Health Insurance Florida 2-40 Practice Exam Questions #2

Reimbursement benefits may be paid directly to the medical providers under which condition? A) Scheduled benefits B) Assignment of benefits C) Loss of income benefits D) Injury benefits

Assignment of benefits

With regard to civil immunity and testimony, which of the following is FALSE? A) A person may ask to be excused from testifying or producing records involving an examination, hearing, or investigation conducted by the DFS or Office of Insurance Regulation, for fear of self-incrimination B) Any person may provide the Department or Office with information about the financial condition of an insurer C) A person providing truthful information about the financial condition of an insurer may still be subject to civil liability D) Only a person providing untruthful information about the financial condition of an insurer may be subject to civil liability

A person providing truthful information about the financial condition of an insurer may still be subject to civil liability (Only a person who knowingly provides false information is subject to civil liability.)

What form of insurance is the primary form of pure accident coverage? -Major Medical -Disability Income -Medical Expense -Accidental Death and Dismemberment

Accidental Death and Dismemberment

Accident and Health Insurance, insures for two major perils, they are? A) Driving under the influence and driving while intoxicated. B) On the job and off the job. C) Accidental injury and sickness. D) Automobile and home health care.

Accidental injury and sickness.

All of the following are ways in which to classify employees for a group health insurance policy, EXCEPT? -Age -Duties -Length of service -Type of payroll

Age

An agent may write insurance under which of the following circumstances? A) Agent's company rejected the insurance so the agent submitted it to another company B) An agent may not broker rejected business to another company C) An agent may share commissions with another agent who is licensed, but not appointed with the insurer D) An agent may not be paid a fee for making a recommendation regarding group health insurance

Agent's company rejected the insurance so the agent submitted it to another company (An agent may write excess or rejected business with another company after the agent's company rejected it or accepted it on a substandard basis, or a portion of a risk is above the limits of that which the agent's own insurer will accept.)

Under a credit health policy, what is the maximum amount of any accidental death benefit? -Multiple of the monthly loan payments -Amount of original debt -Amount of outstanding debt -$100,000

Amount of outstanding debt

Grouping small businesses together to obtain health insurance as one large group is a characteristic of what type of group? -Multiple Employer Trust (MET) -Franchise Health plan -Health Maintenance Organization (HMO) -Blue Cross/Blue Shield

Multiple Employer Trust (MET)

Which of the following is NOT true about "coordination of benefits"? -Establishes which health plan is primary -Found in group and individual health plans -Limits total amount of claims paid from all involved insurers -Purpose is to avoid duplication of benefits and overinsurance

Found in group and individual health plans

Making a false statement about the benefits or nature of a policy is called? A) Twisting B) False Advertising C) Misrepresentation D) Illegal Inducement

Misrepresentation

How will the "miscellaneous expenses" benefit be expressed in a basic health insurance policy? -Reasonable, usual and customary rates -Multiple of daily room and board rate -Approved charge per day rate -Percentage of daily room and board rate

Multiple of daily room and board rate

All of the following are used in underwriting an applicant's health application, EXCEPT? -Parents ages -Weight -Age -Sex

Parents ages

Unlicensed entities is a regulatory concern due to which of the following issues? A) Rates are higher B) Potential for criminal activity C) State insurance department has minimal oversight over unlicensed entities D) Federal funds will pay unpaid claims

Potential for criminal activity (Unlicensed entities also have an adverse economic impact on authorized insurers, potential for unpaid claims due to dishonesty and lack of sound actuarial decisions, and the state and federal guaranty funds do not pay for those unpaid claims.)

All of the following are considered "rights of ownership" for a life insurance policy, EXCEPT? -Right to change irrevocable beneficiary -Right to assign ownership of the policy to someone else -Right to cancel the policy and select a nonforfeiture option -Right to select how the death proceeds will be paid

Right to change irrevocable beneficiary

Blanket health plans may provide coverage for which of the following groups? -School covering students -Company covering employees -Multiple employer group covering members -Association covering members

School covering students

Raymond owns an Accidental Death and Dismemberment Policy with a Principal amount of $50,000, and a Capital amount of $25,000. After owning the policy several months, Raymond dies as the result of coronary artery disease. Lynn, his beneficiary, can expect to receive what amount of benefit from the policy? A) $0 B) $25,000 C) $50,000 D) $75,000

$0 (Lynn will receive no benefit from this policy since Raymond died of coronary artery disease, not an accident. Hopefully, Raymond owned additional life insurance.)

Tad earns $2,000 a month and currently has a disability income policy with Company X and is limited to a monthly benefit of $400. If Tad decides to purchase another disability income policy from Company Z and Company Z's limit on benefits is 70% of his monthly income, how much coverage can he purchase with this second disability policy? -$1,200 -$1,120 -$1,400 -$1,000

$1,000 (Explanation: Tad currently has a disability income policy that will pay him $400 per month. The second policy limits payments to 70% of his income, which would be ($2,000 x .70 = $1,400) $1,400. Because he is already covered for $400 by Company X, Company Z will only pay $1,000 per month. The total of the two policies will then equal 70% of Tad's monthly pre disability income of $2,000.)

Joseph has a disability income policy stating a flat amount of $2,000 monthly benefit. He has been totally disabled for 6 months but is now able to work part-time. What can he expect to receive from his disability income policy if the policy also covers partial disability? -$1,000 monthly benefit -$500 monthly benefit -$0 benefit -$2,000 monthly benefit

$1,000 monthly benefit

Wanda has a Major Medical policy with a flat deductible of $250, coinsurance of 80%/20% and a stop-loss of $5,000. She has a covered claim for $5,500. What will Wanda pay? -$1,100 -$250 -$1,300 -$4,450

$1,300 (Wanda will pay the first $250 (her deductible) and then 20% of the remainder ($5,250, remainder amount, x .20 = $1,050. So Wanda will pay a total amount of $1,300 ($250 deductible, plus 20% of 5,250).)

Casey has a medical expense policy that provides a fixed rate of $150 per day for hospitalization. Casey is hospitalized for 10 days and incurred covered medical expenses of $20,000. What will her medical expense policy pay? -$1,500 -$20,000 -$15,000 -$3,000

$1,500 (Explanation: Casey's policy will only cover a fixed rate per day for hospitalization of $150. If she is hospitalized for 10 days, then her policy will pay $1,500 ($150 x 10) of the total $20,000 in expenses.)

Travis has a Major Medical policy with a flat deductible of $500 and coinsurance of 80%/20% on the next $5,000 in covered expenses with 100% coverage for any remaining covered expenses. On an claim of $10,000, what amount will Travis pay? -$2,500 -$1,500 -$2,000 -$1,000

$1,500 (Explanation: Travis will pay the first $500 (deductible) and then 20% of the next $5,000 ($5,000 x .20 = $1,000. So Travis will pay a total of $1,500 (deductible plus 20% of $5,000).)

Roberta has a basic hospital expense policy with a $10,000 limit for benefits, coordinated with a major medical policy with a $500 corridor deductible and 80/20 coinsurance provision. If she incurs a loss of $20,000, how much will the insurer pay? -$17,600 -$18,000 -$11,900 -$2,400

$17,600 (Explanation: Total expenses are $20,000. Basic medical will pay the first $10,000 which leaves $10,000 remaining. Roberta will pay the first $500 of this $10,000 with $9,500 remaining. Company will now pay 80% of $9,500 or $7,600. Total company pays will be $10,000 from the basic medical plus $7,600 from the major medical = $17,600)

Charlie has a hospital expense policy and a surgical expense policy. The hospital pays $100 a day for room and board and a maximum of $1,000 for miscellaneous hospital charges. The surgical policy pays a maximum of $500 for any one operation. If Charlie was hospitalized for 10 days and had charges of $200 per day for room and board, $1,500 for miscellaneous expenses, and $2,000 for surgical expenses. What will his policies pay of these expenses? -$3,500 -$1,000 -$5,500 -$2,500

$2,500 (Explanation: Hospital will pay - $1,000 for room and board ($100 per day for 10 days) and $1,000 (maximum allowed) for miscellaneous expenses. Surgical will pay - $500 (maximum allowed) for surgery)

Jamie has a reimbursement type medical expense policy with a maximum benefit of $500,000. She is hospitalized and incurs $25,000 in covered medical expenses. What will her policy provide in coverage? -$20,000 -$25,000 -$10,000 -$12,500

$25,000 (Explanation: A reimbursement type policy will provide coverage for expenses incurred. In this case that would be the total $25,000.)

Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect will be based on which salary amount? A) $2,000 B) $4,000, the contract amount C) The average of her income over the life of the contract D) $3,500

$3,500 (Relations of Earnings to Insurance (a Optional Uniform Provision) establishes that disability benefits shall not exceed the monthly earnings of an insured at the time the disability commenced, or his/her average earnings for the 2 years immediately preceding a disability, whichever is greater.)

Jason has a Major Medical policy with a flat deductible of $500, coinsurance of 80%/20% and a stop-loss of $5,000. If he has a covered claim of $5,500, what will the insurance company pay? -$0 -$4,400 -$1,500 -$4,000

$4,000 (Explanation: Jason will pay the first $500 (his deductible amount) of the total medical bills. After this Jason will pay 20% of the remainder ($5,000) and the insurance company will pay 80%. $5,000 (amount remaining) x .80 = $4,000 paid by insurance company.)

Ed and Mavis own a Major Medical Policy for their entire family with a $250 per person/per accident deductible, 80/20 coinsurance and a stop-loss of $2,000. Their contract also contains the Carry-Over Provision, the Common Accident Provision and the Restoration of Benefits Provision. In June, Ed and 2 of his daughters were injured in an auto accident with a total medical bill of $2,000. In July, Ed and his son were also injured in a different incident for a total of $4,500 medical expenses. How much did the insurer have to pay for both accidents? A) $3,400 B) $1,700 C) $4,800 D) $4,500

$4,800 (Read Carefully: Since Ed and Mavis's Major Medical Policy contains a Common Accident Provision, only one deductible applies per claim even though more than one person was injured. Claim #1 ($2,000 - $250 deductible=$1750 X 80%=$1,400 the insurer's portion); Claim #2 ($4,500 - $250 deductible=$4,250 X 80%=$3,400 the insurer's portion). Insurer's total for the two claims=$4,800.)

Jay receives an annual disability benefit of $10,000. His employer contributed 75% of the premium. How much of Jay's benefit is subject to income tax? A) $10,000 B) $2,500 C) $7,500 D) None

$7,500 (Jay is covered under a contributory plan in which the employer is contributing 75% of the premium, thus 75% of the $10,000 benefit ($7,500) is subject to income tax.)

Peter is injured in an auto accident. He is only able to work on a part-time basis and at 60% of his predisability salary. If Peter's disability income policy provides for residual disability benefits of $2,000, what amount would he receive in monthly benefit payments? -$1,200 -$1,000 -$400 -$800

$800 (Explanation: Residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income. The benefit is usually determined by multiplying the percentage of lost income by the stated monthly benefit for total disability. In this example Peter is would receive 40% of the total disability benefit of $2,000 which will equal $2,000 x .40 = $800.)

When a person is covered by an HMO, the contract certificate or member's handbook must be delivered within how many days after approval of the enrollment by the HMO? -20 days -10 days -5 days -14 days

10 days

One of your clients just reinstated their Accident and Health policy. When is coverage effective for sickness and accident? A) 30 days sickness, immediate coverage for accidents. B) Immediately for both accident and sickness. C) 10 days sickness and immediately for accidental injuries. D) 10 days accident and 48 hours for sickness.

