

Annuity

Determine which of the following statements apply to life insurance or an annuity -Protects against living too long

Annuity

Determine which of the following statements apply to life insurance or an annuity -Provides steady income until death

Annuity

As part of the the Patriot Act, financial institutions and insurance companies are required to provide ____________- training to their producers, since insurance products are now being used to give legitimate appearance to money financed by and for illegal activities.

Anti-Money Laundering (AML)

AML

Anti-Money Laundering Law

A person making application, for themselves or another, to be insured under an insurance policy is called the:

Applicant

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be the _________ process.

Application

How often can the Office examine each insurer?

As often as may be warranted for the protection of the policyholders and in the public interest.

Financial requirement for Florida Medicaid?

Asset test indicating what the applicant owns, and income test indicating how much earned and unearned income is received.

The transfer of ownership.

Assignment

Which of these modes would result in the insured paying the least annual outlay for life insurance? A-Quarterly B-Annual C-Semi-annual payroll deduction D-Monthly automatic bank draft

B-Annual

Interest only, life income with period certain, lump sum, and life income only are all forms of which of these life insurance policy options? A-Dividend options B-Beneficiary options C-Nonforfeiture options D-Settlement options

B-Beneficiary options

When may an insurer apply to the Department on behalf of the licensee for an appointment.

At any time while a license is in force.

When must the Medicare Outline of Coverage be delivered to the applicant?

At the time the application is completed- The outline must be delivered to the applicant at the time application is made, however, if the policy is direct response, acknowledgment of receipt or certification of delivery of the outline of coverage must be provided to the insurer.

APS

Attending Physician Statement

It enables the insurer to automatically borrow against the cash value to cover a premium payment to prevent the contract from lapsing unintentionally.

Automatic Premium Loans (APL)

Give 6 Exclusions

Aviation Status Clause Results Clause (War Clause) Hazardous Occupation Hazardous Hobbies or Avocation Suicide

The LMC Partnership has 3 partners and is concerned about what would happen to their $300,000 business if one of the partners should die. If they consider a buy-sell agreement, then each partner would have to buy a policy in the amount of $__________ on the other partners. A-$150,000 B-$50,000- If there are 3 partners in a company valued at $300,000, then each would have a $100,000 interest in the company. Each partner would purchase a policy on the other partners, providing for a total of 6 policies (3x2 = 6). Each policy would be valued at $50,000 (6 x $50,000 =$300,000). C-$75,000 D-$100,000

B-$50,000

B-$50,000- If there are 3 partners in a company valued at $300,000, then each would have a $100,000 interest in the company. Each partner would purchase a policy on the other partners, providing for a total of 6 policies (3x2 = 6). Each policy would be valued at $50,000 (6 x $50,000 =$300,000).

Social Security monthly retirement benefits are determined using a formula that calculates which of the following? A-COLA B-PIA C-FRA D-FICA

B-(PIA) Primary Insurance Amount

The Time Limit on Certain Defenses (Incontestable) period is _____ years under individual health and disability contracts. A-3 B-2 C-7 D-5

B-2 - The Time Limit on Certain Defenses (Incontestable) period is 2 years.

A change of address must be reported to the DFS within how many days after the change? A-60 B-30 C-15 D-20

B-30- A new residence address, principal business street address, mailing address, contact telephone numbers, including a business telephone number, or e-mail address must be reported to the Department of Financial Services within 30 days after the change.

Which of the following is the correct number of days in the grace period for each premium mode? A-10 days for weekly, 15 days for monthly, 31 for all others B-7 days for weekly, 10 days for monthly, 31 for all others C-10 days for weekly, 15 for all others D-7 days for weekly, 10 days for monthly, 28 for all others

B-7 days for weekly, 10 days for monthly, 31 for all others

Proof of loss is required within _____ days of loss. A-45 B-90 C-180 D-60

B-90

What is the name of the rider (benefit) that, in the event of a claim, the policy normally pays double or triple the face amount if death was a result of an accident. A-Additional Indemnity B-Accidental Death C-Auto Insurance D-Occupational

B-Accidental Death

Which type of rider pays out a capital sum in case an insured loses a limb or their eyesight? A-Return of Premium B-Accidental Death and Dismemberment C-Accidental Death D-Disability Benefit

B-Accidental Death and Dismemberment

If an individual starts receiving Social Security retirement benefits at age 62, when are they eligible for Part A benefits? A-An individual is not eligible for Part A if they receive Social Security retirement benefits B-Age 62 C-Automatically at age 65 D-24 months after receiving Social Security retirement benefits

B-Age 62

Confidential information shared by the producer to the insurer and does not become part of the policy is the __________. A-Consumer Investigative Report B-Agent's Report C-Medical Examination D-Attending Physician Statement

B-Agent's Report

All of the following are true about riders, EXCEPT: A-Most riders are added at the time of policy issue B-All riders are available free of charge and can be added at anytime without proof of insurability C-Once a rider drops from the policy, the additional premium will also drop D-Riders added after the policy has been issued usually require evidence of insurability

B-All riders are available free of charge and can be added at anytime without proof of insurability

Which of the following special provisions is incorrect with respect to small employers? A-The employee must request such special enrollment no later than 30 days after the coverage termination date B-An initial enrollment period of no more than 30 days must be provided C-An initial enrollment period of at least 30 days must be provided D-A small employer carrier may not offer coverage limited to certain person in a group or to part of a group, except with respect to late enrollees

B-An initial enrollment period of no more than 30 days must be provided- An initial enrollment period of at least 30 days must be provided.

Regarding Social Security survivor benefits, when the youngest child reaches age 16, the widow's/widower's _________ period begins and continues until the surviving (non-remarried) spouse reaches age 60. A-Elimination B-Blackout C-Waiting D-Probationary

B-Blackout

B-Blackout- When the youngest child reaches age 16, the widow's/widower's blackout period begins.

Which of the following best describes a conditional contract? A-The exchange of values may be unequal B-Both parties must perform specified duties in order for the contract to be enforceable C-Written by only one party D-Only one party is legally bound to contractual obligations

B-Both parties must perform specified duties in order for the contract to be enforceable

An agent who induces a client to use the cash value of an existing policy to buy an unnecessary additional policy for the purpose of generating commission is guilty of: A-Rebating B-Churning C-Fraud D-Twisting

B-Churning- Churning is the practice whereby policy values, such as cash value, in an existing life insurance policy, annuity contract, and/or any riders, are used to purchase another insurance policy or annuity contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation.

Which of the following is not a Mandatory Uniform Provision? A-Physical Exam and Autopsy B-Conformity with State Statutes C-Reinstatement D-Payment of Claims

B-Conformity with State Statutes

Which of the following is not a Mandatory Uniform Provision? A-Physical Exam and Autopsy B-Conformity with State Statutes C-Reinstatement D-Payment of Claims

B-Conformity with State Statutes- Conformity with State Statutes is an Optional Uniform Provision.

Which statement would be considered inaccurate regarding the underwriting of a group plan? A-The cost of a group policy is determined by the type, size, and average age of the group and claims experience with previous insurers B-Contributory plans require 100% employee participation C-The insurer can require a minimum percentage of the group to be enrolled to guard against adverse selection D-The corporate home office of the group normally is the group's address

B-Contributory plans require 100% employee participation- Contributory plans require both the employee and the employer to contribute to the premium, and 75% participation is required.

Which provision of group health plans is used to determine primary and secondary coverage when an insured is covered by more than one insurance plan? A-Schedule of Benefits B-Coordination of Benefits C-Primary Care Coverage D-Extension of Benefits

B-Coordination of Benefits- The Coordination of Benefits provision describes how primary and secondary coverage will be determined when an insured is covered by more than one group policy.

An initial amount the insured must meet per year before benefits are paid is known as the: A-Coinsurance B-Deductible C-Stop loss D-Copayment

B-Deductible- The deductible is an initial amount the insured must meet per year before benefits are paid. A copayment is a dollar amount paid per claim. The coinsurance is a percentage paid up to a stop loss once the deductible is met.

The Department of Financial Services has the authority to perform all of the following duties, EXCEPT: A-Conduct an investigation regarding alleged improper conduct of a person regulated by the Department B-Determine solvency of an insurer C-Require a licensing applicant's fingerprints to be checked by local and federal law enforcement agencies D-Supervise agent licensing

B-Determine solvency of an insurer- The DFS has the authority to investigate and regulate licensee's and applicants, but does not have the authority to determine insurer solvency, only the Office of Insurance Regulation has that authority.

Before the replacement of an annuity contract, the agent must provide information to the consumer regarding the existing contract and the recommended annuity contract to determine suitability, which is included on which of the following forms? A-Buyer's Guide B-Disclosure and Comparison of Annuity Contracts C-Annuity Suitability Questionnaire D-Notice Regarding Replacement

B-Disclosure and Comparison of Annuity Contracts- Before executing a replacement of an annuity contract to a consumer, the agent or insurer must provide contract comparison information to the consumer by using form DFS-H1-1981, known as the Disclosure and Comparison of Annuity Contracts.

Which plan is a business that provides access to medical service providers in exchange for a fee? A-Exclusive provider organization B-Discount Plan C-MEWA D-Prepaid service organization

B-Discount Plan- Which plan is a business that provides access to medical service providers in exchange for a fee?

Regarding group health insurance, which is true? A-Individual underwriting is utilized B-Each plan participant receives a policy C-The premium payment is the responsibility of each individual D-The plan sponsor is issued the Master Policy

B-Each plan participant receives a policy- In group health insurance, only the plan sponsor receives a copy of the Master Policy. Covered individuals receive a Certificate of Insurance. The plan sponsor is responsible for paying the premiums.

Which of the following is a characteristic of a contributory plan? A-Dependents of eligible employees must pay 75% of the premium B-Eligible employees pay a portion of the premium C-Part-time employees must be eligible to participate D-Employers must enroll 100% of eligible employees

B-Eligible employees pay a portion of the premium-

B-Eligible employees pay a portion of the premium- In a contributory group insurance plan, eligible employees pay a portion of the premium. Part-time employees are usually not eligible. Dependents of an eligible employee do pay a required percentage of premium, the amount varies as determined by the employer. A contributory plan requires at least 75% participation of eligible employees. Noncontributory group plans require 100% participation.

Which of the following is NOT one of the essential elements of any legal contract? A-Offer and Acceptance B-Legal Purpose C-Indemnity D-Competent Parties

C-Indemnity

Stephen must be disabled 60 days before he will receive any benefits from his disability policy. This 60-day period is the: A-Free Look Period B-Elimination Period C-Policy Period D-Probationary Period

B-Elimination Period- The elimination period is the period of time between the onset of a disability, and the time the insured is eligible for benefits. It can be thought of as a deductible period for the policy.

An insurer may not discontinue an individual health insurance policy for which of the following reasons? A-Insurer is ceasing to offer individual insurance in the insured's service area B-Excessive health claims C-Fraud D-Failure to pay copayments

B-Excessive health claims- The insurer can also discontinue or nonrenew for failure to pay premiums, if the insured no longer lives or works in the service area, or the insured is no longer a member of an association that is the policyholder.

When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? A-Cash surrender value B-Extended term C-Reduced paid-up D-Automatic premium loan

B-Extended term

The Florida Health Insurance Coverage Continuation Act applies to any person who employs: A-More than 20 employees B-Fewer than 20 employees C-Members of an association with 25 or more employees D-Not less than 25 individual members

B-Fewer than 20 employees- The act is designed to ensure continued access to affordable health insurance coverage for employees of small employers, their dependents, and other qualified beneficiaries not currently protected by COBRA. A small employer, according to the Act, is any person who employees fewer than 20 employees.

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be: A-Law of large numbers B-Field underwriting C-Application process D-Principle of indemnity

B-Field underwriting- The agent's primary underwriting role is to make sure the application provides proper information for the insurer.

Which of the following is an insurance company that is organized under the laws of a different state within the United States? A-Domestic B-Foreign C-Alien D-Authorized

B-Foreign

A nonprofit corporation without capital stock formed solely for the benefit of its members is a: A-Stock insurer B-Fraternal benefit society C-Unauthorized insurance association D-Mutual company

B-Fraternal benefit society- A fraternal benefit society is a nonprofit organization formed solely for the benefit of its members and transacts insurance only for its members.

All of the following are accurate statements, EXCEPT: A-In group insurance, the contract is between the employer and the insurer B-Group insurance normally covers occupational injury or disease C-In group insurance, the employer receives a Master Policy and each employee receives a Certificate of Insurance D-The group must be a natural group

B-Group insurance normally covers occupational injury or disease- Group insurance normally covers nonoccupational injury or disease. Workers' Compensation Insurance is designed for occupational injury and disease.

As part of POS plans, when a subscriber stays in network, benefits will be paid as a(n): A-PCP B-HMO C-PPO D-MHO

B-HMO

As part of POS plans, when a subscriber stays in network, benefits will be paid as a(n): A-PCP B-HMO C-PPO D-MHO

B-HMO- If the subscriber stays in network, benefits are paid as an HMO.

During the application process, a mistake is made by the applicant in answering one of the health questions and needs to be corrected. What is the best way to go about this? A-The producer should simply make a note in the agent report section of the application describing the error and what the true response was supposed to be B-Have the applicant initial the change or start over with a completely new application C-Submit the application as is and see if the insurance company catches the mistake D-The licensed producer has the applicant's implied authority to make any necessary changes to the application on the applicant's behalf

B-Have the applicant initial the change or start over with a completely new application.

The only time a policy loan is taxable is in which of the following situations? A-Borrowing more than the premiums paid in B-Having the policy lapse with a loan outstanding in excess of cost basis C-Borrowing less than the cash value D-Borrowing the entire cash value

B-Having the policy lapse with a loan outstanding in excess of cost basis- The loan is not taxed as long as the policy is in force. If the policy lapses with a loan outstanding, the excess over cost basis becomes taxable as ordinary income.

Ultimately it is up to the _______ to determine if the proposed insured is an acceptable risk. A-Insured's primary care physician B-Home office underwriter C-Home office actuary D-Field underwriter

B-Home office underwriter

Choose the statement that is false about the requirements for HIV testing: A-No insurer must cancel or nonrenew the health insurance policy of any insured because of diagnoses or treatment of HIV or AIDS B-Informed consent is not required prior to testing C-A person tested for HIV must first give informed consent D-An applicant must be notified of a positive test result by a physician designated by the applicant or by the Department of Health

B-Informed consent is not required prior to testing- Prior to testing for HIV/AIDS, the insurer must disclose its intent to test the person for HIV and must obtain the person's written informed consent to administer the test.

The incontestability clause states that after 2 years the: A-Insurer will not argue about which beneficiary is primary or contingent B-Insurer will not refuse to pay a death claim based on misinformation in the original application for insurance C-Policyowner cannot sue the insurer for misstatements made by the producer in the sale of the policy D-Insurer will only pay for suicide if the insured was insane at the time

B-Insurer will not refuse to pay a death claim based on misinformation in the original application for insurance

Which of the following distributions in a life insurance policy is taxable? A-Cash dividend from a participating policy B-Interest paid on a death benefit settlement option C-Withdrawal of cost basis D-Policy loans

B-Interest paid on a death benefit settlement option

Social Security monthly retirement benefits are determined using a formula that calculates which of the following? A-COLA B-PIA C-FRA D-FICA

B-PIA- To be eligible for SS all benefits and be considered fully insured, a worker must have earned 40 credits.

B-Interest paid on a death benefit settlement option- Policy loans, cash dividends, and withdrawal of cost basis are not subject to taxation. Interest paid as part of a death benefit settlement option is taxed as ordinary income.

All of the following are true about a buy/sell agreement, EXCEPT: A-It contractually establishes the intent to buy and sell a business interest B-It can only be funded with term life insurance C-It contractually establishes a price for the business interest D-It provides the funds necessary to carry out the terms of the agreement

B-It can only be funded with term life insurance

B-It can only be funded with term life insurance- The agreement contractually establishes a price with the intent to purchase, at a predetermined value, the assets of a business should one of the contract participants predecease the other participant(s). It is funded with life insurance to assure that the funds are available to carry out the agreement, but it can be funded with permanent or term insurance.

Which of the following is TRUE of a term rider when attached to a permanent life policy? A-It always is in the amount of the base policy B-It can provide additional temporary coverage on the insured or on other members of the family C-It only pays out a death benefit in cases of accidental death D-It allows the policy to achieve paid up status at the end of the term

B-It can provide additional temporary coverage on the insured or on other members of the family

What happens to the overall policy premium when most riders on a life insurance policy expire? A-It goes up B-It goes down C-It stays the same D-It is refunded

B-It goes down- Most life insurance policy riders have a premium associated with it. Once the rider expires so too does the obligation to continue paying its premium.

In those instances in which the death of a valued employee could cause financial hardship for a company, the company might acquire additional funds through which type of coverage? A-Employer-Employee Cross Purchase B-Key Person C-Business Reimbursement D-Preferred Insured

B-Key Person- The business would likely purchase a Key Person (Key Employee) Policy on the life of the valued employee to offset the expenses and financial losses due to the death of that employee.

A beneficiary wants a guarantee that benefits will be paid for a period of 10 years or life whichever time period is greater. Which of the following options should the beneficiary select? A-10-year Period Certain B-Life with 10-year Period Certain C-Joint Life Income D-Fixed Amount

B-Life with 10-year Period Certain

B-Life with 10-year Period Certain- Life with 10-year Period Certain pays out for the greater of 10 years or life.

A policy issued as a preferred risk will be issued with a: A-Tabular rate B-Lower than standard rate C-Sub-standard rate D-Standard rate

B-Lower than standard rate

If an individual has limited assets and low income, which of the following would most likely cover the cost of long-term care? A-Medicare Part D B-Medicaid C-Medigap D-Long-Term Care insurance

B-Medicaid- Medicaid pays for hospital care, outpatient care, certain nursing facilities, doctors, laboratory and x-ray services, prescriptions, Long-Term Care, and some home health care after current assets are exhausted. Medicaid is a means tested needs based program for individuals of all ages needing care and without the ability to pay for it.

Fraternal insurance companies are owned by: A-Directors B-Members C-Stockholders D-Policyowners

B-Members

Which of the following actions is the responsibility of the Office of Insurance Regulation? A-Licensing of insurance agents B-Monitoring the financial condition of all regulated insurance entities C-Providing consumer education by answering general insurance questions D-Overseeing banking regulations

B-Monitoring the financial condition of all regulated insurance entities- The OIR is responsible for regulating insurance companies, including monitoring the financial condition of regulated insurance entities. The DFS regulates licensing of insurance agents; the Division of Consumer Services is part of the DFS and provides consumer education; the Office of Financial Regulation oversees banking regulations.

A characteristic of a fixed annuity is that the: A-Interest rate credited in the account varies based on the performance of the separate account B-Monthly income benefits are fixed and level C-Separate account has investment options D-Annuitant cannot be changed

B-Monthly income benefits are fixed and level

Group health plans usually cover: A-Both occupational and nonoccupational injury or disease B-Nonoccupational injury or disease C-Occupational injury or disease D-Neither occupational nor nonoccupational injury disease

B-Nonoccupational injury or disease- Group health plans usually only cover nonoccupational injury and disease. Workers' Compensation Insurance is designed to cover job-related injury or disease.

Under an annuity with a Joint Life Payment Option, what will the survivor receive upon the death of the first annuitant? A-The undistributed balance B-Nothing C-The same amount they were receiving together D-The remaining period certain

B-Nothing

A Certificate of Authority is issued to an insurer by the: A-CFO B-Office of Insurance Regulation C-Department of Financial Services D-Office of Financial Regulation

B-Office of Insurance Regulation- A Certificate of Authority authorizes an insurer to transact business in Florida and is issued by the Office of Insurance Regulation.

