Florida Health and Life Insurance State Exam Practice Part 1 Questions And Answers, Exams of Insurance law

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Exam Practice Part 1 Questions And Answers

Which Accident and Health policy provision addresses preexisting conditions? - correct answer Time Limit on Certain Defenses Which of the following individual health insurance policies will provide the broadest protection? - correct answer Major Medical Which of the following situations does NOT apply to the Florida Replacement Rule? - correct answer An existing policyholder purchases an additional policy from the same insurer 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 answer Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Under which of the following circumstances will the benefits under COBRA continuation coverage end? - correct answer All group health plans are terminated by the employer Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the

Exam Practice Part 1 Questions And Answers

right to change the premium rate for the overall risk class? - correct answer Garunteed Renewable An incomplete life insurance application submitted to an insurer will result in which of these actions? - correct answer Application will be returned to the writting agent The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond - correct answer 6 Months Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? - correct answer Entire cash surrender value is taxable Which of these is considered a mandatory provision? - correct answer Payment of Claims Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? - correct answer Issue the policy with an altered Time of Payment of Claims provision

Exam Practice Part 1 Questions And Answers

Which of the following phrases refers to the fees charged by a healthcare professional? - correct answer Usual, customary, and reasonable expenses D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? - correct answer The full face amount N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is: - correct answer $1, No benefits are available during the elimination period. Who does an agent represent during the solicitation or insurance? - correct answer The insurance company Which of the following costs would a Basic Hospital/Surgical policy likely cover? - correct answer Sugically removing a facial birthmark The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as: - correct answer

Exam Practice Part 1 Questions And Answers

Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure Premiums paid by an employer for an employee's coverage are deductible by the employer as a buisness expense What must the policyowner provide to the insurer for validation that a loss has occurred? - correct answer proof of loss Association Plans that are designed to provide health benefits to their members are regulated by the state because - correct answer They are insured by and authorized insurer Which of the following statements is CORRECT about the period in which a Term Policy can be converted? - correct answer It varies according to contracts When does a life insurance contract become effective if the initial premium is not collected during the application process? - correct answer When producer delives policy and collects initial premium

Exam Practice Part 1 Questions And Answers

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: - correct answer Policy Loan Provision Medicare Part A and Part B do no pay for: - correct answer Dental Work When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? - correct answer Void the policy only if it is discovered during the Contestable period and proven to be material The insuring Clause - correct answer States the scope and limits of the coverage An applicant's medical information recieved from the Medical Information Bureau (MIB) may be furnished to the: - correct answer Applicant's physician K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - correct answer Daughter

Exam Practice Part 1 Questions And Answers

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - correct answer Primary Beneficiary. Which of the following is NOT considered rebating - correct answer Sharing commissions with an agent licensed in the same line of buisness Which of the following employer tasks does a Professional Employer Organization normally handle? - correct answer Administration tasks What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? - correct answer Decreasing Term Which action could result in a hearing being ordered by the Department of Financial Services? - correct answer Performing insurance transactions without a license What kind of special need would a policyowner require with an Adjustable Life insurance policy? - correct answer Flexible Premiums

Exam Practice Part 1 Questions And Answers

The premiums paid by an employer for his employee's group life insurance are usually considered to be: - correct answer Tax deductible to the employer Which of the following consists of an offer, acceptance, and consideration? - correct answer Contract Which of the following statements is true about most Blue Cross/Blue Shield organizations? - correct answer They are non-profit organizations Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: - correct answer Signed HIPAA disclosure Which of the following characteristics is associated with a large group disability income policy? - correct answer No medical underwritting When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? - correct answer Change of Occupation Provision What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? - correct answer Waiver of Premium Rider

Exam Practice Part 1 Questions And Answers

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T? - correct answer Conditional Recipt A conditional recipt binds the insurer to coverage as the date of the application or medical exam, provided the proposed insured is determined to be an aceptable risk When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): - correct answer Exclusion A Stock insurance Company - correct answer is owned exclusively by it's shareholders A stock insurance company is best defined as an incorperated company that has its capital divided into shares and is owned exclusively by its shareholders. When an insurance application is taken by a producer, which of these statements is true? - correct answer Any changes made on the applicationrequire the applicants initials