10 days sickness and immediately for accidental injuries. (Upon reinstatement, accidents are covered immediately, and sickness is covered after 10 days.)

Once the insured has paid a specified amount of his expenses, under the stop-loss feature of a health insurance policy, how much will the company then pay? -75% -20% -80% -100%

100%

An insured should receive necessary claim forms within _____ days after notice of claim. A) 5 B) 10 C) 15 D) 20

15

COBRA is a federal law that provides for an extension of health benefits for what length of time after employment is terminated? -24 months -6 months -12 months -18 months

18 months

What year was the Social Security Act amended to add health insurance protection for the aged and disabled? -1973 -1965 -1985 -1935

1965

Notice of claim is required within _____ days of loss. A) 90 B) 15 C) 20 D) 10

20 (The insured under the Notice of Claim Provision (a Mandatory Uniform Provision) is required to notify the insurer, in writing, within 20 days of any loss.)

How many credit hours of continuing education must an new agent complete every two years? A) 12 (with 1 hour in ethics and no more than 3 hours in agency management) B) 24 (with at least 2 in unauthorized insurers and 3 in ethics) C) 30 (with at least 2 in unauthorized insurers and 3 in ethics) D) 12 (with at least 2 in unauthorized insurers and 3 in ethics)

24 (with at least 2 in unauthorized insurers and 3 in ethics)

All insurance carriers authorized in Florida must be audited by the Office of Financial Regulation once every __________. A) Year B) 3 years C) 5 years D) 7 years

3 years (The Office of Financial Regulation protects the public against unauthorized behavior by audited insurance companies at least once every 3 years, and more frequently if warranted.)

All insurance carriers authorized in Florida must be audited by the Office of Financial Regulation once every __________. A) Year B) 3 years C) 5 years D) 7 years

3 years (The Office of Financial Regulation protects the public against unauthorized behavior by audited insurance companies at least once every 3 years, and more frequently if warranted.)

If you are found guilty of any crime punishable by imprisonment one year or more, you must report it to the Insurance Department within how many days? A) 15 B) 20 C) 30 D) 60

30 (If you are declared guilty of any crime that is punishable by imprisonment for 1 year or more, you must report it to the Insurance Department within 30 days, even if you pleaded 'no contest' or it occurred outside of Florida or even the U.S.)

What is the period of time for an HMO "open enrollment"? -45 days during every 18-month period -30 days during every 12-month period -30 days during every 18-month period -45 days during every 12-month period

30 days during every 18-month period

What is the free-look period for a Medicare Supplement policy? -7-days -10-days -14-days -30-days

30-days

After COBRA continuation of benefits has expired, how long does the terminated employee have to convert their group certificate to an individual policy? -90 days -31 days -45 days -180 days

31 days

With all other factors being equal, who of the following would have the highest premiums for a health insurance policy? -25 year old female -45 year old male -25 year old male -45 year old female

45 year old female (Explanation: Health insurance costs tend to increase as the age of the insured increases. The older the insured, the higher the applicable premium rate. Disabilities among women under the age of 55, on the average, have a greater frequency and longer duration than among men, so female premium rates for certain coverages are higher than premium rates for males.)

An agent may have no more than ________ of his total business within a 12-month period be from controlled business. A) 25% B) 35% C) 50% D) 65%

50% (Controlled business is the practice of an agent selling policies or annuity contracts to himself or family members, officers, directors, stockholders, partners, or employees of a business in which he or a family member is engaged, or the debtors of a firm, association, or corporation of whom he or she is an officer, director, stockholder, partner, or employee.)

If an insurer makes a payment for a claim but you are dissatisfied, you must wait _____ days after proof of loss before you might take any legal action. A) 60 B) 90 C) 45 D) 20

60 (According to the Legal Actions Provision (a Mandatory Uniform Provision), the insured must wait at least 60 days after proof of loss before legal action can be brought against the insurer.)

What is the typical maximum coverage provided to an individual by a group disability income insurance policy? -100% of pre-disability gross earnings -60% of pre-disability gross earnings -75% of pre-disability gross earnings -50% of pre-disability gross earnings

60% of pre-disability gross earnings

What is the correct sequence of time for the grace period on an individual medical expense policy for each mode of premium? A) 7 days weekly, 10 days monthly, 30 all others B) 7 days weekly, 10 days monthly, 31 all others C) 10 days weekly, 15 days monthly, 31 all others D) 30 for individual contracts, 31 for group

7 days weekly, 10 days monthly, 31 all others

For an individual to be able to take a tax deduction for individual contributions to a group medical plan, his medical expenses must exceed what percentage of his adjusted gross income? -7.0% -6.5% -7.5% -5.5%

7.5%

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

90 (The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates the insured is to prove their loss within 90 days of the loss, or in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity.)

Two business partners wanting to be assured the business will not be lost should one of them become disabled, should purchase a Disability Policy to fund which of the following? A) A Buy-Sell Agreement B) A Business Continuation Plan C) A Business Overhead Expense Contract D) A Guaranteed Purchase Option

A Buy-Sell Agreement (The partners should purchase a Disability Policy to fund a Buy-Sell Agreement that then would pay a lump sum enabling them to buy out the interests of the other partner should the other partner become totally disabled.)

Hank was in the hospital last month for 3 days, today he received a check for $330. Is this a refund or a payment from a health policy? A) A benefit payment from his Hospital Income or Indemnity Policy. B) A refund from his doctor. C) A refund of premium triggered by hospitalization. D) He submitted the claim wrong and this is the total benefit.

A benefit payment from his Hospital Income or Indemnity Policy. (The Hospital Income or Indemnity Policy pays directly to the insured a specified dollar (cash) amount per day during hospitalization.)

If a replacement is involved, the replacing producer or agent is required to give to the applicant all of the following, EXCEPT? A) An outline of coverage and the replacement notice. B) A copy of each sales proposal. C) A copy of the state regulations regarding replacements. D) A reminder that new evidence of insurability may be required.

A copy of the state regulations regarding replacements. (Although the producer or agent is required to follow the state regulations regarding replacement, the producer or agent does not give the client a copy of such regulation.)

All of the following could be approved as Long-Term Care facilities, except? A) A skilled nursing facility B) A sanitarium for weight loss C) An intermediate care facility D) A custodial care facility

A sanitarium for weight loss

Which of the following definitions are INCORRECT? A) Annuity units are the basic measure and method by which annuity income is determined. B) The two factors that determine the annuitant's dollar income are the number of annuity units and the value of each unit. C) A variable annuity does not have a loan value because of its variable value. D) There is no capital gains tax to the individual during the accumulation period of a variable annuity.

A variable annuity does not have a loan value because of its variable value. (There is a cash value so there is a loan value.)

Which of the following is a function of the Bureau of Financial Investigations? A) Supervise insurer and agent licensing B) Prosecute violations of Insurance or Criminal law C) Handle consumer complaints D) Act as a criminal justice agency within the DFS

Act as a criminal justice agency within the DFS (The Bureau of Financial Investigations does not supervise insurer and agent licensing, prosecute violations of Insurance or Criminal law, or handle consumer complaints.)

Every LTC Policy that provides benefits of homecare or community-based services shall provide all of the following except? A) Adult day care B) Hospice services C) Respite care D) Acute care

Acute care

All of the following are techniques commonly used by insurers in issuing health insurance policies to substandard risks, EXCEPT? -Add a waiting period of 6 months -Charge extra premium -Attach exclusion or impairment rider or waiver -Limit the type of policy

Add a waiting period of 6 months

An insurer authorized to do business within this state is considered what type of insurer? A) Foreign B) Domestic C) Admitted D) Certified

Admitted (An insurer authorized to do business in this state is referred to as admitted, and could be either domestic, foreign, or alien domiciled.)

With regard to market conduct examinations... A) The costs of examinations are paid by the Market Investigation Division B) The Special Investigations Unit conducts market conduct examinations C) The Division of Financial Services of the Office conducts market conduct examinations D) All accounts, records, documents, files, etc. must be freely available to the examiners

All accounts, records, documents, files, etc. must be freely available to the examiners (The costs of an examinations will be paid by the person or entity examined, the Special Investigations Unit investigates allegations of unauthorized and illegal insurance activity; the Division of Market Investigations conducts market conduct examinations.)

Under a Key Employee Disability Income Policy, the employer is the? A) Policyowner B) Premium Payor C) Recipient of the proceeds D) All answers are correct

All answers are correct (As in Key Employee or Key Person in life insurance (Chapter 1), the employer is the owner, premium payor, and recipient of the proceeds. The key employee or person is the insured.)

Fines and penalties for violating provisions of the agent's qualification laws include? -The denial, suspension, revocation and nonrenewal of License -A misdemeanor fine of not less than $500 nor more than $3500 -Imprisonment for not more than 6 months as well A misdemeanor fine of not less than $500 nor more than $3500 -All of the above

All of the above

The entities of state government involved in the regulation of the insurance business in Florida are? -The State Legislature -The Florida Dept of Financial Service -The State Courts -All of the above

All of the above

Why were Cafeteria Plans designed? -Provide insurer greater control over benefits selected for employees -Allow employees to pick and choose from a menu of benefits to tailor their own benefit package -Allow employers to pick and choose benefits from a menu that best suits their company needs -Provide diversity of insurance company and HMO

Allow employees to pick and choose from a menu of benefits to tailor their own benefit package

What is the purpose of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)? -Allow terminated employees to continue their group medical expense coverage for up to 18 months -Gives terminated employees 31 days to convert their medical expense coverage to another plan -Allows terminated employees to keep their group medical coverage at the same premium rates -Automatically convert terminated employee's group medical expense coverage into an individual policy

Allow terminated employees to continue their group medical expense coverage for up to 18 months

What does the principal sum represent in an AD&D policy? -Amount payable for accidental loss of sight -Amount payable as a death benefit -Amount payable for dismemberment -Amount payable for accidental loss of sight or dismemberment

Amount payable as a death benefit

Which of the following is INCORRECT about life insurance company appointments? A) Also applies to health applications B) An agent must be appointed for life and health insurance separately C) An agent may not use the same insurer appointment to sell life insurance and excess business D) An agent may present a proposal to a company without being appointed

An agent must be appointed for life and health insurance separately (The department may issue a single appointment covering both life and health insurances to an individual licensed for both kinds of insurance and appointed as agent for both kinds by the same insurer.)

Which of the following are part of the legal responsibility of maintaining an insurance license? A) An agent must inform the Department of any change in address within 10 days B) An agent must inform the Department of any change in address within 30 days C) An agent must inform the Department of any change in address within 60 days D) An agent must inform the Department of any change in address within 90 days

An agent must inform the Department of any change in address within 30 days

An example of rebating is? A) Giving a 10% rate discount as advertised by the company. B) Giving an agent a financial favor for overlooking a risk. C) Using a rate comparison chart to show your company's lower rates. D) An agent paying the first 6 months premiums for a friend if he will buy a policy.

An agent paying the first 6 months premiums for a friend if he will buy a policy. (Rebating is defined as returning a portion of the premium or the agent's/broker's commission on the premium to the insured or other inducements to place business with a specific insurer. Rebating is illegal for an agent or broker.)

