Florida Life and Health Insurance Exam Preparation: Multiple Choice Questions and Answers, Exams of Insurance law

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Florida Life and Health Insurance Prep

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Within how many days must a licensee notify the Department of Financial Services of a change in address? - Answer 30 All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT...

• Answer An agent's commission Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency? - Answer The amount of premium collected at this location Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years - Answer 5 Agents that have been licensed for less than six years must complete __ hours of continuing education every two years - Answer 24 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? - Answer 48 What is the maximum percentage of controlled business an agent may produce? - Answer 50% A group plan was recently terminated. In Florida how many days are covered individuals guaranteed coverage after a group plan's termination? - Answer 31 days The Financial Services Commision may hold hearings... - Answer For any reason deemed necessary In Florida, an insurer domiciled and incorporated in this state is called... - Answer Domestic company

According to Florida law, which of the following statements accurately describes an admitted mail order insurance company? - Answer It may solicit insurance business by mail only without the assistance of a licensed Florida agent According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age... - Answer 64 years or older Which action could result in a hearing being ordered by the Department of Financial Services? - Answer Performing insurance transactions without a license Which of the following professional organizations has its code of ethics incorporated into Florida law? - Answer National Association of Insurance and Financial Advisors (NAIFA) Which entity approves the insurance policy forms used in Florida? - Answer Office of Insurance Regulation (OIR) In Florida, agents are allowed to engage in rebating if... - Answer Offered to all insured in the same actuarial class In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the... - Answer Florida Replacement Rule In Florida, an element of an insurance transaction would be... - Answer Issuing an insurance contract The Bureau of Unclaimed Property is overseen by... - Answer The chief financial officer One of the stated purposes of the Life and Health Insurance Guaranty Association is... - Answer To assist in the prevention of insurer insolvencies The Life and health Insurance Guaranty Association is funded by... - Answer Assessments on member companies

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? - Answer Policy was returned within the free- look period, premium will be fully refunded According to Florida law, which of the following info does NOT need to be obtained by an agent recommending an annuity purchase? - Answer Marital status K is an agent who made 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? - Answer Pay a monetary restitution to the client Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract... - Answer Once each year Which two entities regulate variable annuities? - Answer Department of Financial Services and Securities Exchange Commission If an agent would like to sell Variable annuities, which state examination must the agent pass? - Answer Life and Variable contracts According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with... - Answer Buyer's Guide and Policy Summary In Florida, most life insurance policies have a contestability period of... - Answer 2 years Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called - Answer Fraternal life insurance organizations The 14-day free look period for life insurance policies begins at the... - Answer Day of delivery According to Florida law, group life insurance conversion privileges must NOT - Answer Require evidence of insurability

Which of the following situations are NOT subject to Florida life insurance laws? - Answer Insurance companies' day-to-day operations What are adjustable rates for life policy loans in Florida based on? - Answer Moody's corporate bond index A life policy loan in Florida cannot charge a fixed rate of interest higher than... - Answer 10% The minimum age at which a person can sign a life insurance application is... - Answer 15 years Which of the following situations does NOT apply to the Florida Replacement Rule? - Answer An existing policyholder purchases an additional policy from the same insurer According to Florida's life insurance replacement laws, a policyowner must be provided with a written Comparison and Summary Statement when it's requested by.... - Answer the policyowner A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as... - Answer a broker dealer Which of these is NOT a legal entity for selling life insurance in Florida? - Answer risk management advisors The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of... - Answer the policyowner When an existing life insurance policy is being reissued with a reduction in cash value, the agent must sign the... - Answer Notice regarding the replacement of life insurance or annuity The life insurance and annuity replacement regulation defines replacement as - Answer Exchanging an existing policy for a new policy

All of the following provisions are required in a group life policy EXCEPT... - Answer An accidental death and dismemberment provision Which of the following is a standard provision of the conversion privileges in a Group Life Policy? - Answer Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis An individual covered under a Group Life insurance policy is considered to be... - Answer A certificate holder The conversion period for a terminated employee to convert group life coverage to an individual plan is...

