Florida Health and Life Insurance Exam Questions and Answers, Exams of Nursing

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HOSMERIT

FLORIDA HEALTH AND LIFE INSURANCE EXAM

QUESTIONS WITH COMPLETE SOLUTION 2025

According to Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? - Correct Answer - 31 days G purchased a Family Income policy at age 40. The policy has a 20 - year rider period. If G were to die at age 50, how long would G's family receive an income? - Correct Answer - 10 years E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - Correct Answer - F The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for:

• Correct Answer - health information What do Dread Disease policies cover? - Correct Answer - A specific disease or illness When an insurance application is taken by a producer, which of these statements is true? - Correct Answer - Any changes made on the application require the applicant's initials A student pilot can pay regular premium costs for her life insurance policy with the addition of which ofthe following? - Correct Answer - Aviation exclusion What is the consideration given by an insurer in the Consideration clause of a life policy? - Correct Answer - Promise to pay a death benefit to a named beneficiary

Accident - Correct Answer - An unplanned, unforeseen event which occurs suddenly and at an unspecified place Accident Insurance - Correct Answer - A type of insurance that protects the insured against loss due to accidental bodily injury Accidental Bodily Injury - Correct Answer - Unplanned, unforeseen traumatic injury to the body Accidental Death and Dismemberment - Correct Answer - An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies, loses his/her sight, or loses two limbs due to an accident Accidental Death Benefits - Correct Answer - A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death Activities of Daily Living - Correct Answer - Activities individuals must do every day such as moving about, getting dressed, eating, bathing, etc. Actual Charge - Correct Answer - The amount a physician or supplier actually bills for a particular service or supply Adhesion - Correct Answer - A contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured Admitted (Authorized) Insurer - Correct Answer - An insurance company authorized and licensed to transact insurance in a particular state Adult Day Care - Correct Answer - A program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes

Adverse Selection - Correct Answer - The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability Which of the following reimburses its insureds for covered medical expenses? - Correct Answer

• Commercial insurers Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy? - Correct Answer - Limitation on pre-existing conditions for up to 12 months Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency? - Correct Answer - Florida Life and Health Insurance Guaranty Association Major Medical policies typically: - Correct Answer - contain a deductible and coinsurance The Life and Health Insurance Guaranty Association is - Correct Answer - funded by admitted insurance companies through assessments P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: - Correct Answer - P only Which of the following is considered an accurate statement of an unfair trade practice? - Correct Answer
• Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company Which of the following is an example of an Unfair Trade Practice? - Correct Answer - Coercison The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: - Correct Answer - protect the producer

Which of these actions should a producer take when submitting an insurance application to an insurer? - Correct Answer - Inform insurer of relevant information not included on the application A Health Reimbursement Arrangement MUST be established: - Correct Answer - by the employer If an individual has an Accidental Death and Dismemberment policy and dies, and autopsy can be performed in all these situations, EXCEPT: - Correct Answer - When the state prohibits this by law P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - Correct Answer - Set up a meeting with the applicant to answer the remaining questions A disability elimination period is best described as a: - Correct Answer - time deductible Which type of insurance company allows their policyowners to elect a governing body? - Correct Answer

• Mutual Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE? - Correct Answer - Each partner owns a $500,000 policy on their partner's life 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 Answer - Exclusion A policyowner's rights are limited under which beneficiary designation? - Correct Answer - Irrecovable

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made? - Correct Answer - Irrevocable beneficiary Which type of contract liquidates an estate through recurrent payments? - Correct Answer - Annuity Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract - Correct Answer - once each year J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? - Correct Answer - Reinstatement provision Which is the purpose of the Life and Health Insurance Guaranty Association? - Correct Answer

• Protects policyowners against insolvent insurance companies Which of the following Dividend options results in taxable income to the policyowner? - Correct Answer - Accumulation at Interest Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies? - Correct Answer - Blanket Accident policy A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as: - Correct Answer - Variable Life When replacing or exchanging an annuity, the agent must disclose to the annuitant - Correct Answer - the possible tax ramifications as a result of the transaction When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: - Correct Answer - Entire Contract provision

Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions? - Correct Answer - Entire Contract The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond- Correct Answer - 6 months Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is: - Correct Answer - Business Overhead Expense K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered: - Correct Answer - guaranteed renewable Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - Correct Answer - inspection report On a life insurance policy, who is qualified to change the beneficiary designation? - Correct Answer - Policyowner An example of false advertising would be - Correct Answer - An insurer exaggerating its dividends in a magazine advertisement Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? - Correct Answer - The income from the TSA is received income tax-free According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? - Correct Answer - No minimum A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an Increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options? - Correct Answer - Paid-Up Additional Insurance

What type of renewability guarantees premium rates and renewability? - Correct Answer - Noncancellable Agent - Correct Answer - An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer Aleatory - Correct Answer - A contract in which participating parties exchange unequal amounts. Insurance contracts are this in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss Apparent Authority - Correct Answer - The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created Approved Amount - Correct Answer - The amount Medicare determines to be reasonable for a service that is covered under Part B of Medicare Assignment - Correct Answer - A claim to a provider or medical supplier to receive payments directly from Medicare Attained Age - Correct Answer - The age of the insured at a determined date Attending Physician's Statement (APS) - Correct Answer - A statement usually obtained from the applicant's doctor Avoidance - Correct Answer - A method of dealing with risk (e.g. if a person wanted to avoid the risk ofbeing killed in an airplane crash, he/she might choose never to fly in a plane) Basic Hospital Expense Insurance - Correct Answer - Coverage that provides benefits for room, board and miscellaneous hospital expenses for a certain number of days during a hospital stay Basic Medical Expense Insurance - Correct Answer - Coverage for doctor visits, x-rays, lab tests, and emergency room visits; benefits, however, are limited to specified dollar amounts Beneficiary - Correct Answer - The person who receives the proceeds from the policy when the insured dies

Benefit Period - Correct Answer - The length of time over which the insurance benefits will be paid for each illness, disability or hospital stay Birthday Rule - Correct Answer - The method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calendar year, is designated as primary Blanket Medical Insurance - Correct Answer - A policy that provides benefits for all medical costs, including doctor visits, hospitalization, and drugs Boycott - Correct Answer - An unfair trade practice in which one person refuses to do business with another until he/she agrees to certain conditions Buyer's Guide - Correct Answer - A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision Cafeteria Plan - Correct Answer - A selection of health care benefits from which an employee may choose the ones that he/she needs Contributory - Correct Answer - A group insurance plan that requires the employees to pay part of the premium Coordination of Benefits - Correct Answer - A provision that helps determine the primary provider in situations where an insured is covered by more than one policy, thus avoiding claims overpayments Copayment - Correct Answer - An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost Custodial Care - Correct Answer - Care that is rendered to help an insured complete his/her activities ofdaily living

Capital Amount - Correct Answer - A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage Carriers - Correct Answer - Organizations that process claims and pay benefits in an insurance policy Cease and Desist Order - Correct Answer - A demand of a person to stop committing an action that is in violation of a provision Certificate of Authority - Correct Answer - A document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate Certificate of Insurance - Correct Answer - A written document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided Claim - Correct Answer - A request for payment of the benefits provided by an insurance contract Coercion - Correct Answer - An unfair trade practice in which an insurer uses physical or mental force to persuade an applicant to buy insurance Coinsurance - Correct Answer - An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses Coinsurance Clause - Correct Answer - A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon in advance Commissioner - Correct Answer - The chief executive and administrative officer of the Insurance Department

Comprehensive Policy - Correct Answer - A plan that provides a package of health care services, including preventative care, routine physicals, immunization, outpatient services and hospitalization Comprehensive Major Medical - Correct Answer - A combination of basic coverage and major medical coverage that features low deductibles, high maximum benefits, and coinsurance Concealment - Correct Answer - The withholding of known facts which, if material, can void a contract Conditional Contract - Correct Answer - A type of an agreement in which both parties must performcertain duties and follow rules of conduct to make the contract enforceable Consideration - Correct Answer - The binding force in a contract that requires something of value to be exchanged for the transfer of risk. On the part of the insured is the representations made in the application and the payment of premium; on the part of the insurer is the promise to pay in the event of loss Consideration Clause - Correct Answer - A part of the insurance contract that states that both parties must give something of value for the transfer of risk, and specifies the conditions of the exchange Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 - Correct Answer - The law that provides for the continuation of group health care benefits for the insured for up to 18 months if he/she terminates employment or is no longer eligible. and for the insured's dependents for up to 36 months incases of loss of eligibility due to death of the insured, divorce, or attainment of the limiting age Consumer Report - Correct Answer - A written and/or oral statement regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources Contract - Correct Answer - An agreement between two or more parties enforceable by law Domestic Insurer - Correct Answer - An insurance company that is incorporated in the state

