FLORIDA HEALTH AND LIFE INSURANCE ACTUAL EXAM AND FINAL EXAM LATEST 2024-2025 400 QUESTI, Exams of Insurance law

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FLORIDA HEALTH AND LIFE INSURANCE ACTUAL EXAM AND FINAL

EXAMLATEST 2024-2025 400 QUESTIONS AND CORRECT DETAILED

CORRECTS (VERIFIED ANSWERS) |ALREADY GRADED A+

Which parts of a life insurance insurance policy are guaranteed to be true? - CORRECT-

• Warranty Florida requires that coverage for newborns begins "from the moment of birth" and continues for - CORRECT-- 18 months Florida's 14 - day free-look period for life insurance policies begins at the
• CORRECT--date of delivery Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy? - CORRECT--Entire Contract Periodic health claim payments MUST be made at least: - CORRECT-- monthly A life policy loan in Florida cannot charge a fixed rate of interest higher than - CORRECT--10% What type of group insurance plan involved employees sharing the cost?
• CORRECT--contributory plan The Florida Employee Health Care Access Act was established to make
• CORRECT--group health insurance available to employers with up to 50 employees

Which of these is NOT a legal entity for selling insurance in Florida? - CORRECT-- Riskmanagement advisors From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? - CORRECT--Fair Credit Reporting Act 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: - CORRECT--High-deductible health plan If an insurance company issues a Disability Income policy that it cannot cancel of for which it cannot increase premiums, the type of renewability that best describes the policy is called: - CORRECT-- noncancellable A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? - CORRECT-

• Insurance 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 - CORRECT--to an individual policy upon employment termination Which of the following statements describes what an Accident and Health policyowner may NOT do? - CORRECT--Adjust the premium payments According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? - CORRECT--The premiums for the handicapped child are not paid

K is an agent who made an improper sales of an annuity to a client/ Which of the following corrective actions would the Department of Financial Services likely order K to take - CORRECT-

• Pay a monetary restitution to the client Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? - CORRECT--Variable Life Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the: - CORRECT--marital deduction What are adjustable rates for the life policy loans in Florida based on? - CORRECT-- Moody'scorporate bond index According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: - CORRECT--two years fromthe date of the policy was issued Which of the following does Social Security NOT provide benefits for? - CORRECT-
• Dismemberment What type of insurance company is domiciled in England, but conducts business in Florida? - CORRECT--Alien 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? - CORRECT-- $50,

Which of the following is NOT an unfair claim settlement practice? - CORRECT--Needing writtendocumentation of claim details 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? - CORRECT-

• Beneficiary will be paid the Death Benefit An individual covered under a Group Life insurance policy is considered to be a(n) - CORRECT-
• certificate holder What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?
• CORRECT--Premiums may increase at time of renewal Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? - CORRECT--Each partner must own a policy on the other partners J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - CORRECT-- 20 - pay Life

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? - CORRECT--$7,000 ($5,000 + 20% of the remaining bill = $7,000) Employers with less than employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA) - CORRECT-- 20 An insurance company incorporated under the laws of the state in which its home office is located is called a(n) company. - CORRECT-- domestic J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? - CORRECT--The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age The guarantee of insurability option provides a long-term care policyowner the ability to: - CORRECT--buy additional coverage at a later date Group Life policies in Florida are required to contain a conversion privilege that allows for conversion - CORRECT--to an individual policy for a stated period of time An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - CORRECT--When the conditions of the receipt are met

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's - CORRECT--gross income at the time of the purchase Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? - CORRECT--Premiums are waived after the insured has been totallydisabled for a specified time period A policy that becomes a Modified Endowment Contract (MEC): - CORRECT--will lose many of itstax advantages An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: - CORRECT-- $25,000 individual whole life policy Agents that have been licensed for less than six years must complete hours of continuing education every two years. - CORRECT-- 24 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: - CORRECT--adjust the death benefit to a reduced amount S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning: - CORRECT--November 1 (60 days after written proof of loss before legal action can be broughtagainst the company)

Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? - CORRECT--It is taxed as ordinary income 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? - CORRECT--Family Maintenance Policy An agent selling Medicare Supplement policies must provide every applicant with a(n) - CORRECT--Suitability form A policy loan is made possible by which of these life insurance policy features? - CORRECT--Cash value provision Which of these life insurance riders allows the applicant to have excess coverage? - CORRECT-

• Term rider A variable insurance policy: - CORRECT--does not guarantee a return on investment accounts Which of the following is NOT required in the Outline of Coverage for a health insurance policy?
• CORRECT--Projection of the policy's future costs What percentage of eligible persons must a policy cover in a noncontributory group? - CORRECT--100%

When does a life insurance contract become effective if the initial premium is not collected during the application process? - CORRECT-- When producer delivers policy and collects initial premium Premature IRA distributions are assessed a penalty tax of: - CORRECT-- 10% Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? - CORRECT--Business owner becoming disabled Association Plans that are designed to provide health benefits to their members are regulated by the state because - CORRECT--they are insured by an authorized insurer How long does the coverage normally remain on a limited-pay life policy? - CORRECT--age 100 Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? - CORRECT--PPO (Preferred Provider Organization) An example of rebating would be - CORRECT--offering a client something of value not stated inthe contract in exchange for their business

When is a Group Health policy required to provide coverage for a newborn child? - CORRECT-- Atthe moment of birth A characteristic of Preferred Provider Organizations (PPOs) would be: - CORRECT--Discounted fees for the patient (PPO - a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured) 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?

• CORRECT--Revocable Which of the following is a standard provision of the conversion privileges in a Group Life policy? - CORRECT--Group Life coverage can be converted to an individual policy at a regular rates on an attained- age basis B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have? - CORRECT--Disability Income A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?
• CORRECT-- 20

Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? - CORRECT--Notice to existing and replacing insurers of intention to replace Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of: - CORRECT--$10, According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - CORRECT--a Buyer's Guide and Policy Summary The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called: - CORRECT-- Reinstatement Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? - CORRECT--More physicians tochoose from 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? - CORRECT--Entire Contract Credit Life insurance is: - CORRECT--issued in an amount not to exceed the amount of the loan

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? - CORRECT--Single Premium What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? - CORRECT--Family Maintenance Policy The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n): - CORRECT-- Accidental Death and Dismemberment rider (AD&D) K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used? - CORRECT--Conditional ABC Insurance Company has accepted a life insurance application which contains unCORRECTed questions. The company then makes the application part of the life contract. In this situation, the insurer has - CORRECT--waived one ofits legal rights M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the: - CORRECT--policy proceeds Which of the following actions is NOT possible with a Universal Life policy? - CORRECT-

• Premiums may be applied as a credit against income tax

Any changes made on an insurance application requires the initials of whom? - CORRECT-

• Applicant The part of a life insurance policy guaranteed to be true is called a(n): - CORRECT--warranty Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured? - CORRECT--Monthly The act of an insurance company publishing misleading information about its policy's provisions is called - CORRECT--false advertising Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? - CORRECT--Reimbursement In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? - CORRECT-
• Owner's Rights The provision that defines to whom the insurer will pay benefits to is called: - CORRECT-
• Payment of Claims How can an agent-in-charge have more than one location? - CORRECT-- Only if the agent- in-charge is present when insurance activity occurs

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium, On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producers then take? - CORRECT--Collect initial premium along with a signed health statement 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 - CORRECT--twisting Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - CORRECT--Risk classification One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is - CORRECT--closely regulated and requires full disclosure In Florida, the underwriting and issuance of a master group health policy requires that all employees - CORRECT--are eligible to participate, regardless of their individual history Insured - CORRECT--The person covered by the insurance policy.

