Insurance Test Cheat Sheet

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a:

$25,000 individual whole life policy

This percent of personal life insurance premiums are usually deductible for federal income tax purposes.

0%

Major Medical policies have a _____ day grace period

10

In order to qualify for Long Term Care health benefits an individual must be UNABLE to perform:

2 activities of Daily Living

Eligibility for coverage under the Florida Healthy Kids Corporation requires a family to be within what percent of the federal poverty level?

200%

The USA Patriot Act was enacted in:

2001

IF a question says, "triple indemnity" how much is added tot he value?

3, an example would be if a question said the "triple indemnity" of $100,000, the answer would be $300,000

How long is the typical free look period for Long Term care insurance policies?

30 days

Within how many days must a licensee notify the Department of Financial Services of a change in address?

30 days

A Life Insurance policy's grace period entitles the insured a period of No LESS than:

30 days, to make premium payment

An agents commission is NOT listed under the:

4 principal areas of Florida insurance law

The amount of days from the reinstatement application date the insurance company has to notify someone of the denial before the policy will be automatically be placed back in force is:

45 days

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

The waiting period for a pre-existing condition under a Medicare Supplement policy may not go beyond:

6 Months

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days

A Fixed Deferred Annuity pays out:

A fixed amount for life STARTING at a future date

Prescription Drugs are an allowable expense when paid for by:

A medical flexible spending account

A TRUE statement regarding a Variable Whole Life policy is:

A minimum guaranteed Death benefit is provided

Past due premiums are NOT waived during:

A policy's grace period

A LIMITED pay life policy has premium payments limited to:

A specified number of years

Under a MASTER Group Health policy who is eligible for coverage?

ALL employees, REGARDLESS of their individual health history.

What is the best description of an insurer?

ANY person, corporation, association, or society that writes insurance contracts

Qualified profit-sharing plan

Allows employees to participate in the profits of the company. (Designed to distribute a portion of company warnings to its employees)

The mode of premium provision permits:

An insured to pay premiums more than once every year

The premium schedule that results in the lowest cost to the policyowner is:

Annual

Group Life Insurance policies are generally written as an:

Annually Renewable Term

What type of contract liquidates an estate through recurrent payments?

Annuity, a contract that provides liquidation for all or part of an estate

According to Florida Law, when must an agent deliver the Outline of Coverage to a Medicare Supplement Applicant?

At the time of application

What is not a typical characteristic to describe the nature of an insurance contract?

Bilateral

A variable life insurance agent must be licensed and appointed as a life and variable contract agent as well as a(n):

Broker Dealer

A "term" rider may be used to include coverage for:

Children under their parents' life insurance policy.

Major Medical Policies typically:

Contain a deductible and coinsurance

Employees that share the cost of insurance are a part of a:

Contributory Group Life Plan

An agent making a mistake while filling out an insurance application MUST:

Correct the information and have the prospect initial the change

What BEST describes a Hospital Indemnity policy?

Coverage that [ays a stated amount per day of a covered hospitalization

Which BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount er day of a covered hospitalization

Florida's 14-day free-look period for life insurance policies begins at the:

Date of DELIVERY

Additional coverage can be added to a Whole Life policy by adding a(n):

Decreasing Term Rider (coverage decreases over time)

If someone travels overseas and is unable to work for 3 months, what kind of policy would cover the loss of income?

Disability Income

A Medicare Supplement policy would provide the subscriber the best coverage for:

Excess Charges (and hospital stays)

The reason for a business having a Business Overhead Expense Disability Plan is to cover:

Fixed business expenses; this covers fixed business costs in the event the owner becomes disabled

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment was terminated the right to continue:

Group Health Benefits

The Health Insurance Portability and Accountability Act (HIPAA) provides PRIVACY protection for:

Health Information

If an employee injures him/herself while not on the work premises and is covered under a group health plan what Insurance plan would be considered the primary?

Her group health plan, if the employer has more than 20 employees, the group health plan generally pays first.

A Basic Hospital Policy pays:

Hospital room and board

What requires a policyowner to provide proof of insurability in an Adjustable Life policy?

Increase face amount

How does an indexed annuity differ from a fixed annuity?

Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index.

Quarterly premium payments increase. the annual cost of insurance because:

Interest to the insurer is decreased while the administrative costs are increased.

