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282 Cards in this Set
- Front
- Back
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What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made? Irrevocable beneficiary Tertiary beneficiary Primary beneficiary Revocable beneficiary |
Irrevocable |
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T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? $1,000,000 $500,000 $250,000 $0 |
$0 |
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Which statement is true regarding a minor beneficiary Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 Normally, a guardian is required to be appointed in the Beneficiary clause of the contract The minor must pay the debts of the insured's estate before receiving any of the proceeds The minor is entitled to receive the death proceeds immediately |
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
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What is the underlying concept regarding level premiums? Level premiums build cash value quicker in the early years The early years are charged more than what is needed The early years are charged less than what is needed Level premiums can only be paid annually |
The early years are charged more than what is needed
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J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? Irrevocable Contingent Primary Revocable |
Revocable |
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M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? Tertiary Irrevocable Revocable Contingent |
Revocable |
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K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? Proceeds will be paid to P's estate Proceeds will be divided equally between K's and P's estate Proceeds will be paid to K's estate if P dies within a specified time The courts will decide who will receive death benefits |
Proceeds will be paid to K's estate if P dies within a specified time
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Which premium schedule results in the lowest cost to the policyowner? Semi-annual Monthly Quarterly Annual |
Annual
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At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? After the Contestable period When the policy proceeds are paid At the time of application When the insured dies |
At the time of application |
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Any changes made on an insurance application requires the initials of whom? Insured Agent Applicant Beneficiary |
Applicant
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Which Federal law allows an insurer to obtain an inspection report on a potential insured? Medical Information Bureau Act Freedom of Information Act Fair Credit Reporting Act Medical Information Act |
Fair Credit Reporting Act
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Who is NOT required to sign a life insurance application? Adult insured Policyowner Agent Beneficiary |
Beneficiary
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What action should a producer take if the initial premium is NOT submitted with the application? Keep the application until premium is paid Forward the application to the insurer after giving the applicant a binding receipt Forward the application to the insurer without the initial premium Forward the application to the insurer after giving the applicant a conditional receipt |
Forward the application to the insurer without the initial premium
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What is the purpose of the U.S.A. Patriot Act? detect and deter fraud detect and deter alien insurance companies detect and deter terrorism detect and deter misrepresentations |
detect and deter terrorism
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Which of these actions should a producer take when submitting an insurance application to an insurer? Issue a binding receipt to applicant if no initial premium is submitted Disclose to the applicant the amount of commissions to be earned on this transaction Inform insurer of relevant information not included on the application Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer |
Inform insurer of relevant information not included on the application
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K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used? Binding Initial Premium Conditional Contingent |
Conditional
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Why is an applicant's signature required on a life insurance application? To attest that the statements on the application are warranties To attest that the statements on the application are accurate to the best of the applicant's knowledge To give Power of Attorney to the producer if needed To attest that all statements on the application are guaranteed to be true |
To attest that the statements on the application are accurate to the best of the applicant's knowledge
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M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT policy is delivered free-look period has expired insurance company issues policy initial premium is collected |
free-look period has expired
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An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the agent applicant's spouse National Association of Insurance Commissioners (NAIC) applicant's physician |
applicant's physician |
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What is being delivered during a policy delivery? A binding receipt to the proposed insured Insurance contract to the proposed insured Application and initial premium to the insurer Policy summary sheet and disclosure material to the proposed insured |
Insurance contract to the proposed insured |
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Before a life insurance policy is issued, which of these components of the contract is required? Applicant's signature on application Beneficiary's signature A conditional receipt Attending Physician Statement (APS) |
Applicant's signature on application |
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When an employee is terminated, which statement about a group term life conversion is true? Employee must convert group term life coverage into an individual term life policy Employee must provide evidence of insurability for conversion Policy proceeds will be paid if the employee dies during the conversion period Policy proceeds will NOT be paid if the employee dies during the conversion period |
Policy proceeds will be paid if the employee dies during the conversion period |
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An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a $125,000 individual whole life policy $25,000 modified whole life policy $25,000 individual term life policy $25,000 individual whole life policy |
$25,000 individual whole life policy
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Which provision is NOT a requirement in a group life policy? Conversion Grace period Incontestable period Accidental |
Accidental |
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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
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T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? Fixed Certain Joint and Full Survivor Life Annuity with Period Certain Installment Refund |
Life Annuity with Period Certain |
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A person who is insured within a group contract will be given a certificate master policy policy summary participation agreement |
certificate |
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What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? Entire contract Owner's rights Nonforfeiture options Conversion |
Conversion |
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N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? Fixed Period Fixed Deferred Fixed Immediate Fixed Variable |
Fixed Deferred |
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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? 403(b) Plan Deferred Premium Single Premium Period Certain |
Single Premium
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W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
Flexible Premium Deferred annuity Variable annuity Immediate annuity Straight Life annuity |
Immediate annuity |
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Which of these is an element of a Single Premium annuity?