Rider - CORRECT--A written modification attached to a policy that increases or decreasescoverage and/or premiums. What is a unilateral contract? - CORRECT--A contract in which only one of the parties is legallybound to fulfill its obligations. What law protects consumers from the circulation of inaccurate or obsolete information? - CORRECT--The Fair Credit Reporting Act. What are the three types of agent authority? - CORRECT--Implied, Express, and Apparent. Agent - CORRECT--An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. What is name of the process that insurance companies use to determine whether or not an applicant is insurable? - CORRECT--Underwriting The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility?

• CORRECT--Fiduciary What is a third-party ownership? - CORRECT--An insurance arrangement in which the policyowner and the insured are not the same person.

Suitability - CORRECT--Factors that determine if an insurance product is appropriate for aparticular customer. A+ Premium - CORRECT--A payment by the policy owner to the insurance company to keep the policy in force. Disclosure - CORRECT--Providing sufficient information to help someone make informeddecision. An agent offer a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? - CORRECT--Rebating If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer? - CORRECT--Authorized What information are the members of the medical information bureau required to report? - CORRECT--Adverse medical information about the applicants or insureds. What type of beneficiary can be changed at any point by the policy owner? - CORRECT-

• Revocable What document describes the specific information about a policy? - CORRECT--Policy Summary What is the term for the causes of loss insured against in an insurance policy? - CORRECT--Peril

Whom does an insurance agent represent? - CORRECT--Insurance Company What is an unfair trade practice? - CORRECT--Any fraudulent, deceptive, or dishonest businesspractice that is prohibited by statutes and regulations. Insurer - CORRECT--The company that issues an insurance policy. Peril - CORRECT--Cause of loss A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision - CORRECT--Payor Provision Which of the following actions is NOT possible with Universal Life policy - CORRECT-- Premiumsmay be applied as a credit against income tax A life policy with death benefit and cash value that can fluctuate according to performance of its underlying investment portfolio is referred to as - CORRECT--Variable life Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? - CORRECT--Variable life

P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own. - CORRECT--Endowment atAge 70 All of these are characteristics of Adjustable life policy, EXCEPT: - CORRECT--face amount can beadjusted using policy dividends J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - CORRECT-- 20 - pay life 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? - CORRECT--Family maintenance Policy K age 45, and his wife, age 43, have three children. They purchase a Family Policy that covers K's wife to age 65. All of these situations will pay a death benefit EXCEPT: - CORRECT--K's wife dies at age 66 Which statement is correct regarding the premium payment schedule for whole life policies? - CORRECT--Premiums are payable throughout the insured's lifetime/coverage lasts until death ofthe insured. Under a Graded Premium policy, the premiums - CORRECT--Are lower during the policy's early years Term insurance has which of the following characteristics? - CORRECT-

• Expires at the end of the policy period

How long does the coverage normally remain on a limited-pay life policy? - CORRECT--age 100 Which of these is an element of a Variable Life policy - CORRECT--A fixed, level premium Variable Whole Life insurance can be described as - CORRECT--both an insurance and securitiesproduct Which of the following 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? - CORRECT-

• Conversion Privilege Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - CORRECT-- Variable life What does a Face Amount Plus Cash Value Policy pay upon the insured's death? - CORRECT-
• Face amount plus the policy's cash value 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? - CORRECT--Claim will be denied

What provision in a life insurance policy states that the application is considered part of the contract? - CORRECT--Entire Contract provision B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will - CORRECT--pay the amount that the premium would have purchased at the correct age K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT - CORRECT--K will forfeit the right to use the automatic loan provision upon reinstatement Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? - CORRECT-- Payor clause Which of the following is an example of a nonforfeiture option? - CORRECT--Reduced paid- upoption K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Divided Option should she chose? - CORRECT--Paid-Up Additional Insurance

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? - CORRECT--waiver of premium A cost of living rider gives the insured - CORRECT--additional death benefits B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes? - CORRECT-- Interestonly All of these statements about the waiver of premium provision are correct, EXCEPT: - CORRECT-

