Florida Life and Health Insurance Correct Questions & Answers(Latest Update 2024)Correct 1, Exams of Insurance law

Download Florida Life and Health Insurance Correct Questions & Answers(Latest Update 2024)Correct 1 and more Exams Insurance law in PDF only on Docsity! Florida Life and Health Insurance Correct Questions & Answers(Latest Update 2024)Correct 100% Insured - ANSWER The person covered by the insurance policy. Rider - ANSWER A written modification attached to a policy that increases or decreases coverage and/or premiums. What is a unilateral contract? - ANSWER A contract in which only one of the parties is legally bound to fulfill its obligations. What law protects consumers from the circulation of inaccurate or obsolete information? - ANSWER The Fair Credit Reporting Act. What are the three types of agent authority? - ANSWER Implied, Express, and Apparent. Agent - ANSWER An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. What is name of the process that insurance companies use to determine whether or not an applicant is insurable? - ANSWER Underwriting The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility? - ANSWER Fiduciary What is a third-party ownership? - ANSWER An insurance arrangement in which the policy owner and the insured are not the same person. Suitability - ANSWER Factors that determine if an insurance product is appropriate for a particular customer. Premium - ANSWER A payment by the policy owner to the insurance company to keep the policy in force. Disclosure - ANSWER Providing sufficient information to help someone make informed decision. An agent offer a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? - ANSWER Rebating If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer? - ANSWER Authorized What information are the members of the medical information bureau required to report? - ANSWER Adverse medical information about the applicants or insureds. What type of beneficiary can be changed at any point by the policy owner? - ANSWER Revocable What document describes the specific information about a policy? - ANSWER Policy Summary What is the term for the causes of loss insured against in an insurance policy? - ANSWER Peril Whom does an insurance agent represent? - ANSWER Insurance Company What is an unfair trade practice? - ANSWER Any fraudulent, deceptive, or dishonest business practice that is prohibited by statutes and regulations. Insurer - ANSWER The company that issues an insurance policy. Peril - ANSWER Cause of loss Contract of Adhesion - ANSWER A contract prepared by one party that must be accepted as written or be rejected by the other party. What are the four elements of an insurance contract? - ANSWER Agreement (Offer and Acceptance), consideration, competent parties, and legal purpose. Policy Provision - ANSWER A clause that stipulates the rights and obligations under an insurance contract. Fiduciary - ANSWER A producer who handles insurer's funds in a trust capacity. Who is considered a nonresident agent? - ANSWER An agent who resides and is licensed in another state, but is authorized to transact insurance in Florida. What is underwriting? - ANSWER The risk selection and classification process. What is the best way to handle incomplete insurance applications? - ANSWER Return the application to the applicant for completion. What are the five characteristics of an ideally insurable risk? - ANSWER Loss must be: 1. Due to Change 2. Definite and measurable Who must be a member of a state insurance guaranty association? - ANSWER Any authorized insurer within a state. When should an agent obtain a statement of good health from the insured? - ANSWER When the premium was paid upon delivery rather that at the time of application. What is the main responsibility of a company's underwriting unit? - ANSWER Risk Selection Conditions that increase the chance of a loss are known as what? - ANSWER Hazards What is the purpose of the agent's report during the application process? - ANSWER It provides the agent's observation about the proposed insured that may help in the underwriting process. If an underwriter requires extensive information about the applicants medical history, what report will best serve this purpose? - ANSWER Attending Physician's statement. What are agents required to do in order to renew their license? - ANSWER Complete required continuing education hours. Primary Beneficiary - ANSWER A beneficiary who has the first claim to the policy proceeds after the death of the insured. Why are dividends in life insurance polices not taxable? - ANSWER Dividends are not considered income for tax purposes; they are a return of unused premium. How soon can income payments begin in an immediate annuity? - ANSWER No later that one year from the time of annuity purchase. What type of annuity requires an agent to have a securities license? - ANSWER Variable Annuity What are some examples of Life qualified plans? - ANSWER IRA, 401(k), HR 10 (keogh), SEP, SIMPLE Under what non-forfeiture option does the company pay the policy's surrender value and have no further obligations to the policy owner? - ANSWER Cash Surrender What provision in a life insurance policy extends coverage beyond the premium due date? - ANSWER Grace Period. In term policies, what happens to the premium throughout the term of the policy? - ANSWER The premium remains level. What type of whole life insurance policy only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and endows at the insured's age 100? - ANSWER Single premium whole life. What are the characteristics of the group that underwriters will consider before issuing a group life policy? - ANSWER Groups purpose, size, financial strength, and turnover. What is the main advantage of converting from group life insurance to individual coverage? - ANSWER Evidence of insurability is not required What is included in Part 2 of a life insurance application? - ANSWER Medical information about the prospective insured. Term Insurance - ANSWER Coverage for a specified period of time without cash values or living benefits. Lump Sum - ANSWER A payout method that pays the beneficiary the entire benefit in one payment. What are the consequences of withdrawing funds from a traditional IRA prior to the age of 59 1/2? - ANSWER 10% penalty Whose life expectancy is taken into consideration in an annuity contract? - ANSWER Annuitant Who bears the investment risk in a fixed annuity? - ANSWER The insurer What is the primary purpose of a 401(k) plan? - ANSWER Provide retirement income. What does the term "double indemnity" mean? - ANSWER The insurer will pay a benefit of twice the face amount. What type of beneficiary is next in line after the primary beneficiary? - ANSWER Contingent Beneficiary. Who controls changes in premium payments, face changes, and loans in a life insurance policy? - ANSWER Policy owners. When would a 20-pay whole life policy endow? - ANSWER When the insured reaches age 100. Who owns a group life insurance contract? - ANSWER The employer. In a joint life policy, when is the death benefit paid? - ANSWER Upon the first death (if first-to-die policy), or upon the second death (if survivor ship policy) What is the blackout period for Social Security Benefits? - ANSWER A period of time during which the surviving spouse does not receive social security benefits. What are the personal uses of life insurance? - ANSWER Survivor protection, estate creation and conservation, cash accumulation and liquidity. Non-forfeiture Options - ANSWER Methods of distribution of guaranteed values in a life insurance policy. With the interest-only settlement option, what happens to the policy's death benefit? - ANSWER Policy proceeds are retained by the insurance company; only the interest is paid to the beneficiary. If there is no named beneficiary for the annuity benefits, where do the benefits go? - ANSWER Annuitant's estate What is the general taxation rule for death benefits payable to the beneficiary of a life insurance policy? - ANSWER Death benefits are generally not subject to income taxes. What is the purpose of the automatic premium loan provision? - ANSWER To prevent the unintentional lapse of a policy because of nonpayment of premium. Which non-forfeiture option is automatically selected by the company if not chosen by the policy owner? - ANSWER Extended Term. What life insurance policy provision prevents an insurer form disputing or denying a claim due to misstatements on the application after a certain period of time? - ANSWER Incontestability In annually renewable term policies, what is the annual premium based upon? - ANSWER The insured's attained age. In what type of life insurance policy can the policy owner skip premium payments without the policy lapsing? - ANSWER Universal Life What type of life insurance policy offers pure death protection? - ANSWER Term At what point does coverage begin when an agent issues a conditional insurability receipt for a life insurance policy? - ANSWER Either on the date of the application or the date of the medical exam, whichever occurs last. What are the three main factors that determine the premium for a life insurance policy? - ANSWER Mortality, Interest, and Expense. Qualified Plan - ANSWER A retirement plan that meets the IRS guidelines for receiving favorable tax treatment. When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured? - ANSWER Evidence of Insurability. What are the "living benefits" of whole life insurance? - ANSWER Cash Value Statements on the application made by an applicant for a life insurance policy are known as what? - ANSWER Representations What dividend option can increase the death benefit of the existing life policy> - ANSWER Paid-up additions What are the most common exclusions in life insurance policies? - ANSWER War and Military service, hazardous occupation, and Aviation. If the beneficiary of a life insurance policy receives death benefit payments that consist of principal and interest, which portion, if any, will be taxed? - ANSWER Interest Only What type of annuity is suitable for someone who wants the largest benefit amount only for as long as the annuitant lives? - ANSWER Straight Life What is the main reason for purchasing an annuity? - ANSWER To provide income that the annuitant cannot outlive. SIMPLE plans are available to groups of how many employees? - ANSWER No more than 100 What type of health insurance would pay for hiring a replacement for a valuable employee who becomes disabled? - ANSWER Key-person disability insurance What is a presumptive disability provision? - ANSWER Provision found in most disability income policies that specifies the conditions that will automatically qualify for full disability benefits. Under an individual disability income policy, the benefits must be paid on at least what schedule? - ANSWER Monthly What is a probationary period in group health insurance? - ANSWER The period of time that must lapse before an employee is eligible for group health coverage. Who decides which optional provisions would be included in the health policy? - ANSWER The insurance company Which Medicare part helps pay for inpatient hospital care, inpatient care in skilled nursing facility, home health care, and hospice care? - ANSWER Part A Can Alzheimer's disease be excluded from coverage under a ling-term care policy? - ANSWER NO, organic cognitive disorders, such as Alzheimer's or Parkinson's must be covered. How many consecutive months of coverage must long-term care insurance provide? - ANSWER 12 Months Under a fully contributory health plan, how are the benefits received by the employee? - ANSWER Income tax free How are the benefits of a group accidental death and dismemberment policy received? - ANSWER Income Tax free What is overinsurance? - ANSWER An excessive amount of insurance that would result in over payment to the insured in the event of a loss. Most health policies will pay accidental death benefits if the death is caused by an