Deferred payment Lump-sum payment Fixed income Tax-deductible |
Lump-sum payment |
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The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) Cash Refund Installment Refund Straight Life annuity Life Annuity with Period Certain |
Straight Life annuity |
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An individual who purchases a Life annuity is given protection against inflation the risk of dying prematurely the risk of living longer than expected the risk of not having enough retirement income |
the risk of living longer than expected
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What is considered to be a characteristic of an immediate annuity? Benefit payments start within one payment period of purchase Benefit payments start within 5 years of initial purchase Normally tied to a specific equity or stock index Periodical contributions begin immediately |
Benefit payments start within one payment period of purchase |
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Which of these retirement plans can be started by an employee, even if another plan is in existence? Individual Retirement Account (IRA) Defined plan Keogh plan 403(b) plan |
Individual Retirement Account (IRA) |
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One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months |
5 months |
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What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA |
Social Security |
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Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? 3 4 5 6 |
5 |
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Which plan is intended to be used by a sole proprietor and the employees of that business?
SEP Plan Keogh Plan Individual Retirement Account (IRA) SIMPLE Plan |
Keogh Plan |
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Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? Variable Life Interest-sensitive Life Universal Life Annuity |
Annuity |
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An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? 70 1/2 65 55 59 1/2 |
59 1/2 |
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Which of these provisions require proof of insurability after a policy has lapsed? Insuring Conversion Reinstatement Consideration |
Reinstatement |
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Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Policy Exclusion Incontestable Entire Contract provision Assignment |
Entire Contract provision |
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The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called Reinstatement Grace period Automatic premium loan Waiver of premium |
Reinstatement
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A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
The employee's family Company Y Company X The employee's estate |
Company X |
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An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the State Guaranty Association Fair Labor Standards Board Fair Credit Reporting Act National Association of Insurance Commissioners |
Fair Credit Reporting Act
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What provision in a life insurance policy states that the application is considered part of the contract? Application provision Policy Exclusions provision Entire Contract provision Incontestability provision |
Entire Contract provision |
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All of these statements about the Waiver of Premium provision are correct EXCEPT A waiting period must pass before becoming eligible for benefits Waiver of Premium is available on both permanent and term insurance policies Insured must be eligible for Social Security disability for claim to be accepted Insured must be totally disabled to qualify |
Insured must be eligible for Social Security disability for claim to be accepted
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Question 27 Select the correct answer 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
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Which statement regarding the Misstatement of Age provision is considered to be true? Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered Requires that a new policy must be applied for if a misstatement of age is found on the current policy Misstatement of Age provision is valid only during the contestable period Insurer may void the policy if a misstatement of age is discovered |
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered |
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Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? Family Maintenance clause Payor clause Assignment provision Automatic Premium Loan provision |
Payor clause
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J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
Payor clause Automatic Premium Loan provision Reinstatement provision Waiver of Premium |
Reinstatement provision
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N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? Misrepresentation Exclusion Collateral assignment Concealment |
Exclusion
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P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? Accelerated Benefits provision Entire Contract Accidental Death and Dismemberment provision Consideration clause |
Accidental Death and Dismemberment provision
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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
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Which of these life insurance riders allows the applicant to have excess coverage? Automatic Premium Loan rider Waiver of Premium rider Guarantee Insurability rider Term rider |
Term rider
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B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of additional Term Life coverage at any time additional Term Life coverage at specified intervals additional Whole Life coverage at any time additional Whole Life coverage at specified times |
additional Whole Life coverage at specified times
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What action can a policyowner take if an application for a bank loan requires collateral? Utilize accelerated benefits provision Borrow against policy cash value and use as a down payment Assign policy ownership to the bank Name bank as beneficiary |
Assign policy ownership to the bank |
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M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? Collect premium from M's estate Deny the claim Pay face amount minus the past due premium Subtract past due premium from cash value |
Pay face amount minus the past due premium
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What benefit does the Payor clause on a Juvenile Life policy provide? Allows payor to assign ownership in the event payor becomes disabled Allows payor to increase face amount without providing evidence of insurability Premiums are waived if juvenile becomes disabled Premiums are waived if payor becomes disabled |
Premiums are waived if payor becomes disabled |
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Whose life is covered on a life insurance policy that contains a payor benefit clause?