The Social Security Survivor Benefit is computed using which of the following? A-ERISA B-PIA C-FUTA D-FICA

B-PIA- The Social Security Survivor Benefit is based on the worker's Primary Insurance Amount (PIA), which is determined by cumulative earnings.

An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision? A-Proof of Disability or Death B-Physical Exam & Autopsy C-Intoxicants and Narcotics D-Proof of Loss

B-Physical Exam & Autopsy- According to the Physical Exam and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at its own expense, has the right to request a physical exam or autopsy where not prohibited by law.

All of the following are TRUE regarding qualified plans, except: A-Distributions taken prior to age 59 1/2 are subject to tax and a tax penalty B-Plans can discriminate in favor of highly compensated employees C-Employer contributions are not taxable to the employee until withdrawn D-Employer contributions are immediately tax-deductible

B-Plans can discriminate in favor of highly compensated employees- In an ERISA-qualified plan, there can be no discrimination in favor of highly compensated employees.

The __________ has the right to change the premium mode. A-Irrevocable beneficiary B-Policyowner C-Revocable beneficiary D-Insured

B-Policyowner- The policyowner has the right to change the premium mode.

ERISA sets minimum standards for ________ pension plans. A-Both public and private B-Private C-Quasi-government D-Public

B-Private- ERISA focuses in on private-industry pension plans.

What is the purpose of the LTC Partnership policy? A-Temporary fix for tax exempt policies B-Protect some assets from Medicaid spend down C-Diversify the inflation protection options D-To replace qualified LTC policies

B-Protect some assets from Medicaid spend down- The LTC Partnership policy is designed to help protect the assets of LTC insurance policyholders who subsequently seek Medicaid benefits.

What provision states that if there is a second disability due to the same cause within a specified period, the elimination period will be waived? A-Residual Disability B-Recurrent Disability C-Rehabilitation Disability D-Second Disability

B-Recurrent Disability-Under the Recurrent Disability provision, if a second disability is suffered due to the same cause as the first, within a given period of time, the elimination period will be waived.

Which statement about Medicare marketing standards is false? A-It is an unfair trade practice to frighten a person into buying Medicare supplement policies B-Require an applicant for a Medicare supplement policy to prove that no other health policies exist C-Every insurer must establish an audit program to verify compliance D-It is unacceptable to mislead a person into taking out a policy with another insurer

B-Require an applicant for a Medicare supplement policy to prove that no other health policies exist- The agent must inquire and make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance, but the applicant cannot be forced to prove it.

If a client is unsure about whether or not he/she can obtain coverage or how much it would cost, what can the producer suggest to see what the insurer can do without tying up any of the client's funds? A-Submit a term life application B-Submit a trial application C-Submit a whole life application D-Issue a binding receipt

B-Submit a trial application

Generally, the payment of an accelerated death benefit is _______ to a recipient if the benefit payment is qualified. A-Taxable to the extent it exceeds 7.5% of AGI B-Tax free C-Taxable D-Tax free up to $50,000

B-Tax free- Generally, the payment of an accelerated death benefit is tax free to a recipient if the benefit payment is qualified.

The agent's duties regarding replacement of an existing policy include which of the following? A-Require the applicant sign a statement if the insurance will replace an existing non-convertible and nonrenewable term policy which will expire in 5 years or less B-The agent must give the applicant copies of the Notice Regarding Replacement and all sales proposals used during the presentation C-Send a Comparative Information Form to the applicant within 5 days of the date of application D-Notify the existing insurer of the planned replacement

B-The agent must give the applicant copies of the Notice Regarding Replacement and all sales proposals used during the presentation- A nonconvertible and nonrenewable term policy which will expire in 5 years or less is not considered replacement and it is the replacing insurer's responsibility to send a Comparative Information Form and to notify the existing insurer of the planned replacement.

Which of the following statements regarding conversion rights of a group policy is correct? A-The individual policy will not cover dependents B-The amount of coverage on the individual policy cannot exceed the amount of life insurance provided under the ceased group policy C-All supplementary benefits provided under the group policy will remain on the individual policy D-The individual is required to provide evidence of insurability

B-The amount of coverage on the individual policy cannot exceed the amount of life insurance provided under the ceased group policy- Group conversion will cover the individual and dependents without evidence of insurability, but will not include any supplementary benefits covered under the group policy.

Each of the following are characteristics of a Current Assumption Whole Life insurance policy, except: A-The insurance company can change the premium B-The death benefit is not guaranteed C-The insurance company can change the interest rate credited to the policy D-If interest rates increase premiums can be reduced or cash values can increase at a faster rate

B-The death benefit is not guaranteed

B-The death benefit is not guaranteed- Current Assumption Whole Life guarantees a death benefit just like any other whole life insurance product. However based on interest rates premiums can be reduced or increased and cash values can be credited with a higher or lower interest rate.

Policy loan provisions include all of the following, EXCEPT: A-Outstanding loans will be deducted from the face amount at time of claim B-The death benefit of a policy is automatically reduced when a loan is requested C-Unpaid interest is added to the value of the loan D-Interest is charged annually

B-The death benefit of a policy is automatically reduced when a loan is requested

What portion of an employee's pension plan withdrawal is subject to tax? A-The employee's contribution B-The entire withdrawal C-The employer's contribution D-The earnings on the contributions

B-The entire withdrawal- Since the contributions were pre-tax and all earnings were tax deferred, then the entire withdrawal would be subject to taxation unless one of the EXCEPTIONS apply.

What is the net amount at risk in a Whole Life Insurance policy? A-The face amount of the policy B-The face amount plus the cash values C-The face amount less the cash values D-The face amount minus any dividends paid

B-The face amount plus the cash values

What is the risk to the purchaser in a viatical settlement transaction? A-The check given to the seller does not clear the bank B-The insured does not die within the time period anticipated C-The insured dies sooner than expected D-The purchaser paid too little for the policy

B-The insured does not die within the time period anticipated

All of the following are TRUE regarding a Variable Annuity, EXCEPT: A-Upon annuitization, accumulation units are converted into annuity units, which generate income based on the value of the units B-The number of annuity units received upon annuitization, and the unit value, remain level C-The contract owner bears the investment risk and receives the return actually earned on invested assets, less any charges assessed by the insurer and investment managers D-Premiums paid during the accumulation period are invested into a separate account(s)

B-The number of annuity units received upon annuitization, and the unit value, remain level

With a Current Assumption Whole life policy, what can happen if the cash values increase too quickly? A- The policy will lapse B-The policy could mature sooner than expected C-The face amount of the policy will decrease D-The insurer will be forced to pay out the excess to the policyowner

B-The policy could mature sooner than expected

What happens if a premium due is not paid before the end of the grace period? A-The policy is automatically renewed B-The policy lapses C-The policy is converted to one that is more affordable for the client D-The coverage continues until the home office and the policyowner can work out a payment plan

B-The policy lapses

What is the primary advantage to the policyowner in the reinstatement of a life insurance policy? A-All policy loans that were outstanding at the time of lapse are forgiven and full cash value is restored B-The policyowner continues to enjoy the benefits that were provided in the original policy, including the original premium C-The insured is not required to prove insurability if under age 40 D-The insurance company cannot start a new period of contestability

B-The policyowner continues to enjoy the benefits that were provided in the original policy, including the original premium

What happens to a spouse or child rider just prior to it expiring? A-The spouse or child receives a premium refund B-The spouse or child has a conversion option C-The policyowner receives a premium refund D-They must prove insurability in order to continue on with the rider

B-The spouse or child has a conversion option-Both spouse and child riders will also provide a conversion provision permitting the spouse or child to convert to permanent coverage without evidence of insurability prior to the termination of the rider or upon the death of the insured under the basic policy (or upon reaching age of majority for the child covered under a child rider).

Participating policy dividends become taxable as income when: A-The policyowner receives them in cash B-The total amount of dividends received by a policyowner exceeds the total amount of premium he/she has paid C-They are distributed by the insurer D-They are declared by the board of directors

B-The total amount of dividends received by a policyowner exceeds the total amount of premium he/she has paid- When the total amount of dividends received exceeds the total amount of premium paid, the excess is taxable as income to the policyowner.

All of the following are true regarding annuities, except A-They are similar to life insurance B-They can liquidate an estate C-They are used primarily to provide a steady stream of income D-They are designed to protect against outliving one's income

B-They can liquidate an estate

All of the following are generally the main business uses of life insurance, EXCEPT: A-To provide funds for the continuation of the business B-To provide funds for the deceased's heirs C-To cover the unexpected death of a business partner D-To cover the unexpected death of a key employee

B-To provide funds for the deceased's heirs

B-To provide funds for the deceased's heirs- Business uses of insurance often mirror individual needs - to cover the unexpected death of business partners, executives, and key employees by providing funds for the continuation of the business, not for the heirs of the decedent.

An insurer issues a policy as "other than applied for," requiring an additional premium of $100. When would an agreement come into being? A-When the producer receives the policy from the home office B-When the applicant accepts delivery of the policy and pays the additional premium C-When the applicant agrees to the terms D-When the insurer puts the policy into the mail

B-When the applicant accepts delivery of the policy and pays the additional premium- This is how a counteroffer is accepted.

When does the annuitization period begin? A-When the annuitant reaches age 70 1/2 B-When the policyowner elects to convert the annuity into an income benefit payment C-At the specified age stated in the policy, usually age 100 D-When the annuitant reaches age 59 ½

B-When the policyowner elects to convert the annuity into an income benefit payment

Frank purchases a life insurance policy and names his wife Jean as his beneficiary. They divorce several years later. If Frank dies before making any changes to his policy, can Jean still collect as his beneficiary? A-No, she married someone else B-Yes, she is the beneficiary C-Only if the insurer approves D-It will have to go to probate court first

B-Yes, she is the beneficiary

Which of the following manufactures and sells insurance coverage in the form of insurance policies or contracts of insurance? A-Insurance agencies B-Applicants/insureds C-Insurance companies D-Insurance agents

C-Insurance companies

FICA taxes

Based on the Federal Insurance Contributions Act; tax withheld from employees' paychecks and matched by employers for Social Security and Medicare.

How can Universal Life Insurance (UL) offer a flexible premium?

Because mortality and expense charges are deducted from the cash value monthly, the policyowner has more flexibility with universal life premium payments. The premiums can be increased, decreased, or even skipped at the policyowner's discretion as long as there is sufficient cash value to cover these deductions.

Give example of an Aleatory?

Because of the uncertainty of risk, there will always be an unequal exchange of value between the parties. The insured's premium payments are less than the potential benefit in the event of a loss. But, if a loss never occurs, the total cost of premium payments is greater.

If overdue premiums are not paid by the end of the grace period, a traditional Whole Life policy will automatically

Become extended term

Individual specified in the policy who is eligible to receive benefits upon a loss suffered by the insured

Beneficiary

A ____________ receipt provides immediate coverage if the premium is paid at the time of application

Binding (Unconditional) Receipt

This type of receipt is usually not allowable in connection to the sale of life insurance.

Binding (Unconditional) Receipt

A generic brochure developed by the NAIC to assist prospective buyers of life insurance. Descriptions of all basic types of life insurance as well as comparative costs of each are included.

Buyer's Guide

A copy of the _____________ must either be provided to the applicant at the time of application or no later than policy delivery.

Buyer's Guide Personal Summary

Producers are required to provide all life insurance applicants with written disclosure regarding information to help applicants make a more informed decision when purchasing insurance. What are they?

Buyer's Guide Personal Summary

D has an accidental death and dismemberment policy with a $200,000 principal sum and a $100,000 capital sum. While mowing the lawn, D cut off a finger. How much will the policy pay? A-$200,000 B-$50,000 C-$0 D-$100,000

C-$0- An accidental death and dismemberment policy will not pay for fingers or toes since they are not considered to be limbs.

C paid $20,000 in premiums into a $100,000 universal life insurance policy. The accumulated cash value was $35,000 when C received a cash withdrawal of $30,000. How much of the cash withdrawal was taxable? A-$30,000 B-$20,000 C-$10,000 D-$0

C-$10,000- The cost basis in this scenario is $20,000. Only the amount withdrawn that exceeds the cost basis is taxable. Therefore, of the $30,000 withdrawn, $10,000 is taxable.

G, being undecided on what to do with $100,000 just received on F's policy, decides to leave the proceeds on deposit with the insurer at interest. The rate being paid is 5%. In one year, what amount will be taxable to G? A-$500 B-Zero C-$5,000 D-$105,000

C-$5,000- While the lump sum death benefit is not income taxable, the interest paid on the amount left on deposit with the insurer is, whether taken in cash or left on deposit.

Hicks Corp. wants to install a contributory group plan. It employs 200 people. How many employees must participate in order to install the plan? A-100 B-200 C-150 D-50

C-150- Contributory plans require a participation percentage of 75%.

Which of the following life insurance policies does not develop a cash value? A-Variable whole life B-Whole life C-5 year term D-Universal life

C-5 year term-Term insurance is temporary, therefore it does not develop a cash value.

Which of the following disability policies would be considered a deductible business expense? A-A policy which funds a disability buyout plan B-A key employee policy C-A business overhead expense policy D-A disability income policy purchased by an entrepreneur on him or herself

C-A business overhead expense policy

C-A business overhead expense policy- A business overhead expense policy pays for deductible business expenses not the employer's personal income.

All of the following become part of the entire contract, except: A-Any riders B-A copy of the application C-A copy of the check D-The policy itself

C-A copy of the check

Which rider would eliminate coverage for a preexisting condition? A-Guaranteed Purchase Option B-Lifetime Benefit Rider C-Impairment Rider D-Return of Premium Rider

C-Impairment Rider- The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

An agent may share a commission or any valuable consideration with: A-A person who is licensed and appointed by the same insurer in a different line of business B-A policyowner who provides referrals C-A person who is licensed and appointed in the same line of business D-An unaffiliated agent who charges a fee to make recommendations

C-A person who is licensed and appointed in the same line of business- Commissions may be shared with a person who is licensed and appointed in the same line of business.

The period of time over which a single sum or periodic deposits grow within an annuity is referred to as the: A-Benefit Period B-Growth Period C-Accumulation Period D-Savings Period

C-Accumulation Period

The period of time over which a single sum or periodic deposits grow within an annuity is referred to as the: A-Benefit Period B-Growth Period C-Accumulation Period D-Savings Period

C-Accumulation Period- The pay-in phase of an annuity is called the Accumulation Period or Phase. The pay-out phase is

Which of the following special provisions is incorrect with respect to small employers? A-A small employer carrier may not offer coverage limited to certain person in a group or to part of a group, EXCEPT with respect to late enrollees B-The employee must request such special enrollment no later than 30 days after the coverage termination date C-An initial enrollment period of no more than 30 days must be provided D-An initial enrollment period of at least 30 days must be provided

C-An initial enrollment period of no more than 30 days must be provided- An initial enrollment period of at least 30 days must be provided.

Insurance contracts are aleatory contracts. What does "aleatory" refer to? A-Ambiguity in policy language B-Duties and conduct expected of the parties C-An unequal exchange of value D-A contract written by one party

C-An unequal exchange of value

All of the following factors are used to determine the monthly benefit payment of an annuity, EXCEPT: A-Accumulated account value B-Age of annuitant C-Annuitant's medical history D-Annuity payment option selected

C-Annuitant's medical history

Insurable interest for life insurance is necessary only at the time of: A-Policy delivery B-Death C-Application D-Policy renewal

C-Application

How often may the Office of Financial Regulation make investigations? A-Every 2 years B-Every 5 years C-As often as necessary D-Every 3 years

C-As often as necessary- The Office of Financial Regulation make investigations as often as necessary to determine if a person has violated, or is about to violate, any provision of the financial institutions codes or rules.

A Buy-Sell Agreement: A-Specifies the conditions and requirements that are necessary to sell the business to a third party if a business owner dies unexpectedly B-Describes which relatives of a business owner have the right to purchase that person's interest in the business upon death C-Assures the continuation of the business by providing benefits to the surviving business partners to buyout a business partner's interest in the event one of them dies unexpectedly D-Provides a business with funds in the event of the death of a key person who is not an owner

C-Assures the continuation of the business by providing benefits to the surviving business partners to buyout a business partner's interest in the event one of them dies unexpectedly- A Buy-Sell agreement is funded with life insurance and is designed to protect the business and assure continuation by providing benefits to the surviving business partners to buy out the deceased partner share of the business.

C-Automatically at age 65- Regardless of when an individual starts receiving Social Security retirement benefits, they cannot be eligible for Part A until age 65 unless they have been receiving Social Security disability (not retirement) benefits for 24 months.

For purposes of administration of the Life and Health Guaranty Association, all of the following accounts must be maintained, except: A-Life insurance account B-Health insurance account C-Cash value account D-Annuities account

C-Cash value account

C-Cash value account- The Association must maintain 3 accounts: life insurance, health insurance, and annuities. The cash value of a policy may be covered, but those funds will be held in the life insurance account.

If the insured of a Whole Life policy is on claim with a Waiver of Premium rider, what happens to the cash values? A-They are reduced by the cost of the rider B-They are reduced by the total cost of the policy C-Cash value and dividends are not affected D-The cash value is frozen until regular premium payments resume

C-Cash value and dividends are not affected

Which of the following insurance policies may be written in conjunction with a Basic Medical Expense Coverage and utilizes a Corridor Deductible after the basic plan benefits have been exhausted? A-Surgical Expense B-Hospital Expense C-Comprehensive Major Medical D-Supplementary Major Medical

C-Comprehensive Major Medical

The Department of Financial Services has the authority to perform all of the following duties, except: A-Conduct an investigation regarding alleged improper conduct of a person regulated by the Department B-Require a licensing applicant's fingerprints to be checked by local and federal law enforcement agencies C-Determine solvency of an insurer D-Supervise agent licensing

C-Determine solvency of an insurer- The DFS has the authority to investigate and regulate licensee's and applicants, but does not have the authority to determine insurer solvency, only the Office of Insurance Regulation has that authority.

A qualified pension plan must meet ___________ requirements. A-COBRA B-SEC C-ERISA D-OSHA

C-ERISA- A qualified plan must meet the requirements of the Employee Retirement Income Security Act (ERISA).

Each of the following is an element of a legal contract, except: A-Legal Purpose B-Agreement C-Indemnity D-Consideration

C-Indemnity

Florida is implementing a new program where Medicaid recipients will receive ________.

LTC services

All of the following regarding employer group life insurance are true, except: A-Death benefit proceeds paid to an employee's named beneficiary are received income tax-free B-Premiums paid by an employer are tax-deductible to the business as an ordinary and necessary business expense C-Employee-paid premiums are tax-deductible to the employee D-Employer-paid premiums do not constitute taxable income to the employee unless the death benefit exceeds $50,000

C-Employee-paid premiums are tax-deductible to the employee- Premiums paid by an employee are not eligible for a tax deduction.

All of the following are characteristics of a qualified retirement plan, EXCEPT: A-Employer contributions are immediately tax deductible to the employer B-The penalty for premature distributions may be waived for death, disability, qualified education costs, medical expenses and first -time homebuyers C-Employers in private industry are required to establish pension plans D-Employee contributions are either pre-tax or tax deductible

C-Employers in private industry are required to establish pension plans

C-Employers in private industry are required to establish pension plans- Qualified retirement plans receive favorable tax treatment, such as deductible premiums to the employer, pre-tax or deductible premiums to the employee, and waived penalties for the listed situations. ERISA is a federal law that sets minimum standards for employers who establish pension plans in private industry, but does not require employers to establish a plan.

The insurance company must meet requirements under the _____ when gathering information about an applicant from a third party. A-FINRA B-NAIC C-FCRA D-SEC

C-FCRA- The insurance company must meet requirements under the FCRA when gathering information about an applicant from a third party.

