XCEL Exam Simulator FL
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? A. Increasing B. Decreasing C. Adjustable D. Level
Level A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.
Which of these require an offer, acceptance, and consideration?
Contract
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? A. Endowment policy B. Limited-Pay Whole life C. Convertible Term D. Decreasing Term
Convertible Term
Which of these retirement plans can be started by an employee, even if another plan is in existence?
Individual retirement account (IRA)
Who does an agent represent during the solicitation of insurance? -The state of Florida -Department of financial services -the insurance company -the client
The insurance company
What type of insurance offers permanent life coverage with premiums that are payable for life?
Whole life
When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n) -federal fair credit act violation -title 18 fraud violation -anti-money laundering violation -unfair trade practice violation
anti-money laundering violation
In Florida, an insurer domiciled and incorporated in this state is called a(n)
domestic company
Which of the following services is NOT covered under a hospitalization expense policy? -daily room and board -surgeon's fees -intensive care -miscellaneous expenses
surgeon's fees
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has -waived one of its legal rights -issued a voidable policy -committed an act of fraud -assigned the risk to a reinsurer
waived one of its legal rights
Which of the following statements is CORRECT about accelerated death benefits? -the full face amount is available as an accelerated benefit -those on social security disability automatically qualify for this benefit -this provision is usually provided with an increase in premium -must have a terminal illness to qualify
must have a terminal illness to qualify accelerated death benefits provide for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury
All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT -An agent's commission -Policyowner's rights -Policy provisions -An agent's licensing requirements
An agent's commission
A type of annuity that promises: if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid
An installment refund annuity
Group life insurance policies are generally written as -a term rider -annually renewable term -increasing term -group whole life
Annually renewable term
Which type of contract liquidates an estate through recurrent payments? -universal life insurance -whole life insurance -annuity -401(k)
Annuity
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider
Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client.
$25
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
$3,000 11,000 - 1,000 =10,000 x .20 =2,000 +1,000 =3,000
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay
$3,600 10,000 -2,000 =8,000 x .20 =1600 +2000 =3600
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?
$300,000
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000 the suicide occurred outside the suicide clause period (normally 1-2 years), thus the face amount will be paid
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
The minimum age at which a person can sign a life insurance application is
15 years old
Florida requires that coverage for newborns begins "from the moment of birth" and continues for:
18 months
J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? -life paid-up at age 70 -20-pay life -increasing term to age 65 -straight life
20-pay Life the shorter the pay period, the faster the cash value growth
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? -term to Age 70 -Universal Life -30-pay life -Adjustable life
30-pay life. Limited-pay whole life policies have level premiums that are limited to a certain period
V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?
4 months after the 30 day elimination period has been satisfied, there will be 4 months of benefit payments.
A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time?
48 months An agent's license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license.
In Florida, what is the maximum percentage of controlled business an agent may produce?
50%
Which of the following statements about noncontributory programs is FALSE? -A minimum number of employees is required to participate -All eligible employees must be covered -No evidence of insurability required -Must have conversion rights
A minimum number of employees is required to participate Noncontributory employee group life insurance plans must cover ALL eligible employees at all times
When is a Group Health policy required to provide coverage for a newborn child?
At the moment of birth
All the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Automatic Premium loan option c) Cash surrender d) Extended term
Automatic Premium loan option
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? -automatic policy loan -assignment -grace period -waiver of premium
Automatic policy loan
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
Aviation exclusion
Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is -Business overhead expense -disability income -key employee life -contributory
Business overhead expense
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
Business owner becoming disabled. A business Disability Buy-Sell policy is signed to assist in the sale of a business when one of the owners becomes disabled.
Which rider provides coverage for a child under a parent's life insurance policy?
Child term rider
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
Collect initial premium along with a signed health statement. in this situation, the producer should deliver the policy and obtain the premium payment along with a signed health statement.
When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the
Entire contract provision.. states that the application and policy contain all provisions and constitute the entire contract
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase? -equity index insurance -endowment -graded whole life insurance -return of premium policy
Equity index insurance Equity index insurance yields greater gains than bonds but will still protect the principal with a minimum of risk.
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract Policies that do not meet the 7-pay test are considered MEC's and will lose favorable tax treatment. The test is designed to discourage premium schedules that would result in a paid-up policy before the end of a seven year period.