Parent Beneficiary Child Spouse |
Child
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P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? Premiums paid plus interest Nothing. Claim will be denied $50,000 minus any outstanding policy loans $100,000 because the cause of death was accidental |
$50,000 minus any outstanding policy loans |
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D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? Refund of premiums paid plus interest Nothing, due to actively serving in the armed forces Double the face amount because cause of death was accidental The full face amount |
The full face amount
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In a Life insurance contract, an insurance company's promise to pay stated benefits is called the
Insuring clause Consideration clause Entire Contract Owner's rights |
Insuring clause
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What does the ownership clause in a life insurance policy state? Who the policyowner is and what rights the policyowner is entitled to Who the beneficiary is and what rights the beneficiary is entitled to Ownership cannot be assigned after the incontestable period Allows the policyowner to adjust the death benefit and premium amount at anytime |
Who the policyowner is and what rights the policyowner is entitled to
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The automatic premium loan provision is designed to provide a source of revenue to the insurance company avoid a policy lapse allow a policyowner to request a policy loan allow a policyowner to take out additional coverage without evidence of insurability |
avoid a policy lapse
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A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? Accelerated Benefits Waiver of Premium Cost of Living Return of Premium |
Waiver of Premium
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Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? Coverage can be added at specific events such as marriage or having a child Evidence of insurability is not required when the option is exercised Evidence of insurability is required when the option is exercised Coverage can be added at specific ages |
Evidence of insurability is required when the option is exercised
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S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? $100,000 $50,000 Refund of premiums paid plus interest No claim will be paid because cause of death was from natural causes |
$50,000
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P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? P cannot borrow against the policy's cash value while disabled P will have to pay income taxes on the amount of premiums waived P will still receive declared dividends P cannot assign ownership of the policy while premiums are being waived |
P will still receive declared dividends
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Which type of policy is considered to be overfunded, as stated by IRS guidelines? Modified Whole Life Modified Endowment Contract Variable Universal Life Interest-Sensitive Whole Life |
Modified Endowment Contract
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When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? Extended term option Conversion provision 1035 Exchange Incontestable period |
Conversion provision
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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
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Which of these would be considered a Limited-Pay Life policy? 10-year Renewable and Convertible Term Life Paid-Up at Age 70 Straight Whole Life Renewable Term to Age 100 |
Life Paid-Up at Age 70
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What type of life insurance incorporates flexible premiums and an adjustable death benefit? Endowment Policy Modified Whole Life Decreasing Term Universal Life |
Universal Life
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What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? Endowment policy Limited-Pay Whole life Convertible Term Decreasing Term |
Convertible Term
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The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due |
Amount of premium payments and when they are due
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How long does the coverage normally remain on a limited-pay life policy? age 65 age 100 when premium payments stop at the discretion of the insurer |
age 100
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Which statement about a whole life policy is correct? Beneficiary may be changed only with the consent of the premium payor Death benefit can usually be adjusted Cash value may be borrowed against Premiums are flexible |
Cash value may be borrowed against
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How does a typical Variable Life Policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to Treasury Bills |
Through mutual funds, stocks, bonds
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What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? Family Lump Sum Policy Family Maintenance Policy Family Survivor Policy Family Income Policy |
Family Maintenance Policy
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A 15-year mortgage is best protected by what kind of life policy? Modified whole life 15-year level term 15-year decreasing term Adjustable life |
15-year decreasing term
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S is covered by a whole life policy. Which insurance product can cover his children? Assignment provision Payor benefit Accelerated benefit rider Child term rider |
Child term rider
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All of these are characteristics of an Adjustable Life policy EXCEPT adjustable premiums adjustable premium payment period combination of term and whole life insurance face amount can be adjusted using policy dividends |
face amount can be adjusted using policy dividends
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What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term life Graded Premium Whole life Whole life Endowment policy |
Term life
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All of these insurance products require a producer to have proper FINRA securities registration in order to sell them EXCEPT for
Variable Life Modified Whole Life Universal Variable life Variable Annuity |
Modified Whole Life
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Which of these life products is NOT considered interest-sensitive?
Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life |
Modified Whole Life
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Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? Modification Conversion Exchange Adjustable |
Conversion
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D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? Limited-pay life Graded Premium Level term Endowment |
Level term
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What type of policy would offer a 40-year old the quickest accumulation of cash value? Paid-up at 65 20-pay life 30-pay life Straight whole life |
20-pay life |
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What is the consideration given by an insurer in the Consideration clause of a life policy? Promise to never cancel coverage Promise to pay a death benefit Promise to not raise premiums Promise to pay a policy dividend |
Promise to pay a death benefit
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A life insurance policy that provides a policyowner with cash value along with a level face amount is called Whole life Level term Credit life Ordinary life |
Whole life
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When must insurable interest be present in order for a life insurance policy to be valid? When the insured dies Within the incontestability period At the time of application Before the insured dies |
At the time of application
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If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? Insurer Beneficiary Reinsurer Insured |
Insured
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When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have all statements be warranties insurable interest in the proposed insured the agent complete a third-party application all those involved be family-related |
insurable interest in the proposed insured
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Which of these is NOT considered to be an element of an insurance contract?
the offer acceptance negotiating consideration |
negotiating
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Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called
representations consideration warranties guarantees |
representations
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The part of a life insurance policy guaranteed to be true is called a(n) representation exclusion warranty waiver |
warranty
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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
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Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? Company becoming insolvent Death of the business owner Business owner becoming disabled Key employee becoming disabled |
Business owner becoming disabled
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T is covered by two health insurance plans: a group plan through his employer and his spouse’s plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?
Principal carrier Surplus carrier Primary carrier Secondary carrier |
Primary carrier
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J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? $0 $100,000 $25,000 $50,000 |
$25,000
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When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
Joint Noncontributory Contributory Participating |
Contributory
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The federal income tax treatment of employer-provided group health insurance can be accurately described as
Employee's coverage paid for by the employer is considered taxable income to the employee Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure Employer is given tax credits for contributions made to an employer-provided group health plan Benefits are taxable to the employee |
Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure
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Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?
Double indemnity Benefits are taxable More restrictive Less restrictive |
Less restrictive
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Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Group Disability Business Continuation Disability Buy-Sell Key Person Disability |
Disability Buy-Sell
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XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is 25% 50% 75% 100% |
100%
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The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the Grace Period Waiting Period Postponement Period Elimination Period |
Waiting Period
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Medicare Part A and Part B do NOT pay for dental work hospitalization skilled nursing care physical therapy |
dental work
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Which of the following BEST describes how a Preferred Provider Organization is less restrictive than a Health Maintenance Organization?