Exam Practice Part 1 Questions And Answers

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT - correct answer an agents comission Which of the following claims are typically excluded from Medical expense policies? - correct answer Intentionally Self-Inflicted injuries T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called: - correct answer Time lImit of certain Defenses If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - correct answer contributory What do families pay that are covered by the Florida Healthy Kids Corporation? - correct answer A Portion of the premium A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are

Exam Practice Part 1 Questions And Answers

typically covered, EXCEPT for: - correct answer experimental and investigative servives A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: - correct answer $300, G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? - correct answer The insured The minimum age at which a person can sign a life insurance application is - correct answer 15 Years Which of these would be considered a Limited-Pay Life policy? - correct answer Life Paid-Up at age 70 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 either by the insurance company or through J

Exam Practice Part 1 Questions And Answers

Which of the following provisions is NOT required in HMO contracts/certificates? - correct answer Seven-day Grace Period J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? - correct answer Twisting The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT? - correct answer Premiums normally increase at the time of renewal 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 answer Pay face amount minus the past due premium Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? - correct answer annuity

Exam Practice Part 1 Questions And Answers

Which of the following factors affects the amount of monthly disability benefits payable under Social Security? - correct answer The amount of benefits availible from other sources Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? - correct answer the income from the TSA is recieved tax-free M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT: - correct answer Free-look period has expired W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim? - correct answer The proceeds would be reduced based on whatever the premium would have been if purchased at age 59 If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called: - correct answer noncancellable

Exam Practice Part 1 Questions And Answers

Which of the following is NOT included in an annuity contract? - correct answer AD&D rider Disability policies do NOT normally pay for disabilities arising from which of the following? - correct answer War All of these are considered sources of underwriting information about an applicant, EXCEPT: - correct answer Rating Services Taking receipt of premiums and holding them for the insurance company is an example of: - correct answer Fiduciary Responsibillity The guarantee of insurability option provides a long-term care policyowner the ability to: - correct answer buy additional coverage at a later date Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). - correct answer 20 Which of the following health insurance policy provisions specifies the health care services a policy will provide? - correct answer Insuring Clause

Exam Practice Part 1 Questions And Answers

What benefit does the Payor clause on a Juvenile Life policy provide? - correct answer premiums are waved if the payor becomes disabled In Florida, most life insurance policies have a contestability period of - correct answer 2 Years Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: - correct answer March 1 The elimination period of the time between the onset of a disability, and the time you are eligibe for benefits. It is best thought of as a deductible period for your policy. After a 30-Day Elimination period, Z will become eligible for recieving benefits on March 1. When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? - correct answer at future dates specifies in the contrac with no evidence of insurability required Which is true concerning a Variable Life Universal Life Policy? - correct answer Policyowner controls where the investment will go and selects the amount of the premium payment

Exam Practice Part 1 Questions And Answers

A whole life insurance policy endows when the: - correct answer Cash Value equals the death benefit Health insurance benefits NOT covered due to an act of war are: - correct answer excluded by the insurer in the contract provisions When applied to Whole Life insurance, the word "straight" denotes: - correct answer the duration of premium payments Which statement is TRUE in regards to a policy loan? - correct answer Past-due interest on a policy loan is added to the total debt WHat is the purpose of the U.S.A. Patriot Act? - correct answer detect and deter terrorism The insurer must provide a prospective buyer with a(n) - correct answer Buyer's Guide and Policy Summary The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - correct answer Insuring Agreement

Exam Practice Part 1 Questions And Answers

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? - correct answer Automatic Policy Loan As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of? - correct answer Coercion Which requirement must be met for an association to be eligible for a group life plan? - correct answer Group was formed for a purpose other than acquiring insurance A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value. - correct answer viatical settlement provider A life policy loan in Florida cannot charge a fixed rate of interest higher than - correct answer 10% Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? - correct answer Joint Life