Which of the following are FALSE regarding the Life and Health Insurance Guaranty Association? A) It prevents financial loss to policyholders when an insurer becomes insolvent B) An insurer has the option of becoming a member of the Association C) The Association is not liable for more than $300,000 in the aggregate for any one life D) No one may use the existence of the Association as an inducement to sell insurance

An insurer has the option of becoming a member of the Association

Commissions may not be paid to which of the following persons? A) Licensed life and health agent. B) An unlicensed person acting as a producer or agent. C) A nonresident agent. D) A properly licensed registered agent.

An unlicensed person acting as a producer or agent.

Before VA benefits can be paid, they must be converted into? A) Accumulation units B) Annuity units C) Payout units D) Cash

Annuity units (Annuity units remain the same, the value of each unit varies)

Daniel's disability income policy defines total disability as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience". This definition is known as? -Own occupation and is less restrictive than other definitions -Any occupation and is more restrictive than other definitions -Any occupation and is less restrictive than other definitions -Own occupation and is more restrictive than other definitions

Any occupation and is more restrictive than other definitions

Which of the following statement is FALSE regarding certificates of authority? A) A Certificate of Authority is not required to transact surplus lines insurance B) No person can act as an insurer unless authorized by a Certificate of Authority C) A Certificate of Authority is not required for authorized reinsurance transactions D) Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a Certificate of Authority commits a misdemeanor

Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a Certificate of Authority commits a misdemeanor (Any person who acts as an insurer, transacts insurance, or otherwise engages in insurance activities in this state without a Certificate of Authority commits a felony of the 1st, 2nd or 3rd degree.)

To act as an agent for an insurer, the producer must be? A) Elected B) Endorsed C) Certified D) Appointed

Appointed (Insurers must file an appointment for each agent who represents them.)

When must insurable interest exist in health insurance? -During the policy period -Both at the time of application and time of claim -At the time of a claim -At the time of application

At the time of application (Explanation: Insurable interest for health insurance is the same as for life insurance. Insurable interest must exist at the time of application.)

Which of the following is an example of a limited risk policy? -Surgical policy -Medical expense policy -Hospital policy -Aviation policy

Aviation policy

Which of the following operates as a corporation, society, or association to provide life insurance primarily for the mutual benefit of its members, has a lodge or social system with rituals and representative form of government? A) Mutual companies B) Fraternal associations C) Stock companies -Fraternal benefit society

B) Fraternal associations

Which of the following is NOT an example of behavior prohibited by the Code of Ethics? A) Defamation B) Backdating C) Rebating D) Twisting

Backdating

The following qualifications are required for a life or health agent license, except? A) Be at least 21 years of age B) Pass a written licensing examination C) Complete 40 hours of classroom or correspondence instruction within 4 years immediately preceding the application D) Submit fingerprints and a background check

Be at least 21 years of age ( You have to be at least 18 years of age)

All of the following are true statements about Workers Compensation, EXCEPT..? -Benefits are not paid unless there is employer negligence -Pays benefits for work related injuries and illnesses -Employee does not contribute to the plan -All states have Workers Compensation laws

Benefits are not paid unless there is employer negligence

Which of the following terms and definitions DO NOT match? A) Field Underwriting - the agent's personal contact with the applicant. B) Reimbursement - pays benefits directly to the insured. C) Sickness - an illness or disease that first manifests itself, or that is first diagnosed and treated, while the policy is in force. D) Blanket payments - is a lump sum payment for a maximum number of days.

Blanket payments - is a lump sum payment for a maximum number of days (Blanket pays a set maximum overall benefit limit with no itemizing; not a maximum number of days.)

Which is not a provider type? A) Service B) Reimbursement C) Blue Cross/Blue Shield D) Self-Insured

Blue Cross/Blue Shield (Blue Cross/Blue Shield falls under the Service classification of provider. The 3 types of providers are Service, Reimbursement, and Self-Insured (Self-Funded).)

George was in an accident. His Accident, Death and Dismemberment policy will cover all of the following, EXCEPT? -Loss of sight -Loss of use of a limb -Broken arm -Death

Broken arm (Explanation: AD&D is the primary form of pure accident coverage. It provides a stated lump-sum benefit in the event of accidental death or in the event of loss of bodily members due to an accidental injury.)

There are many business uses of Disability Income Insurance. All of the following are possible business uses, EXCEPT? A) Buy-Sell B) Key Employee Insurance C) Business Employer Expense D) Business Overhead Expense

Business Employer Expense

Under which business-related use of Disability Income Insurance would the premiums be tax deductible? A) Disability coverage on each partner of a partnership. B) Entity purchase agreement in a partnership. C) Business Overhead Expense Coverage. D) Key Person Disability Income

Business Overhead Expense Coverage. (Business Overhead Expense Coverage is deductible as the plan is used to offset expenses if the owner of the business were to become disabled. Any benefits received would be taxable to the owner and must be reported as income.)

Under which business related plan are benefits taxable as income to the owner? A) Business Overhead Expense. B) Disability Buy-Sell Agreement. C) Both Business Overhead Expense and Disability Buy-Sell Agreement. D) Neither Business Overhead Expense nor Disability Buy-Sell Agreement.

Business Overhead Expense. (Since the proceeds of the policy are being used by the disabled owner to offset expenses the benefits received are taxable.)

Which of the following is NOT a form of medical insurance? -Business overhead expense -Surgical expense -Hospital expense -Long term care

Business overhead expense (Explanation:Business Overhead Expense insurance is designed to reimburse a business for overhead expenses in the event a business owner becomes disabled. Expenses such as rent, utilities, telephone, equipment, employees' salaries, etc.)

Which of the following is NOT TRUE regarding eligibility for subsidies for families under the new health care act? -For those who make between 100-400% of the Federal Poverty -Level -Cannot be covered by an employer -Cannot be eligible for Medicare -Can be eligible for Medicaid

Can be eligible for Medicaid

Which of the following terms and definitions do not match? A) Noncancellable - guaranteed renewable and guaranteed premium to age 65. B) Optionally Renewable - renewable only at the option of the insurer. C) Guaranteed Renewable - guaranteed renewable without proof of insurability. D) Cancellable - the life of the policy is expressed and cannot be renewed.

Cancellable - the life of the policy is expressed and cannot be renewed. (The definition is defining Nonrenewable instead of Cancellable.)

If an insurer cancels a contract, a written notice must be provided within 5 to 31 days. The contract must have which of the following provisions? A) Legal Actions B) Conformity with State Statutes C) Entire Contract D) Cancellation

Cancellation (Cancellation (an Optional Uniform Provision) establishes that the insurer may cancel, with written notice of 5 to 31 days, to the insured.)

This is the fixed amount paid by the HMO to a health care physician or provider in exchange for medical services rendered by that provider? A) Copayment B) Prepaid plan C) Deductible D) Capitation

Capitation

An insurer desiring to transact business in this state must first obtain a / an... A) Certificate of Business B) Liability Disclosure Notice C) Insurance Agent License D) Certificate of Authority

Certificate of Authority

Before an insurer can operate in this state, it must have which of the following? A) Approval of the National Association of Life Underwriters B) U.S. Senate approval C) Certificate of Automatic Authority issued by the state D) Certificate of Authority issued by the State Department or Division of Insurance

Certificate of Authority issued by the State Department or Division of Insurance (A Certificate of Authority from the Department or Division of Insurance is required for an insurer to operate in most states whether the insurer is domestic, foreign, or alien.)

The administration of state insurance law is the responsibility of which of the following? A) Attorney General B) Director of Financial Regulation C) Governor D) Chief Financial Officer

Chief Financial Officer (The administration of state insurance law is the responsibility of the Chief Financial Officer (CFO), Financial Services Commission, and Director of the Office of Insurance Regulation.)

A bank or credit union will not give a loan unless the borrower buys insurance from a specific company. This is known as? A) Misrepresentation B) Rebating C) Churning D) Coercion

Coercion (It is an unfair trade practice to enter into any agreement to commit, any act of boycott, coercion, or intimidation resulting in an unreasonable restraint of, or monopoly in, the business of insurance.)

All of the following are nontraditional methods of providing health insurance, EXCEPT? -Multiple Employer Trusts -Multiple Employer Welfare Arrangements -Self-insurance -Commercial insurers

Commercial insurers

Which of the following is INCORRECT with regard to commissions and compensation? A) An insurer and producer must keep a copy of their producer compensation agreement for 3 years B) An agent may not share a commission with anyone who does not have a license and appointment for the type of insurance sold C) Commissions are a percentage of the first year premium, and thereafter, a percentage of subsequent renewal premiums D) Commissions may be shared with a person who is licensed and appointed in a different line of business

Commissions may be shared with a person who is licensed and appointed in a different line of business (Commissions may be shared only with a person who is licensed and appointed in the same line of business.)

Which type of insurance policy combines Basic Medical Expense Coverage with Major Medical Coverage? A) Supplemental Major Medical B) Hospital Expense C) Comprehensive Major Medical D) Surgical Expense

Comprehensive Major Medical (A Comprehensive Major Medical Policy combines the best features of the basic policies and Major Medical policy into a single policy and provides the most complete hospital coverage.)

Jasper owns a policy that combines the best features of the traditional Basic Plans and Major Medical Insurance into a single policy to give him the most complete hospital coverage. Jasper owns a? A) Supplementary Major Medical Policy B) Combination Major Medical Policy C) Comprehensive Major Medical Policy D) Blanket Major Medical Policy

Comprehensive Major Medical Policy (Jasper owns a Comprehensive Major Medical policy. It combines the best features on the Basic Plans and Major Medical insurance into a single policy.)

Which of the following types of insurance policies combines several types of benefits and provides more coverage than any of the others? -Hospital expense -Comprehensive major medical -Hospital indemnity -Surgical expense

Comprehensive major medical (Explanation: Comprehensive major medical plans cover virtually all medical expenses in a single policy. Such as hospital, physician and surgeon, nursing care, drugs, physical therapy, x-rays, medical supplies, etc.)

Which of the following is NOT considered one of the renewability classifications? A) Optionally renewable B) Guaranteed renewable C) Conditionally cancellable D) Conditionally renewable

Conditionally cancellable

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

Conformity with State Statutes

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is NOT one of those provisions? A) Concurrent Review B) Mandatory Second Surgical Option C) Consideration Clause D) Ambulatory Service

Consideration Clause (The other choices are Case Management Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms.)

Joyce is totally disabled. Her HMO policy just terminated. All of the following are correct regarding "extension of benefits" for Joyce, EXCEPT? -Coverage ends once maximum benefits have been exhausted -Coverage ends once another carrier assumes coverage -Coverage ends if no longer totally disabled -Coverage ends after 18 months

Coverage ends after 18 months

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not? A) Weaken the application wording. B) Conform to NAIC requirements. C) Create a less favorable meaning than the original wording. D) Cancel the law of large numbers.

Create a less favorable meaning than the original wording. (The insurer must assure that any variation must be at least as favorable as the original wording and no provision may be deleted.)