An insurance license may be suspended for all of the following reasons, EXCEPT: A-Cheating on the licensing exam B-Violating the code of ethics as a life agent C-Failure to meet the continuing education requirements before expiration D-Failure to comply with civil, criminal, or administrative action taken by the child support enforcement program

C-Failure to meet the continuing education requirements before expiration- Failure to meet the continuing education requirements is not grounds for suspension, especially prior to the expiration date.

Information from a third party collected by the insurance company in the application for insurance and during underwriting of the policy may be subject to the jurisdiction of which of the following? A-HIPAA B-USA PATRIOT Act C-Fair Credit Reporting Act D-Unfair Claims Practices Act

C-Fair Credit Reporting Act

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. He applies for and receives a $10,000 policy loan from the insurer. All of the following about this transaction are true, EXCEPT: A-If C died, his beneficiaries would receive $90,000, less any outstanding interest charges B-If the policy is surrendered, C would receive $20,000 less any outstanding interest charges C-If C were disabled, his beneficiaries would receive $70,000, less any outstanding interest charges D-The loan carries a fixed or variable interest rate

C-If C were disabled, his beneficiaries would receive $70,000, less any outstanding interest charges - Policy loans carry a fixed or variable loan interest rate. If the policy is surrendered or a death claim is paid, the proceeds are reduced by the outstanding policy loan and policy loan interest.

All of the following statements regarding group life insurance issued in Florida are correct, except: A-Dependent coverage may not exceed the amount of coverage provided to the insured member or employee B-Each insured must receive an individual certificate containing the group number C-If a person insured under a policy dies during the 31-day conversion period before any individual policy has become effective, there is no death benefit payable D-There is no minimum number of lives that must be covered under a group life insurance policy

C-If a person insured under a policy dies during the 31-day conversion period before any individual policy has become effective, there is no death benefit payable- If a person insured under a policy dies during the 31-day conversion period before any such individual policy has become effective, the amount of life insurance the person would have been entitled to under the individual policy will be payable as a claim under the group policy.

All of the following statements regarding a Modified Endowment Contract are correct, EXCEPT: A-Distributions received from a MEC are subject to a LIFO tax treatment B-A policy that fails the 7-pay test will be deemed a MEC C-If a policy is deemed a MEC, the owner has 7 years to receive a refund of excess premiums and remove the MEC status D-Distributions on gains withdrawn from a MEC prior to age 59 1/2 are subject to a 10% penalty in addition to taxation

C-If a policy is deemed a MEC, the owner has 7 years to receive a refund of excess premiums and remove the MEC status

C-If a policy is deemed a MEC, the owner has 7 years to receive a refund of excess premiums and remove the MEC status- A policy that does not pass the 7-Pay Test will be deemed a Modified Endowment Contract for the life of the contract. A policy can avoid being deemed a MEC if the policyowner receives a refund of excess premiums by the insurer within 60 days of the end of the contract year.

Failure to repay a loan or loan interest will void a life insurance policy: A-After the loan has been outstanding for more than 5 years B-After the insurer calls in the loan with 30 days advance notice C-If the total amount due equals or exceeds the policy's cash values D-If interest rates increase by more than 3% in any 1 year

C-If the total amount due equals or exceeds the policy's cash values

Which rider would eliminate coverage for a preexisting condition? A-Guaranteed Purchase Option B-Lifetime Benefit Rider C-Impairment Rider D-Return of Premium Rider

C-Impairment Rider

The insuring agreement in a life insurance policy states the: A-Policyowner will indemnify the insurance company the policy proceeds if the beneficiary is not named in the application B-Insurance company will not pay death claims in the event of suicide or other exclusion named in the policy unless all premiums are paid in advance C-Insurance company is obligated to pay the policy proceeds upon presentation of valid proof of the death of the insured which occurred while the policy is in force D-Insurance company may refuse to pay a death claim in the event a mistake is found in the original application for insurance at the time of the insured's death

C-Insurance company is obligated to pay the policy proceeds upon presentation of valid proof of the death of the insured which occurred while the policy is in force

Which best describes how an indemnity plan works? A-Plan pays the medical group, not the individual service provider B-Plan provides comprehensive medical services on a prepaid basis in its own facility C-Insured pays a fixed dollar amount up front and files a claim for reimbursement D-Plan provides basic health services on a prepaid fixed-sum basis

C-Insured pays a fixed dollar amount up front and files a claim for reimbursement- An indemnity plan pays a fixed dollar amount generally required up front without regard to the actual expense incurred, and the insured files a claim for reimbursement after the services are rendered.

Which clause in a contract would state that Jim is covered by XYZ insurer for a monthly benefit of $2,000 in the event of disability? A-Free Look Provision B-Entire Contract C-Insuring Clause D-Consideration Clause

C-Insuring Clause- The Insuring Clause states who is covered, by whom, for how much, for what period, and against what peril.

A medical or physical exam requested by the underwriter to determine insurability: A-Includes a written statement by the applicant's primary care physician explaining the treatment for a preexisting condition B-Is paid for by the applicant up front and reimbursed by the insurance company once the policy is issued C-Is performed by a licensed professional and includes checking vital statistics and routine lab work D-Requires notification of information practices and written consent under the FCRA

C-Is performed by a licensed professional and includes checking vital statistics and routine lab work- A medical exam is paid for by the insurer and does not require written consent under the FCRA. A written statement from the applicant's doctor explaining treatment for a preexisting condition is an attending Physician's statement. The medical exam is completed by usually a registered nurse or a paramedical professional and includes checking vitals, height, weight, and collecting blood and urine samples.

What is an impairment rider? A-It pays out an additional benefit if the insured cannot perform 2 of the 5 specified functional activities B-It pays out an additional benefit in cases where the cause of loss is a result of an accident C-It excludes specific conditions that normally would cause the entire policy to be declined D-It guarantees the insured's future insurability

C-It excludes specific conditions that normally would cause the entire policy to be declined

All of the following are TRUE about the Automatic Premium Loan (APL) Provision, except: A-It must be elected by the policyowner B-It becomes effective, if elected, at the end of the grace period C-It is available on any type of life insurance policy D-It can be cancelled at any time by the policyowner

C-It is available on any type of life insurance policy

C-It is available on any type of life insurance policy- The Automatic Premium Loan Provision is available on cash value policies only.

Individuals who do not enroll during the initial enrollment period are considered ___________ enrollees. A-Restricted B-Prohibited C-Late D-Terminated

C-Late

Individuals who do not enroll during the initial enrollment period are considered ___________ enrollees. A-Restricted B-Prohibited C-Late D-Terminated

C-Late- Individuals who do not enroll during the initial enrollment period are considered late enrollees and must provide evidence of insurability unless they wait until the next open enrollment period.

Which of these is a Mandatory Uniform Provision? A-Illegal Occupation B-Misstatement of Age C-Legal Actions D-Conformity with State Statutes

C-Legal Actions

Which of these is a Mandatory Uniform Provision? A-Illegal Occupation B-Misstatement of Age C-Legal Actions D-Conformity with State Statutes

C-Legal Actions- The only choice which is a Mandatory Uniform Provision is Legal Actions. All other responses are Optional Uniform Provisions.

Dividend options do not include which of the following choices? A-Paid-up additional insurance B-Reduce premiums due C-Lifetime income D-Refund in cash

C-Lifetime income

Burt named Liz as his beneficiary; however, he did not choose a Settlement Option. At the time of his death, who determines the option to be used to receive the benefits? A-Lump sum is the automatic option when no option was preselected prior to death of the insured B-Burt's estate, since no Settlement Option was chosen C-Liz the beneficiary determines which option she would like to have D-The insurer decides when the election is not made by the policyowner prior to death

C-Liz the beneficiary determines which option she would like to have- If the owner of the policy does not select a Settlement Option while alive, then the beneficiary may choose an option at the time of claim.

A producer provided a conditional receipt to an applicant on May 5 at the time of an application based on a standard risk. The insurer required a routine medical exam, which was completed on May 15. The policy was issued based on a substandard risk on May 20 and the producer delivered the policy on May 22. The effective date of coverage is: A-May 5 B-May 20 C-May 22 D-May 15

C-May 22- Since the policy was not issued as applied for, coverage is not effective until the producer delivers the policy on May 22 and explains the changes in coverage or increased premium due to a substandard risk. The applicant must accept the counteroffer.

It is the _________ who issues a Certificate of Authority enabling an insurer to conduct insurance business within a particular state. A-Secretary of State B-State legislature C-State insurance Commissioner or Director D-State Senate

C-State insurance Commissioner or Director

When it comes to choosing between home health care or home care, what is the most significant difference? A-Goals B-Availability C-Medical vs. Non-medical D-Cost

C-Medical vs. Non-medical- Home health care is medically driven, may include several different health care professionals, and the goal is to avoid unnecessary hospitalization. Home care is not medical-driven and instead focuses on helping the senior with daily activity and feeling safe and independent at home.

What is the additional premium cost to have the automatic premium loan provision included in a permanent policy? A-10% of the face amount B-10% of the base policy premium C-Nothing D-It varies by insurer and type of policy

C-Nothing

Which state entity is responsible for issuing a Certificate of Authority for an insurance company? A-Department of Financial Services Division B-State judicial system C-Office of Insurance Regulation D-State legislature

C-Office of Insurance Regulation- The Commissioner of the Office of Insurance Regulation also regulates insurance licensing, rates, policy forms, market conduct, claims, and company solvency.

Which state entity is responsible for issuing a Certificate of Authority for an insurance company? A-State legislature B-State judicial system C-Office of Insurance Regulation D-Department of Financial Services Division

C-Office of Insurance Regulation- The Commissioner of the Office of Insurance Regulation also regulates insurance licensing, rates, policy forms, market conduct, claims, and company solvency.

Variable Whole Life has all of the following features, EXCEPT: A-The owner may select which separate account they want their premium to be invested in B-The premium is determined by the insurer and remains fixed and level throughout the contract C-Partial surrender are allowed D-The policy provides for both a general account and a separate account

C-Partial surrender are allowed

In the event a parent becomes disabled or dies while paying premiums on a life insurance policy for a minor child, which provision would allow the policy to continue in force until the child reaches a predetermined age? A-Cost of Premium Rider B-Minor Child Rider C-Payor Benefit (Waiver of Payor Premium) D-Return of Premium Rider

C-Payor Benefit (Waiver of Payor Premium)

When an applicant does not smoke, exercises regularly, seldom drinks, and eats moderately and is considered to be a better-than-average risk, they would likely qualify for: A-Preferred status and pay a higher premium B-Standard status and pay a standard premium C-Preferred status and pay a lower premium D-Substandard status and pay a higher premium

C-Preferred status and pay a lower premium-

The LTC Shopper's Guide must be delivered to the applicant at which of the following times? A-At the time the application is completed B-Any time before a loss occurs and claim is filed C-Prior to the presentation of the application D-When the policy is delivered

C-Prior to the presentation of the application- An agent must deliver the Shopper's Guide prior to the presentation of an application or enrollment form, and in the case of direct response solicitations, the Shopper's Guide must be presented in con-junction with any application or enrollment form.

A contingent beneficiary has the right to: A-Share in the death benefit with the primary beneficiary B-Prevent the policyowner from taking a loan against the cash value C-Receive the policy proceeds if the primary beneficiary predeceases the insured D-Receive the policy proceeds if the primary beneficiary is a minor child

C-Receive the policy proceeds if the primary beneficiary predeceases the insured

Which provision is an Optional Uniform Provision? A-Physical Examination B-Payment of Claims C-Relation of Earnings to Insurance D-Claim Forms

C-Relation of Earnings to Insurance

Which provision is an Optional Uniform Provision? A-Physical Examination B-Payment of Claims C-Relation of Earnings to Insurance D-Claim Forms

C-Relation of Earnings to Insurance- Relation of Earnings to Insurance is an Optional Uniform Provision. The other choices are Mandatory Uniform Provisions.

Which of the following might be done to protect against adverse selection when underwriting group medical insurance? A-Allow coverage to begin immediately B-Enroll the business owner first C-Require a minimum percentage of the group to enroll D-Include all dependents to make the group larger

C-Require a minimum percentage of the group to enroll- By requiring a minimum percentage of the group to enroll, the risk is spread by possibly getting those of better health to participate along with those of poorer health.

A policyowner who wishes to maintain all rights in the policy should designate a(n): A-Contingent beneficiary B-Irrevocable beneficiary C-Revocable beneficiary D-Primary beneficiary

C-Revocable beneficiary

The replacing insurance company must do all of the following regarding a replacement of an existing policy, EXCEPT: A-Provide a copy of the buyer's guide to the applicant prior to accepting the initial or at or prior to the policy delivery if the policy has at least a 10-day unconditional refund provision B-Maintain copies of the notice, comparative information form, all sales proposals, and a replacement register for at least 3 years C-Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery- D-Send the applicant a completed Comparative Information Form within 5 days after the application is signed when requested

C-Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery- The replacing insurer must send the Notice to the existing insurer immediately upon receipt at its home or regional office.

The annuity __________ option selected can provide a temporary or lifetime payment. A-Interest B-Investment C-Settlement D-Accumulation

C-Settlement

Which of the following is not an Unfair Claims Settlement Practice? A-Making a misrepresentation regarding facts or policy provisions relating to coverage B-Denying a claim without a reasonable investigation C-Settling a claim based on an application altered with the insured's consent D-Failing to acknowledge and act promptly to communications regarding a claim

C-Settling a claim based on an application altered with the insured's consent- Settling a claim based on an application altered WITH the insured's consent is not an unfair claim settlement practice. It is an unfair practice if done without the insured's consent.

Surety

Security against loss or damage or for the fulfillment of an obligation, the payment of a debt, etc.; a pledge, or bond.

An HMO is a managed health care system for voluntarily enrolled persons called ___________. A-Insured B-Member C-Subscribers D-Employee

C-Subscribers- An HMO provides a comprehensive array of medical services on a prepaid basis, normally in its own health care facility, to voluntarily enrolled subscribers living within a specific geographic area, or service area, limiting the choice of care providers.

A permanent policy is surrendered for its cash value, and that sum is greater than the amount of premiums paid in. How is the excess taxed? A-No tax is due B-Taxed as long term capital gain C-Taxed as ordinary income D-Taxed as a short term capital gain

C-Taxed as ordinary income- Upon surrender, any equity (i.e., amount above total premiums paid) is taxed as ordinary income. The premiums paid are also referred to as 'cost basis.'

Term life insurance is primarily a _______ form of life insurance protection. A-Renewable B-Permanent C-Temporary D-Convertible

C-Temporary-Term Insurance provides temporary, not permanent, protection. Not all term insurance is renewable and/or convertible.

Which of the following is not a qualifying event? A-Divorce or legal separation B-Death of a covered employee C-Termination due to gross misconduct D-Eligibility for Medicare

C-Termination due to gross misconduct- A qualifying event results in a loss of coverage to a qualified beneficiary when the employee's employment is terminated, EXCEPT for gross conduct, or the hours are reduced.

Which of the following is not a qualifying event? A-Divorce or legal separation B-Death of a covered employee C-Termination due to gross misconduct D-Eligibility for Medicare

C-Termination due to gross misconduct- A qualifying event results in a loss of coverage to a qualified beneficiary when the employee's employment is terminated, except for gross conduct, or the hours are reduced.

Which is not a qualifying event for the continuation of dependent coverage under the Consolidated Omnibus Budget Reconciliation Act? A-The employee's eligibility for Medicare benefits B-Death of the employee C-Termination of the employee for theft D-Divorce or legal separation

C-Termination of the employee for theft- This would be termination for gross misconduct and neither the employee nor his/her dependents would be eligible for continuation under COBRA.

To eliminate the use of life insurance as a short-term, tax-free savings vehicle, what tax law change took place? A-Loan interest became tax-deductible B-Death benefits became income-taxable C-The Modified Endowment Contract (MEC) rules were put into place D-Employer-paid premiums were made non-tax-deductible

C-The Modified Endowment Contract (MEC) rules were put into place- The rule states that if a policy is funded too quickly, it will be classified as a Modified Endowment Contract (MEC). MEC rules impose stiff penalties to eliminate the use of life insurance as a short-term, tax-free savings vehicle.

Which of the following statements regarding conversion rights of a group policy is correct? A-The individual is required to provide evidence of insurability B-The individual policy will not cover dependents C-The amount of coverage on the individual policy cannot exceed the amount of life insurance provided under the ceased group policy D-All supplementary benefits provided under the group policy will remain on the individual policy

C-The amount of coverage on the individual policy cannot exceed the amount of life insurance provided under the ceased group policy- Group conversion will cover the individual and dependents without evidence of insurability, but will not include any supplementary benefits covered under the group policy.

C-The face amount less the cash values- The net amount at risk to the insurer is the difference between the face amount and the cash values.

Which statement is inaccurate regarding the Change of Occupation Provision? A-If the insured works at two occupations, rates for the most hazardous occupation will be charged B-If the insured changes to a less hazardous occupation, he/she may apply for a rate reduction C-The insured must notify the insurer of a change of occupation, or the policy will be cancelled D-If the insured changes to a more hazardous occupation, benefits will be reduced to the amount which the premiums paid would purchase at the more hazardous occupation

C-The insured must notify the insurer of a change of occupation, or the policy will be cancelled

If a life insurance policy lapses due to nonpayment of premium, then reinstatement requires: A-Proof of insurability only B-The payment of back premiums only C-The payment of back premiums, plus interest, and proof of insurability D-The payment of the next annual premium in full and in advance

C-The payment of back premiums, plus interest, and proof of insurability

C-The payment of back premiums, plus interest, and proof of insurability- To reinstate a lapsed policy, the insured must provide evidence of insurability and all back premiums plus interest must be paid.

All of the following are characteristics of Universal Life Insurance, EXCEPT: A-The policyowner has the option to adjust the death benefit up or down B-The policyowner may determine the amount and mode of premium payments C-The policyowner can choose which investment(s) to place the cash values into from those available D-Each month a mortality charge is deducted from the policy's cash value for the cost of the insurance protection and expenses

C-The policyowner can choose which investment(s) to place the cash values into from those available- The policyowner can pay any amount of premium at any time subject to policy limitations and can request an increase (if proof of insurability is provided) or decrease in the face amount. Costs for coverage are deducted monthly from the cash values.

An application for health insurance is completed by a producer and signed by the applicant. The applicant remembers information that needs to be added to the application before being submitted to the insurer and contacts the producer, who has returned to the office. Which of the following statements is correct? A-The producer can make any changes necessary with verbal consent of the applicant B-Once the application is signed, answers reported on the application cannot be changed C-The producer must meet with the applicant in person to update the information and have the applicant initial the changes D-The applicant will have the opportunity to correct any information when the policy is delivered

C-The producer must meet with the applicant in person to update the information and have the applicant initial the changes- Changes can only be made to an application with written consent of the applicant by initialing the changes or updates.

All of the following are characteristics of a variable annuity, EXCEPT: A-Designed to protect against inflation B-Each month the payment will increase, decrease, or remain the same as the previous month's payment based on the actual return as compared to the assumed interest rate (AIR) C-The separate account provides for a guaranteed minimum return D-Premiums made into the annuity purchase accumulation units

C-The separate account provides for a guaranteed minimum return

If a policyowner of a convertible term life insurance policy exercises his/her right to convert, which of the following will happen? A-The new policy will only be issued after proof of insurability is provided B-The new policy will have much more life insurance coverage than the previous one C-The term policy will be replaced by a permanent life insurance policy D-The new life insurance policy will likely have a much lower premium

C-The term policy will be replaced by a permanent life insurance policy

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following? A-Defamation B-Sliding C-Unfair discrimination D-Fictitious grouping

C-Unfair discrimination- Unfair discrimination is knowingly making or permitting individuals of the same actuarially supportable class and equal expectation of life to be charged different rates, paid different dividends or have different terms/conditions regarding any life insurance contract.

