2024 Florida 2-15 Insurance License Exam, Exams of Safety and Fire Engineering

Download 2024 Florida 2-15 Insurance License Exam and more Exams Safety and Fire Engineering in PDF only on Docsity! 2024 FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST 2024 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS) ____ health plans are designed to help the insured pay off a loan in the event he or she is disabled due to an accident or sickness. - CORRECT ANSWER>>Credit accident All statements made on an application are considered ____ because there can be no guarantee that they are true. - CORRECT ANSWER>>Representations Group health Plans that are issued by mutual companies usually: - CORRECT ANSWER>>Provide for dividens With a Roth IRA, the contributory funds are taxed as income ____ the contributions are made. - CORRECT ANSWER>>Before Which of the following does NOT describe one of the ways in which insurable interest can be established? - CORRECT ANSWER>>Sympathy for a neighbor Medicare was approved in: - CORRECT ANSWER>>The 1960's Protection against the unintentional lapse of a life insurance policy is afforded through what means? - CORRECT ANSWER>>Automatic Loan Provision Annuity payment amounts are based upon which of the following factors? - CORRECT ANSWER>>Starting principal, interest, and income period The Statue of Limitations states that if a lawsuit is to be filed, it must be brought within 5 years after Proof of Loss is furnished to the insurance company. - CORRECT ANSWER>>Five "Capitation" as used by HMOs means: - CORRECT ANSWER>>The mount an HMO pays to a physician or provider in exchange for a rendered medical services. Accumulation units are converted into annuity units: - CORRECT ANSWER>>At the time of annuity payout Florida's Replacement Rule sets forth the requirements and procedures to be followed by the insurance companies and insurance producers when a proposal is being made to a client who plans to replace an existing life insurance contract with: - CORRECT ANSWER>>A proposed new life insurance policy The ____ annuity option provides a guaranteed income to the annuitant for life and if the insured dies prematurely, the balance of the principal is paid out in a lump sum to the annuitant's beneficiary. - CORRECT ANSWER>>Cash refund Group AD&D plans normally do not contain conversion privilege's. - CORRECT ANSWER>>TRUE An objective of the NAIC is to: - CORRECT ANSWER>>Encourage uniformity in state insurance laws and regulations. level, decreasing, and increasing insurance are all basic forms of ____ insurance. - CORRECT ANSWER>>Term In a disability insurance policy, the definition of total disability: - CORRECT ANSWER>>Varies depending upon the insurer In a disability income policy, the waiver of premium rider will allow the insured to cease paying policy premiums once the insured has been totally disabled for a typical period of: - CORRECT ANSWER>>3-6 Months Depending upon the contract, annuity payments can begin immediately or they can be deferred to a future date. The investment configuration: - CORRECT ANSWER>>Can be either fixed or a variable rate of return An annuity must begin with a sum of money that can either be supplied through the single payment method or the periodic payment method. If the periodic payment method is used, the payment amount: - CORRECT ANSWER>>Can be either fixed or flexible In order for an HMO to conduct business in Florida, it must obtain a valid Health Care Provider Certificate from the: - CORRECT ANSWER>>Agency for Health care Administration Which of the following is not a benefit to key person insurance? - CORRECT ANSWER>>Wage Control The Social Security Administration defines disability as: - CORRECT ANSWER>>The inability to engage in any substantial gainful work If a mutual insurer's participating policy pays dividends, these dividends can be calculated and guaranteed to be a certain amount. - CORRECT ANSWER>>FALSE To remain in compliance and maintain their licensure, all agents are required to fulfill continuing education requirements of ____ every two years in basic or higher-level courses approved by the Department. - CORRECT ANSWER>>24 hours Mrs. Smith became eligible for Medicare on April 1st. She went to her doctor on May 1st anbd was hospitalized May 5th. On May 8th she had surgery. On what date did her Medicare Part A claim begin? - CORRECT ANSWER>>May 5th Risk Retention Groups (RRGs) are a form