accident and occurs within how many days? - ANSWER 90 Days In health insurance, what is considered a sickness? - ANSWER An illness that first arises while the policy is in force. What do individual insureds receive as proof of their group health coverage? - ANSWER Certificate of Insurance In health insurance contracts, the insured is not legally bound to any particular action; however, the insurer is obligated to pay for losses covered by the policy. What contract characteristic does this describe? - ANSWER Unilateral How do insurers determine that cost for a group health policy? - ANSWER The main variables are the ration of men and women in the group, and the average age of the group. Who is responsible for making premium payments in an HMO plan? - ANSWER Subscribers What health policy provision describes the insured's right to cancel coverage? - ANSWER Renewability Provision When can an irrevocable beneficiary be changed? - ANSWER With the written consent of the beneficiary. Under the uniform required provisions for health insurance policies, proof of loss usually needs to be filed within how many days? - ANSWER 90 Days What is the required free-look period for Medicare supplement policies? - ANSWER 30 Days Who qualifies for Medicaid? - ANSWER People with insufficient income and insufficient assets. What type of insurance covers an employee who is hurt on the job? - ANSWER Worker's Compensation Under what employer sponsored plan are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? - ANSWER Disability income When are LTC benefits received tax-free by an individual? - ANSWER LTC benefits are always received tax-free What is the gatekeeper model? - ANSWER An HMO model that uses the insured's primary care physician as the initial contact for the insured for medical care and for referrals. What are the common exclusions in most health insurance policies? - ANSWER War, self-inflicted injuries, elective cosmetic surgeries, injuries caused by participating in illegal activities, and workers compensation benefits. What is the term for a period of time immediately following a disability during which benefits are not payable? - ANSWER Elimination Period How can health insurance policies be delivered to the insured? - ANSWER Personally delivered by the agent or mailed. What is the purpose of respite care in long-term care insurance? - ANSWER To provide relief for a caregiver. In what type of health insurance plans are providers paid for services in advance, regardless of the services provided? - ANSWER Prepaid plans When an individual is covered under two health plans that have duplicate benefits, the benefit will be prorated to avoid what? - ANSWER Overinsurance What is the main difference between coinsurance and co-pay? - ANSWER Co-pay is a set dollar amount; coinsurance is a percentage of the expenses Which policy rider in a health insurance policy allows an insured to purchase additional amounts of disability income coverage without evidence of insurability? - ANSWER Guaranteed Insurablility Rider What benefits are provided by Medicare part C? - ANSWER Expanded benefits for a fee through private insurance programs such as HMO's or PPO's. What is a tax advantage of the employer paying disability insurance premiums for its employees? - ANSWER Premiums are deductible as a business expense. How are excess funds in an employee's health savings account (HSA) handled? - ANSWER The funds can be carried forward to the next year. What is Major medical insurance? - ANSWER Health insurance that provides coverage for catastrophic losses, and features deductibles and coinsurance, and high limits of coverage. What are two types of expenses that are covered by health plans? - ANSWER Medical expenses and loss of income expenses If the insureds share in the cost of health insurance premiums with the employer, this would be known as what type of group health plan? - ANSWER Contributory Who must sign a health insurance application? - ANSWER The agent and the insured (and the policy owner if different from the insured) What is the time requirement for terminated employees to covert the group health coverage to an individual plan without evidence of insurability? - ANSWER 31 days after termination of the employment According to the time limit on certain defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application? - ANSWER Any time while the policy is in force. What health policy renewal ability provision allows the insurer to terminate coverage for any reason, and to increase the premiums for any class of insureds? - ANSWER Optionally renewable What health policy provision defines the insured's duty to provide the insurer with reasonable notice in the event of a loss? - ANSWER Notice of Claim Which term describes the specific dollar amount beyond which the insured no longer participates in the sharing of expenses? - ANSWER Stop-Loss What is the purpose of Medicare supplement plans? - ANSWER To fill the gaps in Medicare coverage Who qualifies for Medicare coverage? - ANSWER People age 65 of older, or anyone who has been entitled to Social Security disability income benefits for two years, of who has chronic kidney disease. According to the coordination of benefits provision, if both parents have coverage for a child and their employers' policies, which policy would pay first? - ANSWER The order of payment will be determined by the birthday rule. In group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? - ANSWER 100% According to the Affordable Care Act, what are the cost-sharing requirements for preventive care? - ANSWER No cost sharing. What is a hospital indemnity plan? - ANSWER A policy that provides a benefit based only on the number of days confined in the hospital, regardless of medical expenses incurred. What is the main principle of an HMO plan? - ANSWER Preventive Care What does the amount of group disability benefit an insured can receive depend upon? - ANSWER The insured's income prior to a disability.