• Answer 31 days 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... - Answer To an individual policy upon employment termination 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? - Answer All of the employees must be notified of the cancellation either by the insurance company or through J Individual life insurance proceed are exempt from creditor's claims when they are payable to any of the following entities EXCEPT the insured's - Answer estate All of the following provisions must be included in life insurance policies EXCEPT... - Answer Extended term If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely... - Answer Pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age An insurance company can contest a life insurance contract due to application fraud within... - Answer 2 years

Which of the following BEST describes Credit Life Insurance? - Answer Insurance issued on a debtor to cover outstanding balances on installment loans Which of the following areas of state regulation is NOT protected by the savings clause in ERISA? - Answer Commerce According to Florida law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? - Answer The premiums for the handicapped child are not paid The Florida Employee health Care Access Act was established to make... - Answer Group health insurance available to employers with up to 50 employees What do families pay that are covered by the Florida Healthy kids Corporation? - Answer A portion of the premium What is required in the Florida Employee Health Cares Access Act? - Answer Small group benefit plans are to be issued on a "guaranteed-issue" basis In Florida, the underwriting and issuance of a master group health policy requires that all employees... - Answer Are eligible to participate, regardless of their individual health history Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy? - Answer Limitations on preexisting condition for up to 12 months Employers with less than __ employees are affected by Florida's health Insurance Coverage Continuation Act (Mini COBRA) - Answer 20 In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? - Answer Naturopaths Florida requires that coverage for newborns begins "from the moment of birth" and continues for... - Answer 18 months

A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? - Answer Insurance All of the following statements about health coverage for newborns are correct EXCEPT... - Answer Coverage during the first year is limited to congenital defects Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent... - Answer Only if the child is incapable of employment and chiefly dependent on the policyowner All of the following statements about health coverage for physically handicapped dependents of insureds are correct EXCEPT that the dependent must... - Answer Have been covered under the insured's policy at the time the handicap was incurred Association Plans that are designed to provide health benefits to their members are regulated by the state because... - Answer They are insured by an authorized insurer An agent selling Medicare Supplement policies must provide every applicant with... - Answer A suitability form All of the following are Nonforfeiture Options EXCEPT - Answer Automatic premium loan option Which entity approves the insurance policy forms used in Florida? - Answer Office of insurance regulation Deductibles are used in health policies to lower - Answer Overuse of medical services A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as - Answer A representation Advertising gifts not to exceed___ area allowed to be given by an agents to a prospective client - Answer $

What is considered a valid reason for small businesses to insures the lives of its major shareholders - Answer Fund a buy-sell agreement Group Life policies in Florida are required to contain a conversion privilege that allows for conversion - Answer To an individual policy for a stated period of time Which of these statements describe a Modified Endowment Contract (MEC)? - Answer Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract Which two entities regulate variable annuities? - Answer Department of financial services & Securities exchange commission Which of the following is NOT an unfair claim settlement practice? - Answer Needing written documentation for claim details 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? - Answer single premium When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called - Answer Residual disability T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - Answer renewable Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? - Answer collateral assignment P died 5 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? - Answer Beneficiary will be paid the death benefit

Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? - Answer 30 All of these are characteristic of an Adjustable Life policy except - Answer Face amount can be adjusted using policy dividends J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - Answer 20-pay life An accident policy will most likely pay a benefit for a - Answer Off the job accident Which of these are NOT an example of a Nonforfeiture option? - Answer life income A policy loan is made possible by which of these life insurance policy features? - Answer Cash value provision The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a - Answer Closed panel Which of the following is NOT included in the policy face? - Answer excisions A young, married teacher has 2 children and owns a whole life policy. If the teacher wants an increasing death benefit to protect against inflation, the teacher should select which ofthe following Dividend Options? - Answer Paid-up additional insurance In Florida, a health policy that is paid on a quarterly basis requires a grace period of - Answer 31 days 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? - Answer 20 Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant? - Answer risk classification