of ____ insurer. - CORRECT ANSWER>>Mutual "Corporations" can be publicly-held or closely-held. - CORRECT ANSWER>>TRUE In addition to mortality, interest and expenses, mathematicians use ____ other principal factors in calculating premium rates. - CORRECT ANSWER>>Five (age, sex, health condition, occupation or avocation, and habits) Medicare Part ____ provides hospital coverage. - CORRECT ANSWER>>A Once insurable interest has beem established, and the process of evaluating all og the information and applying it against the insurer's standards and guidelines has been accomplished, ____ can be established. - CORRECT ANSWER>>Premium rates The operating objective of mutual insurance company is to: - CORRECT ANSWER>>Provide insurance to its owners (the policyholders) at the lowest possible net cost. Aiding and abetting an unauthorized insurer can result in a ____ conviction for the first violation. - CORRECT ANSWER>>Third-degree felony Even with the incontestable clause in a life insurance policy, if an insurer finds that the purchased policy was fraudulent, the insurer can void the contract. - CORRECT ANSWER>>The policy cannot be voided after the two year (or policy-defined) period. Mutualization occurs when a stock company turns to a ___ company. - CORRECT ANSWER>>Mutual What type of insurance is most frequently used in group life plans? - CORRECT ANSWER>>Annual renewable Term When a stock insurer issues both participation and nonparticipating policies, it is referred to as a company doing business on a ____ plan. - CORRECT ANSWER>>Mixed the ____ determines the life insurance policy's beneficiary. - CORRECT ANSWER>>Policyowner To provide a safeguard for insureds, most major medical policies contain a ____ feature that limits the insured's out-of-pocket expenses. - CORRECT ANSWER>>Stop-loss A medical expense policy states that it will pay a flat $200 a day for each day of hospitalization. The policy pays benefits on what basis. - CORRECT ANSWER>>Indemnity Medicare Part ____ provides medical coverage. - CORRECT ANSWER>>Part B Diverting insurance funds for personal use is an example of: - CORRECT ANSWER>>Misuse of premiums The Civil Rights Act of 1979 made it mandatory that group insurance provide maternity benefits if an insured group consists of ____ or more participants. - CORRECT ANSWER>>15 A ____ group involves combining several parties into a group for the purpose of obtaining insurance. - CORRECT ANSWER>>Fictitious NAIC policy provision states that health policy participants have ____ in which to file proof of loss, if reasonable possible. - CORRECT ANSWER>>90 days Under Social Security benefits, in order for an individual to be classified as "fully insured," the worker must have completed ____ of participating employment, - CORRECT ANSWER>>40 quarters Florida law requires group health policies to provide or offer coverage for which of the following medical services? - CORRECT ANSWER>>Alcoholism, drug dependency, and chiropractic care The ____ clause protects the proceeds held under a settlement option from attachment by creditors of the beneficiary. - CORRECT ANSWER>>Spendthrift A PCP is a: - CORRECT ANSWER>>Primary care Physician ____ policies are usually purchased to cover debts whose balances decrease over time, such as credit accounts and mortgages. - CORRECT ANSWER>>Decreasing term Under Florida law, group health insurers must offer mental and nervous disorder insurance to policyowners. - CORRECT ANSWER>>TRUE In general, the standard life insurance Incontestable Clause means that a policy is incontestable after: - CORRECT ANSWER>>Two years A life insurance policy under which the amount a policyowner pays in during the first years exceeds the sum of net level premiums that would have been payable to provide paid-up future benefits in seven years is called: - CORRECT ANSWER>>A Modified Endowment Contract (MEC) The term "doc-in-a-box" refers to which of the following? - CORRECT ANSWER>>Closed-panel HMOs Florida law requires minimum grace periods of ____ days for health policies with premiums payable weekly. - CORRECT ANSWER>>7 regarding hospital expenses, miscellaneous expense coverage does NOT cover physician services: - CORRECT ANSWER>>Even in case of emergency Insurance is a contract of: - CORRECT ANSWER>>Utmost good faith The Time Payment of Claims provision allows insurers ___ days after receiving notice and proof of loss in which to pay or deny any health