Life insurance Flashcards
PASS TEST
1
Q
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
A
WHOLE LIFE
2
Q
In Florida, which of the following is considered an Unfair Trade Practice?
A
COERCION
3
Q
Who is NOT required to sign a life insurance application?
A
BENEFICIARY
4
Q
Under a Guaranteed Renewable health insurance policy, the insurer:
A
MAY CANCEL THE POLICY FOR NONPAYMENT ONLY
5
Q
The Department may request all of these during the licensing application process EXCEPT:
A
DRUG TEST
6
Q
Which of the following statements about noncontributory employee group life insurance is FALSE?
A
A minimum number of employees is required to participate
7
Q
An insurer must provide an insured with claim forms within days after receiving notice of a loss.
A
15 DAYS
8
Q
Term insurance has which of the following characteristics?
A
EXPIRES AT THE END OF THE OF THE POLICY PERIOD
9
Q
Who makes the legally enforceable promises in a unilateral insurance policy?
A
INSURANCE COMPANY
10
Q
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
A
UTILITIES AND OFFICE RENT
11
Q
Which of the following statements is correct regarding an employer/employee group health plan?
A
The employer receives a master copy and the employee receives certificates.
12
Q
Periodic health claim payments MUST be made at least:
A
MONTHLY
13
Q
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?
A
PAY FACE AMOUNT MINUS PAST DUE PREMIUM
14
Q
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:
A
TO AN INDIVIDUAL POLICY UPON EMPLOYMENT TERMINATION
15
Q
Which of these do NOT constitute policy delivery?
A
POLICY ISSUED WITH A RATING
16
Q
Under a life insurance policy, the _____has the authority to name the beneficiary.
A
Owner
17
Q
When does a Probationary Period provision become effective in a health insurance contract?
A
At the policies inception
18
Q
The cash value in a(n) ______ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.
A
Universal
19
Q
An insurance company can contest a life insurance contract due to application fraud within:
A
2 Years
20
Q
An accident policy will most likely pay a benefit for a(n):
A
Off-the-job accident
21
Q
S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September’s payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:
A
Deny the Claim
22
Q
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
A
PPO’s are NOT a type of managed care system
23
Q
Which of these types of coverage is best described as a short term medical policy?
A
Interim Coverage
24
Q
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
A
Full benefits are payable under the master contract
25
Florida requires that coverage for newborns begins "from the moment of birth" and continues for:
18 months
26
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
27
A Medical Information Report (MIB) report may disclose which of the following:
Prior use of marijuana
28
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
29
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
30
Which of the following statements is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application.
31
The fundamental reason for regulation of insurance is to:
Protect consumers
32
Which of the following unfair trade practices involves an agent who makes malicious statements about another person's financial condition?
Defamation
33
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
34
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
$720 ($400 deductible + 20% of the remaining medical)
35
Comprehensive Major Medical policies usually combine:
Major medical with Basic Hospital/Surgical Coverage
36
Which of these needs is satisfied by Adjustable Life insurance?
Insured’s need for flexible premiums
37
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the constable period and proved to be material
38
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?
Single Premium
39
Credit Life insurance is:
Issued in an amount not to exceed the amount of the loan
40
The difference between group insurance and blanket health policies is:
Blanket health policies do not issue certificates
41
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Payor Clause
42
Which of the following types of Term Life policies most likely contains a Renewability feature?
10 year convertible term
43
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called:
Time Limit on Certain Defenses
44
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
Coercion
45
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
46
K is an agent who made an improper sale of an annuity to a client. Which of the following corrective actions would the Department of Financial Services likely order K to take?
Pay monetary restitution to the client
47
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty on 30,000
48
Which of the following employer tasks does a Professional Employer Organization normally handle?
Administration tasks
49
T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as:
Fiduciary Responsibility
50
During the application process, the agent's primary responsibility is to:
The insurance company
51
What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?
Submit the claim in any form
52
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay Life accumulates cash value faster than straight life.
53
Omitting information that affects the issuance or the rate of an insurance contract is called:
Concealment
54
Which of the following consists of an offer, acceptance, and consideration?
Contract
55
The individual most likely to buy a Medicare Supplement policy would be a(n):
68-year old male covered by Medicare
56
Basic Hospital and Surgical policy benefits are:
Lower than actual expenses occurred
57
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
Restoration of used benefits
58
K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives.
Which type of annuity did K purchase?