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first 6 months. Q suddenly dies and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - Answer Aleatory An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to - Answer Determine if the applicant is an acceptable risk by competing standard underwriting procedures What is being delivered during a policy delivery? - Answer Insurance contract to the proposed insured If a retiree on Medicare required for hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? - Answer Medicare supplement According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? - Answer no minimum The Notice of Claims provision requires a policy owner to - Answer Notify an insurer of a claim within specified time What type of policy would only provide courage for specific types of illnesses (cancer, stroke, etc)? - Answer dread disease insurance How are policyowner dividends treated in regards to income tax? - Answer Interest on accumulations is taxed What would be an accurate definition of "controlled business" - Answer Insurance business that is written on the agent's own life, property, or interests M purchases a 470,000 Life Insurance policy with premium payment of $550 a year for the first 5 years. At the beginning of the 6th year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain $70,000 throughout the life of the policy. The type of policy that M has purchased is - Answer Modified premium life

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the insured be responsible to pay with $11,000 in covered medical expenses? - Answer 3000 → 11,000 x .20 + 1, 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 insured. This type of policy is considered? - Answer Guaranteed renewable Which mode of payment is NOT used by health insurance policies? - Answer single premium An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses? - Answer Loss of eyesight due to an accidental injury Which of these is NOT a type of agent authority? - Answer Principal Which of the following provisions is NOT required in HMO contracts/certificates? - Answer Seven day grace period The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the - Answer insuring clause If an annuity is terminated prior to the beginning of the income payment period, the contract owner received - Answer The contract current value at that time According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant? - Answer At the time of application J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to? - Answer Health maintenance organization (hmo)

S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? - Answer Return of premium rider Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

• Answer Premiums normally increase at time of renewal All of these are considered to be a benefit under social security, except for - Answer unemployment All of the following statements about traditional individual retirement account are false EXCEPT - Answer 10% penalty is applied to withdrawals before age 59. Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every 2 years - Answer 5 A long-term care lapse notice must be delivered to both the applicant and - Answer Secondary addressee Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract - Answer Once each year A policy owner would like to change the beneficiary on an Accidental Death and Dismemberment insurance policy and make the change permanent. Which type of designation would fulfill this need? - Answer Irrevocable 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? - Answer Collect initial premium along with a signed health statement Which contract permits the remaining partners to buy-out the interest of a disabled business partner? - Answer Disability buy-sell

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and - Answer the initial premium The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person up an insured's death is called a - Answer insuring agreement Which of the following actions require a policyowner to provide proof of insurability in an adjustable life policy? - Answer Increase face amount A 42-year old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? - Answer Universal life → characterized by flexible premiums and adjustable death benefit Which of the following statements BEST describes what the Legal Actions provision of an ancient and health policy requires? - Answer An insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed Which of these is an element of a single premium annuity? - Answer Lump-sum payment According to the time limit of certain defenses provision in an individual health insurance policy, non fraudulent misstatements first become incontestable - Answer Two years from the date of the policy was issued 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? - Answer Split dollar plan T took out a $50,000 life insurance policy with an accidental death and dismemberment rider. Five years later, T commits suicie. How much will the insurer pay? - Answer $50, Z owns a Disability income policy with a 30-day elimination period. Z contracted pneumonia that left him unable to work from Jan 1 until Jan 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 - Answer March 1

Which of these is NOT considered to be a right give to a policyowner? - Answer Modify a provision in the insurance contract? Whose life is covered on a life insurance policy that contains a payor benefit clause? - Answer Child Which type of renewability best describes a disability income policy that covers an individual until the age of 65, but the insurer has the rights to change the premium rate for the overall risk class? - Answer Guaranteed renewable Which of the following policy features allows an insured to defer current health changes to the following year's deductive instead of the current year's deductive? - Answer Carryover provision When does a probationary period provision become effective in a health insurance contract? - Answer At the policy's inception Which of the following statements about accumulated interest earned on dividends from an insurance policy is true? - Answer It is taxed as ordinary income Which of the following actions is NOT possible with a universal life policy? - Answer Premiums may be applied as a credit against income tax 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 the these features would allow D to continue receiving benefits - Answer Residual benefit clause → based on a proportion of income actually lost to the partial disability Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency? - Answer Florida Life and Health insurance guaranty association D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? - Answer level term N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? - Answer Fixed deferred