insurance claim. - CORRECT ANSWER>>45 Generally, the more liberal the process is for renewing health insurance policy, the ____ the premiums are going to be. - CORRECT ANSWER>>Higher Which of the following statements regarding morbidity tables is CORRECT? - CORRECT ANSWER>>They indicate the average number of individuals from a given group who will become disabled. Knowingly making, issuing, or circulating any estimate, illustration, circular statement, sales presentation, omission, or comparison which incorrectly represents any facet of an insurance policy is called: - CORRECT ANSWER>>Misrepresentation Uber Florida's Mini-COBRA regulations, employers are required to provide their employees a continuation of their group health coverage at: - CORRECT ANSWER>>A cost not to exceed 115% of the regular group rate. Equity indexed annuities are a form of: - CORRECT ANSWER>>Fixed rate annuity ____ insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group is constantly changing. - CORRECT ANSWER>>Blanket The ____ bears the investment risk in a fixed annuity. - CORRECT ANSWER>>Insurer Which of the following health insurance policy provisions defines a specific period in which an insured remains covered by the policy even though the insured has not paid the premium due yet? - CORRECT ANSWER>>Grace Period Florida law requires minimum grace periods of ____ days for health policies with premiums payable monthy. - CORRECT ANSWER>>10 In what way is an equity-indexed annuity different from other fixed annuities? - CORRECT ANSWER>>Because of the way it credits interest to the annuity's value. Which organization regulates the separate account in variable insurance products? - CORRECT ANSWER>>The SEC On medical reimbursement plan, the policyowner is the: - CORRECT ANSWER>>Beneficiary The Office of Insurance Regulation conducts examinations of insurance company financial and operational situations at least: - CORRECT ANSWER>>Once every 3 years Under Florida law, hearing screening for any newborn children of an individual who is covered under a health insurance policy is a covered benefit. - CORRECT ANSWER>>TRUE What conversion rights belong to a surviving spouse of a group life insurance certificate holder? - CORRECT ANSWER>>The surviving spouse has the same conversion rights the insured employee possessed. the type of annuity that provides a guaranteed rate of return is called a ____ anuitity - CORRECT ANSWER>>Fixed Lloyd's of London is an association of individuals and companies that individually: - CORRECT ANSWER>>Underwrite insurance What type of insurance contract contain unequal contingencies on the potential for profit or loss on both parties in the contract? - CORRECT ANSWER>>Aleatory contract The social Security payroll tax is known as ___ tax - CORRECT ANSWER>>FICA Medicaid provides funds for charitable organizations that provide assistance to the poor. - CORRECT ANSWER>>FALSE The type of rating that relies on a group's track record of past claims to determine premiums is called ____ rating. - CORRECT ANSWER>>Experience An outside organization that manages employers' self-insured plans is known as: - CORRECT ANSWER>>A Third-Party Administrator (TPA) "Direct access" means that an HMO subscriber does NOT have to obtain a referral from their ____ in order to obtain medical services. - CORRECT ANSWER>>PCP A person may not be required to purchase health insurance except as a condition of: - CORRECT ANSWER>>All if the reasons listed apply(public employment, an order of child support, voluntary participation n a state or local benefit) The designated time period for an equity-indexed annuity is ____ years - CORRECT ANSWER>>Seven The two categories of retirement contribution plans are ____ Plans and Defined Contribution Plans. - CORRECT ANSWER>>Defined benefit Which aspect of a decreasing term policy actually decreases each year? - CORRECT ANSWER>>Face amount The ____ refers to the fact that a written contract cannot be changed by oral evidence. - CORRECT ANSWER>>Parole Evidence Rule basic surgical expense policies generally provide coverage for all of the following EXCEPT: - CORRECT ANSWER>>miscellaneous expenses such as lab fees and x-rays Why is it important that the agent carefully ask the applicant each question on the application and see that the answers are correctly stated? - CORRECT ANSWER>>The insured or a beneficiary may not have a valid claim. A $50,000 fine can be