Single Premium Immediate Joint with Survivor Annuity
59
A Variable Annuity has which of the following characteristics?
Underlying equity investments
60
Which of the following are NOT managed care organizations?
Medical Information Bureau (MIB)
61
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
62
An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a:
25,000 individual whole life policy
63
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following
contractual elements?
Legal Purpose (Insurable Interest)
64
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?
59 1/2
65
P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?
50,000 minus any outstanding policy loans
66
All of the following are Nonforfeiture Options EXCEPT:
Automatic Premium Loan Option
67
K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT?
K will forfeit the right to use the automatic loan provision upon reinstatement
68
An example of rebating would be?
Offering a client something of value not stated in the contract in exchange for their business
69
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
70
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
Collateral assignment
71
In Florida, monthly-premium health insurance policies must provide a grace period of at least?
10 Days
72
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT?
Beneficiary’s age
73
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?
Waiver of premium rider
74
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?
Split-dollar plan
75
Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:
Partial withdrawal features beyond a surrender charge period
76
What type of renewability guarantees premium rates and renewability?
Noncancellable
77
A license may be denied, suspended, or revoked if the licensee?
Is found guilty of misrepresentation
78
An agent selling Medicare Supplement policies must provide every applicant with a(n)?
Suitability Form
79
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term Life
80
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n):
Living Benefit
81
The amount of coverage on a group credit life policy is limited to:
The insured’s total loan value
82
A(n) _____ annuity pays benefits based on units rather than stated dollar amounts?
Variable
83
What is the purpose of the Insurance Guaranty Fund Association?
Protects policyowners against insolvent insurance companies
84
The advantage of reinstating an original life policy is:
The premiums are based on a younger age
85
Tis covered by an Acidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of change will be refused
86
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
87
An example of sliding would be:
Charging for an additional product without the applicants consent
88
According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with?
Buyer's guide and policy summary
89
An incomplete life insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing agent
90
With a medical discount plan, how often would a person generally pay a fee to get discounts on specific services?
Monthly
91
Which of the following does Social Security NOT provide benefits for?
Dismemberment
92
According to Florida law, group life insurance conversion privileges must NOT:
Require evidence of insurability
93
Which of these statements concerning an Individual Straight Life annuity is accurate?
Payments are made to an annuitant for life
94
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be?
Universal Life
95
)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
96
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?
Owners' rights
97
Typically a life insurance death benefit is paid by a lump-sum payment. A(n)
method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.
Settlement
98
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
Business owner becoming disabled
99
Who is a mutual insurance company owned by?
Its policyholders
100
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
Conversion
101
Whole Life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase?
The Duration of premium payments
102
What do Dread Disease policies cover?
A specific disease or illness
103
A term life insurance policy matures:
upon the insured’s death during the term of the policy
104
Upon reaching the limiting age, a disabled child may extend their health insurance coverage as a dependent?
Only if the child is incapable of employment and chiefly dependent on the policy owner
105
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?
Twenty (20)
106
Y purchased $100,000 worth of permanent protection on himself and $50;000 worth of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase?
While life with an other insured rider
107
An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed?
Twisting
108
When can a policyowner change a revocable beneficiary?
Anytime
109
A life insurance policyowner would like to file a complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the?
Office of Financial Regulation
110
Life and health insurance policies are:
Unilateral Contracts
111
The investment gains from a Universal Life Policy usually go toward:
The cash value
112
The USA Patriot Act was enacted in:
2001
113
Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?
Disability income policy premiums are tax-deductible
114
Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?
Limitation on pre-existing conditions for up to 12 months
115
P is a forty-year-old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?
An immediate annuity
116
The act of an insurance company publishing misleading information about its policy's provisions is called?
False advertising
117
How are Roth IRA distributions normally taxed?
Distributions are received tax free
118
The health insurance program which is administered by each state and funded by both the federal and state governments is called:
Medicaid
119
According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age?
64 years or older
120
Who does an agent represent during the solicitation of insurance?
The insurance company
121
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
The initial premium was NOT submitted with the application
122
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 application off to the insurance company
123
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
124
Which of the following would be a likely candidate for disability income insurance on a key employee?
Company executive
125
Employers with less than _____ employees are affected by Floridas Health Insurance coverage continuation act (mini COBRA)?
20
126
The insuring clause:
States the scope and limits of the coverage
127
B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?
Interest only
128
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is:
$1,250
129
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?