• Insured must be eligible for social security disability of claim to be accepted. Whose life is covered on a life insurance policy that contains a payor benefit clause - CORRECT-
• Child D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture option will the insurer likely proceed with? - CORRECT--Extended Term What action can a policyowner take if an application for a bank loan requires collateral? - CORRECT--Assign policy ownership to bank M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the - CORRECT--policy proceeds

An insured's inability to perform two or more activities of daily living may trigger which type of life policy rider? - CORRECT--Long term care Variable whole life insurance can be described as - CORRECT--both an insurance and securitiesproduct The Accidental Death and Dismemberment (AD&D) provisions in a life insurance policy would pay additional benefits in the insured - CORRECT--is blinded in an accident 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? - CORRECT-- Exclusion 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? - CORRECT-- $50,000 Which of the following best describes a contingent beneficiary - CORRECT--Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured. J chooses a monthly premium payment mode on his Whole life insurance policy. Which of these statements is correct - CORRECT--The gross premium is higher on a monthly premium mode as compared to being paid annually

Which statement is true regarding minor beneficiary - CORRECT-- Normally a guardian isrequired to be appointed in the beneficiary clause of the contract. Which premium schedule results in the lowest cost to the policyownwer? - CORRECT--Annual If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who dies first, where are the death proceeds to be directed under the uniform Simultaneous Death Act? - CORRECT--Insured's contingent beneficiary Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? - CORRECT--All proceeds are income tax free in the year they are received. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - CORRECT--Life income The common Disaster clause provides that if both the insured and the sole named beneficiary where to die in a common accident, which of the following is true? - CORRECT--The clause provides the payment of proceeds to the insured's estate A policyowner is allowed to pay premiums more than once a year under which provision? - CORRECT--Mode of premium

Which of these is NOT an element of Life insurance premiums? - CORRECT--Morbidity rate J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? - CORRECT--revocable Quarterly premium payments increase the annual cost of insurance because - CORRECT-

• Interest to the insurer is decreased while the administrative costs are increased A+ Which statement regarding the Change of Beneficiary provision is true?
• CORRECT--The policy owner can change the beneficiary A Whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? - CORRECT--Life settlement contract A policyowner's rights are limited under which beneficiary designation?
• CORRECT--Irrevocable What action should a producer take if the initial premium is NOT submitted with the application? - CORRECT--Forward the application to the insurer without the initial premium All statements are true regarding the underwriting process EXCEPT - CORRECT--AIDS and HIVvirus exams can be conducted in a discriminatory fashion.

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - CORRECT--Risk Classification A+ Who is NOT required to sign a life insurance application? - CORRECT-- Beneficiary The entity whose sole purpose is sharing medical data among its member companies is called the - CORRECT--Medical Information Bureau Which of these actions should a producer take when submitting an insurance application to an insurer? - CORRECT--Inform the insurer the relevant information not included on the application T is given a receipt after completing a life insurance application and paying the initial premium. Under this Situation T's coverage is - CORRECT--conditional, depending on the insurer's underwriting guidelines Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - CORRECT-- Policywas returned within the free-look period, premium will be fully refunded Life insurance companies are required to establish and maintain a anti- money laundering compliance program according to which federal regulation? - CORRECT--USA PATRIOT Act A life insurance application must be signed by all these EXCEPT - CORRECT--Beneficiary

T cash surrenders a recently-issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red-flagged for violation of - CORRECT-

• anti-money laundering rules on January 8, an applicant filled out an application of a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January

15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective - CORRECT-- January 26 Before a life insurance policy is issued, which of these components of the contract is required? - CORRECT--Applicant's signature on application Before a life policy is issued, which of these contract elements is necessary? - CORRECT-- Asigned application by the prospect P is a producer who notices 5 questions on a life application were not CORRECTed. What actionsshould P take? - CORRECT--Set up meeting with the applicant to CORRECT the remaining questions. An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be - CORRECT--converted to an individual permanent policy at an individual rate Which of the following statements about non contributory employee group life insurance is FALSE? - CORRECT--A minimum number of employees is required to participate