214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWER, Exams of Business Administration

Download 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWER and more Exams Business Administration in PDF only on Docsity! 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) Which type of insurance protects an agent and even pays claims if a lawsuit is brought against the agent as a result of failing to provide a service to a client? - correct answerErrors and Omissions Insurance Which of the following terms is known as the voluntary relinquishment of a given right or privilege? - correct answerWaiver This Supreme Court case placed the regulation of insurance within the authority of the federal government by defining insurance as a form of interstate commerce? - correct answerUnited States v. Southeastern Underwriters Association (1944) Tim was just hired today by MAB INC and wants to join the company's group insurance policy. What period of time is he currently in and when can he join the plan? - correct answerProbationary period, he can sign up after 90 days If Justin submitted an initial premium with his life insurance application, was provided a conditional receipt by the insurance company and was ultimately issued a policy as applied for, when would his insurance policy be considered in force? - correct answerThe date of his application or the day he completed any required medical exam When dividends are issued, the policyowner has the following dividend options in utilizing a return EXCEPT: - correct answerLife Income Option Which two life insurance riders can Bill purchase to guarantee that his policy will continue without further commitment from him and that income will be paid to him if he becomes totally and permanently disabled? - correct answerWaiver of premium and Disability Income Riders In a contributory group plan, what percentage of eligible employees must be covered? - correct answer75% Which statement regarding annuities is CORRECT? - correct answerVariable annuity units are fixed but the annuity payment will vary according to the value of the annuity unit. 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) In order to be considered currently insured and thus eligible for limited survivor benefits from Social Security, a worker must have earned ___ credits during the 13-quarter period ending with the quarter in which the worker died. - correct answer6 Social security is also known as: - correct answerOld Age Survivors and Disability Insurance (OASDI) Insurance is not intended to protect against? - correct answerSpeculative Risk Under a family plan life insurance policy, coverage on the breadwinner is often provided by which of the following insurance types? - correct answerWhole Life Which of the following statements regarding annuity settlement or payout options is NOT true? - correct answerIf the annuitant dies before the principal sum is depleted, the Refund Life Annuity Option will pay the entire annuity amount to the beneficiary in a lump sum payment or over scheduled installments. The following statements regarding 401(k) retirement plans are correct EXCEPT: - correct answerPlans rarely have a matching contribution component by an employer All of the statements below pertaining to group life insurance are correct EXCEPT: - correct answerIf the insurance coverage is less than $75,000, employees do not have to report the employer-paid premiums as income According to Florida Statues, entering into any agreement to commit any act of intimidation resulting in the business of insurance is known as: - correct answerCoercion William, age 67, has owned his life insurance policy for the past 15 years and has mailed his monthly premiums to his life insurance company. Last month he failed to mail the monthly payment on his premium due date as well as during his policy's grace period. As a result, which of the following scenarios will MOST likely occur? - correct answerThe insurer will provide notification of impending lapse in coverage, and allow at least 21 additional days beyond the grace period to make a payment to prevent the policy from lapse 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) Agents selling insurance products for an agency are not required to be individually licensed, as long as the agency itself is. - correct answerWhich of the following statements regarding insurance agencies in Florida is INCORRECT? 100% - correct answerWhen an employee makes contributions into a pension plan, what percentage of his or her own contributions are vested? Cash value - correct answerWhich of the following is NOT associated with a term life policy? Pre-texting - correct answerAs a provision of the Financial Services Modernization Act of 1999, attempts to obtain non-public personal information from consumers and customers under false pretenses is referred to as Extended Term option - correct answerWhich of the following is NOT considered to be a life policy settlement option? Interest earned will be taxed, but premiums paid into the policy will not be taxed. - correct answerIn the event that a policyowner surrenders his or her individual whole life policy, which outcome will likely occur? Occurence Policy - correct answerWhich type of E&O policy provides permanent coverage for the actions of an agent during which time he or she was covered under such policy, regardless of when a lawsuit is filed against the