Typically not subject to deductibles Not regulated by the federal government More benefits available More physicians to choose from |
More physicians to choose from
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J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
Multiple Employer Welfare Arrangement Multiple Employer Trust Health Maintenance Organization Co-op Arrangement |
Health Maintenance Organization
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Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments Intended to be used by individuals age 65 and older Provides disability income benefits Automatically covers those receiving Social Security disability benefits |
Funded by both state and federal governments
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M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy |
Determined by the terms of the policy
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Which of the following statements BEST describes dental care indemnity coverage? Services are reimbursed before the insurer receives the invoice Services are reimbursed after insurer receives the invoice In-network dentists must always be used Very limited list of providers |
Services are reimbursed after insurer receives the invoice
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Which of the following types of health coverage frequently uses a deductible?
Major Medical policy Basic Surgical policy Basic Hospital policy Worker's Compensation |
Major Medical policy
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S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
Low-deductible health plan Medicare Supplement High-deductible health plan Flexible savings plan |
High-deductible health plan
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Major Medical policies typically
pay 100% of covered expenses contain a deductible and coinsurance require use of in-network facilities only do not contain a deductible and coinsurance |
contain a deductible and coinsurance
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Comprehensive Major Medical policies usually combine Major Medical with Disability Income coverage Major Medical with Basic Hospital/Surgical coverage Basic Hospital/Surgical with Accidental coverage Basic/Hospital/Surgical with Disability Income coverage |
Major Medical with Basic Hospital/Surgical coverage |
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The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the corridor deductible initial deductible stop-loss deductible coinsurance deductible |
initial deductible
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Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?
Discourages overutilization of the insurance coverage Minimizes the need for deductibles Discourages adverse selection Minimizes the waiting period |
Discourages overutilization of the insurance coverage
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M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? $2,000 $1,760 $1,600 $400 |
$1,600 |
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If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? Long-term care Indemnity Medicare Supplement Medicaid |
Medicare Supplement
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What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? 1 2 3 4 |
2 |
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According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? Annually Semiannually Quarterly Monthly |
Monthly
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What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy’s Claims Forms provision? File a lawsuit Submit the claim in any form Wait for the claim form to arrive Resubmit the request for a claim form |
Submit the claim in any form |
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Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? Consideration Entire Contract Free-look Insuring |
Entire Contract
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With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period? Gives the policyowner additional time to pay past due premiums Gives the policyowner additional time to file a lawsuit Gives the policyowner additional time to file a claim Gives the policyowner additional time to provide proof of loss |
Gives the policyowner additional time to pay past due premiums
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N has a Major Medical policy that only pays a portion of N’s medical expenses. N is responsible for paying the remaining balance. This provision is known as
Assignment of Benefits Coinsurance Indemnity Co-deductible |
Coinsurance
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Which of the following BEST describes a Hospital Indemnity policy?
Coverage that reimburses an insured for surgeon expenses Coverage that pays a stated amount per day of a covered hospitalization Coverage that replaces lost income due to hospitalization Coverage that pays for hospital room and board |
Coverage that pays a stated amount per day of a covered hospitalization
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Basic Medical Expense insurance:
normally has a deductible and coinsurance covers an illness but not an accident covers an illness but not an accident has lower benefit limits than Major Medical insurance |
has lower benefit limits than Major Medical insurance
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Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?
$2,100 $2,020 $2,000 $100 |
$2,100
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A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? $500 $1,000 $1,500 $2,000 |
$1,000
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Which of the following phrases refers to the fees charged by a healthcare professional?
Deductible Coinsurance Usual, customary, and reasonable expenses Hospital expense |
Usual, customary, and reasonable expenses
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A characteristic of Preferred Provider Organizations (PPOs) would be:
Discounted fees for the patient Not allowed to see out-of-network physicians Physicians are paid on a capitation basis A primary care physician is required |
Discounted fees for the patient
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Which of the following will a Long Term Care plan typically provide benefits for?
disability income death unemployment home health care |
home health care
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The individual most likely to buy a Medicare Supplement policy would be a(n)
unemployed 64-year old female 62-year old male covered by Medicaid 68-year old male covered by Medicare uninsured 60-year old male |
68-year old male covered by Medicare
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S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company not responded to the claim. S can take legal action against the insurer beginning
September 21 October 16 November 1 December 1 |
November 1
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The provision that defines to whom the insurer will pay benefits to is called
Entire Contract Proof of Loss Claim Forms Payment of Claims |
Payment of Claims
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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 Insuring clause Time Limit on Certain Defense provision Legal Contract clause |
Entire Contract provision
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Which of the following statements describes what an Accident and Health policyowner may NOT do?
File a covered claim Assign ownership Cancel the coverage Adjust the premium payments |
Adjust the premium payments
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Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies? Specifies the additional time given to pay past due premiums States the scope and limits of the coverage Specifies a claim will be paid immediately upon receipt of proof of loss Prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss |
States the scope and limits of the coverage
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What must the policyowner provide to the insurer for validation that a loss has occurred? Proof of Coverage Proof of Claim Proof of Loss Proof of Payment |
Proof of Loss
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If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations EXCEPT
When the cause of death is unknown When the state prohibits this by law When consent for the autopsy is not obtained When foul play was a contributing factor |
When the state prohibits this by law
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Which of these is considered a mandatory provision?
