Florida 215 Life, Health, and Insurance Law Practice Exam, Exams of Nursing

Download Florida 215 Life, Health, and Insurance Law Practice Exam and more Exams Nursing in PDF only on Docsity!

Practice Exam questions and answers

Who elects the governing body of a metal Insurance company? - The Policyholders When a policy pays dividends to its policy holders is said to be? - Participating Which of these describe a participating insurance policy? - Policy owners are entitled to receive dividends An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the? - 1970 Fair credit reporting act The Stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called? - Reserves The Part of a life insurance policy GUARANTEED to be true is called? - Warranty At what point does an informal agreement become a binding contract? - When consideration is provided by one of the parties to the contract

Practice Exam questions and answers

Who makes the legally enforceable promise in a unilateral insurance policy? - The Insurance Company When a third-party ownership is involved, applicants who also happen to be the stated the primary beneficiary are required to have? - Insurable interest in the proposed insured A policy of adhesion can only be modified by whom? - The insurance company Insurance policies are considered aleatory contracts because? - Performance is conditioned upon a future occurrence Q purchase $500k life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which insurance contract features? - Aleatory What consists of an offer, acceptance, and consideration? - The Contract A Principal is NOT a type agent authority? - True

Practice Exam questions and answers

Taking a receipt of premiums and holding them for the insurance company is an example of? - Fiduciary responsibility A Bilateral typically has characteristics describing the nature of an insurance contract. - False In regards to representation or warranties? - If material to the RISK, false representations will void a policy Statements made on an insurance application that are BELIEVED to be true to the best of the applicants knowledge are called? - Representations A variable insurance policy? - Does NOT guarantee a return on investment accounts Whole life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase? - The duration of premium payments

Practice Exam questions and answers

What type of policy would offer a 40- year old the quickest accumulation of cash value? - A 20-pay life Modified Whole Life - This life product is NOT considered interest sensitive? Y Purchased $100,000 worth of permanent protection on himself and $50, worth of 10-year Term coverage for his wife on the same policy. What did Y Purchase? - Whole life policy with an Other Insured Rider Which of the following types of Term Life policies most likely contains a Renewability feature? - A 10 year convertibility Term Modified Endowment Contract - This type of policy is considered to be overfunded, as stated by IRS guidelines? A company that owns a life insurance policy on one of its key employees can't? - Change the policy's interest rate Under a Graded Premium policy, The premiums? - Are lower during the policy's early years

Practice Exam questions and answers

When a policy owner exchanges a term policy for a whole life policy without providing proof of good health this is applied? - Conversion Provision This features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? - Conversion Privilege What type of policy covers two people and pays upon the death of the last insured? - Survivorship Term insurance has what characteristic? - Expires at the end of the policy period Term Life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period? - Varies according to the contract What type of insurance offers permanent life coverage with premiums that are payable for life? - Whole Life

Practice Exam questions and answers

What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - Convertible term A life policy that contains a monthly mortality charge as well as self-directed investment choice is called an? - Variable Universal Life policy K is Shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. This policy fits best? - Straight life This is an element of Variable Life policy? - Whole life variables have a fixed, level premium How Long Does the coverage normally remain on a limited-pay life policy? - Age 100 S buys a $10,000 Whole life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? - A return of Premium Rider

Practice Exam questions and answers

How do life insurance companies handle cases where the insured commits suicide within the contracts stated contestable period? - Claims are denied under the Suicide clause of the policy L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age Provision, the insurer will: - Adjust the death benefit to a reduced amount This statement is true in regards to a policy loan? - Past-due interest on a policy loan is added to the total debt When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? - Void the policy only if it is discovered during the contestable period and proven to be material When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? - At future dates specified in the contract with no evidence of insurability required

Practice Exam questions and answers

The policy owner has the right to change a life insurance policy's beneficiary - TRUE What does the insuring agreement in a life insurance contract establish? - An insurer's basic promise The consideration clause in a life insurance contract contains what pertinent information? - Amount of premiums paid and when they are due The consideration clause in life insurance policy indicates that a policy owner's consideration consists of a completed application and? - The initial premium P is the insured on a participating life policy. This statement is true if P's premiums are waived due to a disability? - P will still receive declared dividends Additional coverage can be added to a Whole Life Policy by adding an? - Decreasing term Rider

Practice Exam questions and answers

The Agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called an? - Insuring Agreement A whole Life insurance policy owner does NOT have the right to? - Change The Grace Period Whose Life is covered on a life insurance policy that contains a payor benefit clause? - The Child This is NOT considered to be a right given to a policy owner? - Modify a provision in the insurance contract K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy this isn't true? - K will forfeit the right to use the automatic loan provision upon reinstatement When is the face amount of a Whole policy paid? - When the insured dies or at the policy maturity date, whichever happens first