Domicile of Insurer - Correct Answer - Insurer's location of incorporation and the legal ability to write business in a state Dread (Specified) Disease Policy - Correct Answer - A policy with a high maximum limit that covers certain diseases named in the contract (such as polio and meningitis) Dual Choice - Correct Answer - A federal requirement that employers who have 25 or more employees, who are within the service area of a qualified HMO, who pay minimum wage, and offer a health plan, must offer HMO coverage as well as an indemnity plan Death Benefit - Correct Answer - The amount payable upon the death of the person whose life is insured Deductible - Correct Answer - The portion of the loss that is to be paid by the insured before any claim may be paid by the insurer Defamation - Correct Answer - An unfair trade practice in which one agent or insurer makes an injurious statement about another with the intent of harming the person's or company's reputation Director - Correct Answer - The chief executive and administrative officer of the Insurance Department Disability - Correct Answer - A physical or mental impairment, either congenital or resulting from an injury or sickness Disability Income Insurance - Correct Answer - Health insurance that provides periodic payments to replace an insured's income when he/she is injured or ill Disclosure - Correct Answer - Am act of identifying the name of the producer, representative or firm, limited insurance representative, or temporary insurance producer on any policy solicitation Exposure - Correct Answer - A unit of measure used to determine rates charged for insurance coverage

Express Authority - Correct Answer - The authority granted to an agent by means of the agent's written contract Extended Care Facility - Correct Answer - A facility which is licensed by the state to provide 24 hour nursing care Extension of Benefits - Correct Answer - A provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date. This coverage continues only until the employee returns to work or the dependent leaves the hospital Eligibility Period - Correct Answer - The period of time in which an employee may enroll in a group health care plan without having to provide evidence of insurability Elimination Period - Correct Answer - A waiting period that is imposed on the insured from the onset ofdisability until benefit payments begin Emergency - Correct Answer - An injury or disease which occurs suddenly and requires treatment within 24 hours Endodontics - Correct Answer - An area of dentistry that deals with diagnosis, prevention and treatment of the dental pulp within natural teeth at the root canal Enrollment Period - Correct Answer - The amount of time an employee has to sign up for a contributorygroup health plan Estoppel - Correct Answer - A legal impediment to denying a fact or restoring a right that has been previously waived Excess Charge - Correct Answer - The difference between the Medicare approved amount for a service or supply and the actual charge Expiration - Correct Answer - The date specified in the policy as the date of termination

Explanation of Benefits (EOB) - Correct Answer - A statement that outlines what services were rendered, how much the insurer paid, and how much the insured was billed Explanation of Medicare Benefits - Correct Answer - A statement sent to a Medicare patient indicating how the Medicare claim will be settled Foreign Insurer - Correct Answer - An insurance company that is incorporated in another state Fraternal Benefit Societies - Correct Answer - Life or health insurance companies formed to provide insurance for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government Fraud - Correct Answer - The intentional misrepresentation or deceit with the intent to induce a person to part with something of value Free Look - Correct Answer - A period of time, usually required by law, during which a policyowner may inspect a newly issued individual life or health insurance policy for a stated number of days and surrender it in exchange for a full refund of premium if not satisfied for any reason Fair Credit Reporting Act - Correct Answer - A federal law that establishes procedures that consumerreporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used Fiduciary - Correct Answer - An agent/broker who handles insurer's funds in a trust capacity Flexible Spending Account (FSA) - Correct Answer - A salary reduction cafeteria plan that uses employees funds to provide various types of health care benefits Gatekeeper Model - Correct Answer - A model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals

Grace Period - Correct Answer - Period of time after the premium due date in which the premiums may still be paid, and the policy and its riders remain in force Group Disability Insurance - Correct Answer - A type of insurance that covers a group of individuals against loss of pay due to accident or sickness Group Health Insurance - Correct Answer - Health coverage provided to members of a group Hazard - Correct Answer - A circumstance that increases the likelihood of a loss Moral Hazard - Correct Answer - The effect of a person's indifference concerning loss has on the risk to be insured Physical Hazard - Correct Answer - A type of hazard that arises from the physical characteristics of an individual, such as a physical disability due to either circumstances or a condition present at birth Health Insurance - Correct Answer - Protection against loss due to sickness or bodily injury Home Health Care - Correct Answer - Type of care in which part-time nursing or home health aide services, speech therapy, physical or occupational therapy services are given in the home of the insured Home Health Services - Correct Answer - A covered expense under Part A of Medicare in which a licensed home health agency provides home health care to an insured Hospice - Correct Answer - A facility for the terminally ill that provides supportive care such a pain relief and symptom management to the patient and his/her family. Covered under Part A of Medicare Hospital Confinement Rider - Correct Answer - An optional income rider that waives the elimination period when an insured is hospitalized as an inpatient Health Maintenance Organization (HMO) - Correct Answer - A prepaid medical service plan in which specified medical service providers contract with the HMO to provide services. The focus is preventative medicine

Health Reimbursement Accounts (HRAs) - Correct Answer - Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses Health Savings Accounts (HSAs) - Correct Answer - Plans designed to help individuals save for qualified health expenses Home Health Agency - Correct Answer - An entity certified by the insured's health plan that provides health care services under contract Insured - Correct Answer - The person or organization that is protected by insurance; the party to be indemnified Insurer - Correct Answer - An entity that indemnifies against losses, provides benefits, or renders services (also known as "company" or "insurance company") Insuring Clause - Correct Answer - A general statement that identifies the basic arrangement between the insurance company and the insured, usually located on the 1st page of the policy Intentional Injury - Correct Answer - An act that is intended to cause injury. Self-inflicted injuries are not covered under accident insurance; intentional injuries inflicted on the insured by another are covered Implied Authority - Correct Answer - Authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal Income Replacement Contracts - Correct Answer - Policies which replace a certain percentage of the insured's pure loss of income due to a covered accident or sickness Indemnify - Correct Answer - To restore the insured to the same condition as prior to loss with no intent of loss or gain

Insolvent Organization - Correct Answer - A member organization which is unable to pay its contractualobligations and is placed under a final order of liquidation or rehabilitation by a court of competent jurisdiction Insurability - Correct Answer - The acceptability of an applicant who meets an insurance company's underwriting requirements for insurance Insurance - Correct Answer - A contract whereby one party (insurer) agrees to indemnify or guarantee another party (insured) against a loss by a specified future contingency or peril in return for payment of a premium Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? - Correct Answer - 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 Answer - $10, According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - Correct Answer - a Buyer's Guide and Policy Summary Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - Correct Answer - Risk classification One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is - Correct Answer - closely regulated and requires full disclosure In Florida, the underwriting and issuance of a master group health policy requires that all employees - Correct Answer - are eligible to participate, regardless of their individual history The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called: - Correct Answer - Reinstatement

Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? - Correct Answer - More physicians to choose 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 Answer - Entire Contract Credit Life insurance is: - Correct Answer - 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 Answer - Single Premium Which of the following is a standard provision of the conversion privileges in a Group Life policy? - Correct Answer - 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 Answer - 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 Answer - 20 What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? - Correct Answer - Family Maintenance Policy What provisions in a life insurance policy states that the application is considered part of the contract? - Correct Answer - Entire Contract provision Which of the following is NOT included in the policy face? - Correct Answer - Exclusions What would the Medical Information Bureau (MIB) identify? - Correct Answer - Testing positive for marijuana use from a previous screening

J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken? - Correct Answer - All of the employees must be notified of the cancellation wither by the insurance company of through J Florida requires that an insurance agent must complete hours of continuing education on the subject of law and ethics every two years. - Correct Answer - 5 How can an agent-in-charge have more than one location? - Correct Answer - 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 recentlytaken place with the doctor. What action should the producers then take? - Correct Answer - Collect initial premium along with a signed health statement When is a Group Health policy required to provide coverage for a newborn child? - Correct Answer - At the moment of birth A characteristic of Preferred Provider Organizations (PPOs) would be: - Correct Answer - 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 Answer - Revocable 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 Answer - twisting After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