agent? Deferred Vesting - correct answerWhich of the following is NOT a retirement vesting schedule? Spendthrift Clause - correct answerWhich of the following life policy clauses or provisions protects a life policy's proceeds against a beneficiary's creditors? Reviewing the applicants MIB file - correct answerA paramedical exam includes all of the following EXCEPT The employer - correct answerIn an employer-related group life contract, an employee may choose any of the following individuals or entities to serve as his or her policy's beneficiary EXCEPT 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) A broker - correct answerRaymond, a licensed insurance producer, solicits insurance through more than one insurer and negotiates on behalf of his clients; therefore, he is considered to be Non-Medical - correct answerReferred to as a _________ application, it is common for a health or life insurance policy to be issued to an applicant based solely on the medical information gathered from the application that is submitted by the applicant to the insurer. National Association of Insurance Commissioners (NAIC) - correct answerWhich agency has influenced the insurance industry by introducing uniform regulation 'models' for states to follow in an attempt to standardize multiple-state insurance laws? A beneficiary - correct answerWhich of the following does not have the responsibility of acting as a fiduciary? The ratio between company losses and company revenue that determines an insurance company's revenues that must be maintained to cover annual claims by its policyowners. - correct answerLoss ratio is defined as No minimum - correct answerIn the state of Florida, what is the minimum number of members required for a group life insurance policy? Controlled business - correct answerSandra, who is a licensed agent and an employee at XYZ company, is writing an insurance policy on herself and a few of her co-workers since group benefits are currently not available. What type of business is she considered to be conducting? Substandard risk - correct answerBetty has a history of poor health and is currently taking four medications for high blood pressure and cholesterol. What type of risk is Betty if she were to apply for a health policy? The primary function of an Equity Index Annuity is to: - correct answerLink excess interest to the upward movement of an outside market index, such as the S&P 500, while maintaining a minimum guaranteed interest rate Speculative risk - correct answerInsurance is not intended to protect against? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) At the time of application - correct answerIn determining the validity of an insurance contract, when must insurable interest be present? 60 days - correct answerIf an individual wants to transfer funds from their 401(k) plan into a Rollover IRA, what is the maximum allowed time in order to be eligible for a tax-free rollover? Annuity Funding plan - correct answerWhich of the following qualified employer retirement plans is NOT recognized as a 'defined contribution' plan? 40 credits - correct answerWhat is the full amount of Social Security credits needed to be fully insured for benefits? Long-term care rider - correct answerWhich life rider allows for care in a convalescent or nursing home? Extended term option - correct answerIf Jim decides to cancel his whole life insurance policy and uses his policy's cash value to purchase a term life policy with a face amount of equal value but with a likely shorter coverage period, he is utilizing which type of life insurance nonforfeiture option? Consideration Clause - correct answerWhich provision or clause below will illustrate the frequency and amount of policy premiums? A term life policy builds cash value over the policy's term. - correct answerWhich of the following statements describing term life insurance is INCORRECT? The insurance company evaluates the individuals within a group instead of the group as a whole, and then measures the individual's risks against its underwriting standards. - correct answerIn regards to group insurance, which statement below is INCORRECT? Central Medical Bureau (CMB) - correct answerAll of the following are sources for obtaining information regarding an applicant's insurability EXCEPT: An insurer is required to disclose medical information to an applicant in the event the applicant is rejected due to findings in the report. - correct answerWhich of the following is NOT required by the Fair Credit Reporting Act of 1970? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) Taft-Hartley Trust - correct answerWhich of the following is established to fund a multiemployer plan? Misrepresentation - correct answerOverstating promises, using inaccurate or misleading information and guaranteeing insurance are types of: Interest-free option - correct answerThe following life policy settlement options are available to the policy's beneficiary EXCEPT: Dividend - correct answerA return of premium that is paid out by mutual insurance companies at the end of the year as a result of either positive operating costs or other investment returns is also known as a: Accumulation Period - correct answerWhich of the following defines the period during which funds grow in an annuity? 