What is considered a valid reason for small businesses to insure the lives of its major shareholders? -to provide an income for the surviving dependents -reduce the company's tax liability -to pay for final expenses -fund a buy-sell agreement
Fund a buy-sell agreement Life insurance is purchased to fund a buy-sell agreement in the event of the death of a major shareholder in a business
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Gives the policyowner additional time to pay overdue premiums
An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits: -immediately -within a maximum of 3 months -within a reasonable amount of time -at least monthly
Immediately
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider? -waiver of premium -long term care -accelerated death benefit -accidental
Long term care
Defamation occurs when an agent makes a false statement intended to
Malign another insurer
Which of the following are NOT managed care organizations? -Point of service plan (POS) -Preferred provider organization (PPO) -Medical Information Bureau (MIB) -Health maintenance organization (HMO)
Medical Information Bureau (MIB)
Which of these life products is NOT considered interest-sensitive? -Variable universal life -Modified whole life -Interest sensitive whole life -Variable life
Modified Whole Life. The following ARE interest sensitive: -Variable universal life -Interest sensitive whole life -Variable life
Which of these is NOT considered to be a right given to a policyowner? -Surrendering the policy's cash value -Modify a provision in the insurance contract -Assignment of ownership -Change the beneficiary, if revocable
Modify a provision in the insurance contract
Periodic health claim payments MUST be made at least:
Monthly
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
NONE there is no tax withheld on an IRA transfer
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage ... is the coverage provided by a disability income policy that does not provide benefits for losses occurring as the result of the insured's employment
On a life insurance policy, who is qualified to change the beneficiary designation?
Policyowner. However, consent may be needed by the current beneficiary if designated as irrevocable.
Generally, how long is a benefit period for a major medical expense plan?
One year.
The provision that defines to whom the insurer will pay benefits to is called:
Payment of claims
The underwriting process involves all of these EXCEPT for Credit report Policy loan Risk classification Application
Policy loan
Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? -Past due premiums on a lapsed policy are waived and coverage is restored -The insured is paid a monthly benefit to keep insurance premiums current in the event of total disability -Premiums are waived after the insured has been unemployed for a specified time period -Premiums are waived after the insured has been totally disabled for a specified time period
Premiums are waived after the insured has been totally disabled for a specified time period
The department of financial services serves as the receiver of any insurer placed into: -bankruptcy -foreclosure -receivership -indebtedness
Receivership The division of rehabilitation and liquidation plans, coordinates and directs the receivership processes on behalf of the department
A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the
Recurrent Disability provision. In this situation, the insurer will provide the same benefits without a new elimination period under the recurrent disability provision.
When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?
Residual disability a 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.
Equity indexed annuities are invested in which of the following: -insurer's general account -savings bonds -insured's general account -S&P 500
S&P 500 An indexed annuity is a type of tax-deferred annuity whose credited interest is linked to an equity index- typically the S&P 500
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
Single Premium. Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date.
Which mode of payment is NOT used by health insurance policies?
Single premium
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? -Social Security Disability Income -Medicare Supplements -Medicaid -COBRA
Social Security Disability Income
The insuring clause:
States the scope and limits of the coverage
According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? -The handicapped child has reached the limiting age -The premiums for the handicapped child are not paid -The handicapped child becomes a full-time student -The family moves outside the provider network
The premiums for the handicapped child are not paid
A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?
Twenty
Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?
Universal life.. has a cash value hat may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? -deferred -flexible -variable -fixed
Variable
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? A. Modified Whole Life B. Variable Life C. Universal Life D. Adjustable Life
Variable life
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? -universal life -variable life -fixed annuity -modified endowment contract
Variable life The variable nature of a variable whole life insurance is its death benefit. However, if investment performance is poor, the death benefit will not go lower than the policy's guaranteed minimum.
A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value.?
Viatical settlement provider.
Which of these is an element of a variable life policy? -a fixed, level premium -insurer assumes the investment risk -no investment risk to the policyowner -rate of returns are guaranteed
a fixed, level premium Variable Whole Life Policies have a fixed, level premium
All of the following will result in the suspension of an agent's license EXCEPT: -intentionally misrepresenting the provisions of a policy -acting with fiduciary responsibility -forging a name on an insurance application -being convicted of a felony
acting with fiduciary responsibility
Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? -the proceeds which exceed the amount paid in premiums are taxable -the proceeds are taxable only if the beneficiary's tax bracket has changed from the payout -all proceeds are considered taxable income in the year they are received -all proceeds are income tax free in the year they are received
all proceeds are income tax free in the year they are received
To be eligible for social security benefits, an employee must be unable to perform: -any occupation -their current occupation -any occupation that reflects the employee's education level - any occupation that the employee is qualified and willing to do
any occupation
P died five years after purchasing a Life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? -beneficiary will be denied the claim -beneficiary will be denied the claim and refunded all paid premiums -beneficiary will be paid the death benefit -beneficiary will be paid a partial death benefit
beneficiary will be paid the death benefit. the incontestable clause prevents the insurer from canceling the contract even for a material misrepresentation.