assessed for violation of a Cease and Desist order. - CORRECT ANSWER>>TRUE Florida law does not regulate retirement plans. - CORRECT ANSWER>>TRUE Agents are sometime referred to as "field underwiters." - CORRECT ANSWER>>TRUE A Salary Continuation Plan can be used for the ___ of disabled employees - CORRECT ANSWER>>Continuance of wages An insurance agent is required to have ____ for recommending an annuity transaction to a senior consumer. - CORRECT ANSWER>>An objectively reasonable basis Solicitation or inducement to purchase insurance begins the process of: - CORRECT ANSWER>>The insurance Contract Who is responsible for notifying the original insurer that a replacement policy may be issued? - CORRECT ANSWER>>The replacing agent The basic risk insured against by purchasing a life insurance contract is ____ whereas the basic risk insured against by an annuity contract is ____. - CORRECT ANSWER>>The risk of dying too soon; the risk of living too long Which of the following life policies do NOT allow partial surrenders? - CORRECT ANSWER>>Both Whole Life and Variable Life The characteristics of common stock make them a suitable form of investment for what type of annuities? - CORRECT ANSWER>>Variable annuities The ____ is a qualified plan that allows unincorporated business owners to participate in the retirement plan as an employee. - CORRECT ANSWER>>Keogh Plan Which of the following does NOT describe one of the ways in which insurable interest can be established. - CORRECT ANSWER>>Sympathy of a neighbor Tom is a newly appointed life, health and variable annuity agent with Acme insurance Agency. He is writing his first insurance policy on his bother-in-law's life. Who does Tom legally represent in this transaction? - CORRECT ANSWER>>Acme Insurance Agency What is the purpose behind full disclosure requirements? - CORRECT ANSWER>>To help a client make an informed decision Roland invested $30,000 in a deferred annuity when he was 30 years old, which grew to $60,000 in 20 years. At age 50, he decides to take a partial withdrawal in the amount of $15,000. What are the tax implications? - CORRECT ANSWER>>The $15,000 withdrawal is taxable as ordinary income plus a 10% premature distribution penalty applies. Which of the following expenses would NOT be covered under a Business Overhead Expense Policy? - CORRECT ANSWER>>Owner's salary Bill gives Jim a couple of tickets to a Florida Gators game to thank him for purchasing a policy. This is an example of: - CORRECT ANSWER>>Rebating Which of the following is NOT a part of a product presentation? - CORRECT ANSWER>>Asking for referrals An annuitant selects Life with Period Certain as his annuity option. What will he receive? - CORRECT ANSWER>>Payout for life or a fixed number of years, whichever is longer. Purchasers of life insurance policies are ____, but are not necessarily ____. - CORRECT ANSWER>>Policyowners; policyholders Mathew purchased an annuity naming his wife, Cher, beneficiary. Upon Mathew's death, Cher will receive the proceeds: - CORRECT ANSWER>>Taxed as ordinary income above Mathew's cost basis. In annuities, the ____ can be calculated by dividing the expected return (life expectancy) into the total of all premiums paid into the contract (contact investment). - CORRECT ANSWER>>Exclusion ratio Florida does not issue separate licenses for: - CORRECT ANSWER>>Brokers Reserve monies that represent the insurer's liability for losses that have not yet occurred but for which premiums have been paid are called ____ reserve funds - CORRECT ANSWER>>Premium An insured group of doctors and an insured group of pharmacists are typically insured through - CORRECT ANSWER>>Risk retention groups In life insurance, a beneficiary designated as third in line to receive the proceeds or benefits if the other named beneficiaries do not survive the insured is the ____ beneficiary. - CORRECT ANSWER>>Tertiary PPOs use the reimbursement method for covered medical expenses. - CORRECT ANSWER>>TRUE ____ refers to the monies set aside by insurers for future claims costs. - CORRECT ANSWER>>Reserve funds A life insurance policy will not be reinstated if it has been: - CORRECT ANSWER>>Surrendered for its cash value In order for the Social Security 40-quarter rule to apply, an individual must have been employed and paid FICA taxes for at least ____ years - CORRECT ANSWER>>Ten COBRA coverage is considered continuous: - CORRECT ANSWER>>Group health