A partial withdrawal is permitted on which of the following policies? A-Whole Life B-Variable Whole Life C-Universal Life D-Current Assumption Whole Life

C-Universal Life

A partial withdrawal is permitted on which of the following policies? A-Whole Life B-Variable Whole Life C-Universal Life D-Current Assumption Whole Life

C-Universal Life- Policies on a universal life platform allow for partial withdrawals.

All of the following annuities can be sold without a securities registration/license, EXCEPT: A-Indexed B-Guaranteed C-Variable D-Fixed

C-Variable

An insured forgets to pay his insurance premium. Instead of the policy lapsing, the premium is paid by the company. This would suggest that a __________ policy was purchased. A-Level term B-Decreasing term C-Whole Life D-Renewable term

C-Whole Life

C-Whole Life- Only cash value policies can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan.

Which of the following is true regarding coinsurance? It is: A-The initial out of pocket expense before benefits are payable B-Always written as 80%-20% C-Written as a percentage and paid by both the insurer and the insured D-Paid prior to the deductible

C-Written as a percentage and paid by both the insurer and the insured

A life insurance policy is being applied for on Z's life. In order for the contract to be valid, all of the following have an insurable interest and could be the owner of the policy, except: A-Z B-Z's business partner C-Z's neighbor D-Z's spouse

C-Z's neighbor

The maximum amount payable in one sum in the event of accidental death or dismemberment.

Capital Sum

Give 6 Dividend Options

Cash Premium Reduction Accumulate at Interest Paid-Up Additions 1-Year Term Paid-Up Option

An amount of cash accessible to the policyowner from within permanent life insurance policies.

Cash Accumulation

The policyowner receives the declared dividends in the form of a check on or near each policy anniversary. This is the ___________ Dividend Option.

Cash Dividend Option

Upon surrendering the policy back to the insurer, the policy owner will receive the cash surrender value stated in the policy less any outstanding loans and accrued interest. Any amount that exceeds the premiums paid into the policy will be taxable as ordinary income. The insured no longer has insurance coverage if this option is selected.

Cash Surrender

Also known as permanent life insurance; premiums include a death benefit and a plan to build savings within the policy

Cash Value Insurance

_____________ is cash accumulation in the policy that can be accessed through a policy loan or cancellation (surrender) of the policy.

Cash value

Issued to each participant describing the benefits, identifying the insurance company and policy number

Certificate of insurance

Making use, directly or indirectly, of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

Cold lead Advertising

____________ Assignment does not cause a permanent change in ownership. However, the rights of the owner will be subject to the assignment.

Collateral Assignment

What Clause goes into effect-If an insured and primary beneficiary both are killed when the bus they are riding in goes over a cliff and if it cannot be determined who died first, the insured or primary beneficiary, the insured will be presumed to have survived the primary beneficiary so the contingent beneficiary will be able to receive the death proceeds

Common Disaster Clause

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Conditional receipt may be issued

Completing the Application

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Formal request for the insurer to issue a policy

Completing the Application

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Required signatures

Completing the Application

Which Managed Care Provision is used by insurers to monitor hospital stays

Concurrent Review

Which of the following is a Managed Care Provision used by insurers to monitor hospital stays?

Concurrent Review- Once an insured is admitted to the hospital, the insurer monitors the insured's hospital stay to make certain that everything is proceeding on schedule through the Concurrent Review Provision.

Both parties must perform certain duties and follow rules of conduct to make the contract enforceable

Conditional Contract

If a home office underwriter obtains MIB codes inconsistent with information provided on the application, what is the underwriter required to do?

Conduct further investigation to obtain more information prior to making a decision

The act of saving or keeping the existing policy and preventing it from being replaced.

Conservation

The exchange of value that makes a contract binding.

Consideration

This clause specifies the amount and frequency of premium paid by the owner as something of value provided in exchange for the company's promise to pay.

Consideration Clause

______________ delivery occurs when the insurer issues the policy, as long as the premium was paid at the time of application.

Constructive delivery

One party, the insurer, prepares the contract and it is not negotiable

Contract of Adhesion

4 types of contracts

Contract of Adhesion Aleatory Contract Unilateral Contract Conditional Contract

Employees pay a portion of the premium and at least 75% of eligible employees must participate

Contributory plan

____________________ is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates.

Current Assumption or Interest-Sensitive Whole Life

Agent examples includes an insurance producer, but does NOT include these roles?

Customer service representative Limited customer representative Service representative

______________ is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates. A-Traditional Whole Life B-Universal Life C-Adjustable Life D- Current Assumption Whole Life

D- Current Assumption Whole Life

An insured has paid $1,000 in annual premiums for her permanent life insurance policy for 12 years. Now upon surrendering the policy she is due to receive $15,000 of cash value. How much of this cash value is taxable? A-Zero B-$15,000 C-$12,000 D-$3,000

D-$3,000- The Cost Recovery Rule states that at surrender, cash values will be recovered tax-free to the extent of the cost basis of the policy. The cost basis is $12,000 (i.e. 12 years x $1,000 annual premium). The $3,000 excess over cost basis ($15,000 of CSV less $12,000 cost basis) is taxed as ordinary income.

Z suffers a total and permanent disability. The policy he has requires a premium payment of $100 per month. He is on claim for 100 months. Initially, how much did Z have to pay before the waiver of premium benefit on his policy started? A-$10,000 B-$1,800 C-$1,200 D-$600

D-$600 -There is usually a maximum 6-month elimination period before premiums are waived.

An employer may require a former employee who has COBRA coverage to pay up to _____% of the premium. A-95 B-90 C-105 D-102

D-102- Recipients of COBRA coverage will be required to pay premiums to the employer. Employers may require a former employee or his/her surviving spouse to pay up to 102% of the premium.

If a plan offers coverage to dependents, eligible dependents includes all children, natural and adopted, married and unmarried, up to age ______. A-21 B-19 C-18 D-26

D-26- If a plan offers coverage to dependents, eligible dependents includes all children, natural and adopted, married and unmarried, up to age 26.

A partnership has 3 partners who each have an equal ownership interest in their $3,000,000 business. How many policies would have to be purchased under a traditional cross purchase buy-sell agreement plan? A-3 B-9 C-1 D-6

D-6- There would need to be 6 policies purchased in a traditional cross purchase buy-sell agreement plan (3x2). Each partner would be acquiring a policy on the other two partners.

A flexible premium deferred annuity permits all of the following EXCEPT: A-Annuitization is allowed at any time after 1 year B-Scheduled and unscheduled premiums may be payable at any time prior to annuitization C-Accumulated values in the account are not taxable until they are withdrawn D-A lump sum payment can be used to purchase the annuity

D-A lump sum payment can be used to purchase the annuity

D-A small employer carrier may not offer coverage limited to certain person in a group or to part of a group, except with respect to late enrollees

Experience rating utilizes _______ in determining the rate the insurer will charge for group coverage in each year of coverage. A-Actual loss experience of everyone in that zip code B-The plan sponsor's credit rating C-Credit rating of all participants D-Actual loss experience of the group

D-Actual loss experience of the group

_____________ is/are not considered material to the policy issuance. A-12 driving under the influence tickets within 6 months prior to application B-Recent major inpatient hospital surgeries C-Hazardous occupations and/or hobbies D-Age and/or gender

D-Age and/or gender

D-Age and/or gender- Age and/or gender are not considered material to the policy issuance.

A contract that is designed to accumulate value over time with the intent to provide a stream of income over the lifetime of an individual is called _________. A-Term insurance B-Variable life insurance C-Whole life insurance D-An annuity

D-An annuity

All of the following statements are correct regarding an annuity, EXCEPT: A-The accumulation value grows tax-deferred B-Annuity premiums can be made in single or periodic payments C-An annuity can be characterized by immediate or deferred income D-An immediate annuity must start providing income within 3 years of the first premium payment

D-An immediate annuity must start providing income within 3 years of the first premium payment

Which of the following beneficiary designations is a class designation? A-Mary Smith - spouse B-Bank of Springfield - creditor C-Frank Jones - son D-Any children of this marriage

D-Any children of this marriage

Which of the following beneficiary designations is a class designation? A-Mary Smith - spouse B-Bank of Springfield - creditor C-Frank Jones - son D-Any children of this marriage

D-Any children of this marriage- A class designation is when the beneficiary is not directly identified by name.

Social Security uses which of the following definitions to determine total disability? A-Own occupation B-Loss of income C-Any occupation D-Any substantial gainful activity

D-Any substantial gainful activity

Which of the following statements is NOT correct about insurance company appointments? A-To transact insurance on behalf of an insurer, an agent must be licensed by the Department and appointed by an insurer or appointing entity B-An agent must be appointed for all lines of insurance to be transacted C-Appointments are valid for 24 months if effective in a licensee's birth month D-Appointments are subject to renewal every 48 months

D-Appointments are subject to renewal every 48 months- Appointments are valid for 24 months (up to 36 if effective in any month other than birth month) and renew every 24 months.

Which of the following statements is NOT correct about insurance company appointments? A-To transact insurance on behalf of an insurer, an agent must be licensed by the Department and appointed by an insurer or appointing entity B-An agent must be appointed for all lines of insurance to be transacted C-Appointments are valid for 24 months if effective in a licensee's birth month- D-Appointments are subject to renewal every 48 months

D-Appointments are subject to renewal every 48 months- Appointments are valid for 24 months (up to 36 if effective in any month other than birth month) and renew every 24 months.

__________________ are for a specified dollar amount paid monthly until the benefits along with interest are exhausted.

Fixed Amount Payments

Dividends issued by mutual insurance companies: A-Are taxable distributions to policyholders B-Are considered guaranteed member benefits C-Represent a share of company profits for stockholders D-Are non-taxable refunds (returns) of unused or surplus premiums

D-Are non-taxable refunds (returns) of unused or surplus premiums

The Medicare Outline of Coverage must be delivered to the applicant at which of the following times? A-Within 30 days after the application is completed B-Prior to completing the application C-When the policy is delivered D-At the time the application is completed

D-At the time the application is completed- The outline must be delivered to the applicant at the time application is made, however, if the policy is direct response, acknowledgment of receipt or certification of delivery of the outline of coverage must be provided to the insurer.

Which of the following is NOT required to sign a completed application? A-Producer B-Insured or guardian C-Applicant D-Beneficiary

D-Beneficiary- The applicant, insured (or guardian if a minor) and the producer's signatures are all required in an application for insurance. The beneficiary is not required to sign the application.

What is the fastest way to pay up a traditional whole life policy? A-Use the dividend features available B-Borrow against the policy's cash values to pay off any premium balance C-Double up on premium payments D-Buy a single premium policy

D-Buy a single premium policy-A single premium life policy only requires one premium payment to be made therefore this would pay up the policy the quickest.

If an insured suffers a dismemberment under the AD&D policy, which of the following will provide benefit payouts to the beneficiary? A-Principal sum B-Capital funds C-Principal investments D-Capital sum

D-Capital sum

D-Capital sum- Dismemberment benefits payable under an AD&D policy are referred to as the capital sum.

For purposes of administration of the Life and Health Guaranty Association, all of the following accounts must be maintained, EXCEPT: A-Annuities account B-Health insurance account C-Life insurance account D-Cash value account

D-Cash value account- The Association must maintain 3 accounts: life insurance, health insurance, and annuities. The cash value of a policy may be covered, but those funds will be held in the life insurance account.

In an employer-sponsored group life insurance plan, the employee's description of benefits is referred to as the: A-Master Policy B-Claim form C-Change of beneficiary form D-Certificate of Insurance

D-Certificate of Insurance

In an employer-sponsored group life insurance plan, the employee's description of benefits is referred to as the: A-Master Policy B-Claim form C-Change of beneficiary form D-Certificate of Insurance

D-Certificate of Insurance- The employees in a group life plan receive a certificate of insurance that describes the benefit, identifies the insurance company and policy and certificate numbers, and provides information about changing beneficiaries or filing a claim.

Which of the following is not true about life insurance applications? A-Contains two parts: General Information and Health History B-May contain all the necessary information to determine insurability C-Primary source of underwriting D-Confidential communication between the agent and the insurer

D-Confidential communication between the agent and the insurer

When a group member terminates employment, he or she has 31 days to purchase an individual policy without proof of insurability. This is referred to as the: A-Coordination of Benefits B-Adverse Selection C-Extension of Benefits D-Conversion Privilege

D-Conversion Privilege- It is the Conversion Privilege, which affords a group member the right to purchase individual coverage without proof of insurability. The 31-day period also applies when COBRA continuation is exhausted.

Part 2 of the application consists of all of the following information, except: A-Past and present health B-Surgeries C-Hospitalizations D-Date of birth, gender

D-Date of birth, gender

Even though this rider can pay out upon death, it also pays out a benefit if the insured loses a limb, eyesight, or hearing as a result of an accident. What is this rider benefit called? A-Reattachment B-Indemnity C-Reimbursement D-Dismemberment

D-Dismemberment

Which of the following is consistent with group health underwriting? A-Participants must submit to individual physical exams B-Smokers pay a higher rate C-Individual health histories are required D-Each member of the group is covered regardless of his or her health history

D-Each member of the group is covered regardless of his or her health history -Group health insurance does not usually require individual underwriting, and the group is either accepted or rejected as a whole. If accepted, all of the group members are covered, regardless of their health history.

D-Employer-paid premiums do not constitute taxable income to the employee unless the death benefit exceeds $50,000

Alice finds she no longer is able to pay premiums on her $50,000 Whole Life Policy, but needs that amount of protection for her family. Which Nonforfeiture Option provides this protection? A-Reduced Paid-Up B-Fixed Amount C-Paid-Up Option D-Extended Term

D-Extended Term- Fixed Amount is a Settlement Option, and Paid-Up Option is a Dividend Option.

_______________ means that the insurance company cannot use the statements in the original application for insurance as a reason to avoid paying a death claim.

Incontestability

D-For citizens over the age of 65, there is no additional premium or cost- Part B - Medical Insurance (Physicians, Surgeons, and Outpatient expenses) is a voluntary program of government-subsidized insurance requiring participants to make premium payments.

An insurer authorized to do business in State A, which was incorporated in State B, is considered what type of insurer in State A? A-Stock B-Domestic C-Alien D-Foreign

D-Foreign- The insurer would be domestic in State B and foreign in State A.

If the insured dies while the _______ period is in effect, the death benefit paid is the face amount, minus the premiums due. A-Reinstatement B-Settlement C-Incontestability D-Grace

D-Grace

The National Association of Insurance Commissioners (NAIC): A-Requires each legislature to accept recommendations B-Requires only 30 Commissioners to be members at any time C-Enacts legislation and policy D-Has no legal authority over insurance regulation

D-Has no legal authority over insurance regulation

Which of the following is considered an agent? A-Limited customer representative B-Customer service representative C-Public adjuster D-Insurance producer

D-Insurance producer- An agent includes a general lines agent, life agent, health agent, title agent. An insurance producer is considered an agent, but NOT a customer service representative, limited customer representative, or service representative.

Which of the following is considered an agent? A-Limited customer representative B-Customer service representative C-Public adjuster D-Insurance producer

If an annuity lifetime benefit is selected, in most cases it is a/an _________ election. A-Revocable B-Poor C-Excellent D-Irrevocable

D-Irrevocable

An applicant determined to have below average risk of loss would be: A-Issued a rated policy B-Issued a standard policy C-Declined for coverage D-Issued a preferred policy

D-Issued a preferred policy

Which statement DOES NOT apply to an Accidental Death and Dismemberment Policy? A-It may be written separately or added to a Health/Disability or Life Policy as a rider B-A smaller amount (capital sum) may be paid for the loss of sight in one eye or the loss of one limb C-It usually provides that the death benefit (principal sum) will also be paid if the insured loses sight in both eyes or loses any two limbs D-It provides coverage for specified travel or events

D-It provides coverage for specified travel or events- A Limited Accident Policy provides blanket coverage for large groups, offering benefits for injuries associated with specific travel such as while on a common carrier. The other options refer to an Accidental Death and Dismemberment Policy.

A blanket health policy may be issued to all of the following policyholders, EXCEPT: A-Boy Scouts of America B-University C-Newspaper or publisher D-Labor union

D-Labor union- A labor union is eligible for group insurance and is not issued a blanket policy.

A blanket health policy may be issued to all of the following policyholders, except: A-Newspaper or publisher B-University C-Boy Scouts of America D-Labor union

D-Labor union- A labor union is eligible for group insurance and is not issued a blanket policy.

Which provision is an Optional Uniform Provision? A-Physical Examination B-Claim Forms C-Payment of Claims D-Misstatement of Age

D-Misstatement of Age- Misstatement of Age is an Optional Uniform Provision. All of the other answers are Mandatory Uniform Provisions.

A ______________ insurance company is owned by its policyholders. A-Fraternal Benefits Society B-Reciprocal C-Stock D-Mutual

D-Mutual- Its members, also called policyholders, own a mutual insurance company.

In an employer-sponsored group life insurance plan, the employee has control over which of the following? A-Amount of benefits B-Type of policy C-Premium payment option D-Naming a beneficiary

D-Naming a beneficiary

In an employer-sponsored group life insurance plan, the employee has control over which of the following? A-Amount of benefits B-Type of policy C-Premium payment option D-Naming a beneficiary

D-Naming a beneficiary- In an employer-sponsored group life insurance plan, the employer determines the type of coverage, amount of coverage, and premium options, but naming the beneficiary is the employee's right.

An aunt and uncle purchase a life insurance policy on their niece, for whom they are the legal guardians. Both guardians perish in an accident some time later. Who receives the death benefit? A-The contingent beneficiary B-The niece's estate C-The primary beneficiary D-No claim is paid out

D-No claim is paid out because the insured (niece) did not die.

D-No claim is paid out- The policy insures the life of the niece, and she has not died.

A key person is typically all of the following, EXCEPT: A-More highly paid B-Respected by customers, creditors, suppliers, or vendors C-Part of the management team D-Not directly involved in sales, production, or service

D-Not directly involved in sales, production, or service

D-Not directly involved in sales, production, or service- Key persons are employees whose contributions have a significant impact on the revenue and profitability of the company, especially in small businesses. They are typically: part of the management team, more highly paid, respected by customers, creditors, suppliers, and vendors, and have direct responsibilities for sales, production, or service.

D-Ownership Provision- The rights of ownership are a standard contract provision and allows the policyowner to do all of these things and more.

If two or more group policies cover a dependent child, which parent's policy will pay first? A-They will share coverage equally B-Parent whose birthday, month and day, is later in the year C-Parent who has custody D-Parent whose birthday, month and day, is earlier in the year

D-Parent whose birthday, month and day, is earlier in the year- If two or more policies cover the same child, the benefits of the policy of the parent whose birthday falls earlier in a year pays first.

All of the following are TRUE of Policy Loan Rate provisions, EXCEPT: A-Policies with adjustable loan interest rates have a maximum interest rate based upon Moody's corporate bond yield average B-Interest, if not paid when due, is added to the total debt C-The policy loan amount cannot exceed the available cash value D-Policies with fixed interest loan rates have a maximum interest rate of 10%

D-Policies with fixed interest loan rates have a maximum interest rate of 10%

D-Policy loans and partial withdrawals are allowed

Mutual insurance companies are owned by: A-Directors B-Stockholders C-Beneficiaries D-Policyowners

D-Policyowners- The ownership of mutual insurance companies rests with the policy owners

To help protect against ___________, group plans have a probationary period set by the group sponsor. A-Inventory shrinkage and bad hires B-Lazy and unmotivated employees C-High employee turnover D-Preexisting conditions and immediate claims

D-Preexisting conditions and immediate claims

D-Preexisting conditions and immediate claims- To help protect against preexisting conditions and immediate claims, group plans have a probationary period set by the group sponsor.