Jake purchased group "credit disability" insurance to cover a loan. He was injured and disabled for 7 months. What benefits were paid under this policy? -Insured's loan is paid off at the beginning of his disability -Creditor receives monthly payments equal to the monthly loan payments -Creditor receives monthly payments equal to the loan amount less loan interest charges -Insured receives monthly disability income payments

Creditor receives monthly payments equal to the monthly loan payments

What type of care, in a long-term care policy, is described as providing assistance in meeting daily living requirements, such as bathing, dressing, getting out of bed or toileting? -Custodial care -Respite care -Intermediate nursing care -Skilled nursing care

Custodial care

Which of the following will not be covered under "Miscellaneous Expenses" of a hospital expense policy? -Drugs -Lab fees -Daily room and board -Use of operating room

Daily room and board

Making false, oral or written statements that are critical or derogatory of an insurer's financial condition and is intended to cause injury to someone in the insurance business is called? A) False Advertising B) Twisting C) Intimidation D) Defamation

Defamation

An agent is guilty of ______ when he / she makes a false or malicious statement about a competing insurer's financial condition. A) Twisting B) Intimidation C) Defamation D) Boycott

Defamation (Defamation is defined as making false oral or written statements that are critical or derogatory of an insurer's financial condition and is intended to cause injury to someone in the insurance business.)

On what basis may a variable annuity be purchased? A) Fixed or variable B) Flexible or fixed C) Deferred or immediate D) Delayed or detained

Deferred or immediate (The annuitant may receive payments either immediately or in the future.)

Which of the following is CORRECT concerning an LTC policy? A) Defining a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage. B) Providing coverage for only skilled nursing care instead of lower levels of care. C) Cancelling, nonrenewing, or terminating a policy on the grounds of age. D) Establishing a new waiting period when existing coverage is converted or replaced by a new form, except when the insured voluntarily selects an increase in benefits.

Defining a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage.

Which of the following is CORRECT about group health insurance? -Insured members decide participation requirement -Individual plans have better maternity benefits than group plans -Once issued, group insurance may only be cancelled by the insurer -Dependent survivors of a deceased worker, eligible for COBRA, may be covered by COBRA for 36 months

Dependent survivors of a deceased worker, eligible for COBRA, may be covered by COBRA for 36 months

Cathy is a dentist and decides to purchase insurance that would cover a large portion of her income should she become disabled. What type of coverage will she purchase? -Disability income insurance -Business overhead expense insurance -Medical expense insurance -Lump sum disability

Disability income insurance

Which of the following conditions would NOT typically be covered by a Long Term Care policy? -Dementia -Drug dependency -Diabetes -Alzheimer's disease

Drug dependency

All of the following are TRUE statements regarding group health insurance, EXCEPT? -It contributes to the morale of employees. -Maternity benefits are more comprehensive than those in an individual policy. -Each individual insured covered by the group policy is given a separate policy. -Enables the employer to have some control over employees.

Each individual insured covered by the group policy is given a separate policy.

Beth has a contract stating she must be disabled for 3 months before benefits will be paid. This is considered the? A) Probationary Period B) Elimination Period C) Grace Period D) Contingency Period

Elimination Period (The Elimination Period is a period of time that must expire after onset of an illness or occurrence of an accident before benefits will be payable.)

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

Elimination Period (Upon reinstatement accidents are covered immediately, and sickness after 10 days. This avoids the motivation for one to want to reinstate a policy because they are already sick.)

All of the following are examples of how disability insurance is used for business continuation, EXCEPT? -Business overhead expense -Key person disability -Employee disability -Disability buy-out

Employee disability

All of the following are correct regarding group health insurance, EXCEPT? -Major medical coverage may be written on a group basis -Employees receive separate policies -Debtor groups are eligible for group plans -Employer is issued a master policy

Employees receive separate policies

The policy, a copy of the application, any riders and policy endorsements constitute the _____ _____. A) Entire contract B) Legal actions C) Time limit D) Whole policy

Entire contract (The Entire Contract Provision (a Mandatory Uniform Provision) stipulates that the policy, a copy of the application and any riders constitutes the entire contract between the insurer and insured.)

Which of the following is NOT a function of the Division of Consumer Services? A) Compile and distribute information the DFS deems necessary to assist consumers B) Receive inquiries and complaints C) Report alleged violations of law by persons licensed by the DFS, OIR, or OFR to the appropriate regulator D) Examine and investigate licensees

Examine and investigate licensees

Group life insurance policies are... A) Bound by replacement requirements. B) More restrictive in replacement rules. C) Exempt from replacement requirements. D) Contracts of Adhesion.

Exempt from replacement requirements. (Group policies are not affected by Replacement Regulations.)

Funds deposited in the _______ are the funds of others. A) Operating Account B) Fiduciary Account C) Tertiary Account D) Contingency Account

Fiduciary Account (A fiduciary account contains funds that are owned by the insured or the insurer but administered for that individual's benefit by the agent.)

What is "capitation" as it relates to an HMO? -Amount to be collected by the HMO from participating health care providers -Fixed amount paid by an HMO during a policy period -Fixed amount paid by an HMO to a physician for medical services -Amount required to be deposited with the State of Florida

Fixed amount paid by an HMO to a physician for medical services

What does each member pay in a typical HMO plan? -Fixed premium based on a deductible and copay -Fixed premium whether or not plan is used -Premium based on how often plan is used

Fixed premium whether or not plan is used

All of the following are types of major medical policy deductibles, EXCEPT? -Franchise -Integrated -Corridor -Flat

Franchise

The intentional misrepresentation, deceit, or withholding of a material fact known to a person with the intention of causing injury to another party is? A) Concealment B) Fraud C) Warranty D) Utmost good faith

Fraud (key word here is deceit)

Gregg owns a Business Overhead Expense Policy whereby if he, the owner of the business, should become disabled, the policy will continue to meet expenses in his absence. The policy would cover all of the following, EXCEPT? A) Greg's office rent B) Gregg's employee payroll C) Gregg's utility bills D) Gregg's personal lost income

Gregg's personal lost income (The intent of the policy is to offset expenses, not to replace the disables owner's personal lost income. If Ole is concerned about his own personal lost income he should own an individual Disability Income policy.)

Generally what type of health insurance policies offer dental and vision care benefits? -Individual -Franchise -Blanket -Group

Group

The Coordination of Benefits (COB) clause is found in what kind of policy? -Fictitious -Group -Indemnity -Individual

Group

Health protection is offered in three different forms, which is NOT one of those forms? A) Accidental Death and Dismemberment B) Group Coverage C) Medical Expense D) Disability Income

Group Coverage (Group is how those plans may be distributed)

To qualify for group health coverage, a group of persons must be considered a "natural group". What is meant by "natural group"? -Group must be made up of people in good health -Group must have been formed for some reason other than to obtain insurance -Group must be consist of natural born citizens -Group must have ten (10) or more members

Group must have been formed for some reason other than to obtain insurance

Fred's group health offers prepaid routine medical exams to provide early treatment and preventive care. He has what type of coverage? A) Blue Cross B) Hospital Indemnity C) PPO D) HMO

HMO (HMOs emphasize preventive medicine and early treatment with prepaid routine medical exams, stress management, and diagnostic screening techniques.)

Which statement is INCORRECT regarding HMOs? A) HMOs must provide basic health care services to include hospitalization, laboratory services, optical services, physical therapy, dental care and preventive services. B) HMOs are sponsored by medical schools, hospitals, employers, labor unions, consumer groups, commercial insurers, governments, and hospital-medical service plans. C) Members are required to pay a small copayment for basic health care services. D) The copayment discourages unnecessary use of medical resources.

HMOs must provide basic health care services to include hospitalization, laboratory services, optical services, physical therapy, dental care and preventive services. (Usually optical services, physical therapy, dental care are supplemental and offered as an option.)

An individual accidental death and dismemberment policy (AD&D) will pay benefits if an insured dies from... -Heart attack -Catastrophic illness -Head injury resulting from an auto accident -Occupational disease

Head injury resulting from an auto accident

Sylvia is a participant in a Preferred Provider Organization (PPO) and finds that if she opts to use a provider other than a preferred provider, that? A) Her PPO will not pay at all. B) Her PPO will pay only if the circumstances for care were precipitated by an emergency. C) Her PPO will pay a reduced amount with Sylvia paying the balance. D) Her PPO will cover any charges in full.

Her PPO will pay a reduced amount with Sylvia paying the balance.

William was involved in a 2-car accident in which he is disabled and his passenger and the driver of the other car are injured. Which of the following would most likely be covered by William's disability income policy? -Disability of the other driver -His lost income -William's medical expenses -Dismemberment of the passenger's leg

His lost income

What type of medical expense policy simply provides a daily, weekly, or monthly payment of a specified amount based on the number of days the insured is hospitalized? -Daily room and board expense policy -Surgical expense policy -Hospital Fixed-rate policy -Hospital expense policy

Hospital Fixed-rate policy

Part A of Medicare is known as? A) Medical Insurance B) Medicare + Choice C) Outpatient Insurance D) Hospital Insurance

Hospital Insurance (Part A of Medicare is formally known as Hospital Insurance (Inpatient). Part B is formally known as Medical Insurance (Outpatient))

Which of the following is NOT a category level of long-term care? -Custodial care -Intermediate nursing care -Hospitalization care -Skilled nursing care

Hospitalization care

Which of the following is NOT true about a fiduciary? A) A fiduciary holds a position of special trust and confidence B) Giving an agent a premium payment is the same as giving it to the insurer C) If an agent is holding a premium payment for less than 3 days, it can be put in his personal account D) A fiduciary responsibility is to offer advice about financial security

If an agent is holding a premium payment for less than 3 days, it can be put in his personal account (An agent or agency must keep funds belonging to each insurer in a separate account so it can be properly audited. An agent must never commingle the insurer's premium with personal funds, or otherwise use it for personal purposes.)

Which of the following is NOT a reform provided by the new Health Care Reform Act? -Companies cannot deny pre-existing conditions -Children can stay on parent's insurance plans until age 26 -There will be a fine for those who do not purchase health insurance -Illegal immigrants now eligible for Medicaid

Illegal immigrants now eligible for Medicaid

Amy owns her own individual Medical Expense Policy. Which of the following is TRUE about taxation circumstances? A) In most cases, the premiums for Medical Expense policies are not deductible. B) If she itemizes deductions and her medical expenses exceed 10% of her adjusted gross income, the portion exceeding that may be deducted. C) Benefits she received from her policy are taxable. D) When itemizing deductions, the deduction for reimbursed medical expenses normally applies to premiums that are paid for medical expenses.

In most cases, the premiums for Medical Expense policies are not deductible. (The answer 'the premiums for Medical Expense policies are not deductible' is the only correct response. Expenses that exceed 7.5% may be deducted; benefits received are not taxable; and the deduction for non-reimbursed medical expenses normally applies.)

When someone other than the insured is the owner of a life insurance policy, the owner may do all of the following without consent of the insured, EXCEPT? -Change the beneficiary -Take out a policy loan -Increase the amount of insurance -Surrender the policy for its cash value

Increase the amount of insurance

Which of the following is CORRECT about "franchise" health plans? -It doesn't matter if the plan is contributory or noncontributory -It can only be sold to a franchise -Plans are guaranteed issue -Individual policies are issued to individual members

Individual policies are issued to individual members

Which statement is INACCURATE regarding the Change of Occupation Provision? A) Change to a less hazardous occupation, insured may apply for a rate reduction. B) Change to a more hazardous occupation, upon claim, benefits will be reduced to that which premiums paid would have purchased at the more hazardous occupation. C) Insured must notify the insurer of a change of occupation, or policy will be cancelled. D) If the insured works at two occupations, rates for the most hazardous occupation will be charged.

Insured must notify the insurer of a change of occupation, or policy will be cancelled. (Failure to notify the insurer of a change of occupation will not result in cancellation of the policy.)

