Download Florida Life Insurance Regulations and more Exams Nursing in PDF only on Docsity! Florida Life and Health Insurance Practice Questions/ 373 Q&A/ 2024-2025. 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) Page 1 of 43 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 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 Page 2 of 43 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 Page 5 of 43 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 Page 6 of 43 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 Replacement regulation applies to which of the following types of contracts? - Answer: ordinary life Replacement is involved in all of the following situations EXCEPT when... - Answer: A Term policy is converted to a permanent plan with the same insurance company Which policy is EXEMPT from replacement regulations? - Answer: Group life policy Which of the following statements is CORRECT about the replacement of one insurance policy with another? - Answer: It is strictly regulated and requires full disclosure by both the agent and the replacing insurance company Which of the following parties must provide an insured with proper disclosure concerning the replacement of an insurance company? - Answer: The agent who sells the new insurance policy Which of the following statements is CORRECT if an insured converts his Life policy to Paid-Up Insurance and buys new insurance? - Answer: The transaction is considered a replacement When replacing or exchanging an annuity, the agent must disclose to the annuitant... - Answer: The possible tax ramifications as a result of the transaction Page 7 of 43 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 long-term care lapse notice must be delivered to both the applicant and... - Answer: Secondary addressee An agent MUST give a prospective insured in Outline of Coverage when taking an application for... - Answer: Medicare Supplement Policy Page 10 of 43 Individual Medicare Supplement policies must allow an insured a MINIMUM of how many days after policy delivery to return the policy and receive a refund of premium? - Answer: 30 days Which of the following is NOT required in the Outline of Coverage for a health insurance policy? - Answer: Projection of the policy's future costs Under a Long-Term Care policy, which of the following is considered an activity of daily living? - Answer: Dressing A Long-Term Care policy must offer a MINIMUM benefit period of how many months? - Answer: 12 The Free-Look provision of any health policy begins the date... - Answer: The policy is delivered to the insured Disclosure standards require that which of the following be delivered with a Medicare Supplement policy? - Answer: The outline of coverage The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond... - Answer: 6 months An Outline of Coverage for Medicare Supplement policy MUST be given to the applicant at which of the following times? - Answer: The time of application When is a Group Health policy required to provide coverage for a newborn child? - Answer: At the moment of birth Page 11 of 43 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 Page 12 of 43 Which of these is NOT considered to be a cost connected with an individual's death? - Answer: Business expenses An insurance company may NOT reject a prospective insured's life application on the basis of - Answer: gender With a Medical Expense policy, what does hospitalization expense cover? - Answer: Hospital room and board A long-term care ride in a life insurance policy pays a daily benefit in the event of which of the following? - Answer: Inability of the insured to perform more than 2 activity of daily living Which requirement must be met for an associate to be eligible for a group life plan? - Answer: Group was formed for a purpose other an acquiring insurance 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 Page 15 of 43 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 Page 16 of 43 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 Page 17 of 43 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 59.5 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 Page 20 of 43 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 How do life insurance companies handle cases where the insured commits suicide within the contract's stated contestable period? - Answer: Claims are denied under the suicide clause of the policy Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? - Answer: Notice of existing and replacing insurers of intention to replace A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as - Answer: Adjustable life K pays on a $20,000 20 year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - Answer: 20,000 death benefit Page 21 of 43 The consideration clause in a life insurance policy indicate that a policyowner's consideration consists of a completed application and - Answer: The initial premium When determining the monthly benefit amount for a disability income policy the factor that limits the amount a prospective insured may purchase is - Answer: medical condition Which of the following statements describes what an accident and health policyowner may NOT do? - Answer: Adjust the premium payments A family income policy is a combination of whole life and - Answer: Decreasing term insurance What is the primary factor that determines the benefits paid under a disability income policy? - Answer: Wages An insured must notify an insurer of a medical claim within how many days after an accident? - Answer: 30 According to Florida's rule on disclosure, a life insurance applicant is expected to be provided with - Answer: A buyer's guide and policy summary 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 Page 22 of 43 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 An insurance company can contest a life insurance contract due to application fraud within - Answer: 2 years A noncontributory group term life plan is characterized by - Answer: The entire cost of the plan is paid for by the employer Which of the following organizations would make reimbursement payment directly to the insured individual for covered medical expenditures? - Answer: Commercial insurer Which of these types of policies