Which of the following statements is correct regarding an employer's ability to deduct the premiums it pays for an employee's life insurance benefit? A-An employer cannot ever deduct premiums it pays for an employee's life insurance benefit B-Employers can always deduct the premiums it pays for an employee's life insurance benefit C-Premiums can be deductible if the business does not receive more than 50% of the death benefit D-Premiums are deductible as long as the business does not derive a direct benefit from the policy

D-Premiums are deductible as long as the business does not derive a direct benefit from the policy- As long as the insurance death benefit is not payable to the employer when an employee dies, the premiums paid for the life insurance are deductible to the business.

As part of the code of ethics, all life insurance agents have a common obligation to work together to achieve all of the following, EXCEPT: A-Always place the policyholder's interests first B-Observe the laws governing life insurance C-Serve the best interests of the public D-Presenting the facts to persuade a client's decision to select the policy with the largest commission

D-Presenting the facts to persuade a client's decision to select the policy with the largest commission- All agents have a common obligation to work together serving the best interests of the public, under-standing and observing the laws governing life insurance, presenting the facts essential to a client's decision accurately and completely, by being fair in all relations with colleagues and competitors and always placing the policyholder's interests first.

HIPAA's privacy rules are implemented to: A-Protect the applicant from providing evidence of insurability finding data collected on the initial sales appointment B-Require all insurers to perform testing for HIV C-Allow an insurer to obtain investigative, medical, and financial reports to complete the underwriting process D-Protect the privacy of all individually identifiable health information

D-Protect the privacy of all individually identifiable health information

When comparing life insurance to an annuity, an annuity: A-Creates a lump sum benefit to be paid upon the annuitant's death B-Guarantees a death benefit upon the insured's death C-Provides tax-free payments for the lifetime of a beneficiary D-Protects against the annuitant living too long

D-Protects against the annuitant living too long- Annuities protect against an annuitant living too long by providing a stream of income the annuitant cannot outlive. Annuities do not provide tax-free payments or guarantee a death benefit. Annuities liquidate an estate and life insurance creates an estate.

Paying any valuable consideration or inducement to a client that is not specified in the contract is known as: A-Coercion B-Churning C-Misrepresentation D-Rebating

D-Rebating- It is considered unlawful rebating to pay, allow, or give an unlawful rebate of premiums payable on the contract, any special favor or benefits, or any valuable consideration or inducement that is not specified in the contract.

Janelle is the beneficiary of a life insurance policy in which the insured has died. What is the only way she can receive the claim amount totally free from income taxes? A-Elect the life only settlement option B-Select the 10-year period certain settlement option C-Choose the interest income only settlement option D-Receive the claim amount in a lump sum

D-Receive the claim amount in a lump sum- Any settlement option will generate taxable income to the beneficiary. The only way to be exempt from any income taxation is to receive the death benefit in a lump sum.

An insured, whose policy is in force, intentionally kills herself 7 months after purchasing the policy. How much will the insurer pay? A-Refund of premiums paid less the costs of policy issuance B-The face amount of the policy C-Nothing D-Refund of premiums paid only

D-Refund of premiums paid only- Suicide within 2 years of policy issue is a common exclusion in life insurance (the time can vary by state). Only premiums paid are refunded.

The death benefit increases over the life of the policy while the premiums remain level.

Increasing Term

Which statement about Medicare marketing standards is false? A-It is unacceptable to mislead a person into taking out a policy with another insurer B-Every insurer must establish an audit program to verify compliance C-It is an unfair trade practice to frighten a person into buying Medicare supplement policies D-Require an applicant for a Medicare supplement policy to prove that no other health policies exist

D-Require an applicant for a Medicare supplement policy to prove that no other health policies exist- The agent must inquire and make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance, but the applicant cannot be forced to prove it.

When, Peter, an independent contractor, purchased his own personal medical and dental insurance, he discovered that: A-Self-employed persons may deduct up to 100% of the cost of their medical insurance for themselves and their dependents, but not dental insurance B-Self-employed persons may deduct up to 100% of the cost of health insurance for themselves and their dependents over the 10% of AGI threshold C-Self-employed persons may deduct up to 100% of the cost of health insurance, including long-term care insurance, for themselves and their dependents D-Self-employed persons may deduct up to 100% of the cost of health insurance for themselves and their dependents

D-Self-employed persons may deduct up to 100% of the cost of health insurance for themselves and their dependents

The replacing insurance company must do all of the following regarding a replacement of an existing policy, EXCEPT: A-Provide a copy of the buyer's guide to the applicant prior to accepting the initial or at or prior to the policy delivery if the policy has at least a 10-day unconditional refund provision B-Send the applicant a completed Comparative Information Form within 5 days after the application is signed when requested C-Maintain copies of the notice, comparative information form, all sales proposals, and a replacement register for at least 3 years D-Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery

D-Send the existing insurer a copy of the Notice Regarding Replacement of Life Insurance within 10 days after policy delivery- The replacing insurer must send the Notice to the existing insurer immediately upon receipt at its home or regional office.

At the time of her retirement at age 62, Jolene chose a Life Income Payment Option to have her annuity distributed. Five years later, when her health declines, she needs the distribution to be increased. How is this accomplished? A-By adding a disability income rider B-By adding a Cost of Living Rider C-By adding an increase of benefits rider D-She cannot change the distribution once commenced

D-She cannot change the distribution once commenced

Charging an applicant for a specific product in addition to the cost of the insurance coverage applied for without informed consent of the applicant is called: A-Twisting B-Controlled business C-Defamation D-Sliding

D-Sliding- Sliding is the act of representing that a specific coverage is required by law in conjunction with the purchase of a product, which it is not, freely included in the policy when in fact there is a charge, and charging an applicant for a product in addition to the cost of the insurance applied for without in-formed consent of the applicant.

As part of the qualification process to become licensed in Florida, an applicant must do all of the following, EXCEPT: A-Pass a written examination within 1 year of submitting an application for license B-Successfully complete any required prelicensing coursework within 4 years immediately preceding the date of application C-Secure a detailed credit and character report made by an independent reporting service D-Submit fingerprints to the Department of Financial Services

D-Submit fingerprints to the Department of Financial Services- Fingerprints must be submitted to the Department of Enforcement and the FBI, not the DFS.

An HMO is a managed health care system for voluntarily enrolled persons called ___________. A-Employee B-Insured C-Member D-Subscribers

D-Subscribers- An HMO provides a comprehensive array of medical services on a prepaid basis, normally in its own health care facility, to voluntarily enrolled subscribers living within a specific geographic area, or service area, limiting the choice of care providers.

Which of the following is not a requirement to obtain an insurance license in Florida? A-Pay all applicable nonrefundable fees in advance B-File a written application made under oath and signed by the applicant C-Include a statement on the application indicating the method used to meet any prelicensing requirements D-Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for

D-Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for- An applicant must complete at least 40 hours of coursework for one area of insurance (such as life-only or health-only) and 60 hours for multiple areas of insurance (life and health combined).

D-Supplementary Major Medical- The question is describing the characteristics and mechanics of a Supplementary (or, Supplemental) Major Medical Policy.

_____________ are allowed as a way to access annuity values without having to elect a settlement option or surrender the contract. A-Loans B-Premium deferrals C-Contract waivers D-Systematic withdrawals

D-Systematic withdrawal

D-Systematic withdrawals- Systematic withdrawals are allowed as a way to access annuity values without having to elect a settlement option or surrender the contract.

The interest earned on dividends is: A-Tax-deductible B-Tax-deferred C-Nontaxable D-Taxable

D-Taxable

The interest earned on dividends is: A-Tax-deductible B-Tax-deferred C-Nontaxable D-Taxable

D-Taxable- The dividends themselves are generally not taxable, but any interest earned on the dividends is taxable.

The Initial Enrollment Period for Medicare is 7 months in length. Which of the following are the start and stop dates for this period? A-7 months after his/her 65th birthday B-The 1st day of the month before the individual turns age 65 and the last day of the 5th month after the month the individual turns age 65 C-January 1 to July 31 in the year of his/her 65th birthday D-The 1st day of the 3rd month before the individual turns age 65 and the last day of the 3rd month after the month the individual turns age 65

D-The 1st day of the 3rd month before the individual turns age 65 and the last day of the 3rd month after the month the individual turns age 65

All of the following statements regarding sources of underwriting are correct, except: A-A consumer investigative report may include a credit report B-A medical exam may be requested based on the amount of coverage being applied for C-The agent's report is confidential between the producer and the insurer D-The applicant may be denied coverage based solely on the MIB report

D-The applicant may be denied coverage based solely on the MIB report- The applicant may not be denied coverage based solely on the MIB report. This report is used as an alert for the insurer to gather additional information and to help detect fraud.

Which of the following is not an acceptable reason for denying coverage? A-Employee does not work or reside in the service area B-Carrier is unable to offer coverage due to obligations to existing contracts C-Small employer is not physically located in the carrier's service area D-The claims experience of the small employer is excessive

D-The claims experience of the small employer is excessive- A small employer carrier does not need to offer coverage to small employers who are not physically in their service area, or employees who do not live or work in the service area, or the carrier cannot deliver proper service in the area.

Events that will cause termination of continuing health coverage under COBRA include all of the following, except: A-The employee becomes eligible for Medicare benefits B-The employer ceases to maintain any group health insurance plan C-Timely premium payments are not made D-The employee fails to convert to an individual health insurance plan on the day it is offered

D-The employee fails to convert to an individual health insurance plan on the day it is offered- Events that will cause termination of continuing health coverage by COBRA include failure to pay premiums on time, cessation of group health coverage by the employer, and employee eligibility for Medicare benefits. Conversion is a separate benefit.

When an insurer requires that an insured be subjected to a medical examination, who pays for the medical exam? A-The insured B-The applicant C-The producer D-The insurer

D-The insurer

The face amount of insurance is also referred to as the: A-The cash surrender value B-The maximum loan value C-The cash value D-The limit of liability

D-The limit of liability- The face amount of insurance is the stated death benefit, and is referred to as the insurer's limit of liability—the most the policy will pay in the event of the insured's death.

An application for insurance is completed and submitted to an insurance company. In order for coverage to be effective immediately, all of the following conditions must be met, except: A-A conditional receipt is issued B-A medical exam is not required C-The initial premium is submitted with the application D-The policy is issued at a higher risk than the standard risk applied for

D-The policy is issued at a higher risk than the standard risk applied for

All of the following are true of a substandard risk, except: A-The insured may have a flat additional premium added to their base premium B-The coverage could be reduced for a period of time C-The insured may be rated as older than their actual age D-The premium would be discounted

D-The premium would be discounted

The Social Security Death Benefit is payable to the ____________. A-The estate of the insured B-The next of kin C-The named beneficiary D-The surviving spouse

D-The surviving spouse- The Social Security Death Benefit is payable to the surviving spouse or minor children if they meet certain requirements.

All of the following statements regarding life insurance policy provisions in Florida are correct, EXCEPT: A-Under the beneficiary designation provision, the agent cannot be named as beneficiary unless insurable interest exists B-The unconditional refund period for life insurance policies must be at least 14 days C-The grace period for a person 64 years of age or older is 51 days D-The unconditional refund period for variable annuities must be at least 31 days

D-The unconditional refund period for variable annuities must be at least 31 days- The unconditional refund period for all annuities must be at least 21 days.

All of the following statements regarding life insurance policy provisions in Florida are correct, except: A-The grace period for a person 64 years of age or older is 51 days B-Under the beneficiary designation provision, the agent cannot be named as beneficiary unless insurable interest exists C-The unconditional refund period for life insurance policies must be at least 14 days D-The unconditional refund period for variable annuities must be at least 31 days

D-The unconditional refund period for variable annuities must be at least 31 days- The unconditional refund period for all annuities must be at least 21 days.

A licensee who is self-appointed and is in the business of analyzing policies, providing insurance advice or making specific recommendations of insurance policies for a fee is a(n): A-Customer Service Representative B-Agent C-Unlicensed agent D-Unaffiliated agent

D-Unaffiliated agent- An unaffiliated agent is self-appointed and practices as an independent contractor who charges a fee to analyze insurance policies, provide insurance advice or counseling, and make recommendations of insurance policies. A written contract is required.

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following? A-Fictitious grouping B-Defamation C-Sliding D-Unfair discrimination

D-Unfair discrimination- Unfair discrimination is knowingly making or permitting individuals of the same actuarially supportable class and equal expectation of life to be charged different rates, paid different dividends or have different terms/conditions regarding any life insurance contract.

Upon the death of the insured, payment of proceeds of a lump sum will be made: A-A date determined by a probate judge B-The actual date of death listed on the death certificate C-The date any investigations by the insurance company are complete D-Upon receipt of proof of death and surrender of the policy

D-Upon receipt of proof of death and surrender of the policy- Payment of proceeds are made upon the receipt of proof of death and surrender of the policy.

All of the following are times in which life insurance policy cash values can become taxable, EXCEPT: A-At policy surrender B-If the policy fails to meet the IRS definition of life insurance C-When the policy is sold D-When a policy loan is taken out

D-When a policy loan is taken out- Policy loans do not trigger a taxable event.

What is the purpose of nonforfeiture values? A-The NAIC mandates nonforfeiture values B-It is a way for the insurance company to charge extra for this optional benefit C-Federal insurance law requires them D-Without them, any cash values would be retained by the insurer when the policy lapses due to non-payment of premium

D-Without them, any cash values would be retained by the insurer when the policy lapses due to non-payment of premium

Does the insured have the right to change the beneficiary designation of a health insurance policy? A-Yes, the beneficiary designation is always revocable in health policies B-No, the beneficiary designation in health policies is always irrevocable C-No, only the insurer has that right in health policies D-Yes, unless the beneficiary is designated as irrevocable

D-Yes, unless the beneficiary is designated as irrevocable

Often _____________ policies are sold as mortgage protection with the amount of insurance decreasing as the balance of the mortgage decreases.

Decreasing term

The death benefit decreases, but premiums remain level for the policy term.

Decreasing term

An initial amount the insured must meet per year before benefits are paid is known as the:

Deductible

Spend down

Depleting private or family finances to the point where the individual or family becomes eligible for Medicaid assistance.

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Accumulate with Interest

Dividend Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Cash

Dividend Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -One-Year Term

Dividend Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Paid-up Additions

Dividend Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Premium Reduction

Dividend Options

One-Year Term Option

Dividend option in which the policyowner uses the dividend as a single premium to purchase one-year term protection.

Refers to the location, or jurisdiction (state, district, territory, or country), where an insurer is formed or incorporated

Domicile

Accidental Death Benefit aka _____________ .

Double or Triple Indemnity

This type of term is normally written as a rider to provide cost of living or return of premium benefits.

Increasing Term

12 Mandatory Provisions

Eddie(entire Contract;changes); The (time limit of certain defenses); Gardener (grace period); Raided (reinstatement); Nana's (Notice of Claim); Cookies (Claim Forms); Prior (proof of loss); To (time of payment of claims); Publicly (payment of claims); Performing (physical exam and autopsy); Last (legal actions); Christmas (change of beneficiary)

Eddie The Gardiner Raided Nana's Cookies Prior To Publicly Performing Last Christmas

Stephen must be disabled 60 days before he will receive any benefits from his disability policy. This 60-day period is the:

Elimination Period

Thought of as a "time deductible."

Elimination period

Give 5 standard provisions

Entire Contract Clause Incontestability Clause Insuring Clause (Proof of Death) Consideration Clause Suicide Clause

Provides money to pay any estate taxes or loans which must be satisfied upon the death of the estate owner (the insured) preserving the insured's estate.

Estate Conservation

Life insurance proceeds paid in a lump sum provide financial assets to create an immediate estate the insured can pass on to survivors.

Estate Creation

Insurer

Every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.

________________ are conditions stipulated in the contract for which the insurer will not provide coverage. The insurer cannot add or alter any of the exclusions after the policy has been issued.

Exclusions

The ____________ Insurer is the insurer that issued the current policy to be replaced.

Existing Insurer

This is the insurance company's cost of maintaining the policy and can be impacted by the overall increasing administrative costs associated with a plan.

Expense charges

Present cash value is used to buy a single premium term policy of the same face amount for as long a period as it will buy, expressed as a combination of years and days.

Extended Term

This option provides the largest death benefit and is sometimes referred to as the Automatic (or Default) Option if no other option has been selected. The insured no longer has rights to the cash value under this option, and the policy will expire prior to age 100.

Extended Term

__________________ would allow the present cash value of the policy to buy a single premium term policy of the same face amount for the time period stated in the policy's nonforfeiture table.

Extended Term

The insurance company must meet requirements under the _____ when gathering information about an applicant from a third party.

FCRA- Fair Credit Reporting Act

Variable Universal Life is considered a security and can only be sold by producers registered with ___________ and holding either a _____________ registration.

FINRA (Financial Industry Regulatory Authority) Series 6 or Series 7

What may happen if the Division requests information from a person and fails to respond?

Failure to respond to the request in writing within 20 days of receipt may result in an administrative penalty.

FCRA

Fair Credit Reporting Act

This rider provides a combination of coverages on the spouse and children.

Family Rider

What type of crime is transacting insurance without a license?

Felony

FINRA

Financial Industry Regulatory Authority

FIFO

First In, First Out

Joint Life =____________ to Die

First to Die

Means to compensate for a loss, or to make one whole again.

Indemnify

Medicare Supplement insurance may not be issued or sold to an individual if the individual is entitled to Medicaid unless _______________________.

Florida's Medicaid plan pays the premium for the policy, or pays less than an individual's full liability for Medicare cost sharing as defined under the federal Medicare law.

What does the Florida Guaranty Association not extend protection for?

For Floridians who buy from unlicensed Entities

known as the Annuity Suitability Questionnaire

Form DFS-H1-1980

known as the Disclosure and Comparison of Annuity Contracts

Form DFS-H1-1981

Right to Examine is the same as:

Free Look Period

All health insurance policies covering dependents of the insured must provide coverage for newborns from what age?

From the moment of birth

The Financial Services Commission (Cabinet) is composed of

Governor Chief Financial Officer Attorney General and Commissioner of Agriculture.

These four members serve as the agency head of the Commission.

Governor Chief Financial Officer Attorney General and Commissioner of Agriculture.

Allows an employee who loses eligibility for enrollment in a group plan to get coverage under an individual plan without evidence of insurability

Group conversion

Risk Retention Groups (RRG)

Group-owned insurers that primarily assume and spread the liability-related risks of its members.

This rider allows the insured to purchase stated amounts of additional insurance every 3 years based on certain ages.

Guaranteed Insurability

General Account = ______________Values

Guaranteed Values

Primary appeal of this insurance: No Lapse Insurance

Guaranteed lifetime coverage at a potentially low premium outlay

May include payments for disability income, medical, hospital and surgical expense reimbursement, dental expenses, accidental death and dismemberment, and long-term care expenses

Health insurance benefits

HDHPs

High Deductible Health Plans

Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

High-pressure Tactics

When are stock insurance dividends taxable as ordinary income?

IF declared by the Directors.

Whole Life is permanent protection that matures, or endows, at the insured's age of 100 when the cash value is scheduled to equal the face amount of the policy. What happens if the insured are still living at age 100?

If the insured is still living at age 100, the insurer will pay the face amount to the owner.