Optional Uniform Provisions are included in the contract at the _____ option. A) Insured's B) Insurer's C) Commissioner's D) No one's option, they are regulated by statute.

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.)

Which is NOT a reason insurers limit disability income benefits to 70% or less of the insured's past earnings? A) Insurers limit the benefits simply because it keeps their expenses down. B) The full income is not paid in order to reduce malingering. C) The insurer considers other sources of disability income in order to prevent overinsurance. D) Insurers limit the length of the benefit to encourage the return to work.

Insurers limit the benefits simply because it keeps their expenses down. (Although insurers are always sensitive to controlling expenses, that is not a factor in this question.)

Which clause in a contract states that Jim is covered by XYZ insurer for a lifetime maximum of $1,000,000, with a schedule of benefits for various expenses? A) Consideration Clause B) Entire Contract C) Free Look Provision D) Insuring Clause

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

If liability is denied due to the insured being intoxicated or under the influence, it is because of which provision? A) Legal Actions B) Illegal Act C) Conformity with State Statutes D) Intoxicants and Narcotics

Intoxicants and Narcotics (Intoxicants and Narcotics (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is under the influence or intoxicated at the time of loss.)

Which of the following would be considered a good result from an underwriter's action when an individual Accident and Health Policy is issued? A) Issued rated-up B) Issued standard C) Issued with exclusions or limitations D) Application is rejected

Issued standard (To be issued standard is the most favorable action listed, as the coverage requested is issued at the rate that was quoted.)

If the insurer cancels an individual health plan, what happens to the unearned premium? A) It is used to offset underwriting costs. B) The total is refunded. C) It is refunded on a short rate basis. D) It is refunded on a pro rate basis.

It is refunded on a pro rata basis. (According to the Cancellation Provision (an Optional Uniform Provision), if the insurer cancels on the insured, unearned premiums are refunded on a pro rate basis.)

Which statement is INCORRECT concerning an Accidental Death and Dismemberment Policy? A) It provides a specified payment for a specified injury. B) May be written separately or added to a Health/Disability or Life Policy as a rider. C) It usually provides that the death benefit (Principal) will also be paid if the insured loses sight in both eyes or loses any two limbs. D) A smaller amount (Capital) may be paid for the loss of sight in one eye or the loss of one limb.

It provides a specified payment for a specified injury. (This is describing a Limited Accident Policy, not an Accidental Death and Dismemberment Policy.)

Pete is a valuable veteran of 21 years at Joe's Garage working with 24 people and filling in for Joe when he is not in. Joe wants to insure Pete to offset any losses and the costs of trying to find, recruit and train a replacement, should Pete become disabled. What type of policy should Joe purchase? A) Business Overhead Insurance B) Key Employee Insurance C) Special Insurance Supplement D) Employee Impairment Insurance

Key Employee Insurance (Joe is after a policy that will pay a benefit to the business when a key employee (Pete) becomes disabled by helping pay for a replacement, training, loss of revenue, etc.)

All of the following are true about a multiple employer welfare arrangement (MEWA), EXCEPT? -Required by law to have an employment-related common bond -Often provide insurance on a self-insured basis -Tax-exempt entities -Large employers who have joined together to provide health insurance benefits

Large employers who have joined together to provide health insurance benefits (Explanation: MEWAs consist of small employers who join together to provide health insurance benefits for their employees)

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

Legal Actions (The only response that is a Mandatory Uniform Provision is Legal Actions. All other responses are Optional Uniform Provisions.)

All are Optional Provisions, EXCEPT? A) Illegal Occupation. B) Legal Actions. C) Change of Occupation. D) Misstatement of Age.

Legal Actions. (Legal Actions is a Mandatory Uniform Provision. All other responses are Optional Uniform Provisions.)

As compared to individual disability income policies, group disability income policies are generally? -More costly and have less liberal provisions -Tied more closely to Social Security disability benefits -Less costly and have more liberal provisions -More restrictive in terms of covered medical expenses

Less costly and have more liberal provisions

Which contract would a bus line passenger purchase to cover injuries sustained while traveling across the United States? A) Blanket B) Limited Accident C) Common Carrier Insurance D) Liability Insurance

Limited Accident (A Limited Accident Policy provides specific benefits for specific injuries from specific causes such as travel.)

A life agent may not sell which type of insurance? A) Annuities B) Viatical settlement broker C) Limited credit insurance D) Variable contracts

Limited credit insurance (A life agent is appointed to also sell life insurance and fixed-dollar annuity contracts, but no limited credit insurance.)

What type of medical expense policy would be available to cover the high costs associated with a specific kind of illness such as cancer or heart disease? -Hospital expense -Surgical expense -Major medical -Limited risk

Limited risk (Explanation: Limited risk or dread disease policies are designed specifically to cover the high costs associated with a specific illness.)

Which of the following is CORRECT regarding group health insurance? -Insurer must ask health questions of each individual in the group -Labor unions are not eligible -A group may be eligible that is formed just for the purpose of purchasing insurance -Lodges are eligible

Lodges are eligible

This is 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. This product is called? A) Long-Term Care B) Medicare Supplement C) Retirement Benefits D) Outpatient Care

Long-Term Care (The question is describing a Long-Term Care Policy. Medicare Supplement is incorrect as it covers skilled nursing care only, and then on a limited basis by number of days.)

Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except? A) Loss of a limb B) Loss of sight C) Loss of hearing D) Loss of speech

Loss of a limb (Presumptive Disability involves the loss of two or more limbs, not the loss of one limb only.)

Under replacement rules, the replacing insurer's duties include? A) Making certain that all replacement actions comply with state regulations. B) Notifying each insurer whose insurance is being replaced within 45 working days, and upon request, furnish a copy of any sales proposals. C) Maintain copies of proposals and receipts for at least 1 year. D) Terminating the replaced policy immediately upon receipt of the replacement notice.

Making certain that all replacement actions comply with state regulations. (Two of the remaining choices are actions of the replacing insurer, but the periods in each response are erroneous. The other choice applies to the existing insurer.)

Which of the following is NOT a factor affecting health insurance premiums? -Marital status -Sex -Age -Hobbies

Marital status

What type of health insurance is available to assist low-income individuals?

Medicaid

A program designed to provide increased assistance to those who are unable to pay for their medical needs is known as? A) Medicaid (In California, Medi-Cal) B) Medicare Part A C) Supplemental Security Income D) State Supplemental Payment Program

Medicaid (In California, Medi-Cal) (Medicaid (in California, Medi-Cal) is the federal and state administered program that provides increased assistance to those who are unable to pay for their own medical needs.)

A policy that covers inpatient doctor visits and may be expanded to include payment for office visits, diagnostic x-ray, laboratory charges, ambulance and nurses expenses when not hospitalized, and maternity benefits for an additional premium, is considered which of the following? A) Medical Expense Policy B) Basic Physician's Expense Policy C) Major Medical Policy D) Supplementary Major Medical Policy

Medical Expense Policy (Key word was in the question "expenses". The question is describing a Medical Expense Policy, sometimes referred to as a Regular (Basic) Medical Expense Policy.)

Which type of Accident and Health policy would provide reimbursement for expenses involved with a broken hip? A) Endowment Policy. B) Medical Expense Policy. C) Accidental Death and Dismemberment Policy. D) Disability Income Policy.

Medical Expense Policy. (Key word is in the question "expenses". The question specifies to reimburse for expenses, not death, dismemberment, or loss of income.)

Which statement regarding Medicare is NOT true? A) Medicare may be the primary payor to any employer group health plan coverage. B) It is a federal health program for people 65 and older and others of any age, who have received Social Security Disability Benefits for at least 2 years. C) The initial enrollment period lasts 7 months and begins on the 1st day of the 3rd month before one is eligible for Medicare. D) Hospitals and other providers of health care wanting to participate in the Medicare program must be licensed by the state.

Medicare may be the primary payor to any employer group health plan coverage. (Group health plans with 20 or more employees are primary to Medicare and pay first.)

All of the following are state or federal government programs that provide health insurance, EXCEPT? -Medicare -OASDI disability -Medicaid -Medigap

Medigap (Explanation:A Medigap policy is a Medicare supplement insurance policy sold by private insurance companies to fill "gaps" in Medicare Parts A and B.)

All of the following are requirements in Florida to be eligible to purchase group health insurance, EXCEPT? -Natural group -Minimum of 15 employees -No specific minimum percentage participation -Group formed for reasons other than obtaining insurance

Minimum of 15 employees (There is no minimum)

Which of the following correctly describes the practice of Twisting? A) Offering anything of value to a client that is not already a part of the policy, as an incentive to purchase insurance B) Misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment C) Entering into any agreement to commit an act of boycott, coercion, or intimidation resulting in an unreasonable restraint of the business of insurance D) Representing to the applicant that a specific coverage or product is required by law in conjunction with the purchase of insurance when such coverage or product is not required

Misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment (Offering anything of value to a client that is not already a part of the policy, as an incentive to purchase insurance' describes Rebating; 'Entering into any agreement to commit an act of boycott, coercion, or intimidation resulting in an unreasonable restraint of the business of insurance' describes Boycott, Coercion, and Intimidation; 'Representing to the applicant that a specific coverage or product is required by law in conjunction with the purchase of insurance when such coverage or product is not required' describes Sliding.)

A false statement in the application that can render the contract void, if material to the acceptance of the risk, is known as a? A) Representation B) Concealment C) Fraud D) Misrepresentation

Misrepresentation (A misrepresentation can render the contract void, if material to the acceptance of the risk.)

Both life and health insurance use all of the following factors in determine premiums, EXCEPT? -Interest factor -Expense factor -Morbidity -Age

Morbidity

The chart that shows the chance of a disability at any given age is called? A) Disability Table B) Mortality Table C) Morbidity Table D) Chance of Loss Table

Morbidity Table (Morbidity Tables reflect the likelihood of disability. Mortality Tables reflect the likelihood of death.)

The average person has a 3 to 1 chance of being disabled at any working age than dying. This is a comparison of? A) Adverse selection to Normal selection. B) Adverse selection to Mortality. C) Adverse Selection to Morbidity. D) Morbidity to Mortality.

Morbidity to Mortality. (The statement is comparing Morbidity (the likelihood of one being is disabled) to Mortality (the likelihood of one dying).

All of the following are characteristics of group health insurance, EXCEPT? -Group plans may be contributory or noncontributory -More Americans are covered by individual health plans than by group health plans -Benefits are predetermined by the employer -Cost for insuring an individual under a group plan is less than the cost under an individual plan

More Americans are covered by individual health plans than by group health plans

All of the following are true regarding a disability income policy defining total disability as "own occupation", EXCEPT? -Insured is unable to work at their own occupation as a result of an accident or sickness -Difficult to qualify for -More advantageous to the insurer -More expensive than a policy providing "any occupation"

More advantageous to the insurer

When comparing a major medical policy having an 80%/20% coinsurance provision with one having a 75%/25% coinsurance provision, the insured will pay more or less premium for the 80%/20% provision? -Less premium -The same premium -Significantly less premium -More premium

More premium (Explanation: Because the insured will be responsible for less of the cost for medical expenses (20% verses 25%), he will pay more in premium costs.)

An officer, director or employer who receives a commission... A) If unlicensed, must place the commission in tertiary funds. B) If licensed, must share the commission with the producer. C) Must be licensed to receive the commission. D) These personnel cannot receive commissions.