Quarterly premium payments increase the annual cost of insurance because:

Interest to the insurer is decreases while the administrative costs are increased

A pension deficiency if the key employee dies is NOT a reason for a business to buy:

Key Person Life Insurance

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

Basic Medical Insurance has:

Lower limits than Major Medical Insurance

Adjustable Rates for Life policy loans in Florida are based on:

MOODY'S Corporate Index

Comprehensive Major Medical policies usually combine:

Major Medical with Basic Hospital/Surgical Coverage

An employer that offers a qualified retirement plan to its employees is eligible to:

Make tax-deductible contributions to the plan

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid a:

Mandatory income tax withholding on the transfer amount

Health Insurance program that is administered by each. state and funded by both the federal and state governments is called:

Medicaid

According to Florida law, a Group Life insurance policy requires a minimum of how many insureds?

No minimum

Life Income is NOT an example of a:

Nonforfeiture Option

Extended Term Insurance is often the default nonforfeiture option in the event of:

Nonpayment of premiums

The BEST way to describe a short-term medical expense policy is that it's:

Nonrenewable

The Notice of Claims provision requires a policyowner to:

Notify an insurer of a claim within a specified time

Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care?

Obtain prior approval from the insurer for the medical service

An accident policy would most likely pay a benefit for an:

Off-the-job accident

A _________ is authorized to assign a Life Insurance policy for as collateral for a loan:

Policyowner

What Nonforfeiture Option continues a build-up of cash value?

Reduced Paid-Up

What type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

Reimbursement

Insurers may request a hearing within 20 days if their policy is:

Rejected

A term coverage that allows the continuation of coverage after expiration of the initial policy period is a:

Renewable (term coverage)

Post-tax dollar contributions are found in:

Roth IRA Investments

A 401(k) plan normally provides participants:

Salary Deferral Contributions

In a Payment of Claims provision the insured and insurance company:

Share the cost of covered losses

Agent selling medicare supplement policies MUST provide every applicant with a:

Sustainability Form

Under a Health Reimbursement Arrangement, reimbursements may be:

Tax Free

Association Plans that are designed to provide health benefits to their members are regulated by the state because:

The Association Plans must be fully insured by an authorized insurer

Which department oversees 'Market Conduct Examinations' in Florida?

The Office of Insurance Regulation

Insurers are required to report receipt of cash payments in excess of $10,000 under:

The USA Patriot Act

What is the elimination period of an individual disability policy?

The amount of time a disabled person must WAIT before benefits are paid

Whole life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase?

The duration of premium payments

Coverage for a NON-MEDICAL insurance to take effect the same day, the producer MUST collect a signed application and:

The initial premium

If both the insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if:

The insured died LAST; the proceeds will be paid to the secondary (contingent) beneficiary.

The amount of coverage on a group credit life policy is limited to:

The insured's total loan value

The incontestable period begins when:

The insurer dates the policy

What MUST be included in a Medicare Supplement Policy's Outline of Coverage?

The policy's limitations and exceptions

Under a Graded Premium Whole Life Policy:

The premium increases each year during the early years of the contract and remains the same after that time.

The advantage of reinstating an original life policy is:

The premiums are based on a younger age

A Disability Buy-Sell Contract permits:

The remaining partners to buy-out the interest of a disabled business partner

An Individual who purchases a Life annuity is given protection against:

The risk of living longer than expected

Under a Basic hospital/surgical expense policy the amount of the patients claim payment will be based on:

The terms of the policy

An IRREVOCABLE beneficiary MAY not be changed without:

The written consent of the beneficiary

Why is an applicant's signature required on a Life Insurance application?

To attest that the statements on the application are accurate. to the best of the applicant's knowledge

Variable Life

Type of Life Insurance that allows the policyowner to have level premiums and to also choose from a selection of INVESTMENT options.

Life and Health Insurance Policies are:

Unilateral Contracts

What is designed to provide flexible premiums and an adjustable death benefit?

Universal Life

Churning can be defined as:

Using the contract values of an existing policy to purchase a new policy with an existing insurer.

A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:

Variable Life

The policyowner controls where the investment will go and selects the amount of the premium payment in a:

Variable Universal Life Policy

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 after the policy's effective date is referred to as the:

Waiting Period

Equity Index Insurance

Yields greater gains than bonds but will still protect the principal with a minimum of risk

An example of sliding would be:

charging for an additional product without the applicant's consent. Sliding involves selling additional coverage to an insurance applicant who doesn't want or need it. (An agent will often "slide" this additional coverage in without the customers knowledge or consent).