may not have the automatic premium loan provision attached to it? - Answer: decreasing term An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? - Answer: full face amount minus any past due premiums which type of insurance company allows their policy owners to elect a governing body? - Answer: mutual policyholders what kind of special needs would a policy owner require with an adjustable life insurance policy? - Answer: flexible premiums Page 25 of 43 S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase? - Answer: equity index insurance when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? - Answer: takes into account the present value of future income earned by the breadwinner What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? - Answer: family maintenance policy 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? - Answer: waiver of premium rider Group/voluntary long-term care policy premiums are typically deducted from the employee's income and - Answer: are less costly as compared to individual long-term care coverage All of these statements about the Waiver of Premium provision are correct EXCEPT - Answer: insured must be eligible for social security disability for claim to be accepted which of these types of coverage is best described as a short term medical policy? - Answer: interim coverage What does a Guaranteed Insurability rider provide a Disability Income policyowner? - Answer: the ability to periodically increase the amount of coverage only WITHOUT evidence of insurability Page 26 of 43 A disability income policy owner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of the application. How will the insurer handle this claim? - Answer: claim will be paid and coverage will remain in force what is considered to be a characteristic of a conditionally renewable health insurance policy? - Answer: premiums may increase at time of renewal L, aged 50, and L's spouse 48, have one natural child and one adopted child. They purchase a family policy that covers L's spouse at age 65. A death benefit will NOT be paid in which of the following circumstances? - Answer: L's spouse dies at age 66 All of the following statements regarding group health insurance is true, except: - Answer: an individual policy is given to each member How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated? - Answer: 45 M becomes disabled and is unable to work for 6 months. M dies soon after from complications arising from this disability. M has a disability income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? - Answer: $2,000 The Legal Actions provision of an insurance contract is designated to do all off the following, EXCEPT: - Answer: protect the producer 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? - Answer: conditional Page 27 of 43 An agent who makes misleading statement that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed - Answer: twisting The waiting period for a pre-existing condition under a medicare supplement policy may not go beyond - Answer: 6 months What is being delivered during a policy delivery? - Answer: Insurance contract to the proposed insured Which of these statements concerning an individual disability income policy is true? - Answer: Normally includes an elimination period 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 of the following situations does not apply to the florida replacement rule? - Answer: An existing policyholder purchases an addition policy from the same insurer One becomes eligible for social security disability benefits after having been disabled for - Answer: 5 months Post tax dollar contributions are found in - Answer: Roth IRA investments An insurance company can contest to a life insurance contract due to application fraud within - Answer: 2 years Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - Answer: Life income Page 30 of 43 S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? - Answer: Full benefits are payable under the master contract A 55 year old recently received a $33,000 distribution from a previous employer's 401K plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? - Answer: income taxes plus a 10% penalty tax on $30,000 when a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? - Answer: void the policy only if it is discovered during the contestable period and proven to be material a medical care provider which typically delivers health services at its own local medical facility is known as a - Answer: health maintenance organziation a CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. which type of policy will pay a monthly benefit to the personal assistant? - Answer: major medical which of the following is a characterstic of a variable annuity? - Answer: underlying equity investment all of these statements concerning settlement options are true, except - Answer: only the beneficiary may select M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the - Answer: policy proceeds Page 31 of 43 Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? - Answer: subrogation The benefits under a disability buy-out policy are - Answer: Payable to the company or another shareholder Which of these statement accurately describes the waiver of premium provision in an accident and health policy - Answer: Premiums are waived after the insured has been totally disabled for a specified time period Which of these statements is NOT the reason for purchasing life insurance on the life of a minor? - Answer: If both parents were to die, it would provide death benefits to the child K purchased a $10,000 life policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? - Answer: Endowment at age 65 In Florida, the underwriting and issuance of a master group health policy requires that all employees - Answer: Are eligibility to participate, regardless of their individual health history Under the USA Patriot Act, insurers are required to report receipt of cash payment in excess of - Answer: 10,000 The universal life policy is called an unbundled life policy because he policyholder can see the expense charges, the interest earned, and the - Answer: Cost of insurance Equity indexed annuities are invested in which of the following - Answer: S&P 500 