Must be licensed to receive the commission. (Anyone compensated by commission on the sale of insurance must be licensed)

All of the following are correct regarding Medicare Supplement policies, EXCEPT -Must cover pre-existing conditions from the date the policy goes into effect -Must automatically adjust its benefits to reflect statutory changes in Medicare -Must cover all expenses not covered by Part A from the 61st to the 90th day -Must supplement both Part A and Part B of Medicare

Must cover pre-existing conditions from the date the policy goes into effect

All of the following are correct regarding Florida regulation of HMOs, EXCEPT? -Must obtain a Certificate of Authority -Must file a report of its activities within 3 months of the end of each fiscal year -Must deposit $100,000 with the Rehabilitation Administration Expense Fund -Must be sold by agents licensed and appointed as health insurance agents

Must deposit $100,000 with the Rehabilitation Administration Expense Fund (Explanation: They must deposit $10,000 with the Rehabilitation Administration Expense Fund.)

Which of the following is NOT a qualification to apply for an insurance license in Florida? A) Must be at least 18 years old B) Must have a high school diploma or GED C) U.S. Citizen D) Legal alien with U.S. work authorization

Must have a high school diploma or GED (The person must also be trustworthy and competent and a resident of Florida.)

All of the following are underwriting criteria taken into account by the insurer in the underwriting of individual cases, EXCEPT? A) Physical condition B) Medical history C) Nationality D) Gender

Nationality (Underwriting for nationality would be discriminatory.)

'Insurance Transaction' includes? A) Negotiations. B) Informal conversation among producers. C) Setting up an unattended brochure stand. D) Taking a random phone survey.

Negotiations

Florida requires what percentage of participation by employees in a contributory group health plan? -100% -50% -No minimum percentage -75%

No minimum percentage (Explanation: Most noncontributory group health plans require 100% participation by eligible members, whereas contributory group health plans often require participation by 75% of eligible members. Under Florida law there is no specific minimum percentage participation for employees covered by group health insurance.)

Florida requires a minimum participation of how many people for a group policy to be issued? -25 persons -15 persons -10 persons -No minimum percentage

No minimum percentage (It can be one person)

An application for disability insurance may be altered by? A) The insurer B) The Commissioner C) The agent D) No one without the applicant's written consent.

No one without the applicant's written consent. (Only the applicant may alter statements on the application.)

What is the plan called if the employer pays the whole premium on a group policy? -Qualified -Non-qualified -Contributory -Non-contributory

Non-contributory

Which of the following is CORRECT about a group health insurance plan? -Non-contributory plans are paid for by the employer and employee -Non-contributory plans require 100% participation -Contributory plans are paid for by the employer only -Contributory plans require 100% participation

Non-contributory plans require 100% participation

The benefits of an individual Disability Income Policy will be taxed in the following manner? A) Income tax B) FICA tax C) State income tax D) None of the benefits are taxed

None of the benefits are taxed (Benefits received from an individual Disability Income Policy are not subject to taxation.)

Exclusions listed in the policy are NOT covered. Which of the following is not an exclusion? A) Intentionally self-inflicted injuries B) Elective cosmetic surgery C) Nonoccupational injuries D) Care in a government facility

Nonoccupational injuries (Nonoccupational injuries are covered. Job related or occupational injuries are typically excluded as they are covered by Workers' Compensation.)

Most individual health insurance is written on a ________ basis. A) Nonparticipating B) Participating C) Group D) Franchise

Nonparticipating (Individual is commonly nonparticipating, group is commonly participating.)

Which of the following statements about Worker's Compensation laws is INCORRECT? -Employers can purchase coverage through the state program, private insurers or can self-insure -Worker's compensation provides benefits for work-related injuries, illness or death -Not all states have a workers compensation law -Basic principle is that work-related injuries are compensable by the employer without regard to fault

Not all states have a workers compensation law

An agent is not considered to be holding a license for the purpose of controlled business as long as? A) Not more than 50% of the total volume of premiums per year is derived from controlled business B) Not more than 30% of the total volume of premiums per year is derived from controlled business C) Not more than 125% of the total volume of premiums per year is derived from controlled business D) Not more than 15% of the total volume of premiums per year is derived from controlled business

Not more than 50% of the total volume of premiums per year is derived from controlled business

Albert owns a printing business in which he, at times, prints counterfeit money. One day while processing funny money, his arm was severely damaged. His insurance will? A) Not pay since he was involved in an illegal act at the time of injury. B) Pay as he was injured on equipment normally used for legal purposes. C) This is classified as a Workers' Compensation claim. D) Will pay but will cancel his contract when he is convicted of the crime.

Not pay since he was involved in an illegal act at the time of injury. (Illegal Occupation/Act (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is injured while performing an illegal occupation or committing an illegal act.)

If it is known or should be known by the agent that an existing policy is going to be lapsed, forfeited, surrendered or terminated in favor of a new policy, the agent must submit a? A) Notice of Conservation B) Notice of Replacement C) Statement of Release D) Cancellation of Service

Notice of Replacement

When an insured holds more than one occupation, and occupation is used to classify the risk, what occupation will the insurer generally use to classify the insured? -Occupation that would produce the lowest premium -Occupation where insured spends the majority of hours -Occupation insured has been employed the longest -Occupation that is most hazardous

Occupation that is most hazardous

An insurer offering Medicare Supplements to the senior clients of this state must? A) Offer Core Benefit Plan A if they sell any of the other plans. B) Offer the broader coverage plans only. C) Offer any plan from C to S. D) Offer Core Benefit Plans only.

Offer Core Benefit Plan A if they sell any of the other plans (If an insurer is going to offer Medicare Supplement insurance, they must make Plan A available if they offer any of the 10 plans.)

Which action would NOT constitute an unfair claim settlement practice on the part of the Lampoon Insurance Company in their claim handling or processing? A) Making claim payments that are not accompanied by statements containing the coverage under which payments are being made. B) Offering an insured substantially less than a lawsuit would award him/her. C) Offering an insured a prompt explanation in denial of a claim or offer of compromise. D) Disclosing a history of appealing arbitrated decisions in order to threaten the claimant into accepting less than the settlement awarded.

Offering an insured a prompt explanation in denial of a claim or offer of compromise. (Offering an insured a prompt explanation in denial of a claim or offer of compromise, is in fact what an insurer should do in order to avoid an allegation of an unfair)

Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim? A) Only one policy will pay, the premiums for the other contracts will be returned. B) Each contract will pay in direct proportion to the loss. C) Benefits are paid in full by all contracts. D) The insurer will cancel all contracts because of intent to defraud.

Only one policy will pay, the premiums for the other contracts will be returned. (Other Insurance With This Insurer (an Optional Uniform Provision) stipulates that if the insured has more than one policy of the same type with the same insurer, the insured may elect the policy to be used, and excess premiums for the excess coverage will be returned.)

Which provision is an Optional Uniform Provision? A) Claim Forms B) Other Insurance With This Insurer C) Physical Examination D) Payment of Claims

Other Insurance With This Insurer (Other Insurance With This Insurer is an Optional Uniform Provision. All other answers are Mandatory Uniform Provisions.)

Which of the following is NOT provided under Part A of Medicare? A) Hospice Care B) Home Health Care C) Outpatient Hospital Treatment D) Post-hospital Skilled Nursing Facility Care

Outpatient Hospital Treatment (Part A of Medicare is Hospital Insurance or (Inpatient); Part B of Medicare is Medical Insurance or (Outpatient).)

You carry more accident and health insurance than you have the potential to lose. What is this called? A) Extra coverage B) Well covered C) Over insurance D) Excess insurance

Over insurance (Over insurance occurs when more insurance is in force than the insured has the potential to lose.)

An insurance license may NOT be suspended for which of the following? A) Cheating on the license exam B) Twisting C) Over-insuring a health insurance risk D) Violating the code of ethics

Over-insuring a health insurance risk (An agent's license will not be suspended for over-insuring a health insurance risk unless the agent willfully over-insured it.)

An insurance license may not be suspended for which of the following? A) Cheating on the license exam B) Twisting C) Over-insuring a health insurance risk D) Violating the code of ethics

Over-insuring a health insurance risk (An agent's license will not be suspended for over-insuring a health insurance risk unless the agent willfully over-insured it.)

Which of the following will NOT be covered under Business Overhead Expense Insurance? -Leased equipment -Mortgage payments -Owner's salary -Employees' salaries

Owner's salary (Explanation: Business Overhead Expense insurance is designed to reimburse a business for overhead expenses in the event a businessowner becomes disabled.)

Which of the following is NOT one of the three most important factors in underwriting a health insurance policy? -Parents' medical history -Occupation -Physical condition -Moral hazards

Parents' medical history

Which of the following is INCORRECT regarding how Medicare works? A) Part B is optional and offered to applicants when they become entitled to Part A. B) Part A is premium free to those who qualify through Social Security or railroad retirement or government employment. C) Part B covers routine physical exams and dialysis for those with kidney failure. D) Part B - outpatient service benefits are determined by consulting a national fee schedule.

Part B covers routine physical exams and dialysis for those with kidney failure.

Group health insurance is generally written on a basis that provides for dividends or experience rating. What is the basis called? -Participating -Contributory -Noncontributory -Nonparticipating

Participating (Explanation: Group plans written by mutual companies provide for dividends while stock companies frequently issue experience-rated plans.)

Group health insurance is generally written on a basis that provides for dividends or experience rating. What is the basis called?

Participating (Explanation:Group plans written by mutual companies provide for dividends while stock companies frequently issue experience-rated plans.)

Abigail has a preexisting condition noted in her new A & H policy. If she submits a claim for this condition during the probationary period, what will the insurer do? A) Reduce the benefits paid. B) Pay a reduced amount or deny any claim payment. C) Pay benefits in full. D) Provide coverage only if this claim is nonoccupational.

Pay a reduced amount or deny any claim payment. (Since Abigail's claim occurred during the Probationary Period, the insurer would likely deny any claim outright or at least pay a reduced amount.)

An insurer has the right to request a physical exam or an autopsy to determine the entitlement to benefits. The request is at the insurer's expense, due to which provision? A) Intoxicants and Narcotics B) Proofs of Loss C) Physical Exam & Autopsy D) Proof of Disability or Death

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

There are three different approaches used by insurers in providing basic surgical expense coverage and determining the benefits payable. Which of the following is NOT one of these approaches? -Reasonable and customary approach -Physician schedule approach -Relative value scale approach -Surgical schedule approach

Physician schedule approach

When an application for health insurance is submitted without an initial premium, the earliest effective date is the date on which the? -Policy is received by the agent -Policy is delivered to the client by the agent and the premium is collected -Application is taken by the agent -Insurance company issues the policy

Policy is delivered to the client by the agent and the premium is collected

All of the following are additional risk factors used in underwriting a health insurance policy, EXCEPT? -Avocations -Policy premiums of other health insurance -Age -Family history

Policy premiums of other health insurance

What factors are NOT used in underwriting an individual health policy? A) Health history and foreign travel B) Age and gender C) Political affiliation and religious preference D) Smoking and hobbies

Political affiliation and religious preference

A procedure used by dental insurance carriers to determine the benefit to be paid is known as? A) Preliminary Evaluation B) Pretreatment Examination C) Precertification D) Least Coverage Provision

Precertification (Precertification or Predetermination of Benefits, although not normally mandatory, allows both the patient and the dentist to know what will be covered before treatment.)

What types of reserves are set aside and held by health insurance companies?

Premium and Claims reserves (Explanation:Reserves are set aside for the payment of future claims.)