Equity index changes and current charges not guaranteed

Indexed Universal Life

A relationship that must exist at the time of application in which a potential for financial hardship exists in the event of a loss

Insurable interest

Relationship that must exist at the time of application in which an insured's sickness or injury would result in a financial or economic loss by the policyowner

Insurable interest

Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered

Impairment

In _______________ insurance, a target premium is established by the insurer, which is the minimum amount that must be deducted from the cash value to maintain the policy to age 100, based on current interest rates, mortality and expense charges

In Universal Life Insurance (UL)

In _______________ insurance, interest is credited to the cash value on a monthly basis at the current interest rate, but will never be less than the guaranteed minimum rate established at the time the policy was issued.

In Universal Life Insurance (UL)

In ___________________ insurance, the increase in the increase in expense charges are limited to a policy maximum.

In Universal Life Insurance (UL)

In ___________________ insurance, the increase in the mortality charge is limited to a policy maximum. The insurance protection is considered annual renewable term.

In Universal Life Insurance (UL)

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Group life insurance death benefit proceeds (lump sum)

Income-tax Free

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Lump sum death benefit paid to a beneficiary

Income-tax Free

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Policy dividend that is less than the premium paid

Income-tax Free

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Policy loan from an in-force policy

Income-tax Free

Determine which of the following distributions are either income tax-free or taxable to the recipient (owner, insured, beneficiary, or employee) -Qualified accelerated death benefit

Income-tax Free

Insurance must "Legal Purpose" which means_____________.

Insurance may not be issued for an illegal activity or immoral purpose.

Individual covered for a loss under the policy

Insured

Mandatory uniform provisions found in health insurance policies are designed to protect the:

Insured

Optional Uniform Provisions are included in the contract at the _______ option.

Insured's

The term "agency" in "Insurance Agency" does not include these roles:

Insurer Adjuster.

Unlicensed Entities

Insurers who are nonadmitted, meaning they have not been approved or authorized to sell insurance in the state.

Which clause in a contract would state that Jim is covered by XYZ insurer for a monthly benefit of $2,000 in the event of disability?

Insuring Clause

Considered the most important clause in the policy

Insuring Clause (Proof of Death)

The Settlement Options has death benefit proceeds left with the insurer while interest payments are paid at least annually or more frequently.

Interest Only

Give 4 Life Policy Settlement Options

Interest Only Fixed Amount Fixed Period Life Income Option

IOLI

Investor-Originated Life Insurance

The death benefit is paid upon the first insured to die and the policy terminates.

Joint Life

This policy is designed to provide income protection for the surviving spouse when both have earned income.

Joint Life

__________ is a whole life policy that is written to cover 2 or more lives.

Joint Life

Payments are guaranteed to 2 or more recipients until the first recipient dies, then all payments cease.

Joint Life Income Option

This policy is often purchased to provide a lump sum benefit to pay estate taxes once the second spouse dies.

Joint Survivorship Life

This whole life policy is usually written to cover 2 lives, and the death benefit is not paid until the last insured dies.

Joint Survivorship Life

Provides the owner of the policy with funds to recruit and train a replacement employee upon the death of an employee who contributes substantially to the success of a company

Key Person life insurance

Typically part of the management team, more highly paid, respected by customers, creditors, suppliers, and vendors, and have direct responsibilities for sales, production, or service.

Key Persons

The face amount (death benefit) remains level and cash value continues to earn interest and mature at age 100. While the annual premium is higher than Straight Life, it is paid for a shorter period of time and will have a lower total premium outlay.

Limited Payment

Immediate funds available upon death to pay creditors, taxes and final expenses as well as cash values available for policy loans, withdrawals, and full surrenders.

Liquidity

Burt named Liz as his beneficiary; however, he did not choose a Settlement Option. At the time of his death, who determines the option to be used to receive the benefits?

Liz the beneficiary determines which option she would like to have

A product designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital is called:

Long-Term Care

This rider provides up to 100% of the policy benefits if the insured qualifies for long-term care benefits as defined in the rider, such as the inability to perform 2 out of 6 activities of daily living.

Long-Term Care Rider

LTC Policies

Long-term Care Policies

A policy that fails the 7-pay test will be deemed a _________.

MEC (Modified Endowment Contract)

A division of the Office of Insurance Regulation that conducts examinations and investigations of insurers relating to its transactions directly and indirectly affecting the insurer.

Market Investigations

Contract issued to plan sponsor

Master policy

Warranties

Material statements in the application or stipulations in the policy that are guaranteed true in all aspects.

A government-funded program that pays for some community and home services and nursing home care

Medicaid

MIB

Medical Information Bureau

Medical expense insurance

A Medicare PFFS (Private Fee For Service) Plan is a type of

Medicare Advantage Plan (Part C)

A person who purchases a Medicare Supplement policy cannot enroll in a ________

Medicare Advantage Plan Part C.

A person who purchases a Medicare Supplement policy cannot enroll in Medicare Part _________.

Medicare Part C

A false statement contained in the application

Misrepresentation

This Standard Provision states if the age and/or gender of the insured have been misstated in a policy, all benefits under the policy will be provided based upon the insured's correct age and/or gender according to the premium scale in effect at the time the policy was issued.

Misstatement of Age or Gender

What Standard provision has no time limit for discovery and never cancels or voids a policy. The incontestability clause does not apply.

Misstatement of Age or Gender

Schedule Rating

Modification of manual rates either upward (debits) or downward (credits) to reflect the individual risk characteristics of the subject of insurance.

_________________ are used to give the company a basic estimate of how much money it will need to pay for death claims each year.

Mortality Tables

Fl. residency requirement for Medicaid?

Must be a U.S. citizen or qualified resident alien and a Florida resident.

The ____________ provides resources, research, legislative and regulatory recommendations and interpretations for state insurance regulators.

NAIC

National Association Of Insurance Commissioners

NAIC

National Association of Insurance Commissioners

Formed for a purpose other than for purchasing group insurance

Natural group

Are stock insurance dividends guaranteed?

No, just like any other stocks

Also referred to as unlicensed entities.

Nonadmitted/unauthorized insurers

Employer pays the entire premium and 100% of eligible employees must participate

Noncontributory plan

This rider provides coverage for another person, other than a spouse or child, such as a business partner. Insurable interest must exist at the time the rider is added.

Nonfamily (Additional Insured) Rider

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Cash Surrender

Nonforfeiture Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Extended Term

Nonforfeiture Options

Organize the following terms under the correct heading (Settlement Options Nonforfeiture Options Dividend Options) -Reduce Paid-up

Nonforfeiture Options

These options are required in policies that accumulate cash values and protect the policyowner against total loss of benefits if the policy should lapse due to nonpayment of premium or is intentionally cancelled.

Nonforfeiture Options

__________________ are found in policies that accumulate cash values and protect the policyowner against total loss of benefits if the policy should lapse due to nonpayment of premium.

Nonforfeiture Options (Guaranteed Values)

What is the difference between Nonforfeiture values (Extended Term, Reduced Paid-up, and Cash Surrender) and an automatic premium loan ?

Nonforfeiture values go into effect after a policy lapses and the automatic premium loan will keep a policy from lapsing.

Separate Account = ________________Values

Nonguaranteed Values

Group health plans usually cover _________ injury or disease

Nonoccupational

Determine which of the following characteristics apply to qualified or nonqualified retirement plans - Upon withdrawal, only the earnings are taxable

Nonqualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Employee contributions paid with after-tax dollars (not tax-deductible)

Nonqualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Upon withdrawal, only the earnings are taxable

Nonqualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Usually not funded by the employer until the employee actually retires

Nonqualified Plans

Interest/Market - Sensitive Insurance

Nontraditional Whole Life

This is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates.

Nontraditional Whole Life

This type of policy has a guaranteed minimum death benefit, but may increase based on the growth of the cash value.

Nontraditional Whole Life

Nonadmitted (unauthorized) Insurers

Not state licensed and do not have a certificate of authority. They are not regulated by the state of Florida.

An insured, whose policy is in force, intentionally kills herself 7 months after purchasing the policy. How much will the insurer pay?

Nothing

OFR

Office of Financial Regulation

Which state entity oversees the regulation of securities representatives and mortgage brokers within the state?

Office of Financial Regulation (OFR)

OIR

Office of Insurance Regulation

A Certificate of Authority is issued to an insurer by the:

Office of Insurance Regulation- A Certificate of Authority authorizes an insurer to transact business in Florida and is issued by the Office of Insurance Regulation.

The owner of a Variable Life Policy may allocate the premium into a sub-account which is owned by the insurer, this sub-account is a part of what is also known as the:

Separate Account

Which state entity is responsible for issuing a Certificate of Authority for an insurance company?

Office of Insurance Regulation- The Commissioner of the Office of Insurance Regulation also regulates insurance licensing, rates, policy forms, market conduct, claims, and company solvency.

Which insurance does not accumulate cash value?

Only Term Life Insurance

Time period employees can join the group plan and coverage is guaranteed without evidence of insurability

Open enrollment

Guaranteed Insurability Rider

Optional rider that enables the policyowner to purchase additional amounts of coverage at predetermined times without proof of insurability.

LTC Disclosure

Outline of Coverage

Age, disability, or blindness requirement for Florida Medicaid?

Over 65 or blind or unable to function safely alone.

Purchases single premium, additional permanent benefits at the insured's attained age. The additional insurance is paid out in addition to the face amount if the insured dies. This is the ___________ Dividend Option.

Paid-Up Additions

Pays off the policy more quickly than scheduled. If the company's overall performance declines, premiums may have to be resumed. This is the ___________ Dividend Option.

Paid-Up Option

A person who purchases a Medicare Supplement policy cannot enroll in Medicare Part _________.

Part C

Joint Survivorship Life Policy

Pays out to the surviving spouse after the first dies; and second-to-die, or survivorship, which pays a death benefit to the heirs after both spouses are gone.

______________ policies provide cash value, which is cash accumulation in the policy that can be accessed through a policy loan or cancellation (surrender) of the policy.

Permanent policies

POS plans

Point of Service Plan: a physician coordinated health insurance plan that combines characteristics of HMO and PPO

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Constructive delivery

Policy Delivery

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Producer explains rating, premiums, coverages, and policy benefits

Policy Delivery

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Statement of Good Health

Policy Delivery

A computer-generated illustration detailing the premiums (current and guaranteed) to be paid, current and guaranteed interest rates, guaranteed and non-guaranteed values, any projected dividends, and the producer/insurer's name and address.

Policy Summary

The __________ has the right to change the premium mode.

Policyowner

The person who controls the policy and maintains the right to make all decisions regarding coverages

Policyowner

Dividends are applied toward the next premium due. This is the ___________ Dividend Option.

Premium Reduction Option

How are Joint Life Premiums determined?

Premiums are based upon a joint issue age, which is obtained by an average of both insureds' ages, resulting in a lower premium than two separate policies

How are Joint Survivorship Life premiums determined?

Premiums are based upon a joint issue age, which is obtained by an average of both insureds' ages, resulting in a lower premium than two separate policies.

The __________ sum is the stated amount payable as a death benefit if death is due to an accident.

Principal Sum

Based on the _________________ , insurance is designed to restore an insured to the same physical or financial condition which existed prior to the loss, without a profit or gain.

Principle of Indemnity

The LTC Shopper's Guide must be delivered to the applicant at which of the following times?

Prior to the presentation of the application- An agent must deliver the Shopper's Guide prior to the presentation of an application or enrollment form, and in the case of direct response solicitations, the Shopper's Guide must be presented in con-junction with any application or enrollment form.

New rates and forms must be filed and approved by the Office of Insurance Regulation ______________

Prior to use- All new rates and forms must be filed with and approved by the Office of Insurance Regulation prior to use. The OIR has 30 days to approve or disapprove.

__________________ , unlike riders, are included in the contract for no additional charge.

Provisions and clauses

Qualified LTC Plans

Qualified LTC plans are federally qualified for tax benefits when such plans stipulate that covered individuals must be diagnosed as chronically ill, whether such illness is physical or cognitive, unless prior hospitalization occurred and the individual is considered acutely ill.

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -

Qualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Contributions made by employee are tax-deductible or pre-tax

Qualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Entire amount of withdrawal is taxable to the employee upon distribution

Qualified Plans

Determine which of the following characteristics apply to qualified or nonqualified retirement plans -Must meet ERISA minimum standards

Qualified Plans

Fl. medical need requirement for Medicaid?

Ranges from at least some form of impairment that limits activities of daily living to full nursing care services.

This must not be excessive, inadequate, or unfairly discriminatory.

Rates for all insurance classes

Present cash value is used to buy a single premium, permanent paid-up policy of a reduced face amount. This option provides the longest period of coverage provided by a nonforfeiture option. Coverage, although reduced in face value, will continue to age 100.

Reduced Paid-Up

Give the 3 Nonforfeiture Options

Reduced Paid-Up Extended Term Cash Surrender

Insurance for insurance companies

Reinsurance companies

Reinsurance (Reinsurers)

Reinsurance companies operate to accept all or a portion of the financial risk of loss from the primary (or "ceding") insurance company

A transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be Lapsed, forfeited, surrendered, or terminated.

Replacement

A transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be amended with a reduction in benefit or term.

Replacement

A transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be reduced in value.

Replacement

A transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be reissued with a reduced cash value.

Replacement

A transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be subjected to borrowing.

Replacement

_________________ is any transaction in which a new life policy or annuity is to be purchased, and the producer knows, or should know, that existing contract(s) will be: -Lapsed, forfeited, surrendered, or terminated -Reduced in value -Amended with a reduction in benefit or term -Reissued with a reduced cash value -Subjected to borrowing

Replacement

The _____________ Insurer is the insurer responsible for issuing the new policy that will replace the existing policy.

Replacing Insurer

Statements on the application that are substantially true, or believed to be true, to the best of the applicant's knowledge at the time of application

Representations

This policy is written as increasing term insurance and provides for an additional death benefit that equals a full refund of premiums if the insured is still living at the end of the term

Return of Premium Term

This is an increasing term insurance rider that provides additional coverage equal to the amount of premiums paid so if the insured dies within the term, the beneficiary will receive the face amount of the policy plus the benefit of the rider equaling the total amount of premiums paid.

Return of Premium rider

Individual Term policies are generally stand-alone policies, but may be written with other types of policies as a(n):

Rider

All variable products are subject to __________ regulation.

SEC (Securities and Exchange Commission)

Joint Survivorship Life = ___________ to Die

Second to Die

SEC

Securities and Exchange Commission

Why does a life income only annuity distribution option provide the largest possible payment to a single annuitant?

Since the insurer has no risk of paying income to a beneficiary and there is a greater possibility that the insurer will pay income beyond the life of the annuitant if any of the other options are selected.

Why are dividends issued by a mutual insurance company nontaxable?

Since the policyowners also own the company, any policy dividends are being paid back to those who paid them in the first place; therefore, they are non-taxable refunds rather than taxable income.

The entire premium is paid in a lump sum at the time of purchase and creates immediate cash value. The face amount (death benefit) remains level and cash value continues to earn interest and mature at age 100. This policy has the lowest total premium outlay for the life of the policy.

Single Premium

Charging an applicant for a specific product in addition to the cost of the insurance coverage applied for without informed consent of the applicant

Sliding

If an applicant has engaged in high-risk hobbies (skydiving, scuba diving, motorcycle racing), a _______________ Questionnaire will be required to determine, based on the risk and frequency, if those activities will affect insurability.

Special Hazardous Activity Questionnaire

When some people have too much income to qualify for Medicaid but may qualify for Medicaid if they spend the excess income on medical bills

Spend down

___________ rider that provides level term coverage on the life of the insured's spouse.

Spouse (Other Insured) Rider

Name the 4 Riders Covering Additional Insureds

Spouse (Other Insured) Rider Child Rider Family Rider Nonfamily (Additional Insured) Rider

Payments are guaranteed for the lifetime of the recipient. Upon death, payments will cease.

Straight Life (Pure or Life Income Only)

Give 5 Life Income Options

Straight Life (Pure or Life Income Only) Life Income Period Certain Life Refund Joint and Survivor Income Option Joint Life Income Option

The premium is level and payable to age 100 or death of the insured, whichever comes first. The face amount remains level throughout the life of the policy. This policy has the highest total premium outlay.

Straight Life or Continuous Premium

This policy has the highest total premium outlay.

Straight Life or Continuous Premium

Ordinary Whole Life premium payments may be structured as ______________________.

Straight Life or Continuous Premium Limited Payment Single Premium

STOLI

Stranger-Orignated Life Insurance - Typically target seniors

Provides an incentive for the policyowner to maintain the policy and allows for the insurer to recoup any policy issuance costs.

Surrender charge

Providing funds for surviving spouses and dependents.

Survivor Protection

_____________ allows the amount of withdrawal to be changed in the future. It is not a lifetime income guarantee, and the payments will end when the last dollar of cash value is taken.

Systematic Withdrawal Plan

_______________ is considered pure insurance and provides a pure death benefit. Term insurance does not offer any cash value or living benefits. Premiums paid for these types of policies purchase strictly death benefits. For this reason, term insurance policies are less expensive in the early years as compared to permanent forms of insurance.

Term insurance

Why are term insurance policies less expensive in the early years as compared to permanent forms of insurance.

Term insurance does not offer any cash value or living benefits and the premiums paid for these types of policies purchase strictly death benefits.

____________ riders may be attached to any individual life policy to provide additional insurance protection for a fixed period of time. If the need for additional coverage is temporary, a term insurance rider is more cost effective than buying another policy.

Term riders

Directly oversee the insurance industry's activities in accordance to the insurance code.

The "Department" and the "Office"

What can happen if any person refuses to comply with the Department or Office's subpoena or refuses to testify?

The Circuit Court may issue an order requiring such person to comply with the subpoena and to testify.

Designates an employee as the primary contact for consumers on issues relating to sinkholes

The Division of Consumer Services

Provides consumer education and outreach assistance, as well as the following: Receive and compile inquiries and complaints the DFS deems necessary to assist consumers Provide direct assistance and advocacy for consumers who request such services Report alleged violations of law by persons licensed by the DFS, OIR, or OFR to the appropriate regulator Designate an employee as the primary contact for consumers on issues relating to sinkholes

The Division of Consumer Services

A service that "alerts" underwriters to fraud, errors, omissions or misrepresentations made on insurance applications.

The MIB, Inc. (Medical Information Bureau) Report

_________________ is primarily used to collect adverse medical information about an applicant's health and act as an information exchange.

The MIB, Inc. (Medical Information Bureau) Report

Mandatory Uniform Provisions

The Mandatory Uniform Provisions were developed by the NAIC and must, by law, be included in every individual accident and health insurance policy. Different wording may be used as long as it is at least as favorable as the original wording. No additional provisions may be included which otherwise restrict or modify a uniform provision. There are 12 Mandatory Provisions that are designed to protect the insured's interests.

Who has the responsibility of monitoring the financial condition of all regulated insurance entities

The OIR is responsible for regulating insurance companies, including monitoring the financial condition of regulated insurance entities. The DFS regulates licensing of insurance agents; the Division of Consumer Services is part of the DFS and provides consumer education; the Office of Financial Regulation oversees banking regulations.

Who makes investigations (within or outside the state) as often as necessary to determine if a person has violated, or is about to violate, any provision of the financial institutions codes or rules.

The Office of Financial Regulation (OFR)

Which state entity oversees the regulation of securities representatives and mortgage brokers within the state?

The Office of Financial Regulation is responsible for overseeing the regulation of banking, mortgage, and securities representatives in this state.

Solvency

The ability of a company to pay interest as it comes due and to repay the balance of debt due at its maturity.

_____________________ will complete an Attending Physician Statement (APS) as part of the applicant's medical history.

The applicant's treating physician

Appointment

The authority given to a licensee to transact insurance or adjust claims on behalf of an insurer or employer.

Contract of Adhesion

The contract is written by one party, the insurance company, without any input from the applicant and prepares the contract and presents it to the applicant on a "take-it-or-leave-it" basis

What is the benefit of adding a rider rather than buying a separate policy for the same benefits?