Page 32 of 43 An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - Answer: $2,500 Which statement regarding third-party ownership of a life insurance policy is true? - Answer: It is used extensively in estate-planning as well as business circumstances Which of the following statements is CORRECT about accelerated death benefits? - Answer: Must have terminal illness to qualify Which of the following types of health coverage frequently uses a deductible? - Answer: Major medical policy Periodic health claim payment must be maid at least - Answer: Monthly M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force? - Answer: 45 days When an employee is terminated, which statement about a group term life conversion is true? - Answer: Policy proceeds will be paid if the employee dies during the conversion period What determines the full amount of social security retirement benefits a qualified individual is entitled to receive? - Answer: Number of dependents Variable annuities may invest premiums in each of the following except - Answer: Insurer's corporate business account Page 35 of 43 Within how many days after policy delivery can a medicare supplement policy be returned for a 100% premium refund? - Answer: 30 M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the - Answer: Policy proceeds Which type of provider is known for stressing preventative medical care? - Answer: HMO's An assignment of benefits of a Health Policy - Answer: Transfers payment to someone other than the policy owner Which of the following statement about a Guaranteed Renewable health insurance policy is correct - Answer: Premiums normally increase at time of renewal J has an AD&D policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? - Answer: $25,000 Insurance policies are offered on a "take it or leave it" basis, which makes them - Answer: contracts of adhesion Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? - Answer: if Tom's employment is terminated, 20%of the funds would be forfeited S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this? - Answer: entie contract Page 36 of 43 A 15-year mortgage is best protected by what kind of life policy? - Answer: 15-year decreasing term A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? - Answer: guaranteed insurability option rider If an annuity is terminated prior to beginning of the income payment period, the contract owner receives - Answer: the contract surrender value at that time Medicaid was designed to provide health care - Answer: in poor health the incontestable clause allows an insurer to - Answer: contest a claim during the contestable period an example of an unfair trade practice is - Answer: is an agent making a material misrepresentation to the insured an example of rebating would be - Answer: offering a client something of value not stated in the contract in exchange for their business Any changes made on an insurance application requires the initials of whom? - Answer: applicant what percent of personal life insurance premiums is usually deductible for federal income tax purposes? - Answer: 0% All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT - Answer: interest only Page 37 of 43 All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for - Answer: modified whole life 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? - Answer: the proceeds would be reduced based on whatever the premium would have been if purchased at age 59 Which of these life products is NOT considered interest-sensitive? - Answer: modified whole life which of the following actions is not possible with a universal life policy? - Answer: premiums may be applied as a credit against income tax 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? - Answer: consideration clause which of the following statements does not accurately describe the tax treatment of premiums and benefits of individual AD&D insurance? - Answer: disability income policy premiums are tax-deductible T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will Page 40 of 43 the insurer likely consider this condition? - Answer: insurer will likely treat as a pre-existing condition which may not be covered for one year according to the time limit of certain defenses provision in an individual health insurance policy, nonfraudluent misstatements first become incontestable - Answer: two years from the date of the policy was issued 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? - Answer: the insurer will rescind the policy, deny the claim, and recover all payments made a prepaid application for individual disability income insurance was recently submitted to an insurer. when the insurer received the medical information bureau report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. which of the following actions would the insurance company not take? - Answer: send a notice to the MIB that the applicant was declined what action can a policyowner take if an application for a bank loan requires collateral? - Answer: assign policy ownership to the bank 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) - Answer: anti-money laundering violation what type of group insurance plan involves employees sharing the cost? - Answer: contributory plan Page 41 of 43 N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities? - Answer: flexible installment deferred which of the following statements best describes dental care indemnity coverage? - Answer: services are reimbursed after insurer received the invoice J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? - Answer: nonoccupational coverage S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning - Answer: November 1 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 the - Answer: a representation what types of life policy covers 2 lives and pays the face amount after the first one dies? - Answer: joint life policy which of these factors does not influence an applicant's need for life insurance? - Answer: self- maintenance 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? - Answer: the full face amount all of these statements about equity indexed life insure are correct except - Answer: the premiums can be lowered or raised, based on investment performance Page 42 of 43