Payment of Claims Insurance with Other Insurers Misstatement of Age Change of Occupation |
Payment of Claims
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What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Premiums may increase at time of renewal Premiums may increase at any time Policy may be renewed at the discretion of the insured Policy may be amended by insurer at any time |
Premiums may increase at time of renewal
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Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?
Premiums normally decrease at time of renewal Premiums normally increase at time of renewal Policy can renewed at any time by the company Policy can be cancelled at any time by the company |
Premiums normally increase at time of renewal
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The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the Insuring clause Contestable clause Consideration clause Free-look provision |
Insuring clause
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If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called noncancellable conditionally renewable cancellable guaranteed renewable |
noncancellable
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What is the purpose of the Time of Payment of Claims provision? Requires the insured to wait 60 days after submitting Proof of Loss before filing a lawsuit Prevents delayed claim payments made by the insurer Requires a probation period for each claim filed by the insured Protects the insurer from frivolous lawsuits |
Prevents delayed claim payments made by the insurer
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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 |
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A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
Claim will be paid and coverage will remain in force Claim will be denied and coverage will remain in force Claim will be denied and coverage will be cancelled Claim will be denied, the coverage cancelled, and all premiums paid will be refunded |
Claim will be paid and coverage will remain in force
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T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim’s validity. The provision that limits the period during which the company may dispute a claim’s validity is called
Insuring Time Limit on Certain Defenses Grace Period Free-look |
Time Limit on Certain Defenses
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G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G’s policy, who is responsible for paying the medical bills? T
he reinsurer The insured The insurer The Guaranty Association |
The insured
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Pre-hospitalization authorization is considered an example of
managed care PPO care Medicaid Major Medical insurance |
managed care
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A producer takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
issue the policy only when the initial premium check has cleared determine if the applicant is insurable by investigating family health history issue the policy on a standard basis determine if the applicant is an acceptable risk by completing standard underwriting procedures |
determine if the applicant is an acceptable risk by completing standard underwriting procedures
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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) |
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Which of the following statements about the classification of applicants is INCORRECT? Substandard applicants are never declined by underwriters Substandard applicants are occasionally declined by underwriters Preferred risk applicants typically have better premium rates than standard risk applicants An applicant can be classified as substandard risk because of a hazardous job |
Substandard applicants are never declined by underwriters
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Which of the following BEST describes how pre-admission certifications are used? Used to assist in underwriting Used to prevent nonessential medical costs Used to minimize hospital lawsuits Used to help process claims |
Used to prevent nonessential medical costs |
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P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? A presumptive disability An occupational disability A residual disability A recurrent disability |
A recurrent disability
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When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? Residual Disability Presumptive Disability Recurrent Disability Partial Disability |
Recurrent Disability
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When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is occupation income age medical condition |
income |
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K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? Indemnity Major Medical Travel Disability Income |
Disability Income
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Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
Applicant's occupation Applicant's monthly income Applicant's health Applicant's previous disabilities |
Applicant's monthly income
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Which type of contract liquidates an estate through recurrent payments?
Universal life insurance Whole life insurance Annuity 401(k) |
Annuity
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Which of these do NOT constitute policy delivery?
Policy mailed to applicant Policy mailed to agent Policy delivered to the applicant by the agent Policy issued with a rating |
Policy issued with a rating
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Which parts of a life insurance policy are guaranteed to be true?
Rating Representation Statement Warranty |
Warranty
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An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?
Proceeds will go to the primary beneficiary's estate Probate will decide who receives proceeds Proceeds will go to the contingent beneficiary Proceeds will go to the insured's estate |
Proceeds will go to the contingent beneficiary
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Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? Premiums are normally not tax deductible Cash dividends are normally not taxed Entire cash surrender value is taxable Proceeds are received tax-free if there is a named beneficiary |
Entire cash surrender value is taxable |
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N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? Claim will be denied Claim will be paid in full Claim will be partially paid Claim will be decided by an arbitrator |
Claim will be denied
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F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
Level term policy Whole life policy Limited-pay policy Decreasing term policy |
Decreasing term policy
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The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)
Term rider Accidental Death and Dismemberment rider (AD&D) Family rider Annuity |
Accidental Death and Dismemberment rider (AD&D)
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The Consideration clause of an insurance contract includes the buyer's guide a summary of the coverage provided the named beneficiaries the schedule and amount of premium payments |
the schedule and amount of premium payments
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An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT medical history gross income occupation spouse's occupation |
spouse's occupation
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Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Joint Life Adjustable Life Variable Universal Life Universal Life |
Variable Universal Life
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A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate |
20-Pay Life accumulates cash value faster than Straight Life
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Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Geographical location Source of income Risk classification Marital status |
Risk classification
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E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?
F The dissolved partnership E's family E's estate |
F
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P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?
Claim will be denied and policy terminated Claim will be partially paid Claim will be paid Claim will be denied |
Claim will be denied
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How does an indexed annuity differ from a fixed annuity?
Fixed annuity owners receive credited interest tied to the fluctuations of the linked index Indexed annuity owners receive credited interest tied to the fluctuations of the linked index Fixed annuity owners have a separate investment account Indexed annuity owners receive annual dividends |
Indexed annuity owners receive credited interest tied to the fluctuations of the linked index
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Which of these Nonforfeiture Options continue a build-up of cash value?