coverage Which of the following characteristics are associated with a disability buy-out plan? - CORRECT ANSWER>>A lengthy elimination period Should a policyowner get into a situation in which he/she cannot continue to make the required premium payments, ____ options can be utilized. - CORRECT ANSWER>>Nonforfeiture Each Social Security credit equals ____ annual FICA taxed earnings in 2012. - CORRECT ANSWER>>$1,130 What type of annuity settlement would best be used to distribute funds from the settlement of large sums of money (such as with lawsuits and lotteries) - CORRECT ANSWER>>A structured settlement annuity The disability income insurance cost of living rider (COLA) is relatively: - CORRECT ANSWER>>Expensive Mary received a large amount of funds and wants to invest most of the funds to ensure future retirement income. Which of the following annuities would be her best purchase? - CORRECT ANSWER>>A Deferred annuity If a disabled worker covered under Social Security disability benefits recovers and then is disabled again within five years, a new waiting period is required before benefits begin again. - CORRECT ANSWER>>FALSE Endowment insurance provides security and creates an asset called: - CORRECT ANSWER>>Cash value The MIB's main purpose is to: - CORRECT ANSWER>>Be a reliable source of medical information Mass marketing involves exposures to large groups of people through such methods as advertisement, commercials, mass mailouts, etc. ____ is/are not involved in this process of selling. - CORRECT ANSWER>>Licensed agents Retirement plans that meet federal government approval and receive tax benefits are known as ____ plans. - CORRECT ANSWER>>Qualified A serious condition that, with proper medical treatment, the patient should receive full recovery is known as ____ illness. - CORRECT ANSWER>>Acute Social Security provides: - CORRECT ANSWER>>A death benefit, old age benefits, and disability benefits. Under the unpaid premiums provision in a health insurance policy, when premiums remain unpaid at the time a claim is submitted, the insurer may: - CORRECT ANSWER>>Deduct unpaid premiums from benefits before paying the claim. Most group disability policies use the ____ method to calculate the amount of the insured's earnings prior to the accident. - CORRECT ANSWER>>Percentage the face value on industrial insurance policies is usually ____ than most. - CORRECT ANSWER>>Smaller All of the following are characteristics of group health insurance plans EXCEPT: - CORRECT ANSWER>>The parties to a group health contract are the employer and the employees Which of the following risks is insurable? - CORRECT ANSWER>>Pure risks With regard to annuity investments by seniors, "senior consumers" are typically defined as those individuals who are age: - CORRECT ANSWER>>65 or older Only ____ policies pay dividends. - CORRECT ANSWER>>Participating A complete examination of an HMO's affairs is conducted at least: - CORRECT ANSWER>>Once every five years According to the Social Security department, the inability to engage in any substantial gainful work is known as: - CORRECT ANSWER>>Disability Under HMO plans, subscribers pay ____ in advance of any treatment. - CORRECT ANSWER>>A fixed periodic premium The ____ method disperses proceeds equally among the life policy's living named beneficiaries. - CORRECT ANSWER>>Per Capita Joanne requires a surgical procedure for which her health insurance policy provides coverage on an inpatient basis. However, Joanne has decided to have the procedure performed at an ambulatory surgical center instead. Which of the following is TRUE? - CORRECT ANSWER>>the policy must provide the same coverage for qualified services performed in an ambulatory surgical center. The Insurance Code sets forth ____ penalties for individuals who knowingly make a fraudulent application for a license. - CORRECT ANSWER>>Misdemeanor Which type of life insurance is sold by home services insurers? - CORRECT ANSWER>>Industrial life insurance Endowment policies are payable at the death of the insured or on a specific maturity date, whichever comes first. - CORRECT ANSWER>>TRUE Stock and mutual companies can write ____ insurance. - CORRECT ANSWER>>All- Life, health, and property and casualty A person cannot consider disability income expenses tax deductible unless the amount exceeds: - CORRECT ANSWER>>7.5% "ACC" refers to the type pf disability that prevents someone from performing the