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible? -deferral provision -carryover provision -stop loss provision -corridor provision
carryover provision.. permits expenses incurred in the last 3 months of the calendar year to be carried over into the new year if needed to satisfy the deductible for the next year
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to
continue group health benefits
What type of group plan involves employees sharing the cost?
contributory plan.
The insurance Guaranty Fund Association is -an entity that assists in underwriting large insurance policies -funded by admitted insurance companies through assessments -funded by the state government -administered by the federal government
funded by admitted insurance companies through assessments The insurance Guaranty Fund Association is funded by admitted insurance companies through assessments and will pay claims if an insurance company becomes insolvent
Variable Life products require a producer to: -guarantee not more than a 12% return per annum -hold a life and health insurance license -hold a life insurance license and a securities license -be regulated solely by state law
hold a life insurance license and a securities license
In regards to representations or warranties, which of these statements is TRUE? -warranties are statements considered to be true to the best of the applicant's beliefs -if material to the risk, false representations will void a policy -representations are statements guaranteed to be true in every aspect -if material to the risk, false representations will NOT void a policy
if material to the risk, false representations will void a policy
How does an indexed annuity differ from a fixed annuity?
indexed annuity owners receive credited interest tied to the fluctuations of the linked index.
Credit life insurance is: -issued in any amount at the discretion of the applicant -used in the event of loss of income -issued in an amount not to exceed the amount of the loan -coverage that waives the premiums on a loan payment in the event of total disability
issued in an amount not to exceed the amount of the loan credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.
Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy? -Suitability form -Guaranteed issue -Free-look period of 30 days -Limitation on pre-existing conditions for up to 12 months
limitation on pre-existing conditions for up to 12 months there is only a 6 month limitation on pre-existing conditions for medicare supplements
In Major Medical Expense policies, what is the intent of a Stop Loss provision?
limits an insured's out-of-pocket medical expenses
Which of these is NOT relevant when determining the amount of personal life insurance needed? -existing life insurance coverage -local unemployment rate -household income household debt
local unemployment rate
Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? -blanket custodial -long-term care -critical illness -medicare supplements
long-term care
Which of these options can an individual use their medical flexible spending account to pay for? -vitamins and supplements -prescription drugs -household expenditures -cosmetic procedures
prescription drugs
Which of the following provisions is NOT required in HMO contracts/certificates? -enrollment -rates shall not be excessive -no pre-existing exclusions for children -seven day grace period
seven day grace period a grace period of no less than 10 days must be expressly included in an HMO contract
Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? -the income from the TSA is received income tax-free -the amount contributed is deductible from taxable income -the interest earnings are tax deferred -a tax-sheltered annuity is available to employees of non-profit organizations
the income from the TSA is received income tax-free Upon retirement, payments received by employees from the accumulated savings in tax-sheltered annuities are treated as ordinary income
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and: -the initial premium -agreeing to a physical examination -delivery of policy -disclosure of any medical conditions
the initial premium
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? -the insurer will pay the original benefit stated in the policy -the insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age -the insurer will pay the original face amount minus any premium deficiencies owed -the insurer will deny the claim and refund premiums paid
the insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
Under a Renewable Term policy, - the face amount is automatically adjusted at the time of renewal -evidence of insurability must be provided at each renewal -the renewal premium is calculated on the basis of the insured's attained age -a new application must be completed at each renewal
the renewal premium is calculated on the basis of the insured's attained age
Group Life policies in Florida are required to contain a conversion privilege that allows for conversion -with evidence of insurability -to an individual policy for a stated period of time -only if the premiums are paid by the employer -to an individual policy at anytime
to an individual policy for a stated period of time
When does a life insurance contract become effective if the initial premium is not collected during the application process? -after all medical and personal information has been evaluated -when the insurer receives initial premium from the producer -when producer delivers policy and collects initial premium -after application has been approved by the underwriters
when producer delivers policy and collects initial premium
What must an insurer obtain to conduct an HIV test?
written consent