Waiver of Premium Extended Term Reduced Paid-Up Cash Surrender |
Reduced Paid-Up
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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
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All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT Fixed Period Interest Only Fixed Amount Life Income |
Interest Only
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Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk |
both an insurance and securities product
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Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? Portion of the premiums paid for by the employer may be a tax deduction Portion of the premiums paid for by the employee may be a tax deduction Portion of the death proceeds are taxable to the beneficiary Portion of the death proceeds are taxable to the estate |
Portion of the premiums paid for by the employer may be a tax deduction |
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Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Modified Whole Life 20-Pay Life Decreasing Term Endowment |
Decreasing Term |
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All of these statements concerning Settlement Options are true EXCEPT Increased proceeds can be provided through accumulation of interest Rapid depletion of proceeds can be avoided Proceeds can be administered by the insurance company Only the beneficiary may select |
Only the beneficiary may select
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When is the face amount of a Whole Life policy paid? At the policy's maturity date only When the insured dies or at the policy's maturity date, whichever happens first Only when the insured dies When the policy is surrendered |
When the insured dies or at the policy's maturity date, whichever happens first
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Additional coverage can be added to a Whole Life policy by adding a(n) payor rider accelerated benefit rider decreasing term rider automatic premium loan rider |
decreasing term rider
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Which statement is TRUE in regards to a policy loan? Past-due interest payments not paid after 3 months will void the policy Past-due interest on a policy loan is added to the total debt Insurance companies can send delinquent interest accounts to a collection agency Insurance companies can charge an interest rate based on the policyowner's credit report |
Past-due interest on a policy loan is added to the total debt
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Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)? Employee funds the HRA entirely Employer funds the HRA entirely HRA's can be offered with other health plans HRA's allow reimbursement for eligible medical expenses |
Employee funds the HRA entirely |
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An insured must notify an insurer of a medical claim within how many days after an accident? 10 20 30 40 |
20 |
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In a Disability Income policy, which of these clauses acts as a deductible? Elimination Period Waiver Period Deductible Period Probationary Period |
Elimination Period |
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Which health policy clause specifies the amount of benefits to be paid? Insuring Consideration Free-look Payment mode |
Insuring |
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P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? Authorize for payroll deductions Agree to a physical examination Sign an enrollment card Register with her state of residency |
Sign an enrollment card |
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T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? Request will be accepted only if in writing by the insured Change will be made only if premiums are paid current Change will be made immediately Request of the change will be refused |
Request of the change will be refused |
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The Bureau of Unclaimed Property is overseen by the Unclaimed Property Commissioner Chief Financial Officer Governor Insurance Department |
Chief Financial Officer |
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A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for hospital charges physician fees experimental and investigative services nursing services |
experimental and investigative services |
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Long Term Care policies will usually pay for eligible benefits using which of the following methods? Delayed Fee for service Expense incurred Respite |
Expense incurred |
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J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of? Twisting Defamation Coercion Rebating |
Coercion |
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An example of unfair discrimination would be declining an insurance application because of involvement in a hazardous occupation offering the same terms of coverage to different policyowners in the same risk classification offering different terms of coverage for different policyowners having the same risk classification issuing a policy at a substandard rate because of poor health |
offering different terms of coverage for different policyowners having the same risk classification |
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Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract only when requested by the policyowner once each month once each year twice each year |
once each year |
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A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(n) accredited agent broker dealer Certified Variable Dealer (CVD) Registered Managing Agent (RMA) |
broker dealer |
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An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company. domestic alien foreign authorized |
domestic
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A life policy loan in Florida cannot charge a fixed rate of interest higher than 7% 8% 9% 10% |
10%
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An agent selling Medicare Supplement policies must provide every applicant with a(n) MIB form COBRA form Suitability form Signed consent form |
Suitability form |
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When is a Group Health policy required to provide coverage for a newborn child? When the policyowner notifies the insurance company At the moment of birth When the required additional premium is paid No more than 10 days after date of birth |
At the moment of birth |
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Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called Fraternal life insurance organizations Domestic life insurance organizations Unauthorized insurers Mutual life insurers |
Fraternal life insurance organizations |
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A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast? Stock company is regulated by the state where it's incorporated. Mutual company is regulated by its policyholders. Stock company is considered an authorized insurer. Mutual company is considered an unauthorized insurer. Stock company is owned by its policyholders. Mutual company is owned by its shareholders. Stock company is owned by its shareholders. Mutual company is owned by its policyholders. |
Stock company is owned by its shareholders. Mutual company is owned by its policyholders. |
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What is required in the Florida Employee Health Care Access Act? Small group benefit plans are to be issued on a "conditionally-issue" basis Small group benefit plans are to be issued on a "guarantee-issue" basis All small group benefit plans have a 60 day grace period All small group benefit plans have no lifetime benefit limits |
Small group benefit plans are to be issued on a "guarantee-issue" basis |
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A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? Unemployment Banking Retirement Insurance |
Insurance |
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What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law? 0% 25% 75% 100% |
0% |
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Which of these is NOT a legal entity for selling life insurance in Florida? Independent agency system Risk management advisers Career agency system Personal producing general agency |
Risk management advisers |
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Which of the following professional organizations has its code of ethics incorporated into Florida law? Financial Industry Regulatory Agency (FINRA) National Association of Insurance Commissioners (NAIC) National Association of Insurance and Financial Advisors (NAIFA) The American College of Life Insurance |
National Association of Insurance and Financial Advisors (NAIFA) |