Practice Exam questions and answers

This statement regarding the Misstatement of Age provision is considered to be true? - Coverage will be adjusted to reflect the insured's true age misstatement of age is discovered B owns a Whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, state amounts of? - Additional whole life coverage at specified times K has a life insurance policy where her husband is the beneficiary and her daughter is the contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - Her Daughter C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? - The Cost Who has the right to change a revocable beneficiary? - The Policy owner J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? - The Revocable

Practice Exam questions and answers

The Common Disaster clause provides that if not the insured and the sole named beneficiary were to die in a common accident, this clause means? - The clause is payable to the insured's estate 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? - Requests of the change will be refused A policy owner is able to choose the frequent of premiums payments through what policy feature? - Premium Mode M purchased an Accidental Death and Dismemberment(AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary at any time. What type of beneficiary is his son? - Revocable What percent of personal life insurance premiums is usually deductible for federal income tax purposes? - 0%

Practice Exam questions and answers

On a life insurance policy, who is qualified to change the beneficiary designation? - The Policy Owner Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policy owner? - Irrevocable Beneficiary A level of premiums indicates: - The premium is fixed for the entire duration of the contract This statement is incorrect regarding the federal income tax treatment of life insurance: - Entire cash surrender is taxable Which premium schedule results in the lowest cost to the policy owner? - Annually (If the policy owner chooses to pay the premium more than once per year there normally will be an additional charge because the company will have additional charges in billing and collecting premium payments A policy owners rights are limited under which beneficiary designation? - Irrevocable, because an irrevocable beneficiary designation requires the consent and signature of that named beneficiary before a change of beneficiary occurs

Practice Exam questions and answers

When an insurance application is taken by a producer, This happens? - The producer should have the applicant initial any changes made on the application What is the initial source of underwriting for an insurance policy? - Application containing statements from the insured M completes an application for life insurance but does not pay the initial premium. This action must occur before M's policy goes into effect? - Except when the free-look period has expired When does a life insurance contract become effective if the initial premium is not collected during the application process? - When the producer delivers the policy and collects initial premium What is being delivered during a policy delivery? - Insurance contract to the proposed insured The following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - Complete the application and review the

Practice Exam questions and answers

information with the customer prior to obtaining the customers signature, then send the application off to the insurance company What action should a producer take if the initial premium is NOT submitted with the application? - Forward the application to the insurer without the initial premium. However if a premium is not paid with the application, the policy will not become valid until the initial premium is collected Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? - Return the check to the customer, collect a new check made out to the insurance company, and send the new check to the insurance company This following statement is correct about an agent who is taking an insurance application: - The agent who is taking the insurance application should have applicant initial any changes made on the application

Practice Exam questions and answers

An incomplete life insurance application submitted to an insurer will result in what? - Application will be returned to the writing agent, it usually returns to the producer T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T? - A Conditional Receipt ( A conditional receipt binds the insurer to coverage as of the date of the application or medical exam, provided the proposed insured is determined to be an acceptable risk.) A statement made by an insurance applicant that must be true to the best of ones knowledge and which becomes a part of the contract is know as: - A representation What is the purpose of the U.S.A Patriotic Act? - Detect and Deter Terrorism Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary? - The initial premium was NOT submitted with the application. On Delivery of a policy, a signed statement in good health is typically requested if the application was submitted without the initial premium

Practice Exam questions and answers

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: - $25,000 whole life policy( A terminated employee may convert to a $25,000 individual whole life policy) If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - Contributory (Employees share premium costs with contributory plans.) An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be: - Converted to an individual permanent policy at an individual rate All individuals covered under a group contract will receive an? - Certificate A noncontributory group term life plan is characterized by: - The entire cost of the plan is paid for by the employer. (When an employer provides noncontributory group term life insurance, the employer pays the entire cost of the plan.)

Practice Exam questions and answers

Under a trustee group life policy, who would be eligible for a certificate coverage?