The two types of reserves set aside by insurers are? A) Premium and loss reserves B) Premium and liability reserves C) Claim and settlement reserves D) Earned and Unearned premium reserves

Premium and liability reserves

Which of the following is a TRUE statement regarding premiums and benefits for business overhead insurance? -Both premiums and benefits are tax-deductible -Both premiums and benefits are taxable -Premiums-tax-deductible, Benefits-taxable -Premiums-taxable, Benefits-tax-deductible

Premiums-tax-deductible, Benefits-taxable

Steve Borden, a kindergarten teacher, was in a boating accident and lost both legs. Although he will continue to teach, his disability policy pays full benefits because of this provision? A) Presumptive Disability B) Total Disability C) Partial Disability D) Residual Disability

Presumptive Disability (Presumptive Disability is where a loss is presumed to be total and permanent due to loss of sight, hearing, speech or loss of two limbs.)

A specified period before new coverage goes into effect for a specified condition is known as which of the following? A) Waiting period B) Exclusion C) Probationary period D) Morbidity table

Probationary period (The question establishes a period before coverage goes into effect for specified conditions, not a period before an employee is even eligible to enroll for group benefits, which would be a waiting period.)

Which of the following is NOT correct about partial disability? -Benefit period is usually 3 to 6 months -Flat amount benefit is usually 50% of the total disability benefit -Proof of disability is not required for partial disabilities -Follows period of total disability

Proof of disability is not required for partial disabilities

The Financial Services Commission... A) Protects the public through oversight of insurance company solvency B) Is headed by the CFO C) Is headed by the Commissioner of the Office of Insurance Regulation D) Directly regulates financial planners

Protects the public through oversight of insurance company solvency (The Financial Services Commission is made up of the Governor, CFO, Attorney General, and Commissioner of Agriculture and appoints the Commissioner of the Office of Insurance Regulation. The Financial Services Commission does not directly regulate financial planners.)

Which is the best definition of a Limited Accident Policy? A) Provides specific benefits for specific injuries from specific causes. B) Only covers for a limited time after the accident. C) Limited in geographical scope (i.e. only in the state where written). D) All answers are correct.

Provides specific benefits for specific injuries from specific causes.

Lawson, an insurance agent with AOKAY Insurance Agency, is in the habit of offering potential clients a 10% premium discount on the first year's premium if they will buy their insurance from him instead of one of his competitors. Lawson, in doing so, is guilty of? A) Rebating B) Twisting C) Defamation D) Coercion

Rebating

This provision states that if there is a second disability due to the same cause within a specified period, then the elimination period may not apply the second time. It is which provision? A) Rehabilitation Disability B) Residual Disability C) Recurrent Disability D) Second Disability

Recurrent Disability (Under Recurrent Disability, if a second disability - NOT a left over as in Residual, is suffered due to the same cause as the first, within a given period, the elimination period may not apply the second time. The benefit period will be considered as a continuous period of disability.)

Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A) Recurrent Disability Provision B) Residual Disability Provision C) Presumptive Disability Provision D) Second Injury Provision

Recurrent Disability Provision

Which of the following is not an Unfair Claims Practice? A) Settling a claim based on an altered application. B) Failing to affirm or deny coverage after receipt of proof of loss. C) Failing to act promptly on communications of claim. D) Refusing to pay the claim without receiving a proof of loss.

Refusing to pay the claim without receiving a proof of loss. (It is permissible for an insurer to require a proof of loss before paying a claim.)

The Division of Financial Services also has the power to do all of the following EXCEPT? A) Regulate policy forms and rates B) Regulate the state Medicaid program C) Guard against unauthorized insurance activities D) Oversee the insurance industry based on the Insurance Code

Regulate the state Medicaid program

To reduce a substandard disability risk, an insurer may take all of the following actions, EXCEPT? A) Charge additional premium B) Increase the period of elimination C) Reduce the amount of benefit D) Remove all of the exclusion riders

Remove all of the exclusion riders (The underwriter might utilize a Full Exclusion Rider when a condition appears certain to result in recurrent disabilities.)

The Guaranteed Renewable Provision states? A) Renewable with adjustable premiums determined by frequency of claim. B) Renewable with guaranteed premium. C) Renewable with adjustable premiums, by classification only. D) Renewable only at the option of the insurer.

Renewable with adjustable premiums, by classification only. (The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by classification only, not by individual.)

__________ are set aside by an insurance company and designated for the payment of future claims. A) Reserves B) Dividends C) Capital accounts D) Premiums

Reserves

Which Long-Term Care definition does not match the coverage? A) Residential Care - health care provided in one's home under a planned program established by his/her attending physician. B) Respite Care - provides relief to the caregiver not the long-term care patient. C) Custodial Care Facility - a licensed facility, operated according to the laws of the state, under the supervision of an R.N. D) Skilled Nursing Facility - a licensed facility, operated in accordance with the laws of the state, providing skilled nursing care under the supervision of a physician.

Residential Care - health care provided in one's home under a planned program established by his/her attending physician. (This is the definition of Home Convalescent Care, not Residential Care, which occurs within a long-term care facility.)

Which provision provides a loss of earnings benefit to an employee who returns to work after sustaining a total disability, if the insured's earnings are less than they were before the disability? A) Recurrent Disability B) Presumptive Disability C) Residual Disability D) Restorative Disability

Residual Disability

A court reporter develops arthritis making it impossible to continue this employment. The reporter now has other employment at a reduced salary and receives a monthly benefit from an insurance contract due to which of the following policy provisions? A) Residual Disability B) Recurrent Disability C) Partial Disability D) Total Disability

Residual Disability (Residual Disability recognizes one's ability to continue to work, but at a reduction of earnings.Arthritis is what forms as a result of an injury from an accident or otherwise, therefore it's considered a residual disability.)

Which of the following terms relates to payments made for partial disabilities? -Residual amount -Gross amount -Net amount -Recurrent amount

Residual amount (Explanation: The amount of benefit payable when a policy covers partial disabilities depends on whether the policy stipulates a flat amount or a residual amount)

Which optional LTC coverage is designed to provide relief to the actual caregiver in an LTC situation? A) Respite Care B) Adult Day Care C) Hospice Care D) Home Health Care

Respite Care (All responses are optional coverages to LTC insurance, but the question is specifically making reference to the caregiver, not the insured.)

Long-term care insurance also provides for a short rest period for a family caregiver. What is the known as? -Home care -Custodial care -Continuing care -Respite care

Respite care

A Medical Expense Policy list of the amount the insurer will pay for each medical expense incurred is known as a _____ _____ _____. ? A) Conclusion of Benefits B) Schedule of Benefits C) Secluded Emergency Benefits D) Social Insurance Benefits

Schedule of Benefits (Under a Schedule of Benefits, the amount payable is itemized for each medical expense covered by the plan.)

Cafeteria plans are also known as? -Section 125 plans -Flexible plans -Menu plans -Section 1040 plans

Section 125 plans

Which of the following is NOT a requirement for an agent soliciting Medicare supplements? -Explain to prospect where there will be overlapping coverage -Send a signed form to the company explaining why coverage could not be placed -Inquire from each prospect if they already have coverage -Have prospect sign a form acknowledging information has been provided

Send a signed form to the company explaining why coverage could not be placed

When a Medical Expense plan pays eligible expenses directly to the hospital, physician, or surgeon, it is paying on a? A) Reimbursement basis B) Service basis C) Cash basis D) Scheduled basis

Service basis

What are the 3 provider types? -Service, Blue Cross/Blue Shield & Self-Insured -Blue Cross/Blue Shield, Service & Reimbursement -Service, Reimbursement & Self-Insured -None of the above

Service, Reimbursement & Self-Insured (Blue Cross/Blue Shield falls under the Service classification of provider. The 3 types of providers are Service, Reimbursement, and Self-Insured (Self-Funded).)

For individual disability income policies there are basically two types of benefit periods, which are? -Short-term and long-term -Short term and interim term -Basic term and broad term -Full term and partial term

Short-term and long-term

Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A) Increase the benefit period and shorten the elimination period. B) Shorten the elimination period and increase the amount of the benefit. C) Shorten the benefit period and increase the elimination period. D) Increase the benefit period and increase the amount of the benefit.

Shorten the benefit period and increase the elimination period. (All other possible answers actually increase the risk.)

All of the following are classifications of applicants for health insurance, EXCEPT? -Standard risk -Preferred risk -Special risk -Substandard risk

Special risk (Explanation: The classifications of applicants for health insurance are: preferred risk, standard risk, substandard risk and uninsurable risk.)

A famous dancer decides to take out a special policy covering her legs for $1 million. What type of accident policy is this? -Disability income policy -Limited risk policy -Major Medical policy -Special risk policy

Special risk policy

Which state entity decides conflicts between insurance companies and policyholders? A) State legislature B) State judicial system C) Office of Insurance Regulation D) Department of Financial Services Division

State judicial system (The State judicial system also enforces the code by administering criminal penalties and decides if new laws are constitutional.)

Barry suffered a heart attack 26 months ago. What type of risk would he be considered? -Standard risk -Restricted risk -Special risk -Substandard risk

Substandard risk (Explanation: A substandard risk applicant is one who poses a higher-than-average risk for one or more reasons. Substandard applicants may represent a very low risk on moral and occupational considerations and still pose a high risk because of their physical condition.)

Which policy may be written with Basic Medical Expense Coverage utilizing a Corridor Deductible after the basic plan benefits have been exhausted and before Major Medical benefits begin? A) Supplementary Major Medical B) Hospital Expense C) Comprehensive Major Medical D) Surgical Expense

Supplementary Major Medical (The question is describing the characteristics and mechanics of a Supplemental Major Medical Policy.)

With of the following is NOT correct with regard to the Chief Financial Officer? A) The CFO oversees Divisions of: Insurance Agents and Agency Services, Insurance Fraud, Consumer Services and Office of Consumer Advocate B) The CFO is appointed by the Governor C) The administration of Florida insurance law is the responsibility of the CFO D) The CFO acts as head of Department of Financial Services

The CFO is appointed by the Governor (The CFO is elected as part of the Governor's cabinet.)

With regard to agent and adjuster licensing and investigations? A) The DFS does not investigate agents or adjusters B) The DFS does not supervise agent licensing C) The DFS may interrogate an applicant or agent on any matter is deemed necessary for the protection of the public D) The CFO does not impose penalties for violations of the Insurance Code

The DFS may interrogate an applicant or agent on any matter is deemed necessary for the protection of the public (The DFS does investigate agents or adjusters and supervises agent and adjuster licensing; the CFO does impose penalties for violations of the Insurance Code.)

Which of the following handles unclaimed property? A) The Division of Rehabilitation and Liquidation B) The Department of Commerce Division of Unclaimed Funds C) The Division of Consumer Services D) The Department of Financial Services

The Department of Commerce Division of Unclaimed Funds

Which of the following is FALSE with respect to the Division of Rehabilitation and Liquidation? A) The Division handles unclaimed property B) The Division plans, coordinates, and directs the conservation, rehabilitation, and liquidation of insolvent insurance companies C) The Division monitors the financial condition of insurers and rehabilitates or liquidates insurers as needed D) The Division performs the duties as receiver of any insurer placed into receivership in Florida

The Division handles unclaimed property

Which of the following is NOT true of a nonadmitted carrier? A) A nonadmitted carrier is also unauthorized B) The Florida Guaranty Association protects residents who buy from a nonadmitted carrier C) A nonadmitted carrier is not licensed in Florida D) An agent may not do business with a nonadmitted carrier

The Florida Guaranty Association protects residents who buy from a nonadmitted carrier (Nonadmitted companies are not state licensed nor regulated by Florida, and the Florida Guaranty Association does not extend protection for Floridians who buy from these companies.)