• Correct Answer - File written proof of loss

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? - Correct Answer - Guaranteed Insurability Option rider An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet? - Correct Answer - Consideration clause If an agent would like to sell Variable annuities, which state examination must the agent pass? - Correct Answer - Life and Variable contracts During the course of an insurance transaction, if an agent makes a false of incomplete statement, he/she could be found guilty of - Correct Answer - misrepresentation Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy? - Correct Answer - Entire Contract Periodic health claim payments MUST be made at least: - Correct Answer - monthly A life policy loan in Florida cannot charge a fixed rate of interest higher than - Correct Answer - 10% What type of group insurance plan involved employees sharing the cost? - Correct Answer - contributoryplan The Florida Employee Health Care Access Act was established to make - Correct Answer - 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 Answer - Risk management 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 Answer

• 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 Answer - 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 Answer - noncancellable Premature IRA distributions are assessed a penalty tax of: - Correct Answer - 10% Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? - Correct Answer - Business owner becoming disabled Association Plans that are designed to provide health benefits to their members are regulated by the state because - Correct Answer - they are insured by an authorized insurer The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n): - Correct Answer - 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 Answer - Conditional ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has - Correct Answer - waived one of its legal rights How long does the coverage normally remain on a limited-pay life policy? - Correct Answer - 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 Answer - PPO (Preferred Provider Organization)

An example of rebating would be - Correct Answer - offering a client something of value not stated in the contract in exchange for their business A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? - Correct Answer - 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 Answer - to an individual policy upon employment termination Which of the following statements describes what an Accident and Health policyowner may NOT do? - Correct Answer - 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 Answer - 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 Answer - 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 Answer - 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 Answer - marital deduction What are adjustable rates for the life policy loans in Florida based on? - Correct Answer - Moody's corporate bond index According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: - Correct Answer - two years from the date ofthe policy was issued

Which of the following does Social Security NOT provide benefits for? - Correct Answer - Dismemberment The part of a life insurance policy guaranteed to be true is called a(n): - Correct Answer - 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 Answer - Monthly 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 Answer - policy proceeds Which of the following actions is NOT possible with a Universal Life policy? - Correct Answer

• Premiums may be applied as a credit against income tax Any changes made on an insurance application requires the initials of whom? - Correct Answer
• Applicant The act of an insurance company publishing misleading information about its policy's provisions is called- Correct Answer - false advertising What type of insurance company is domiciled in England, but conducts business in Florida? - Correct Answer - 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 Answer - $50,000 Which of the following is NOT an unfair claim settlement practice? - Correct Answer - Needing written documentation 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 Answer - Beneficiary will be paid the Death Benefit

Florida's 14 - day free-look period for life insurance policies begins at the - Correct Answer - date ofdelivery Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? - Correct Answer - 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 Answer - Owner's Rights The provision that defines to whom the insurer will pay benefits to is called: - Correct Answer - Payment of Claims An individual covered under a Group Life insurance policy is considered to be a(n) - Correct Answer - certificate holder What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?

• Correct Answer - Premiums may increase at time of renewal Florida requires that coverage for newborns begins "from the moment of birth" and continues for - Correct Answer - 18 months 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 Answer - 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 ofpolicies will provide the most rapid growth of cash value? - Correct Answer - 20 - pay Life Which parts of a life insurance insurance policy are guaranteed to be true? - Correct Answer - Warranty

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 Answer - $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 Answer - 20 An insurance company incorporated under the laws of the state in which its home office is located is called a(n) company. - Correct Answer - 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 Answer - 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 Answer - buy additional coverage at a later date Group Life policies in Florida are required to contain a conversion privilege that allows for conversion - Correct Answer - 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 Answer - 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 Answer - 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 Answer - Premiums are waived after the insured has been totally disabled for a specified time period

A policy that becomes a Modified Endowment Contract (MEC): - Correct Answer - will lose many of its tax advantages An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: - Correct Answer - $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 Answer - 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 Answer - 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 Answer - November 1 (60 days after written proof of loss before legal action can be brought against the company) Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? - Correct Answer - 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 Answer - Family Maintenance Policy An agent selling Medicare Supplement policies must provide every applicant with a(n) - Correct Answer - Suitability form A policy loan is made possible by which of these life insurance policy features? - Correct Answer - Cash value provision Which of these life insurance riders allows the applicant to have excess coverage? - Correct Answer - Term rider