The cost of the rider is usually insignificant compared to the cost of buying a separate policy for the same benefits.

___________ may also be referred to as the limit of liability or the policy proceeds.

The death benefit

Level Term

The death benefit remains level and the premiums remain level during the policy term.

Aleatory Contract

The exchange of value is unequal.

______________ is the death benefit payable on the policy if the insured dies before the policy ends.

The face amount

Passed to help detect and prevent this illegal activity.

USA PATRIOT Act

A licensee who is self-appointed and is in the business of analyzing policies, providing insurance advice or making specific recommendations of insurance policies for a fee is a(n):

Unaffiliated agent- An unaffiliated agent is self-appointed and practices as an independent contractor who charges a fee to analyze insurance policies, provide insurance advice or counseling, and make recommendations of insurance policies. A written contract is required.

The simplest form of term life insurance is for __________. The death benefit remains level and the premiums increase yearly as the policy renews up to a specified age.

one year

Universal Life Insurance (UL) features an Adjustable Face Amount which means ______________________

The insured can increase or decrease the face amount of the policy. Any increase in the face amount will require evidence of insurability.

What must the insurer file if if rating manuals and rating schedules are not applicable?

The insurer must file with the office applicable premium rates and any change in applicable premium rates.

How much advanced notice must the insurer give to the appointee of its intention to terminate the appointment.

The insurer must give at least 60 days' advance written notice, by delivery in person via mail with postage prepaid or by email,

The basic promise to pay the benefit described in the policy when a claim is proved. In life insurance, a true certified copy of the death certificate is valid proof of death.

The insuring agreement

Why are premiums higher after converting from a Term to a Permanent insurance?

The permanent policy will provide a cash value and coverage can last to age 100 or beyond.

Annuitization

The point at which funds accumulated in an annuity are converted into periodic income payments beginning the annuity phase.

How are premium rates kept level in Whole Life and Traditional Whole Life policies?

The premium at younger ages exceeds the actual cost of protection.

What is the difference between capital sum and principal sum?

The principal sum is the stated amount payable as a death benefit if death is due to an accident. ... The capital sum is the amount payable for the accidental loss of eyesight or for an accidental dismemberment.

What is a risk of a Viatical Settlement?

The risk to the purchaser is that the insured does not die within the time period anticipated and therefore could lose money on the transaction.

The HIV Consent Form specifies which types of individuals may receive __________.

The test results

What must the written notice state that when the insurer file written notice of termination of the appointment to the Department

The written notice must state the reasons and facts involved in the termination.

Why do Return of Premium Term policies charge a much higher premium than level term insurance.

These policies are very low-risk with respect to paying benefits and therefore charge a much higher premium than level term insurance.

Who owns Risk Retention Groups (RRG)

They are owned by their policyholders.

What will happen to agents doing business with unlicensed entities?

They are subject to a felony of the third degree and may have their license suspended or revoked.

What can happen to any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a certificate of authority?

They are subject to a felony of the third degree.

How often should each domestic insurer be examined by the Office?

They should be examined at least once every 5 years.

Surety

Third party agreeing to be primarily liable for debt in case of default by the principal debtor

Child Rider

This rider, also referred to as an Additional Insured(s) Rider, is a term life insurance policy purchased for a family member that is tied to the whole life insurance plan of a breadwinner in the family.

Whos is required to participate in Florida's Statewide Medicaid Managed Care Long-Term Care Program?

Those over 65 and in a nursing home and those over 18 who qualify for Medicaid due to a disability and nursing home care

Admitted (authorized) Insurers

Those that have been issued a license (certificate of authority) by conforming to Florida standards for transacting business.

Provision that states that the insurance company must pay claims immediately.

Time of Payment of Claims

What is the purpose of the licensing laws?

To require a minimum level of insurance knowledge and for the applicant to be familiar with the Florida insurance laws.

______________ policies earn a specified guaranteed rate of return. Once the cash value has accumulated for a certain number of years (typically _________ years), the policy's owner can _____________.

Traditional Whole Life 3 years borrow against the policy

In a _________________ , the net amount at risk is the face value minus the cash value. As the cash value increases over time, the net amount at risk decreases. This does not affect the face amount of the policy as that remains level. Since the cash value equals the face amount at maturity, as the cash value grows, the amount of risk to the insurance company decreases.

Traditional Whole Life policy

It is used when insurability and pricing are in doubt.

Trial application

Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer.

Twisting

In addition to the unfair trade practices, the following acts and practices are prohibited:

Twisting High-pressure Tactics Cold lead Advertising

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Classification of risk and rating

Underwriting Process

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -Insurability is determined

Underwriting Process

Determine if the following statements occur while the application is being completed, during the underwriting process, or when the policy is delivered. -MIB report may be requested

Underwriting Process

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is _____________.

Unfair discrimination

Only one party, the insurer, is legally bound to the contractual obligations

Unilateral Contract

Primary appeal of this insurance: Flexibility, transparency, and backed by conservative investments

Universal Life

A _____________ policy allows a policyowner to choose from two death benefit options, Option A or Option B.

Universal Life (UL)

Flexible Premium Adjustable Life Insurance aka

Universal Life (UL)

_____________ Insurance features insurance protection and a savings element (cash value) that grows on a tax-deferred basis.

Universal Life (UL)

______________ policies give the policyowner the option to take a policy loan, but also to take a partial withdrawal from the cash value without terminating the contract.

Universal Life (UL)

__________________ has built in guarantees regarding the cost of insurance (mortality risk) and the interest rates applied to cash values.

Universal Life (UL)

___________________ is an "unbundled policy." This means the individual elements of the policy and premium—which includes the mortality risk, policy expenses, and the cash value—are credited to the account separately after the premium is paid.

Universal Life (UL)

___________________ policy pays the face amount stated in the contract which is level term, plus any cash values accumulated over the years.

Universal Life (UL) with Option B

Current interest credits and charges not guaranteed

Universal Life Insurance

Insurance with maximum charges and minimum interest crediting rate

Universal Life Insurance Indexed Universal Life Insurance

In a __________________ policy, a guaranteed minimum interest rate applied to the policy (usually around ____________%) means that, no matter how the investments perform, the insurance company guarantees a certain minimum return on the cash value

Universal Life Insurance (UL) policy 3-4

This policy has a general account, so the producer needs only a life insurance license to sell it. Premiums are paid into and interest is credited into the general cash value account. Expenses, loans or withdrawals, and mortality charges (cost of insurance) are deducted from the ____________ .

Universal Life Insurance (UL) policy cash value account

In a ____________ Annuity, premiums paid during the accumulation period are invested into a separate account(s)

Variable Annuity

In a ____________ Annuity, the contract owner bears the investment risk and receives the return actually earned on invested assets, less any charges assessed by the insurer and investment managers

Variable Annuity

In a _____________ Annuity, upon annuitization, accumulation units are converted into annuity units, which generate income based on the value of the units

Variable Annuity

Primary appeal of this insurance: Flexibility, transparency, and mutual fund returns

Variable Life

Market value changes and current charges not guaranteed

Variable Life Insurance

VUL

Variable Universal Life

________________ offers the added attraction of the investment component seen in Variable Life policies through the insurer's separate account.

Variable Universal Life (VUL)

Insurance with maximum charges only.

Variable Universal Life Insurance

___________________ is a whole life policy with certain benefits that will vary based on market conditions.

Variable whole life

Expense loading ___________ from company to company.

Varies

A __________ is an agreement between a third party (specializing in such transactions—viatical settlement provider) and a life insurance policyowner (viator) insuring the life of an individual with a life-threatening or terminal illness, normally with a life expectancy of 2 years or less.

Viatical Settlement

An immediate annuity must start providing income within _________ of the first premium payment.

one year

A rider that waives the deduction of the monthly cost of insurance and expense charges associated with a Universal Life type policy while the insured is totally disabled, usually after 6 months of continuous disability.

Waiver of Monthly Deduction (Cost of Insurance)

If the insured becomes totally disabled, the insurer will waive premiums for the duration of the disability or the end of the policy, whichever occurs first. What is the rider?

Waiver of Premium

Insolvency

When a company or a person is either unable to pay the financial obligations due to poor income or cash flow or the value of the total debts exceed the value of the assets.

When may an insurer terminate its appointment with a licensee at any time?

When termination is due to suspension or revocation of a license, an insurer

Policy endowment

When the cash value equals (and becomes) the death benefit aka maturity date

An applicant completes the application and submits it to the insurer along with a premium check. When is the applicant's offer considered accepted?

When the insurer issues a policy

Insurance with coverage duration for life

Whole Life

Life insurance with dividends not guaranteed

Whole Life

Primary appeal of this insurance: Guaranteed lifetime coverage, backed by investments made by the issuer

Whole Life

Main types of Cash Value Insurances (Permanent)

Whole Life Universal Life Indexed Universal Life Variable Universal Life No Lapse Guarantee

Insurance with maximum premium and minimum cash values

Whole Life Insurance

______________ policies stretch the cost of insurance over a longer period of time in order to level out the increasing cost of insurance. This extra premium builds a reserve (cash value) which helps pay for the policy in later years as the cost of protection rises above the premium. The cash value provides an accumulation element in the policy.

Whole life

When must the insurer file written notice of termination of the appointment to the Department

Within 30 days after terminating the appointment.

In a Mutual Insurance Company, __________ is elected by the policyholders to manage the company but ____________ handle the day-to-day operations

a Board of Directors officers elected by the Board

A Medicare supplement policy or certificate may not exclude benefits based on a preexisting condition if the individual has ___________.

a continuous period of creditable coverage of at least 6 months as of the date of application for coverage

A Medicare Advantage Plan includes a medical savings account plan coupled with ________________.

a contribution into a Medicare Advantage medical savings account

An agent licensee may not transact or attempt to transact any line of insurance under his/her license without _______________________.

a current record of an appointment for those lines of insurance by an authorized insurer with the Department.

Surrender Charge

a fee charged to the insured when a life policy or annuity is surrendered for its cash value

It is prohibited for unlicensed entities to solicit mail order insurance in Florida. Mail order solicitations are completed without personal agents. All transactions must be completed by _______________.

a licensed and appointed agent in Florida.

Cash value is considered ___________ in a permanent policy causing the premiums to be higher than term insurance.

a living benefit

Systematic Withdrawal Plan

a mutual fund service that enables shareholders to automatically receive a predetermined amount of money every month or quarter

Fiduciary

a person who holds assets in trust for a beneficiary

Interest paid as part of a death benefit settlement option is taxed as _______________.

ordinary income

There are two types of assignments: ________ and _________.

absolute and collateral.

Widows/widowers of a fully insured deceased worker may begin receiving benefits at _______.

age 60

In a Mutual Insurance Company, dividends are not guaranteed and are considered a return of premium based on any surplus at the end of the year once __________________________.

all claims and operating expenses have been paid

A LTC insurance shopper's guide in the format developed by the NAIC (2001), or a guide developed by the Office, must be provided to _______________.

all prospective applicants of a LTC insurance policy or certificate.

Estate

all the money and property owned by a particular person, especially at death.

Reduce paid up option

allows the policy owner to receive a lower amount of fully paid whole life insurance, excluding commissions and expenses.

Cash surrender

allows the policyowner to receive the policy's cash value. Policyowner no longer has coverage at this point. Normally, the maximum length of time a life insurance company may legally defer paying the cash value of a surrendered policy is 6 months (Delayed Payment provision).

A partial withdrawal is a permanent deduction of the cash value and cannot be reversed and may _____________.

also be taxable.

Policy loans do not automatically reduce the death benefit in a policy. If an outstanding loan exists at the time of death, the _______________________.

amount of the loan will then reduce the benefit paid to the beneficiary.

The reserve (cash value) provides ___________ element in a Whole Life policy.

an accumulation

A policy offering accident and sickness insurance, including limited and supplemental benefits, LTC, and Medicare supplemental health coverage, cannot be issued or delivered in Florida unless accompanied by ________________

an appropriate outline of coverage, or the outline of coverage may be completed and delivered at the time of application.

The annuity settlement option selected can provide a temporary or lifetime payment. If a lifetime benefit is selected, in most cases it is _____________ election.

an irrevocable

A fixed annuity provides for a fixed level benefit payment to the annuitant when the contract is ___________.

annuitized.

An individual who fails to maintain an appointment under the class of business licensed during this period will not be granted an appointment for that class of insurance until qualifying as a first-time applicant.

any 48-month period

A conditional receipt provides that coverage will become effective as of either the date of ____________, or the date of ________________, whichever is later (occurs first), as long as the policy would have been issued as applied for or better.

application completion of any required medical exam

Policy loans, cash dividends, and withdrawal of cost basis __________ subject to taxation.

are not

Partial withdrawals and any surrenders are paid based on the FIFO method, or "first-in, first-out". All amounts withdrawn up to the amount of premiums paid (first-in) __________ taxable. Any amount withdrawn in excess of the premium is a return of earnings and _______________

are not subject to taxation.

Principle Sum is the amount payable ____________

as a death benefit (the policy face amount).

A contributory plan requires ___________% participation of eligible employees.

at least 75%

The Joint Life Payment Option ceases all distributions _______________ of the annuitants. This would not be the case if a Life Income Joint and Survivor

at the first death of any

When must an outline of coverage be delivered to an applicant for an individual LTC insurance policy.

at the time of application

LTC Insurance- In the case of direct response solicitations, the insurer must deliver the outline of coverage upon the applicant's request, but regardless of request must make such delivery no later than __________.

at the time of policy delivery.

A rider is usually added _______________ and may result in a small increase in premium.

at the time the policy is purchased

The premium upon conversion from Term to Life is usually based upon _______ age which results in ______________premium.

attained age which results in a much higher premium.

No person can act as an insurer and no insurer or its agents, attorneys, subscribers, or representatives can directly or indirectly transact insurance in Florida unless ___________.

authorized by a Certificate of Authority, issued to the insurer by the Office of Insurance Regulation.

By using a Mortality Table, a life insurer can determine the ________________ for each age group, based on the year of birth.

average life expectancy

All of the following are examples of insurance transaction, except: a. Soliciting an interested party to purchase an insurance policy b. Creating advertising materials on behalf of the insurance company c. Taking an insurance application and collecting premium from an applicant d. Delivering an insurance contract to a policyowner

b. Creating advertising materials on behalf of the insurance company

A Certificate of Authority is issued to an insurer by the: a. CFO b. Office of Insurance Regulation c. Department of Financial Services d. Office of Financial Regulation

b. Office of Insurance Regulation

If a conversion is based on the issue or original age, _____________ will be required to be paid at the time of conversion.

back premiums plus interest

Unlike term insurance, a whole life policy cannot _________________.

be convertible or renewable.

In a Universal Life Insurance (UL) policy, if the insurance company does well with its investments, the current interest rate will _________________.

be credited to the cash value causing the cash value to grow at a faster rate

Which of the following statements regarding unlicensed entities is NOT correct? a. A person acting as an agent for an unlicensed entity will be personally liable for any unpaid claims b. All transactions must be completed by a licensed and appointed agent in Florida c. Mail order solicitations are permitted through unlicensed entities d. Unlicensed entities are nonadmitted insurers and are not regulated by the state of Florida

c. Mail order solicitations are permitted through unlicensed entities

A term rider provides additional death benefit on the primary insured or other named insureds. At some point, the coverage becomes unaffordable, _____________

can be converted, or it expires.

In life and health insurance, it may not be possible to truly indemnify a person for all losses. Instead, indemnity takes the form of ______________ or ____________ to physicians or hospitals for care and services provided to an insured who is injured or ill.

cash (a death or disability income benefit) payments

The Automatic Premium Loan provision is available on _____________ policies only and does not require an additional premium.

cash value

APL is available on ______________ policies only and does not require an additional premium.

cash value policies

A collateral assignment is typically used when an insurance policy is used as ____________.

collateral for a loan.

When the initial premium is not paid with the application, the producer must _____________ before coverage can begin.

collect the premium

If the initial premium is paid at the time of application, the producer will issue a _____________.

conditional receipt.

Under a Waiver of Premium rider, cash value and dividends _________________.

continue as if normal premium payments have been made.

If cash values increase too quickly Nontraditional Whole Life policy, the policy could mature prior to age 100. To prevent this from happening, the insurer will add a ______________ to keep the policy from endowing. This increase is provided without evidence of insurability.

corridor of insurance protection

A licensee who is self-appointed and is in the business of analyzing policies, providing insurance advice or making specific recommendations of insurance policies for a fee is a(n): a. Agent b. Unlicensed agent c. Customer Service Representative d. Unaffiliated agent

d. Unaffiliated agent

A Universal Life (UL) with Option B policy pays the face amount stated in the contract which is level term, plus any cash values accumulated over the years which provides for an increasing ________________.

death benefit

- Lifetime income is a ________________ option.

death benefit settlement

Qualified retirement plans receive favorable tax treatment, such as __________ to the employer, ____________ to the employee, and waived penalties for the listed situations.

deductible premiums pre-tax or deductible premiums

As long as the insurance death benefit is not payable to the employer when an employee dies, the premiums paid for the life insurance are _______________.

deductible to the business.

In a Mutual Insurance Company, the policyholders are considered the owners, but do not ________________.

directly manage the company.

The insuring clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving ______________ , as long as the insured died while the policy was in force.

due proof of death of the insured

No Medicare supplement policy in force in this state may contain benefits which _________

duplicate benefits provided by Medicare

FL. Medicare Supplement Insurance Advertising -If the Office believes any advertisement by a Medicare supplement policy insurer violates any of the unfair trade practices or any rule of the commission, the Office may _____________.

enter an immediate order requiring that the use of the advertisement be discontinued.

The policy matures/endows when the cash value in the policy ____________ the face amount of the policy (and the insured is still living).

equals

This Spouse (Other Insured) Rider provides a conversion provision permitting the spouse to convert to permanent coverage without ___________ prior to the termination of the rider or upon _______________.

evidence of insurability the death of the insured under the basic policy

Premiums are based on ______________, ___________, and ___________ and these factors are used by all insurers to determine premiums.

expected mortality interest earnings expenses (expense loading)

The amount charged to cover each policy's share of expenses of operation (salaries, commission, premium taxes, and cost of doing business) is called _________________. This can vary from company to company based on its operations and efficiency.

expense loading

For Fixed Amount Payments, an increase in declared interest will _____________ the time period in which the benefits are paid.

extend

If two or more policies or plans cover the same child as a dependent of different parents: The benefits of the policy of the parent whose birthday, excluding year of birth, __________________.

falls earlier in a year are determined before the benefits of the policy of the parent with the later birthday

It is the producer's responsibility to gather information beyond the stated questions, which is considered part of ______________________.

field underwriting

The three nonforfeiture options add _______ to a cash value policy

flexibility

A _______________ annuity is not funded with a lump sum payment.

flexible premium

With a _______________, contributions may be made as often and in whatever amount the contract owner desires. However, most insurers do set a minimum and a maximum dollar amount they will accept.

flexible premium

Like Universal life, the Variable Universal Life (VUL) policy provides for ____________ premiums and __________ death benefits; Options A and B are available to policyowners. The entire cash value is held in the insurer's separate account and the investment return fluctuates based on the performance of the separate account. Since all premiums are credited to a separate account, there is no guaranteed minimum death benefit; the owner bears all investment risk.

flexible premiums death benefits

Capitol Sum is the amount payable __________

for the accidental loss of eyesight or for an accidental dismemberment.

Business uses of insurance often mirror individual needs - to cover the unexpected death of business partners, executives, and key employees by providing funds for the continuation of the business, not _____________.

for the heirs of the decedent.