Exam Practice Part 1 Questions And Answers

When is the face amount of a Whole Life policy paid? - correct answer When the insured dies or at the policy's maturity date, whichever happens first 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 With Optionally Renewable Health policies, the insurer may: - correct answer review the policy annually and determine whether or not to renew it How does group insurance differ from individual insurance? - correct answer Premiums are Lower What type of life insurance incorporates flexible premiums and an adjustable death benefit? - correct answer Univeral Life Which of the following statements BEST describes dental care indemnity coverage? - correct answer Services are reimbursed after insurer receives the invoice According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? - correct answer No Minimum

Exam Practice Part 1 Questions And Answers

Any changes made on an insurance application requires the initials of whom? - correct answer Applicant 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 Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? - correct answer 30 In Florida, an element of an insurance transaction would be - correct answer issuing insurance contract 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 What do Dread Disease policies cover? - correct answer A specific disease or illness What type of renewability guarantees premium rates and renewability?

• correct answer Noncancellable

Exam Practice Part 1 Questions And Answers

According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - correct answer Marital Status All of the following will result in the suspension of an agent's license EXCEPT - correct answer acting with a fiduciary responsibility 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 of the policy was issued What does the ownership clause in a life insurance policy state? - correct answer Who the policyowner is and what rights the policyowner is entitled to In Florida, monthly-premium health insurance policies must provide a grace period of at least - correct answer 10 days Florida's 14-day free-look period for life insurance policies begins at the

• correct answer date of delivery

Exam Practice Part 1 Questions And Answers

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - correct answer P will still recieve declared dividends What is the main reason for regulating the insurance industry? - correct answer maintain solvency of insurance companies A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: - correct answer mandatory income tax withholding on the transfer amount Which of the following is NOT an unfair claim settlement practice? - correct answer Needing written documentation of claim details Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? - correct answer misrepresentation P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in

2011. What will the insurer pay to P's beneficiary? - correct answer $50,000 minus any outstanding policy loans

Exam Practice Part 1 Questions And Answers

In Florida, a health policy that is paid on a quarterly basis requires a grace period of - correct answer 31 days 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 answer Claim will be denied P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? - correct answer An immediate annuity What are adjustable rates for life policy loans in Florida based on? - correct answer Moody's corporate bond index D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? - correct answer Residual Benefit Clause 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 answer Claim will be denied

Exam Practice Part 1 Questions And Answers

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? - correct answer Premiums may increase at the time of renewal A medical care provider which typically delivers health services at its own local medical facility is known as a: - correct answer HMO The investment gains from a Universal Life Policy usually go toward: - correct answer the cash value 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 The Florida Employee Health Care Access Act was established to make - correct answer group health insurance available to employers with up to 50 employees When is a Group Health policy required to provide coverage for a newborn child? - correct answer at the moment of birth

Exam Practice Part 1 Questions And Answers

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - correct answer Buisness Overhead Expense In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? - correct answer Naturopaths Which of the following BEST describes a short-term medical expense policy? - correct answer nonrenewable An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? - correct answer Gender A policy loan is made possible by which of these life insurance policy features? - correct answer Cash Value Provision 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 regular rates on an attained- age basis

Exam Practice Part 1 Questions And Answers

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 What is Florida's definition of Life insurance replacement? - correct answer A transaction in which a new policy is bought and an old policy is terminated What percentage of eligible persons must a policy cover in a noncontributory group? - correct answer %100 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 Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? - correct answer Buyer's Guide At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - correct answer at the time of the appliation

Exam Practice Part 1 Questions And Answers

What would be an accurate definition of "controlled business"? - correct answer Insurance business that is written on the agent's own life, property, or interests Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it 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 answer Policy was returned within the free-look period, premium will be fully refunded 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 Which of the following is NOT required in the Outline of Coverage for a health insurance policy? - correct answer projection of the policy's future costs Who makes the legally enforceable promises in a unilateral insurance policy? - correct answer Insurance Company Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent - correct answer only if the