job he was performing prior to the disability. - CORRECT ANSWER>>FALSE The ____ are laws passed by state legislatures to regulate the behavior of insurance companies with respect to the payment of claims. - CORRECT ANSWER>>Unfair Claims Settlement Practice Act When a policyowner surrenders his whole life policy for its cash value, he can receive an amount equal to the premiums paid into the policy tax-free - CORRECT ANSWER>>TRUE Reserve funds that represent the insurer's liability for losses that have occurred, but for which settlement is not yet completed are called ____ reserve funds. - CORRECT ANSWER>>Loss which annuity payout option provides guaranteed payments for a certain period of time and if the annuitant dies before the period has expired, the policy pays the beneficiary through the remainder of the period? - CORRECT ANSWER>>Period CertainOption Which type of insurer insures groups of individuals who are of the same class? - CORRECT ANSWER>>Risk Retention Groups Which of the following are considered eligible association groups for life and health insurance? - CORRECT ANSWER>>Fraternal benefit societies, the Salvation Army, or local churches Which of the following is NOT considered one of the three basic parts of a life insurance contract? - CORRECT ANSWER>>Security report Social security provides welfare benefits to all citizens. - CORRECT ANSWER>>FALSE The ____ may take cash surrender on an annuity. - CORRECT ANSWER>>Contract Owner The NAIC Model Provision Law contains ____ optional provisions. - CORRECT ANSWER>>11 In risk classification, a "higher than average risk" is given a _____________ rate. - CORRECT ANSWER>>Substandard Participation, coverage, vesting, funding and contributions are basic requirement categories retirement plans must fulfill in order to be approved by the ____ for favorable tax treatment. - CORRECT ANSWER>>Internal Revenue Service The normal amount of income that can be replaced by a long-term disability policy is: - CORRECT ANSWER>>60% once an organization has filed an application to conduct insurance business, the Office of Insurance regulations will begin it's review for issuing a(n): - CORRECT ANSWER>>Certificate of Authority Most individual insurance policies are written on a ____ basis. - CORRECT ANSWER>>Nonparticipating The ____ is the dollar amount an insured is required to pay before the health insurance benefits kick in. - CORRECT ANSWER>>Deductible Both supplementary and comprehensive major medical plans contain deductibles and coinsurance. - CORRECT ANSWER>>TRUE Agents must secure company approval prior to the use of any advertisement not furnished by the insurer. - CORRECT ANSWER>>TRUE Insurance agents must keep records for at least ____ years if the transaction pertains to premium payments. - CORRECT ANSWER>>3 Charles wants an annuity that provides income for he and his wife, Emma. If he should predecease Emma, he wants her to receive the same income payments for the rest of her life. Which type of annuity payout option should he select? - CORRECT ANSWER>>Joint and Full Survivor Option If a health insurance policy has been in force for at least one year and the insured is 64 years of age or older, an additional lapse notice must be sent (to a secondary addressee if the policyowner designated one). - CORRECT ANSWER>>TRUE ____ requires the policyowner to benefit from the insured's continued existence or the insured's enjoyment of good health; or to suffer a loss when the insured dies or is disabled. - CORRECT ANSWER>>Insurable interest A Waiver of Premium rider is usually included with guaranteed renewable and noncancelable individual disability income policies. - CORRECT ANSWER>>TRUE The ____ designation means that the beneficiary cannot be changed without the named beneficiary's permission. - CORRECT ANSWER>>Irrevocable Under what circumstances can an insurer deny coverage to a firearm owner? - CORRECT ANSWER>>Never Cliff vesting means that an employee must have ____ of service before becoming 100% vested. - CORRECT ANSWER>>Five years Under the Joint and One-Half Survivor option, annuity payments to the survivor are reduced to one-half of the original joint income. - CORRECT ANSWER>>TRUE John died at age 65 leaving his wife, Joan age 59 the proceeds of a $100,000 life insurance policy. If Joan decides to take a lump sum settlement in cash, what taxes are due? - CORRECT ANSWER>>Zero Evan decides to surrender his whole