A portion of the premium is invested by the insurance company and held in its _______________ account. The current return on the investments is credited to the Universal Life Insurance (UL) policy.

general

In a Variable Life policy the _______________ is fixed and guaranteed and provides for a guaranteed minimum death benefit to age 100.

general account

Agent examples

general lines agent life agent health agent title agent.

MIB's coded reports represent ________________ affecting the insurability of the applicant.

general medical information and other conditions (typically hazardous hobbies and adverse driving records)

In a Variable Life policy loans are available from the _____________ account.

general or the separate account

Insurance contracts must be issued in ___________ that the owner is not looking to gain from a loss

good faith

The LTC outline of coverage must include: -A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine ___________.

governing contractual provisions

The mortality charge for Option B is ___________than Option A.

greater

HMO

health maintenance organization

What rider can be added to a policy that will exclude specific conditions that would normally cause a policy to be declined.

impairment rider

A person cannot use the existence of the Life and Health Insurance Guaranty Association "Association" in an advertisement ____________________.

in order to sell, solicit or induce the purchase of any insurance covered by the Life and Health Insurance Guaranty Association.

Fl. Medicaid-Upon a request of the policyholder, an insurer must suspend the benefits and premiums of the Medicare supplement policy for the period_________________. The period of suspension cannot exceed 24 months.

in which the policyholder indicates that he has applied for and been determined to be entitled to Medicaid

irrevocable

incapable of being changed or called back

single premium immediate annuity

is one that is purchased with a single, lump sum payment and provides income payments that start within 1 year from the date of purchase.

What is the insuring clause?

is the basic agreement between the insurer and the insured. it states the insurer's promise to pay the death benefit upon the insured's death.

An individual, firm, partnership, corporation, association, or other entity may not act in its own name or trade name as an insurance agency unless ________________.

it obtains an insurance agency license at each place of business.

Any payout due to the Long-Term Care Rider is an acceleration of the life insurance death benefit, meaning _____________. The amount of protection is determined at the time of policy purchase. Long-term care benefits are paid income tax free after the insured meets the qualifying requirements.

it will reduce the ultimate death benefit payable to the beneficiary

A stock insurer is owned by ______________.

its stockholders, or shareholders.

Individuals purchasing Option A will benefit from ______________ while individuals purchasing Option B will benefit from _________________.

larger cash value accumulations greater death benefits.

A Joint Survivorship Life Policy pays the death benefit upon the death of the ______________. It is used in estate planning situations to fund irrevocable trusts.

last insured to die

Whole Life and Traditional Whole Life have a level _______________________.

level premium and level face amount.

Renewable and convertible features are typically available only on _____________ insurance policies and an additional premium may be charged.

level term insurance

Only a _______________ license is required in order to sell fixed annuities in most states.

life insurance

The Association must maintain what 3 accounts?

life insurance, health insurance, and annuities

What do ADLs trigger?

long term care insurance

The MIB, Inc. (Medical Information Bureau) Report may help _________________ for consumers.

lower the cost of life and health insurance

Membership in the Association is _______________ for insurers authorized in Florida

mandatory

The Guaranteed Insurability rider premiums are based on attained age which will allow for the insured to obtain additional insurance in between the specified ages include ________ and the __________, when the need for insurance coverage may increase.

marriage birth or adoption of a child

Unaffiliated Agent may not be affiliated with

may not be affiliated with an insurer, insurer-appointed agent or insurance agency.

The Association is funded through _______________ used to carry out the duties of the Association.

member dues, or assessment fees

The MIB is a _________________ owned corporation that operates on a not-for-profit basis. MIB's underwriting services are used exclusively by member life and health insurance companies to assess an individual's risk and eligibility during the underwriting of life and health policies.

member-owned corporation

A renewable and convertible term policy will cost _________ than a level term policy.

No policy or certificate may be advertised, solicited, or issued as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are ____________

more restrictive than those of Medicare.

Florida Medicare Required Provisions -Pre-existing: The policy or certificate cannot define a preexisting condition _______.

more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.

In Universal Life Insurance (UL), the ____________ is the cost of pure insurance and although it is deducted monthly, it is determined annually based on the insured's age.

mortality charge

The insured cannot be the __________________.

named beneficiary.

Traditionally, stock insurers issue ____________ policies, since the policyholders are not ENTITLED to dividends.

non-participating

A ____________ annuity is funded with after-tax dollars, meaning taxes on the money were paid before it goes into the annuity.

non-qualified annuity

In a Mutual Insurance Company, when and if declared by the Board, policyholders may receive ____________ as a return of unused premium.

non-taxable dividends

Appointments that became effective in any month OTHER THAN the licensee's birth month will be valid not less than __________months and no longer than _______ months in order to convert the expiration to the birth month cycle. They will renew every 24 months after that, unless ___________.

not less than 24 months and no longer than 36 month. suspended, revoked, or terminated earlier.

Fl. Medicaid-If the policyholder loses entitlement to Medicaid and the policyholder provides ________________, the policy will be automatically reinstated as of the termination of Medicaid entitlement.

notice within 90 days after the loss of entitlement

An agent must deliver the LTC shopper's guide ___________. In the case of direct response solicitations, the shopper's guide must be presented in conjunction with any application or enrollment form.

prior to the presentation of an application or enrollment form

The insurer's ___________________ is its consideration, as is specified in the _________________ clause of the policy.

promise to indemnify in the event of a loss insuring

Most riders have a charge associated with them and can require providing ___________ after the policy has been issued.

proof of insurability

FL. Medicare Supplement Insurance Advertising -Every issuer of Medicare supplement insurance policies or certificates in Florida must ________________.

provide a copy of any Medicare supplement advertisement intended for use in Florida whether through written, radio or television medium to the Office for review or approval by the commission.

In order to maintain all rights in the policy, a policyowner should name a revocable beneficiary. An irrevocable beneficiary would have to _______________ for certain changes to a policy. ________________ beneficiaries can be named as either revocable or irrevocable.

provide consent Primary, contingent, and tertiary

Defray

provide money to pay (a cost or expense)

A ____________annuity is funded with pre-tax dollars.

qualified annuity

Insurance premiums are paid in advance and insurance companies invest these premiums and assume a certain rate of interest will be earned. Interest earnings ____________ of premium needed to fund the future liability of the policy death benefit.

reduce the amount

If the actual return is lower than the AIR (Assumed Interest Rate), the monthly annuity payment will be _______________.

reduced.

If the actual return is equal to the AIR (Assumed Interest Rate), the monthly annuity payment will ____________________.

remain the same as the previous month.

Cash Surrender Value

represents the cash value of a policy minus any surrender charges

In Whole Life policies an extra premium builds a ____________ which helps pay for the policy in later years as the cost of protection rises above the premium. The cash value provides an accumulation element in the policy.

reserve (cash value)

The LTC outline of coverage must include: -A statement of the renewal provisions, including any reservation in the policy of a ______________.

right to change premiums

In a Universal Life (UL) with Option A policy, if the cash value increases to the point where it equals and passes the death benefit, a minimum separation between the cash value and the death is called the ________________. .

risk corridor

The Variable Universal Life (VUL) policyowner may take a policy loan or a partial withdrawal from the cash value without terminating the contract. A partial withdrawal is paid from the _____________ account. Policy loans are available based on the amount in the separate account. Typically ________ % of the cash value can be borrowed.

separate account 75-90%

Policy delivery will be accomplished by: Personal delivery, with ______________ Registered or certified mail with ____________

signed receipt of delivery a signed receipt of delivery

Transacting insurance can involve any of four different phases in the sale of products which are _____________________.

solicitation negotiation execution of a contract and handling matters subsequent to a contract

Consideration

something of value exchanged for something else of value

Insurable Interest

something of value that, if lost, would cause you financial harm

The _______________ include the application, medical exams, an Attending Physician's Statement, the Medical Information Bureau (MIB), an inspection report, and the agent's report.

sources of underwriting

Accidental Death Benefit is a benefit that is payable only if death occurs before a _______________ and within ______________accident. It does not add any additional values to the base policy.

specific age and within 90 days of the

Usually Family Riders are sold in units (packages) of protection, such as ___________ for the main wage earner, ___________on the spouse, and ___________ on each child.

such as $5,000 on the main wage earner, $1,500 on the spouse, and $1,000 on each child.

Insurance cancellation aka

surrender

The difference between the cash value and the cash surrender value is the _____________charge. This provides a means for the insurer to recapture the upfront expenses involved in issuing the policy.

surrender charge

If a policy is not intended to be a qualified policy, the policy must include a disclosure statement within the policy and the outline of coverage ____________________.

that it is not intended to be a qualified LTC insurance contract.

A qualified LTC policy must include a disclosure statement within the policy and within the outline of coverage ____________________.

that the policy is intended to be a qualified LTC contract.

If two or more policies or plans cover the same child as a dependent of different parents: -If both parents have the same birthday, ____________

the benefits of the policy or plan which covered the parent for a longer period of time are determined before the parent covered for a shorter period of time

Which of the following statements is correct regarding an employer's ability to deduct the premiums it pays for an employee's life insurance benefit? Employer paid life insurance premiums are deductible as long as _______________ does not derive a direct benefit from the policy

the business

In a Universal Life (UL) policy, ______________ is collateral if the loan is not paid back before the insured dies or the policy terminates and the unpaid loan balance and loan interest is deducted from a death claim or surrender.

the cash value

If the policyowner increases premiums in a Universal Life Insurance (UL) and "vanishing premium" occurs, the owner will be required to start paying premiums to keep the policy from lapsing if _____________.

the cash value becomes insufficient to pay the monthly deductions

As the cash value increases in Universal Life (UL) with Option A policy, ______________ decreases. If the cash value increases to the point where it equals the death benefit, ______________ will automatically become the greater of the cash value or face amount of insurance.

the company's risk the death benefit

A warranty is a statement guaranteed true in all respects and if later discovered to be false,_________________

the contract may be voided.

Paid-up Additions

the dividend is used to purchase a small amount of paid-up whole life insurance

Universal Life (UL) with Option A pays ___________ of the policy and provides _____________.

the face amount a level death benefit

As the cash value increases over time in a traditional whole life policy, the net amount at risk decreases which does not affect ________________.

the face amount of the policy as that remains level.

In Universal Life Insurance (UL), the current interest rate is controlled and set by _______________ and can be changed as often as _________ without prior notice to the policyholder.

the insurance company monthly

Attained age

the insured's age at the time the policy is renewed or replaced

The fewer features a policy has _______________

the less it will cost the consumer

Entire Contract Clause

the life insurance policy and attached application constitute the entire contract between the parties

The insured's consideration is _______________ , along with an agreement to _______________ of the contract.

the payment of premium abide by the conditions

A person may not act, directly or indirectly, as an agent for an unlicensed entity. Any unpaid claims by an unlicensed entity will become ____________________.

the personal responsibility (liability) of any person who knew or should have known that it is a violation to enter into a contract to transact insurance on behalf of an unlicensed entity.

This corridor of insurance is automatic and does not require insurability. This prevents ___________________.

the policy from maturing too early

Coverage continues during the grace period, but if the premium is not paid, ___________________________

the policy lapses at the end of the grace period.

Each month a mortality charge is deducted from ___________ for the cost of the insurance protection and expenses

the policy's cash value

Automatic premium loan is a policy provision which must be elected by _______________ of the policy lapsing.

the policyowner in advance

Life insurance reduces uncertainty, giving a greater peace of mind by replacing ____________ with ________________.

the possibility of a larger loss (income) a known smaller loss (premium).

The LTC outline of coverage must include: -A description of _______________.

the principal policy benefits and coverage

The LTC outline of coverage must include: -A statement of ______________.

the principal policy exclusions, reductions, and limitations

If two or more policies or plans cover the same child as a dependent of different parents: If the policies do not agree on the order of benefits, _____________.

the provisions of the other policy determine the order of benefits

Accelerated death benefits do not have to be repaid if the insured's health improves, but the amount received reduces _______________.

the remaining death benefit.

Life insurance policies or riders containing accelerated LTC benefits are not required to furnish the above referenced guide, but must furnish ______________.

the required policy summary.

If the insured commits suicide after _______ has expired, the insurer must pay out the death benefit to the named beneficiary. The intent of this clause is to discourage individuals from purchasing an insurance policy while contemplating suicide.

the suicide clause

Most riders are added at ___________ an any riders added after the policy has been issued usually require _____________.

the time of policy issue evidence of insurability

In a Universal Life (UL) policy, a loan is taken against cash value remaining in the policy. The cash value secures the loan and cannot be used for other purposes, but it remains in the policy. The loan itself neither decreases _____________ , nor ___________.

the total cash value the face amount.

If the policy is owned by a person other than the insured, it is referred to as a ___________ ownership.

third-party

Systematic withdrawals are allowed as a way to access annuity values without having _______________________--.

to elect a settlement option or surrender the contract.

The primary purpose of licensing

to protect the general public.

The purpose of the Association is _______________

to protect the insured public against the failure of an insurer to per-form its contractual obligations due to impairment or insolvency

endows

to provide with a permanent fund or source of income

Term life insurance premium rates are based upon _____________________.

underwriting class the age and gender of the insured the length of time protection is provided

Universal Life Insurance (UL) has a flexible premium feature which allows the policyowner to increase premiums during working years to accumulate enough cash value to make future premium payments in later years. This is known as a _________________.

vanishing premium.

A __________ annuity does not provide for any minimum guarantees.

variable

Every insurer or entity marketing Medicare supplement insurance must establish auditable procedures for _________.

verifying marketing compliance.

Life insurance Buyer's Guide and Policy Summary must be delivered _____________.

with the policy or prior to policy delivery.

The Convertibility Option of a term policy allows the policy to be converted to a permanent policy _________ proof of insurability.

without

The office may conduct investigations as it deems necessary of the accounts, records, documents, and transactions pertaining to or affecting the insurance affairs of any:

-Administrator, service company, or other person subject to its jurisdiction -Person having a contract or power of attorney with the right to manage or control an insurer -Person engaged in or proposing to be engaged in the promotion or formation of: a domestic insurer an insurance holding corporation; or a corporation to finance a domestic insurer or in the production of the domestic insurer's business

Which forms require approval and may not be delivered in this state unless filed with and approved by the Office (OIR)?

-Insurance policy or annuity contract form -Printed application -Group policy certificates -Printed rider, endorsement, renewal certificate

20 Days

How many days does the Office of Insurance Regulation (OIR) have to approve or disapprove filings?

30 Days

How many days prior to use or delivery does Florida require the insurer to submit filings such as: -Insurance policy or annuity contract form -Printed application -Group policy certificates -Printed rider, endorsement, renewal certificate to the Office of Insurance Regulation (OIR)?

30 Days

What is a Fiscal year?

A company's annual financial or accounting reporting period.

Annuity contract

A contractual obligation between as many as four parties. They are the issuer (usually an insurance company), the owner of the annuity, the annuitant, and the beneficiary. The owner is the person who buys an annuity.

Riders

Additional benefits that can be bought and added to a basic life insurance policy.

Premium

Amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance

The Office of Financial Regulation (OFR) is responsible for all activities of the Financial Services Commission relating to the regulation of the following:

Banks, credit unions, and other financial institutions Financial service companies Securities industry

Elected official and head of DFS (Dept. of Financial Services)

CFO (Chief Financial Officer)

The administration of state insurance law is the responsibility of

Chief Financial Officer (CFO), Financial Services Commission and Director, or Commissioner, of the Office of Insurance Regulation

A premium is paid at the time of application and a conditional receipt is issued. If the policy is issued as applied for, and assuming a medical exam has already been completed, coverage becomes effective: A-At the date of application B-Upon policy delivery C-After the free look expires D-At the time the policy is issued

D-At the time the policy is issued

May interrogate an applicant or agent relating to the applicant's qualifications, residence, prospective place of business, and any other matter which, in the opinion of the department or office, is deemed necessary or advisable for the protection of the public and to ascertain the applicant's qualifications.

Department of Financial Services (DFS)

May make further investigation of the applicant's character, experience, background, and fitness for the license or appointment, and require the applicant's fingerprints to be checked by local and federal law enforcement agencies.

Department of Financial Services (DFS)

Supervises methods of obtaining business, including agent licensing and control of unfair trade practices.

Department of Financial Services (DFS)

The CFO directly oversees the following divisions under the DFS (Dept. of Financial Services):

Division of Accounting and Auditing Division of Consumer Services Division of Insurance Agent and Agency Services Division of Public Assistance/Insurance Fraud Office of Consumer Advocate for Insurance Division of Unclaimed Property

Office of Insurance Regulation is responsible for all activities concerning insurers and other risk-bearing entities in the following areas:

Insurance company licensing Rates Policy forms Market conduct and investigations Claims Issuance of Certificates of Authority Insurance company solvency Viatical settlements Premium financing Administrative supervision

All accounts, records, documents, and files must be freely available to the Office examiners. The costs of an examinations will be paid by?

Insurer being examined.

What happens if the Department (DFS) believes at any time that a person has violated any provision of the code, or upon the written complaint?

It will conduct an investigation regarding any alleged improper conduct of any licensed, approved, or certified licensee, general agent, surplus lines agent, insurance agent, adjuster, service representative, or any other person regulated under the Department. This includes an investigation of the person's accounts, documents, and transactions pertaining to the subject.

Which state entity is responsible for issuing a Certificate of Authority for an insurance company?

Office of Insurance Regulation (OIR)

Upon receiving a consumer complaint, the Division may do what?

Request information from a person licensed or issued a certificate of authority to address the issues and allegations raised in the complaint.

Allows you to customize a policy and can provide several kinds of protection if you meet their conditions.

Riders

Provides direct assistance and advocacy for consumers who request consumer education and outreach assistance.

The Division of Consumer Services

appoints the Director/Commissioner for each office.

The Commission

Has the powers and authority as expressed or reasonably implied by the Insurance Code

The Department and Office

May collect, propose, publish, and disseminate information relating to the subject matter of any duties imposed by law

The Department and Office

May employ actuaries, provide funds for the professional development of employees, including the cost of professional membership fees, examinations required for employment and the cost of training courses to remain compliant with the NAIC.

The Department and Office

Will each have additional powers and duties as provided by other laws of this state

The Department and Office

Will enforce the provisions and execute such duties imposed within its respective jurisdictions.

The Department and Office

May conduct investigations of insurance matters, determine if a person has violated any provision of the code, or secure information useful to lawfully administer any provisions of the code.

The Department or Office

Receives and compiles inquiries and complaints the DFS deems necessary to assist consumers

The Division of Consumer Services

Reports alleged violations of law by persons licensed by the DFS, OIR, or OFR to the appropriate regulator

The Division of Consumer Services

Responsible for assisting consumers, answering general insurance and financial questions from its toll-free helpline, regional service centers, and website.

The Division of Consumer Services

To facilitate uniformity in the Office examinations, what may be used?

The Market Conduct Examiners Handbook and the Financial Condition Examiners Handbook of the National Association of Insurance Commissioners

Has the duties and powers to: Access all books and records of persons being supervised as necessary to carry out the duties of the office

The Office of Financial Regulation

Has the duties and powers to: Issue orders, disseminate information, and otherwise carry out the purposes, policies, and provisions of the financial institutions codes

The Office of Financial Regulation

Has the duties and powers to: Supervise all state financial institutions, subsidiaries, and service corporations.

The Office of Financial Regulation

May take administrative action and impose penalties as provided under the financial institutions code. Must take into account the appropriateness of the penalty with respect to the amount of financial resources, good faith of the person being charged, gravity of the violation and history of previous violations.

The Office of Financial Regulation

Responsible for regulating persons licensed in the mortgage and securities industry.

The Office of Financial Regulation (OFR)

The Office of Insurance Regulation (OIR) supervises insurers through the approval of new rates and forms, which must be approved by ____________ prior to use.