Florida Health and Life Insurance State Exam Practice Part 1 (Florida Insurance) Edition w, Exams of Insurance law

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Florida Health and Life Insurance State

Exam Practice Part 1 (Florida Insurance)

Edition with 300 Questions and Certified

Answers.

1. The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the: - Correct Ans: ✔✔Insuring clause
2. 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 Ans: ✔✔Conditional
3. A life insurance arrangement which circumvents insurable interest statutes is called: - Correct Ans: ✔✔Investor-Originated Life Insurance
4. 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 Ans: ✔✔Entire Contract

5. Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? - Correct Ans: ✔✔ 30
6. Which of the following is NOT an unfair claim settlement practice?
   • Correct Ans: ✔✔Needing written documentation of claim details
7. Who is NOT required to sign a life insurance application? - Correct Ans: ✔✔Beneficiary
8. To be eligible for Social Security disability benefits, an employee must be unable to perform: - Correct Ans: ✔✔any occupation
9. The type of annuity that can be purchased with one monetary deposit is called a(n): - Correct Ans: ✔✔Immediate annuity
10. A life insurance application must be signed by all of these, EXCEPT: - Correct Ans: ✔✔beneficiary
11. Which of the following is considered an accurate statement of an unfair trade practice? - Correct Ans: ✔✔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

12. The Accelerated Death Benefit provision in a life insurance policy is also known as a(n): - Correct Ans: ✔✔Living Benefit
13. Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble? - Correct Ans: ✔✔Carryover provision
14. Insurance policies are considered aleatory contracts because
    • Correct Ans: ✔✔performance is conditioned upon a future occurrence
15. Within how many days must a licensee notify the Department of Financial Services of a change in address? - Correct Ans: ✔✔ 30
16. Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency? - Correct Ans: ✔✔Florida Life and Health Insurance Guaranty Association
17. The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: - Correct Ans: ✔✔Insuring clause

18. When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n): - Correct Ans: ✔✔Anti-Money Laundering violation
19. According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? - Correct Ans: ✔✔Monthly
20. What would the Medical Information Bureau (MIB) identify?
    • Correct Ans: ✔✔Testing positive for marijuana use from a previous screening
21. How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - Correct Ans: ✔✔If the primary beneficiary dies before the insured
22. Under a Renewable Term policy, - Correct Ans: ✔✔the renewal premium is calculated on the basis of the insured's attained age
23. Which of the following statements is true about most Blue Cross/Blue Shield organizations? - Correct Ans: ✔✔They are nonprofit organizations

24. If a policyowner does not pay the premium by the due date, the - Correct Ans: ✔✔policyowner can make the premium payment during the grace period
25. According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - Correct Ans: ✔✔Marital status
26. Which of these characteristics is consistent with a Straight Life policy? - Correct Ans: ✔✔Premiums are payable for as long as there is insurance coverage in force
27. P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when: - Correct Ans: ✔✔P receives the policy and pays the premium
28. 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 producer then take? - Correct Ans: ✔✔Collect initial premium along with a signed health statement

29. A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value. - Correct Ans: ✔✔viatical settlement provider
30. According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant? - Correct Ans: ✔✔At the time of application
31. Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? - Correct Ans: ✔✔It is taxed as ordinary income
32. The automatic premium loan provision is designed to: - Correct Ans: ✔✔avoid a policy lapse
33. A term life insurance policy matures: - Correct Ans: ✔✔upon the insured's death during the term of the policy
34. What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? - Correct Ans: ✔✔Family Maintenance Policy

35. The guarantee of insurability option provides a long-term care policyowner the ability to: - Correct Ans: ✔✔buy additional coverage at a later date
36. When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is: - Correct Ans: ✔✔income
37. Periodic health claim payments MUST be made at least: - Correct Ans: ✔✔monthly
38. Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary? - Correct Ans: ✔✔Split-dollar plan
39. T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as - Correct Ans: ✔✔fiduciary responsibility
40. J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of? - Correct Ans: ✔✔Coercion

41. An example of unfair discrimination would be - Correct Ans: ✔✔offering different terms of coverage for different policyowners having the same risk classification
42. Which of the following is a characteristic of a variable annuity? - Correct Ans: ✔✔Underlying equity investments
43. 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 Ans: ✔✔Twenty
44. How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated? - Correct Ans: ✔✔ 45
45. The Life and Health Insurance Guaranty Association is - Correct Ans: ✔✔funded by admitted insurance companies through assessments
46. On January 8, an applicant filled out an application for 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 Ans: ✔✔January 26

47. Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against? - Correct Ans: ✔✔People that smoke
48. 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 Ans: ✔✔P only
49. An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision? - Correct Ans: ✔✔ 31
50. Which of the following services is NOT covered under a hospitalization expense policy? - Correct Ans: ✔✔surgeon's fees
51. 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 Ans: ✔✔Beneficiary will be paid the Death Benefit

52. Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). - Correct Ans: ✔✔ 20
53. What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - Correct Ans: ✔✔Conversion
54. Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy? - Correct Ans: ✔✔Entire Contract
55. The incontestable clause allows an insurer to: - Correct Ans: ✔✔contest a claim during the contestable period
56. Which of the following employees may NOT be excluded from a group life plan? - Correct Ans: ✔✔Full-time employees after the probationary period
57. An agent selling Medicare Supplement policies must provide every applicant with a(n) - Correct Ans: ✔✔Suitability form

58. When replacing or exchanging an annuity, the agent must disclose to the annuitant - Correct Ans: ✔✔the possible tax ramifications as a result of the transaction
59. The insuring clause - Correct Ans: ✔✔States the scope and limits of the coverage
60. A stock insurance company - Correct Ans: ✔✔is owned exclusively by its shareholders
61. Which Accident and Health policy provision addresses preexisting conditions? - Correct Ans: ✔✔Time Limit on Certain Defenses
62. The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured: - Correct Ans: ✔✔is blinded in an accident
63. At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - Correct Ans: ✔✔At the time of application
64. A license may be denied, suspended, or revoked if the licensee - Correct Ans: ✔✔is found guilty of misrepresentation

65. What is the Suicide provision designed to do? - Correct Ans: ✔✔safeguard the insurer from an applicant who is contemplating suicide
66. 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 Ans: ✔✔marital deduction
67. Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? - Correct Ans: ✔✔Evidence of insurability is required when the option is exercised
68. B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary? - Correct Ans: ✔✔$300,
69. Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? - Correct Ans: ✔✔Reimbursement
70. An example of false advertising would be - Correct Ans: ✔✔An insurer exaggerating its dividends in a magazine advertisement

71. When does a Probationary Period provision become effective in a health insurance contract? - Correct Ans: ✔✔At the policy's inception
72. All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: - Correct Ans: ✔✔Interest Only
73. What is the maximum Social Security Disability benefit amount an insured can receive? - Correct Ans: ✔✔100% of the insured's Primary Insurance Amount (PIA)
74. P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? - Correct Ans: ✔✔Claim will be denied
75. P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? - Correct Ans: ✔✔Accidental Death and Dismemberment clause
76. Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? - Correct Ans: ✔✔Guaranteed Renewable

77. T and S are named co-primary beneficiaries on a $500, Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - Correct Ans: ✔✔$
78. Which of the following statements is CORRECT about the period in which a Term Policy can be converted? - Correct Ans: ✔✔It varies according to the contracts
79. Which of the following is NOT required in the Outline of Coverage for a health insurance policy? - Correct Ans: ✔✔Projection of the policy's future costs
80. How does a typical Variable Life Policy investment account grow? - Correct Ans: ✔✔Through mutual funds, stocks, bonds
81. What action should a producer take if the initial premium is NOT submitted with the application? - Correct Ans: ✔✔Forward the application to the insurer without the initial premium

82. The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: - Correct Ans: ✔✔Time Limit on Certain Defenses
83. The minimum age at which a person can sign a life insurance application is - Correct Ans: ✔✔15 years
84. Which of the following costs would a Basic Hospital/Surgical policy likely cover? - Correct Ans: ✔✔Surgically removing a facial birthmark
85. Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent - Correct Ans: ✔✔only if the child is incapable of employment and chiefly dependent on the policyowner
86. A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time? - Correct Ans: ✔✔ 48 months
87. If an agent would like to sell Variable annuities, which state examination must the agent pass? - Correct Ans: ✔✔Life and Variable contracts

88. Term insurance has which of the following characteristics? - Correct Ans: ✔✔Expires at the end of the policy period
89. A policy loan is made possible by which of these life insurance policy features? - Correct Ans: ✔✔Cash value provision
90. How are surrender charges deducted in a life policy with a rear-end loaded provision? - Correct Ans: ✔✔Deducted when the policy is discontinued
91. Florida's 14-day free-look period for life insurance policies begins at the - Correct Ans: ✔✔date of delivery
92. The coordination of benefits (COB) provision exists in order to - Correct Ans: ✔✔avoid duplication of benefit payments
93. J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay: - Correct Ans: ✔✔$3,
94. Which of the following employer tasks does a Professional Employer Organization normally handle? - Correct Ans: ✔✔Administration tasks