50% - correct answerFor individuals who have reached their normal retirement age, their spouses are entitled a retirement benefit that is equal to what percentage of the retired worker's primary insurance amount (PIA)? Floods - correct answerAll of the following are considered hazards EXCEPT: Buy-Sell Agreement - correct answerWhich type of business life insurance 'buyout' agreement is used to purchase the interest of a deceased partner so that the business can continue to operate without financial interruption? Viatical settlement Provider - correct answerAn individual, company or legal entity that purchases ownership of a life insurance contract from a policyowner who, in return, receives compensation amounting to less than the policy's death benefit, usually 60%-80% of the policy's proceeds is known as a : A new application for insurance must be established - correct answerIn the event that a life insurance policy has lapsed, which of the following actions is NOT required of the policyowner before an insurance company will reinstate the policy? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) If the insurance coverage is less than $75,000, employees do not have to report the employer-paid premiums as income - correct answerAll of the statements below pertaining to group life insurance are correct EXCEPT: 30 days - correct answerWithin what amount of time must a licensed insurance agent report to the Florida Department of Financial Services that he/she has been found guilty of or has pleaded guilty to a felony or crime punishable by imprisonment of 1 year or more? Individual Life insurance - correct answerWhich of the following insurance contracts must follow the Florida Life Solicitation Law? Pension Benefit Guaranty Corporation (PBGC) - correct answerWhich federal organization was created under ERISA to guarantee payments of pension benefits in defined benefit plans that terminate due to a lack of funding to cover benefit payments? Home service system - correct answerAlthough most insurers no longer use this marketing approach, lower-valued life insurance products, called 'industrial' life insurance, is still marketed through the once an insurance contract, including its provisions and riders, is constructed and provided in written form to the insured, it cannot be modified by any oral, or verbal, statements made by either party. - correct answerThe 'parol evidence rule' states that Deferred Vesting - correct answerWhich of the following is NOT a retirement vesting schedule? At the time of the application - correct answerInsurable interest is required required only after the enrollment period ends. - correct answerIn a group life contract, evidence of insurability is Enrollment period; 30-31 days - correct answerRichard has worked at J&J Printing Inc. for the past three months and wants to join the company's contributory group insurance plan. Which answer BEST describes the period is he entering and how long does he have to apply without proof of insurability? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) 6 - correct answerIn a 3 partner cross-purchase plan, how many policies need to be purchased in order to protect each partner against the loss of any other partner? Fiduciary - correct answerA person in a position of financial trust is known as a Spendthrift provision - correct answerMr. Baker has named his son as the beneficiary to his life insurance policy, but he is worried about his son's spending habits and the money his son might already owe when he receives the death benefit. Which policy provision, clause or rider best fits his situation? Other (Additional) Insured(s) Rider - correct answerWhich of the following life policy riders is also referred to as a 'child' rider? Annual Renewable Term - correct answerWhat is the most common type of employment-related group life insurance? Twisting - correct answerThe practice of inducing a policyowner through misrepresentation to forfeit or change insurance from one company to another to gain commission for an agent or agency is called: Aleatory - correct answerThe concept that an insurance contract is dependent on an uncertain outcome and that one party may receive more value than given it is said to be: If the annuitant dies before the principal sum is depleted, the Refund Life Annuity Option will pay the entire annuity amount to the beneficiary in a lump sum payment or over scheduled installments. - correct answerWhich of the following statements regarding annuity settlement or payout options is NOT true? Her insurer will issue a paid-up term life policy with the same face value as the original whole life policy and a term length based on the amount of cash value that the forfeited whole life policy can purchase. - correct answerSusan has been paying premiums on her whole life policy for the past 14 years. Recently, she decided to stop making payments, but did not select a nonforfeiture option. Since she did not select such option, what actions will her insurer take? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) general buyer's guide; policy summary - correct answerAccording to the NAIC Life Insurance Solicitation Model, when soliciting life insurance, a producer is required to provide a prospect with a ______ and a _______ specific to the product being marketed. Spendthrift provision - correct answerMr. Baker has named his son as the beneficiary to his life insurance policy, but he is worried about his son's spending habits and the money his son might already owe when he receives the death benefit. Which policy provision, clause or rider best fits his situation? Guaranteed Insurability rider - correct answerWhich rider, also known as an 'insurance protection' rider, states that at certain dates in the future, the insured can purchase additional insurance without evidence of insurability? Mutual - correct answerWhich of the following insurers is considered a participating company? Analyzing risk - correct answerWhich of the following is NOT a method of handling risk? A master contract is issued by the insurer to the employer, while employees are given certificates of insurance - correct answerIn regards to group insurance, which of the following statements below is correct? Irrevocable designation - correct answerLinda has decided to make her husband John the beneficiary to her life insurance policy. She has chosen a beneficiary designation that can only allow her to change beneficiaries with the written consent of her husband. This type of beneficiary designation is known as a(n): Annuity Funding Plan - correct answerWhich of the following qualified employer retirement plans is NOT recognized as a 'defined contribution' plan? Morbidity Rate - correct answerIn reference to health insurance, which of the following is a factor when determining health insurance premiums? The insured always receives more from the contract than the insurer - correct answerAn insurance contract is considered Aleatory for the following reasons EXCEPT: 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) 24 - correct answerHow many hours of continuing education must a life and/or health insurance agent complete who has held an insurance license for a period of less than 6 years? Agents selling insurance products for an agency are not required to be individually licensed, as long as the agency itself is. - correct answerWhich of the following statements regarding insurance agencies in Florida is INCORRECT? Mutual/Par - correct answerIn addition to being a policyowner, Allison shares in her insurer's success and receives dividends from the company's annual profits. This is because she purchased an insurance policy through a ________ insurer, also referred to as a ________ company. Extended term option - correct answerLinda now owns a $120,000 term life policy after she forfeited her whole life policy and reinvested its cash value. As described by her actions, which nonforfeiture option did Linda exercise? A term life policy builds cash value over the policy's term. - correct answerWhich of the following statements describing term life insurance is INCORRECT? Fixed-period option - correct answerIn the event a whole life policy is cancelled or lapses due to nonpayment, all of the following nonforfeiture options are available to the policyowner EXCEPT 60 days - correct answerIf an individual wants to transfer funds from their 401(k) plan into a Rollover IRA, what is the maximum allowed time in order to be eligible for a tax-free rollover? 30 days - correct answerWithin what period of time must an agent notify the Florida Department of Financial Services of any change in address? An agent is offering to pay the premium for the first two months of my policy if I purchase life insurance through him. - correct answerWhich of the following is an example of sliding? 1 year - correct answerAn 'in force' life insurance policy illustration is defined as an illustration that is furnished at any time after the policy that it depicts has been in force for at least how long? 214 FLORIDA INSURANCE EXAM 2024-2025 ACTUAL EXAM 150 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) Rebating - correct answerThe act of refunding part of the commission, premium, services or anything of value to the purchaser as an inducement to buy an insurance policy is known as: A variable rate of growth and a variable benefit payable to the annuitant - correct answerVariable annuities are characterized by: Cash value - correct answerWhich of the following is NOT associated with a term life policy? The McCarran-Ferguson Act defined insurance as a form of interstate commerce. - correct answerAll of the following are true regarding the McCarran-Ferguson Act EXCEPT: A master contract is issued by the insurer to the employer, while employees are given certificates of insurance - correct answerIn regards to group insurance, which of the following statements below is correct? Other (Additional) Insured(s) Rider - correct answerWhich of the following life policy riders is also referred to as a 'child' rider? Living benefits - correct answerThe cash value in a whole life policy is also considered to be the policy's: The final fund available to any one participant depends on total amounts contributed, plus interest and dividends earned - correct answerWhen pertaining to a defined contribution plan, all of the following are incorrect EXCEPT: Agents selling insurance products for an agency are not required to be individually licensed, as long as the agency itself is. - correct answerWhich of the following statements regarding insurance agencies in Florida is INCORRECT? Once this period of time ends, an insurance company cannot contest the validity of a policy and must pay its death benefits, even if a policyowner had no insurable interest in the insured at the time of application. - correct answerAll of the following statements are true in regards to the incontestability of a life insurance policy EXCEPT