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Florida Insurance Exam Questions with Simplified
Solution
1. The clause identifying which losses resulting from an accident or sickness are
insured by the policy is called the:: Insuring clause
2. K applies for a life insurance policy on herself and submits the initial pre-
mium 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?: Conditional
3. A life insurance arrangement which circumvents insurable interest statutes is
called:: 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?: - Entire Contract
5. Within how many days after policy delivery can a Medicare Supplement
policy be returned for a 100% premium refund?: 30
6. Which of the following is NOT an unfair claim settlement practice?: Needing written
documentation of claim details
7. Who is NOT required to sign a life insurance application?: Beneficiary
8. To be eligible for Social Security disability benefits, an employee must be
unable to perform:: any occupation
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9. The type of annuity that can be purchased with one monetary deposit is called
a(n):: Immediate annuity
10. A life insurance application must be signed by all of these, EXCEPT:: beneficiary
11. Which of the following is considered an accurate statement of an unfair trade
practice?: 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):: 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?: Carryover provision
14. Insurance policies are considered aleatory contracts because: 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?: 30
16. Which organization was established to provide funds to protect an insured in
the event of an insurer's insolvency?: 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:: Insuring clause
18. When a policyowner cash surrenders a Universal Life insurance policy in it's
4 / 21 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
5 / 21 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?: 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.: viatical settlement provider
30. According to Florida law, when must an agent deliver the Outline of Cover-
age to a Medicare Supplement applicant?: At the time of application
31. Which of the following statements about accumulated interest earned on
dividends from an insurance policy is TRUE?: It is taxed as ordinary income
32. The automatic premium loan provision is designed to:: avoid a policy lapse
33. A term life insurance policy matures:: 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?: Family Maintenance Policy
35. The guarantee of insurability option provides a long-term care policyowner
the ability to:: 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:: income
37. Periodic health claim payments MUST be made at least:: monthly
7 / 21 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?: January 26
47. Which of the following types of insureds are life insurance companies
allowed to make policy rate discriminations against?: 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:: 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?: 31
50. Which of the following services is NOT covered under a hospitalization
expense policy?: 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?: Beneficiary will be paid the Death Benefit
52. Employers with less than employees are
affected by Florida's Health Insurance Coverage Continuation Act (Mini
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COBRA).: 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?: Conver-sion
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65. What is the Suicide provision designed to do?: 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:: marital deduction
67. Which of these statements about a Guaranteed Insurability Option rider is
NOT TRUE?: 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?: $300,
69. Which type of policy pays benefits to a policyholder covered under a Hos-
pital Expense policy?: Reimbursement
70. An example of false advertising would be: An insurer exaggerating its dividends in a
magazine advertisement
71. When does a Probationary Period provision become effective in a health
insurance contract?: 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:: Interest Only
73. What is the maximum Social Security Disability benefit amount an insured
can receive?: 100% of the insured's Primary Insurance Amount (PIA)
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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?: 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?: 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?: Guaranteed Renewable
77. T and S are named co-primary beneficiaries on a $500,000 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?: $
78. Which of the following statements is CORRECT about the period in which a
Term Policy can be converted?: It varies according to the contracts
79. Which of the following is NOT required in the Outline of Coverage for a
health insurance policy?: Projection of the policy's future costs
80. How does a typical Variable Life Policy investment account grow?: Through
mutual funds, stocks, bonds
81. What action should a producer take if the initial premium is NOT
submitted with the application?: Forward the application to the insurer without the initial premium
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83. The minimum age at which a person can sign a life insurance application
is: 15 years
84. Which of the following costs would a Basic Hospital/Surgical policy likely
cover?: Surgically removing a facial birthmark
85. Upon reaching the limiting age, a handicapped child can extend their health
insurance coverage as a dependent: 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?: 48 months
87. If an agent would like to sell Variable annuities, which state examination
must the agent pass?: Life and Variable contracts
88. Term insurance has which of the following characteristics?: Expires at the end
of the policy period
89. A policy loan is made possible by which of these life insurance policy
features?: Cash value provision
90. How are surrender charges deducted in a life policy with a rear-end loaded
provision?: Deducted when the policy is discontinued
91. Florida's 14-day free-look period for life insurance policies begins at the: date of
delivery
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92. The coordination of benefits (COB) provision exists in order to: 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:: $3,
94. Which of the following employer tasks does a Professional Employer Orga-
nization normally handle?: Administration tasks
95. According to Florida law, group life insurance conversion privileges must
NOT: require evidence of insurability
96. An engineering firm that would suffer financially from the death of a project
manager should purchase a:: Key Person Life Policy
97. A Business Disability Buyout plan policy is designed:: to pay benefits to the Corporation or
other shareholders
98. Medicare Part A and Part B do NOT pay for:: 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 provi-sion pays reduced benefits to R while he is not working at full capacity?: Residual Disability
100. The Consideration clause in a life insurance contract contains what perti-
nent information?: Amount of premium payments and when they are due
101. According to Florida Law, in which of the following situations would a de-
16 / 21 faster than Straight Life
111. What type of policy would offer a 40-year old the quickest accumulation of
cash value?: 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?: Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application ott to the insurance company
113. T was insured under an individual Disability Income policy and was severe-
ly 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?: 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/cer-
tificates?: Seven-day grace period
115. In Florida, the underwriting and issuance of a master group health policy
requires that all employees: are eligible to participate, regardless of their individual health history
116. In order to establish a Health Reimbursement Arrangement (HRA), it
MUST:: be established by the employer
117. The waiting period for a pre-existing condition under a Medicare Supple-
ment policy may NOT go beyond: 6 months
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118. An agent's license can be suspended or revoked by: writing primarily controlled
business
119. What type of group insurance plan involves employees sharing the cost?-
: 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?: Consideration clause
121. What do Dread Disease policies cover?: A specific disease or illness
122. Under Florida law, a variable annuity policyowner must be notified of the
accumulated value of the contract: once each year
123. Which of these provisions require proof of insurability after a policy has
lapsed?: Reinstatement
124. Which two entities regulate variable annuities?: Department of Financial Services; and
Securities Exchange Commission
125. J would like to maintain the right to change beneficiaries. Which beneficia-
ry designation should be used?: Revocable
19 / 21 period of: 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?- : Recurrent Disability
136. All of the following statements about traditional individual retirement
accounts are false EXCEPT: 10% penalty is applied to withdrawals before age 59 1/
137. Which of the following statements regarding a Tax Sheltered Annuity (TSA)
is INCORRECT?: The income from the TSA is received income tax-free
138. What is Florida's definition of Life insurance replacement?: 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?: Pay face amount minus the past due premium
140. What does the insuring agreement in a Life insurance contract establish?-
: An insurer's basic promise
141. According to Florida's rules on disclosure, a life insurance applicant is
expected to be provided with: 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
20 / 21 Coordination of Benefits provision, when T files a claim, his employer's plan is considered the:: 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?: 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?: Moody's
corporate bond index
145. Pre-hospitalization authorization is considered an example of:: managed care
146. All of the following are Nonforfeiture Options EXCEPT: Automatic Premium Loan
Option
147. 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:: noncancellable
148. When applied to Whole Life insurance, the word "straight" denotes:: The
duration of premium payments
149. The Florida Employee Health Care Access Act was established to make: -
group health insurance available to employers with up to 50 employees
150. After an insured gives notice of loss, what must he/she do if the insurer