life policy for a reduced paid-up policy. The cash value of his new policy will: - CORRECT ANSWER>>Continue to increase Group health plans that are issued by stock companies frequently: - CORRECT ANSWER>>Issue experience-rated plans A term life insurance policy's cash value builds during a specifically limited period of time. - CORRECT ANSWER>>FALSE ____ is when a stock company turns to a mutual company - CORRECT ANSWER>>Mutualization Which of the followin is NOT true regarding Medicare supplement (Medigap) policies? - CORRECT ANSWER>>Medigap policies can be sold to anyone. The minimum number of persons to be insured under a group health insurance plan is established by: - CORRECT ANSWER>>Sate law In health insurance policy underwriting, the three most important factors are: - CORRECT ANSWER>>Moral hazards, occupation, and physical condition Speculative risk involves the chance of loss and gain. - CORRECT ANSWER>>TRUE Which of the following is NOT involved in a product presentation? - CORRECT ANSWER>>Credit report When does a tertiary beneficiary collect? - CORRECT ANSWER>>When the primary and secondary beneficiaries predecease the insured. Most new life insurance policies are purchased by ____ from life insurance agents. - CORRECT ANSWER>>Individuals According to medical cost management principles, mandatory second opinions are not necessary before an insured undergoes any nonlife-threatening surgery. - CORRECT ANSWER>>FALSE In a reciprocal insurer structure, each policyholder insures the risk of: - CORRECT ANSWER>>The other policyholders Road rage is an example of what type of hazard? - CORRECT ANSWER>>Morale By most insurer's definitions, "partial disability" is the: - CORRECT ANSWER>>Inability of the insured to perform certain important duties of his/her job. Under the surgical schedule method of basic medical expense plan, every procedure: - CORRECT ANSWER>>Is assigned a dollar amount by the insurer. Reciprocal insurers are owned by: - CORRECT ANSWER>>Policyholders Serious problems of misrepresentation are most likely to occur during which phase of the selling process? - CORRECT ANSWER>>The presentation of recommendations ____ is defined as "limiting sales to a specific group in which you have a vested interest." - CORRECT ANSWER>>Controlled business the key factor behind ERISA's development was to encourage employers to establish employee health plans allowing them to self-insure. - CORRECT ANSWER>>TRUE As pertains to group health insurance, COBRA stipulates that: - CORRECT ANSWER>>Group coverage must be extended for terminated employees up to a certain period of time at the employee's expense. The determination of disability for Social Security purposed is usually made by: - CORRECT ANSWER>>A government agency Toni decides to take a special vacation on her 40th birthday and withdraws $4,000 from her IRA. What penalty will she be subject to on the amount withdrawn? - CORRECT ANSWER>>$400 Generally, the more liberal the process is for renewing a health insurance policy, the _____ the premiums are going to be. - CORRECT ANSWER>>Higher Is a variable annuity insurer required to inquire whether an applicant for a variable annuity also has any form of fixed dollar income? - CORRECT ANSWER>>YES Of the key factors involved in the underwriting process of disability income coverage, _____________ is the most important factor. - CORRECT ANSWER>>Income Which of the following whole life policies provide level premiums limited to a certain time period (less than life)? - CORRECT ANSWER>>Limited Pay Whole Life Who governs Workers' Compensation laws? - CORRECT ANSWER>>Individual state governments According to Florida law, all group life policies must contain a conversion provision which allows the covered individual _______ to convert the group coverage to an individual plan without evidence of insurability if their employment is terminated. - CORRECT ANSWER>>31 days What type of buy-sell plan enables each partner to purchase policies on the other partners? - CORRECT ANSWER>>Cross-Purchase plan In Florida, a child must be at least ____ years of age to sign a life insurance application. - CORRECT ANSWER>>15 If a policy is transferred under an absolute assignment, the assignee cannot change the irrevocable beneficiary without: - CORRECT ANSWER>>The beneficiary's permission In a guaranteed renewable health policy, the company may increase premiums: - CORRECT ANSWER>>Only for