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According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? Annual income Age Marital status Financial objectives |
Marital status
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What are adjustable rates for life policy loans in Florida based on? Moody's corporate bond index 90-day treasury bill rate National average of other states' variable rate Prime lending rate |
Moody's corporate bond index |
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The minimum age at which a person can sign a life insurance application is 15 years 16 years 17 years 18 years |
15 years
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According to Florida law, which of the following statements accurately describes an admitted mail order insurance company? It may solicit insurance business by mail without the assistance of a licensed agent It may solicit insurance business by mail only with the assistance of a licensed Florida agent Admitted mail order insurance companies are illegal in Florida Admitted mail order insurance companies cannot solicit insurance business outside the state of Florida |
It may solicit insurance business by mail without the assistance of a licensed agent
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In Florida, most life insurance policies have a contestability period of 1 year 2 years 3 years 4 years |
2 years |
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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? 12 months 24 months 36 months 48 months |
48 months |
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An example of an unfair trade practice is an agent making a material misrepresentation to the insured an agent writing less than 50% of their total sales from controlled business replacing an old life insurance policy with a new one denying payment of a claim within a reasonable time after proof of loss statements were provided |
an agent making a material misrepresentation to the insured
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Which of the following situations does NOT apply to the Florida Replacement Rule? An existing policy is reissued with a reduction in cash value A new policy is issued while an existing one is surrendered An existing policy is subject to extensive borrowing An existing policyholder purchases an additional policy from the same insurer |
An existing policyholder purchases an additional policy from the same insurer |
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All of the following are eligibility requirements for an association group EXCEPT Group must have been in existence for two years Contributory plans require a minimum of 25 participants Group must hold regular meetings at least on an annual basis Must have been organized for some reason other than to obtain group insurance |
Contributory plans require a minimum of 25 participants |
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Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? Policy summary Conditional receipt Buyer's guide Illustration |
Buyer's guide |
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Which of the following situations are NOT subject to Florida life insurance laws? Insurance companies' day-to-day operations Insurance companies' life policy replacement requirements Insurance companies' setting of life insurance policy rates Insurance companies' guidelines for paying a life insurance claim |
Insurance companies' day-to-day operations |
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All of the following are Nonforfeiture Options EXCEPT Cash Surrender Option Extended Term Option Reduced Paid-Up Option Automatic Premium Loan Option |
Automatic Premium Loan Option |
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During the application process, the agent's primary responsibility is to the Department of Financial Services the applicant the insurance company the State of Florida |
the insurance company |
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In Florida, a health policy that is paid on a quarterly basis requires a grace period of 7 days 10 days 31 days 45 days |
31 days |
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Which entity approves the insurance policy forms used in Florida? National Association of Insurance Commissioners (NAIC) Department of Financial Services (DFS) Financial Services Commission (FSC) Office of Insurance Regulation (OIR) |
Office of Insurance Regulation (OIR) |
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In Florida, monthly-premium health insurance policies must provide a grace period of at least 7 days 10 days 14 days 31 days |
10 days
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T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert to an individual policy, only by providing evidence of insurability to an individual policy, only if the employer pays the premiums to an individual policy upon employment termination to an individual policy with a higher amount of coverage |
an individual policy upon employment termination to |
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Association Plans that are designed to provide health benefits to their members are regulated by the state because they are insured by an authorized insurer they conduct business in Florida they provide a service to their members they require a certain level of member participation |
they are insured by an authorized insurer |
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What percentage of eligible persons must a policy cover in a noncontributory group? 25% 50% 75% 100% |
100% |
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According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant? At the time of application At the time of policy delivery Within 14 days of the time of application Within 14 days of policy delivery |
At the time of application |
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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 |
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What is Florida's definition of Life insurance replacement? A transaction in which coverage on an existing policy is increased A transaction in which group life coverage is converted to an individual policy A transaction in which a new policy is bought and an old policy is terminated A transaction in which a policyowner reinstates a lapsed policy |
A transaction in which a new policy is bought and an old policy is terminated |
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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 broker insurer viator agent |
viatical settlement provider
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Which of the following is considered an accurate statement of an unfair trade practice? Coercion involves making a malicious statement about the financial condition of an insurance company Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company No more than 25% of an agent's insurance sales are allowed to come from controlled business Rebating occurs when someone intentionally deceives another with the intent to gain financially |
Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company |
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A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination? 14 days 31 days 45 days 60 days |
31 days
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In Florida, deceptive advertising is considered to be a form of coercion a form of sliding a form of rebating a form of misrepresentation |
a form of misrepresentation
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At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Before the appointment is scheduled Upon completion of the application At the policy's delivery When the insurer receives the MIB report |
Upon completion of the application |
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When must insurable interest exist for a life insurance contract to be valid? Inception of the contract Throughout the entire length of the contract When the insured dies During the contestable period |
Inception of the contract |
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Which of the following is NOT an unfair claim settlement practice? Failing to acknowledge and act promptly with respect to an insurance claim Compelling an insured to initiate a lawsuit by offering less on an insurance claim Failing to accept or deny a claim within reasonable time after proof of loss is submitted Needing written documentation of claim details |
Needing written documentation of claim details |
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Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated 1970 - Fair Credit Reporting Act 1959 - Intervention by (SEC) The Securities and Exchange Commission 1999 - Financial Services Modernization Act 1945 - The McCarran-Ferguson Act |
1970 - Fair Credit Reporting Act |