95. According to Florida law, group life insurance conversion privileges must NOT - Correct Ans: ✔✔require evidence of insurability
96. An engineering firm that would suffer financially from the death of a project manager should purchase a: - Correct Ans: ✔✔Key Person Life Policy
97. A Business Disability Buyout plan policy is designed: - Correct Ans: ✔✔to pay benefits to the Corporation or other shareholders
98. Medicare Part A and Part B do NOT pay for: - Correct Ans: ✔✔dental work
99. R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity? - Correct Ans: ✔✔Residual Disability
100. The Consideration clause in a life insurance contract contains what pertinent information? - Correct Ans: ✔✔Amount of premium payments and when they are due

101. According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? - Correct Ans: ✔✔The premiums for the handicapped child are not paid
102. What type of renewability guarantees premium rates and renewability? - Correct Ans: ✔✔Noncancellable
103. Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: - Correct Ans: ✔✔partial withdrawal features beyond a surrender charge period
104. What is the purpose of a Policy Summary? - Correct Ans: ✔✔It highlights the critical parts of the policy issued
105. Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - Correct Ans: ✔✔Inspection report
106. Which of the following statements is correct regarding an employer/employee group health plan? - Correct Ans: ✔✔the employer receives a master policy and the employees receive certificates

107. Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? - Correct Ans: ✔✔Subrogation
108. Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - Correct Ans: ✔✔Legal Purpose (Insurable Interest)
109. The sections of an insurance contract which limit coverage are called: - Correct Ans: ✔✔exclusions
110. A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? - Correct Ans: ✔✔ 20 - Pay Life accumulates cash value faster than Straight Life
111. What type of policy would offer a 40-year old the quickest accumulation of cash value? - Correct Ans: ✔✔ 20 - pay life
112. Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - Correct Ans: ✔✔Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

113. T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? - Correct Ans: ✔✔The insurer will rescind the policy, deny the claim, and recover all payments made
114. Which of the following provisions is NOT required in HMO contracts/certificates? - Correct Ans: ✔✔Seven-day grace period
115. In Florida, the underwriting and issuance of a master group health policy requires that all employees - Correct Ans: ✔✔are eligible to participate, regardless of their individual health history
116. In order to establish a Health Reimbursement Arrangement (HRA), it MUST: - Correct Ans: ✔✔be established by the employer
117. The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond - Correct Ans: ✔✔6 months

118. An agent's license can be suspended or revoked by - Correct Ans: ✔✔writing primarily controlled business
119. What type of group insurance plan involves employees sharing the cost? - Correct Ans: ✔✔contributory plan
120. 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 Ans: ✔✔Consideration clause
121. What do Dread Disease policies cover? - Correct Ans: ✔✔A specific disease or illness
122. Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract - Correct Ans: ✔✔once each year
123. Which of these provisions require proof of insurability after a policy has lapsed? - Correct Ans: ✔✔Reinstatement

124. Which two entities regulate variable annuities? - Correct Ans: ✔✔Department of Financial Services; and Securities Exchange Commission
125. J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? - Correct Ans: ✔✔Revocable
126. An incomplete life insurance application submitted to an insurer will result in which of these actions? - Correct Ans: ✔✔Application will be returned to the writing agent
127. An individual covered under a Group Life insurance policy is considered to be a(n) - Correct Ans: ✔✔certificate holder
128. In Florida, an insurer domiciled and incorporated in this state is called a(n) - Correct Ans: ✔✔domestic company
129. Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client. - Correct Ans: ✔✔$25

130. What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? - Correct Ans: ✔✔Premiums may increase at time of renewal
131. 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 Ans: ✔✔The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
132. An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. - Correct Ans: ✔✔ 15
133. Which of the following acts is an agent NOT authorized to do on behalf of an insurer? - Correct Ans: ✔✔Authorize claim payments
134. In Florida, a health policy that is paid on a quarterly basis requires a grace period of - Correct Ans: ✔✔31 days
135. When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is

covered under which of the following benefits? - Correct Ans: ✔✔Recurrent Disability

136. All of the following statements about traditional individual retirement accounts are false EXCEPT - Correct Ans: ✔✔10% penalty is applied to withdrawals before age 59 1/2
137. Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? - Correct Ans: ✔✔The income from the TSA is received income tax-free
138. What is Florida's definition of Life insurance replacement? - Correct Ans: ✔✔A transaction in which a new policy is bought and an old policy is terminated
139. M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? - Correct Ans: ✔✔Pay face amount minus the past due premium
140. What does the insuring agreement in a Life insurance contract establish? - Correct Ans: ✔✔An insurer's basic promise

141. According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - Correct Ans: ✔✔a Certificate of Coverage and Buyer's Guide
142. T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the: - Correct Ans: ✔✔Primary carrier
143. 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? - Correct Ans: ✔✔Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
144. What are adjustable rates for life policy loans in Florida based on? - Correct Ans: ✔✔Moody's corporate bond index
145. Pre-hospitalization authorization is considered an example of: - Correct Ans: ✔✔managed care