an entire class of insureds How is a policy loan repaid if the policy pays a death claim? - CORRECT ANSWER>>The loan plus any interest due is deducted from the death benefit. The Medicare "benefit period" begins the _________ day of hospitalization. - CORRECT ANSWER>>First The surrender values are __________ for a participating life insurance policy and a nonparticipating life insurance policy. - CORRECT ANSWER>>Generally the same Mac decides to install a burglar alarm in his residence. What type of risk classification would this be? - CORRECT ANSWER>>Risk reduction On the whole, federal employees hired before 1984 who are covered by Civil Service Retirement or another similar pension plan are not eligible for Social Security benefits. - CORRECT ANSWER>>TRUE Family Income and Family Maintenance contracts both utilize a ____________ as the base, with a __________ rider. - CORRECT ANSWER>>Whole life policy, term insurance In Florida, which of the following groups are eligible for group life insurance? - CORRECT ANSWER>>Typically, any type of legitimate group is eligible to purchase a group life insurance policy. All of the following are characteristics of group health insurance plans EXCEPT: - CORRECT ANSWER>>The parties to a group health contract are the employer and the employees. Section 1035 Exchanges are a way to move annuity funds: - CORRECT ANSWER>>Income tax free When health care is provided first and then charges are submitted to the insurer, it is referred to as: - CORRECT ANSWER>>The reimbursement approach In 2012, for family coverage, an HSA qualified high-deductible health plan is one with a minimum deductible of ________ . - CORRECT ANSWER>>$2,400 With the Joint and Full Survivor annuity option, if one dies: - CORRECT ANSWER>>The same income payments continue to the survivor for life Which of the following is NOT a responsibility of the Department of Financial Services? - CORRECT ANSWER>>Direct rate regulation applicable to life insurance If health savings account (HSA) funds are used for any other purpose than medically authorized, they become taxable and subject to a ______ penalty fee - CORRECT ANSWER>>10% Which answer below best describes the true effective date of a policy? - CORRECT ANSWER>>The date the insurer accepts an offer by the applicant as written Mutual Insurers are owned by stockholders and stock insurers are owned by policyholders. - CORRECT ANSWER>>FALSE Medical expense insurance is a contract of: - CORRECT ANSWER>>Reimbursement Violation of the Unfair Trade Practices Act can result in license suspension, probation, revocation, fines up to __________ or even imprisonment. - CORRECT ANSWER>>$200,000 HMOs reimburse their insureds for covered medical expenses. - CORRECT ANSWER>>false The Free Look Period for long-term care policies is _______ days. - CORRECT ANSWER>>30 A Variable annuity separate account will be invested in: - CORRECT ANSWER>>Common stocks and other securities Which of the following is a standard provision in all life insurance policies? - CORRECT ANSWER>>Grace period Florida law allows health insurance applicants _____ days to inspect a policy that is delivered with the intent of issuing insurance coverage for the policyowner and if the policy is not issued, the applicant must be given a full refund. - CORRECT ANSWER>>10 Deferred compensation plans can be simply and best defined as: - CORRECT ANSWER>>A contractual agreement to pay benefits in the future. Which of the following are typically excluded in life insurance policies? - CORRECT ANSWER>>All - Suicide, war or military service, and hazardous occupation or hobby misrepresentation - CORRECT ANSWER>>"Sliding" is akin to: Social Security disability benefits have a ________ waiting period. - CORRECT ANSWER>>5 month A life insurance policy's cash value belongs to the insured. - CORRECT ANSWER>>FALSE In an Accidental Death and Dismemberment policy, the sum which is paid as a death benefit is called the ______________ sum. - CORRECT ANSWER>>Principal _____________ health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group is constantly changing. - CORRECT ANSWER>>Blanket Social Security is based on a __________ system. - CORRECT ANSWER>>pay-as-you-go Henry has a Life with Period Certain annuity (life or ten years) in which is wife, Harriet, is beneficiary. If Henry dies after 5 years, what will Harriet receive? - CORRECT ANSWER>>Payments for the remaining five years