• The Employee Group Life insurance policies are generally written as: - Annually renewable term This is a false statement about noncontributory employee group life insurance: - A minimum number of employees is required to participate (noncontributory employee group life insurance MUST cover ALL eligible employees at all times.) The following is an important underwriting principle of group life insurance: - Everyone must be covered in the group Company XYZ offers a group Term Life insurance plan to its employees. What does each employee cover under this plane receive? - A certificate of insurance P, age 50, purchased an annuity that P will fund with $500 a month for 15 years. The annuity will then Pay P retirement payments after 15 years. Which type of annuity did P purchase? - A Deferred Annuity

Practice Exam questions and answers

An individual who purchases a life annuity is given protection against: - The risk living longer than expected The Type of annuity that can be purchased with one monetary deposit is called an: - Immediate annuity Variable annuities may invest premiums except for: - Insures Corporate business account A variable annuity has the following characteristics: - Underlying equity investments Which type of contract liquidates an estate through recurrent payments? - An Annuity What type of annuity has a cash value that is based upon performance of its underlying investment funds? - A Variable A contract owner terminates an annuity before the income payment period begins. The owner will then receive? - The current contract surrender value

Practice Exam questions and answers

T purchased a $100,000 single premium, straight life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company: - Does NOT have to make any further payments (With Straight life annuity, the insurer does not have to make further payments after the annuitant dies.) AD&D Rider (Accidental Death & Dismemberment) is NOT included in an annuity contract - TRUE What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? - Primary Insurance amount (PIA) To be eligible for social security disability benefits, an employee must be unable to perform: - ANY occupation The Federal Government is NOT a source of funding for social security benefits - TRUE Social Security does NOT provide benefits for - Dismemberment

Practice Exam questions and answers

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to file for Social Security Benefits? - 5 Months A 55 year old recently received $30,000 distribution from a previous employers 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? - Income taxes plus 10% penalty tax on $30,000 (All withdraws from qualified retirement planner taxable as current income. In addition any withdraws made before 59 1/2 is subject to an additional tax penalty of 10% of the amount withdrawn How are Roth IRA distributions normally taxed? - Distributions received are tax- free This retirement plan can be started by an employee, even if another plan is in existence: - Individual Retirement Account(IRA) What does a 401(k) plan generally provide its participants? - A salary-deferral contributions

Practice Exam questions and answers

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before and distributions are made? - The account can be rolled into the surviving spouses IRA(Individual Retirement Account) With traditional individual retirement accounts(IRA) 10% penalty is applied to withdrawals before age 59 1/2 - True In a qualified retirement plan, the yearly contributions to an employee's account: - Are restricted to maximum levels set by the IRS An employer that offers a qualified retirement plan to its employees is eligible to: - Make tax-deductible contributions to the plan An employee requested that balance of her 401(k) account be sent directly to her in on lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee? - Distribution is subject to federal income tax withholding. How long does an individual have to "rollover" funds from an IRA or qualified plan? - 60 Days

Practice Exam questions and answers

Company Z has a cross purchase Buy-Sell Agreement in place among to its three founding partners. If the agreement is funded with individual life insurance, what would it require? - Each partner must own a policy on the other partners This factor does NOT influence an applicants need for life insurance: - Self maintenance expenses C is a key employee at ABC incorporated. If a Key employee life policy is purchased on her life: - ABC is the policy owner, C is the insured, and ABC is the beneficiary When an individual is planning to protect his family with life insurance, once a method of doing so is called need analysis. What does needs analysis involve? - Establishes the needs of the individual and his dependents. This statement regarding third-party ownership of a life insurance policy is true: - It is used extensively in estate-planning as well as business circumstances. An accident policy will most likely pay a benefit for an: - Of the job accident

Practice Exam questions and answers

P is insured under a basic cancer plan. Which of the following conditions would be covered under this plan? - Operation of malignant tumor The following characteristics is associated with a large group os disability income policy: - No medical underwriting ( A large group of disability income policy can be distinguished by no medical under writing) The following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party: - Subrogation If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? - Insureds contingent beneficiary (If this happens the claim will be paid to the secondary or contingent beneficiary.) Which type of policy pays benefits to a policy holder covered under a Hospital Expense policy? - Reimbursement

Practice Exam questions and answers

The following bets describes how a policy that uses the accidental bodily injury definition of accident differs from one that uses the "accidental means" definition? - Less restrictive The federal income tax treatment of employer- provided group Medical Insurance can be accurately described as: - Employee's Premiums paid by the employer is tax deductible to the employer as a business expenditure Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - Business overhead expense The benefits under a Disability Buy-Out Policy are: - Payable to the company or another shareholder On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation? - The Policy Owner This coverage is best described as short term medical policy: - Interim Coverage

Practice Exam questions and answers

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made? - Irrevocable Beneficiary The Following is reimbursement of benefits for the treatment of a beneficiaries injuries caused by a third party: - Subrogation This Mode of payment is NOT used by health insurance policies: - Single Premium Medicaid was designed to assist individuals who are: - Below a specific income Medicare Part A and Part B do NOT pay for: - Dental Work A 66 year old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be primary? - Her Group Health Plan (If the employee has more than 20 employees, the group health plan generally pays first.)