Which of the following is NOT correct with respect to approval of policy forms and rates? A) An insurer must submit the filing 30 days prior to use B) The Office has 60 days to approve or disapprove or request a change to the filing C) Application forms must be filed for approval D) Every filing must include the effective date and character and extent of the changes

The Office has 60 days to approve or disapprove or request a change to the filing (The Office has 30 days to approve or disapprove or request a change to the filing.)

The best definition of a legal reserve is? -The amount set aside by federal reserve banks as required by law -The amount set aside by the company for future liabilities as required by law -A leeway provision -None of the above

The amount set aside by the company for future liabilities as required by law

Michael has an AD&D policy. Which of the following statements is CORRECT? -The benefit for the loss of both eyes is 75% of the principal sum -Michael's beneficiary will receive the capital sum of $100,000 as a death benefit -Principal sum is the amount paid for the accidental loss of sight or dismemberment -The benefit amount for the loss of one foot or one hand is 50% of the principal sum

The benefit amount for the loss of one foot or one hand is 50% of the principal sum

The Office of Insurance Regulation is NOT concerned with which of the following? -The assets and investments of insurance companies -The types and degree of risks of investments made by insurance companies -The examination of agent's income records -Limiting the amount that insurers can invest in different types of investments

The examination of agent's income records

Florida holds which of the following responsible for the content of any Medicare Supplement as using their name even if they did not approve the ad? -The insurer -The agent who ran the ad -The advertising association -The Agency of Ethical Conduct

The insurer

Hank has medical coverage to age 70. He submits a claim for hospitalization. The insurer discovers Hank is actually 73, when his contract states he is 68. What will the insurer do? A) The insurer must prove fraud to be relieved from making payments. B) The insurer must refund the excess premiums Hank paid after his 70th birthday. C) The insurer pays what the premiums would have purchased at the correct age. D) The insurer must pay the claim, and then cancel the contract.

The insurer must refund the excess premiums Hank paid after his 70th birthday. (Misstatement of Age (an Optional Uniform Provision) stipulates that since the misstatement of age led the insurer to provide coverage beyond the age limit, liability is limited to a refund of premiums.)

Sandra owns a Medical Expense Plan that contains a 60/40 Participation Provision (Coinsurance) after the deductible has been met. If a claim was filed and $7,200 in costs remained after Sandra met the $200 deductible? A) The insurer would pay $2,880, and Sandra would pay $4,320. B) The insurer would pay $4,440, and Sandra would pay $2,960. C) The insurer would pay $2,960, and Sandra would pay $4,440. D) The insurer would pay $4,320, and Sandra would pay $2,880.

The insurer would pay $4,320, and Sandra would pay $2,880.

Which of the following would meet the definition of Presumptive Disability? A) The loss of a leg below the knee. B) The loss of sight in an eye. C) The loss of the ability to speak. D) The loss of hearing in an ear.

The loss of the ability to speak (The only response that reflects complete loss of a function is the ability to speak. 'The loss of a leg below the knee does not represent loss of two limbs, and loss of sight in an eye or hearing in an ear does not reflect loss of all sight or hearing.)

When a group is covered by a MET, who is issued the Master Policy? A) The sponsor B) The insurer C) The trust D) None is issued

The trust (The sponsor develops the plan, sets the underwriting rules and administers the plan, but the trust itself is the Master Policy owner.)

The percentage of Scheduled Coverage in a Major Medical Plan is how much greater than in a Basic Medical Expense Plan? A) There are no schedules in a Major Medical Policy. B) 40% better coverage. C) 20% better coverage. D) Same coverage, major medical has more exclusions.

There are no schedules in a Major Medical Policy. (Remember, a Major Medical Plan provides protection against health losses that may be catastrophic in nature with a lifetime maximum limit; usually there are no schedules included.)

Which of the following statements is true about a Medicare Supplement policy? -These policies are designed to cover deductibles and co-insurance -Only insurance companies affiliated with Medicare can provide Medicare Supplement policies -These policies may be issued to anyone 59 1/2 or older without evidence of insurability -Anyone who qualifies for Medicaid benefits may be issued these policies

These policies are designed to cover deductibles and co-insurance

Which of the following is correct about those who are eligible for Medicare and wish to join an HMO? -They must have a current Medicare supplement policy -They must be told that'll be getting all the benefits from the Medicare Advantage plan -They must be age 70 and above -They must have been enrolled previously in an HMO

They must be told that'll be getting all the benefits from the Medicare Advantage plan

Which of the following statements about health service organizations is true? -They reimburse Policyowners directly for physicians' fees -They provide loss of income benefits to Policyowners -They reimburse Policyowners directly for all medical expenses -They provide benefit payments directly to the hospitals and physicians providing services

They provide benefit payments directly to the hospitals and physicians providing services

Which of the following is TRUE of traditional commercial insurers? A) They offer only individual plans of insurance. B) They offer only group plans of insurance. C) They traditionally market reimbursement type contracts that pay directly to the insured. D) They traditionally market service type contracts that pay directly to the provider of the service.

They traditionally market reimbursement type contracts that pay directly to the insured.

Which is NOT a rating factor for small employer carriers? A) All plans issued or renewed in the same calendar month shall have the same rating period. B) They use anticipated claim experience. C) They shall apply rating factors consistent among all small employers. D) Preexisting conditions may not be excluded any longer than 1 year.

They use anticipated claim experience. (Small employer carriers utilize actual claim experience, not anticipated claim experience.)

Which of the following statements is TRUE about basic hospital, medical and surgical expense policies? -The benefits provided are usually equal to the actual expenses incurred -They contain high deductibles -They usually have a stated limit for specific expenses -Benefits are provided for loss of income

They usually have a stated limit for specific expenses

A firm that provides administrative services for employers, acts as liaison between the insurer and employer and processes claims, etc. is a(n)? A) Third Party Administrator B) Administrative Services Only C) Staff Plan D) Gatekeeper

Third Party Administrator (The key words are acts as liaison between the insurer and employer.)

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

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.)

Which of the following is NOT a purpose of licensing? A) To authorize and enable the licensee to actively and in good faith engage in the insurance business as an agent B) For the applicant to be familiar with the Florida insurance laws C) To authorize the agent to insure risks D) To facilitate the public supervision of such activities in the public interest

To authorize the agent to insure risks

Encouraging a client to lapse a policy and replace it with another policy to his / her detriment is called? A) Coercion B) Twisting C) False Advertising D) Rebating

Twisting

Who is the one that determines the classification of an applicant for health insurance? -Underwriter -Agent -Risk manager -Actuary

Underwriter

Workers Compensation will not provide which of the following benefits? -Rehabilitation to return the person to work -Unemployment insurance -Replacement of wages due to disability -Payment for medical expenses

Unemployment insurance

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

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.)

Managed Health Care attempts to contain health care costs by controlling the behavior of participants through all of the following, EXCEPT? A) Unlimited access to providers. B) Comprehensive case management. C) Preventive care. D) Risk sharing.

Unlimited access to providers. (Managed Health Care attempts to contain health care costs by controlled access to providers as opposed to unlimited access.)

Susan neglected to make her premium payment and she was injured in an accident. After she submitted the claim, she discovered that the insurer had subtracted $200 (the amount of premiums) from the claim. The insurer may do this because of which provision? A) Unpaid Premiums B) Grace Period C) Reinstatement D) Payment of Claims

Unpaid Premiums (Unpaid Premiums (an Optional Uniform Provision) allows the insurer the option of deducting unpaid premiums from a claim.)

Margaret has a special risk policy. It will pay a benefit for... -Unusual hazards normally not covered by other policies -Death or dismemberment resulting from an aviation accident during a specified trip -Dreaded diseases -Special risks such as Lou Gehrig's disease or Parkinson's disease

Unusual hazards normally not covered by other policies

If an HMO is found guilty of unfair trade practices, what is the maximum penalty that can be charged? -Up to $50,000 -Up to $150,000 -Up to $200,00 -Up to $100,000

Up to $200,00

Many insurers pay benefits based on the average fee charged in a geographical area. This is referred to as? A) Reimbursement B) Cash C) Scheduled D) Usual Customary and Reasonable

Usual Customary and Reasonable (UCR is not scheduled, but is based on the average fee charged by all doctors in a given geographical area.)

An annuity purchased 10 years ago would have some value at this time. The accumulation units may now be converted to annuity units. What type of annuity is this? A) Fixed B) Ten Year Certain C) Variable D) Taxable Annuity

Variable (Remember, Variable Annuities are paid in terms of units, rather than dollars. Upon annuitization, accumulation units are converted to annuity units, and the income is paid on the value of the annuity units.)

Which of the following is NOT a Mandatory Uniform Provision of an Accident and Health policy? A) Payment of Claims. B) Time limit on certain defenses. C) Proof of Loss. D) Waiver of Premium.

Waiver of Premium. (Other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included.)

Generally when would an insurer engage in "individual underwriting" under a group health plan? -Never, this is prohibited by law -When the insurer is underwriting and evaluating the group -When an eligible employee tries to join the plan after initially electing not to participate -On an annual review

When an eligible employee tries to join the plan after initially electing not to participate

Which of the following would NOT be considered important when choosing the proper health insurance program? -Will I be able to deduct the premium payments from my taxes? -Is coverage available from a group plan or social insurance program? -Is the coverage for a family, individual, or business? -What are the deductibles and coinsurance?

Will I be able to deduct the premium payments from my taxes?

A health policy not conforming to the Uniform Individual Accident and Sickness Policy Provisions Law... A) Is invalid. B) May be voided. C) Will be construed as if it conformed to the Law. D) The insurer is fined and the policy corrected

Will be construed as if it conformed to the Law. (According to the Conformity with State Statutes Provision (an Optional Uniform Provision), any provision on the policy effective date that is in conflict with statutes of the state is automatically amended to meet state requirements.)

Harry was hospitalized in a coma for 6 months. Since no one knew about his health care coverage, when does proof of loss have to be submitted? A) Within 1 year, unless he suffers legal incapacity. B) Anytime, since he was in a coma and obviously could not submit a claim. C) Within 2 years, covered under the contestable period. D) An executor would be appointed by the courts to handle the necessary paperwork

Within 1 year, unless he suffers legal incapacity. (The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates the insured is to prove their loss within 90 days of the loss, or in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity.)

Which of the following is a state administered disability plan? -Social Security -Workers Compensation -Medigap -Medicare

Workers Compensation

Must a mail-order insurance company be authorized to solicit insurance in the state of Florida? -Yes, and the applications must be taken by a Florida State Agent -No, since there is no personal contact any company can solicit by mail -Yes, but the applications do not have to be sent to a Florida address -No, Florida prohibits the sale of insurance without personal contact

Yes, and the applications must be taken by a Florida State Agent

Can you add a waiver of premium to a variable annuity contract? A) Yes, only during the accumulation period. B) No, because of the fluctuation. C) Yes, throughout the lifetime of the entire contract, no limitations. D) No, because of the tax consequences.

Yes, only during the accumulation period. (Once payouts begin, the contract pays according to how it was set up.)