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An agent is an individual that represents whom? Insurer Insured Broker Himself/Herself |
Insurer |
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What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins Time period a disabled person must wait before benefits are paid Time period after the policy issue date in which the provisions are still contestable The point in time when benefits are no longer payable |
Time period a disabled person must wait before benefits are paid |
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What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age |
Wages |
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A disability elimination period is best described as a time deductible dollar deductible eligibility period probation period |
time deductible |
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In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments Whenever an insured is unable to work During the time an insured is confined in a hospital Following an accidental injury, but not during sickness After an insured has become totally disabled as defined in the policy |
After an insured has become totally disabled as defined in the policy |
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After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? File a lawsuit Contact the insurer again requesting forms Nothing File written proof of loss |
File written proof of loss |
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Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? Administrative-services-only plan Commercial insurer Preferred provider organization Health maintenance organization |
Commercial insurer |
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Which of the following reimburses its insureds for covered medical expenses? Health maintenance organizations Preferred provider organizations Commercial insurers Service providers |
Commercial insurers |
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What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? MEWA Blanket insurance Dread disease insurance Disability insurance |
Dread disease insurance |
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D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to? Ex-wife Current wife Estate Split equally between the ex-wife and current wife |
Ex-wife |
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When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? Void the policy if found during the Contestable period Void the policy, no matter when it is discovered Void the policy at any time only if it is found to be material Void the policy only if it is discovered during the Contestable period and proven to be material |
Void the policy only if it is discovered during the Contestable period and proven to be material |
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Which policy requires a producer to register with the National Association of Securities Dealers (NASD) before selling? Variable Life Credit Life Universal Life Interest-Sensitive Whole Life |
Variable Life |
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What type of life insurance are credit policies issued as? Whole Variable Term Universal |
Term
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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 |
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Term insurance has which of the following characteristics? Expires at the end of the policy period Builds cash value Has nonforfeiture options Endows at the end of the policy period |
Expires at the end of the policy period |
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A policy of adhesion can only be modified by whom? The agent The applicant The primary beneficiary The insurance company |
The insurance company |
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The provision that defines to whom the insurer will pay benefits to is called Entire Contract Proof of Loss Claim Forms Payment of Claims |
Payment of Claims |
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Which of the following BEST describes how pre-admission certifications are used? Used to assist in underwriting Used to prevent nonessential medical costs Used to minimize hospital lawsuits Used to help process claims |
Used to prevent nonessential medical costs |
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M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? $2,000 a lump sum of six times the monthly benefit nothing earned, but unpaid benefits |
earned, but unpaid benefits |
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The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the Probation Period Grace Period Waiver of Premium Elimination Period |
Waiver of Premium |
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The type of annuity that can be purchased with one monetary deposit is called a(n) Single Deposit annuity Single Premium annuity Fixed annuity Immediate annuity |
Immediate annuity |
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Which type of plan normally includes hospice benefits? Short-term disability plans Group life plans Workers' Compensation Managed care plans |
Managed care plans |
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An example of an unfair trade practice is an agent making a material misrepresentation to the insured an agent writing less than 50% of their total sales from controlled business replacing an old life insurance policy with a new one denying payment of a claim within a reasonable time after proof of loss statements were provided |
an agent making a material misrepresentation to the insured |
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K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take? Sell the client a more appropriate annuity Pay monetary restitution to the client Provide a written apology letter Pay a penalty of three times the client's loss |
Pay monetary restitution to the client |
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In Florida, what is the maximum percentage of controlled business an agent may produce? 30% 40% 50% 60% |
50% |
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In Florida, monthly-premium health insurance policies must provide a grace period of at least 7 days 10 days 14 days 31 days |
10 days |
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In Florida, deceptive advertising is considered to be a form of coercion a form of sliding a form of rebating a form of misrepresentation |
a form of misrepresentation |
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A stock life insurance company that issues both participating and nonparticipating policies is doing business on a mixed plan a diverse plan a multiple plan an assorted plan |
a mixed plan |
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In Florida, an element of an insurance transaction would be ordering an MIB report setting up the sales appointment issuing an insurance contract determining how much coverage is needed |
issuing an insurance contract |
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Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years. 3 4 5 6 |
5 |
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An example of sliding would be speaking maliciously of an insurer intending to harm charging for an additional product without the applicant's consent replacing an existing insurance policy with a new one inducing an applicant to purchase an insurance policy by returning some of the premium |
charging for an additional product without the applicant's consent |
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A long-term care lapse notice must be delivered to both the applicant and secondary addressee beneficiary personal physician MIB |
secondary addressee |
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Which type of insurance company allows their policyowners to elect a governing body? Stock Mixed Admitted Mutual |
Mutual |
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Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency? Listing the address on the agent's business cards Business solicitation is done at this location Clients are met at this location The amount of premium collected at this location |
The amount of premium collected at this location |
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An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed coercion rebating defamation twisting |
twisting |
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The Life and Health Insurance Guaranty 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 |
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What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? Primary Insurance Amount (PIA) Total taxes paid into FICA Number of dependents State of residence |
Primary Insurance Amount (PIA) |
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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 |