Florida Replacement Law
130
K made a fraudulent statement on her health insurance policy application: In the event of a claim on this policy, the insurance company is required to pay?
Nothing
131
Towns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
Increase her policy’s coverage amount
132
A long-term care lapse notice must be delivered to both the applicant and?
Secondary Addressee
133
Medicare is intended for all of the following groups, EXCEPT:
Those enrolled as a full-time student
134
T is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, T's coverage is?
Conditional, depending on the insurers underwriting guidelines
135
Why must an insurance applicant answer all questions on the application?
Statements and representations on the application are part of the consideration for issuing a policy
136
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
Proceeds will be paid to P’s estate
137
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract Provision
138
A policy of adhesion can only be modified by whom?
The insurance company
139
Which of the following is TRUE about a qualified retirement that is "top heavy"?
More than 60% of plan assets are key employee accounts
140
Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?
Entire contract
141
According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?
At the time of application
142
A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges, and the?
Cost of insurance
143
A policy of adhesion can only be modified by whom?
The insurance company
144
A life policy loan in Florida cannot charge a fixed rate of interest higher than?
10%
145
A qualified profit-sharing plan is designed to:
Allow employees to participate in the profits of the company
146
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
147
All of these statements about the Waiver of Premium provision are correct, EXCEPT:
Insured must be eligible for social security disability for claim to be accepted
148
All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT?
HRA is entirely funded by the employee
149
Before a life insurance policy is issued, which of these components of the contract is required?
Applicants signature on application
150
Taking receipts of premiums and holding them for the insurance company is an example of:
Fiduciary responsibility
151
Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than _____ month(s) prior to the effective date of coverage.
6
152
P, age 50 purchased an annuity that P will fund with $500/month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Deferred
153
What kind of life insurance policy pays a specified monthly beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
154
The waiting period for a pre-existing condition under Medicare Supplement policy may NOT go beyond:
6 months
155
An example of false advertising would be?
An insurer exaggerating its dividends in a magazine advertisement
156
Which of the following employee's may NOT be excluded from a group life plan?
Full-time employers after the probationary period
157
Which of the following is a standard provision of the conversion privileges in a Group Life Policy?
Group Life coverage can be converted to an individual policy at regular rates on an attained-age basis.
158
Which of the following claims are typically excluded from medical expense policies?
Intentionally self-inflicted injuries
159
Why is an applicant's signature required on a life insurance application?
To attest that the statements on the application are accurate to the best of the applicant's knowledge.
160
Which of the following types of health coverage frequently uses a deductible?
Major Medical Policy
161
An individual covered under Group Life Insurance policy is considered to be a(n)?
Certificate Holder
162
In Florida, a health policy that is paid on a quarterly basis has a grace period of?
31 days
163
Which life insurance rider typically appears on a juvenile life insurance policy?
Payor Benefit Rider
164
The benefits under a Disability Buy-Out are:
Payable to the company or another shareholder
165
The reason for backdating a policy is?
To obtain a premium rate based on an earlier age
166
The consideration clause of an insurance includes:
The schedule and amounts of premium payments
167
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date which the policy remains in force even though the premium has not been paid?
31 days
168
A life insurance policy's grace period entitles the insured period of no less than _____ days to make the premium payment?
30 days
169
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
170
Which of these options can an individual use their medical flexible spending account to pay for?
Prescription drugs
171
An insurer may normally delay the payment of a cash value loan or surrender value for up to?
6 months
172
A(n) _______ of benefits of a Health Policy transfers payments to someone other than the policyowner.
Assignment
173
A Term Life Rider offers the insured?
Additional life coverage
174
A potential client, age 40, would like to purchase a Whole life Policy will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay Life accumulates cash value faster than straight life.
175
Insurance companies that are organized in countries outside the United States are referred to as?
Alien
176
M is insured under a basic Hospital/Surgical Expense Policy. A physician performs surgery on M. What determines the claim M is eligible for?
Determined by the terms of the policy
177
A Comprehensive major medical health insurance policy contains an Eligible Expense provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for?
Experimental and investigative services
178
Under an individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured?
Monthly
179
Traditional individual retirement annuity (IRA) distributions must start by?
April 1st of the year following the year of the participant attains age 70 1/2
180
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
Aviation exclusion
181
Which of the following MUST be included in a Medicare Supplement policy's outline of coverage?
The Policy's limitations and exceptions
182
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child.
183
Which of the following does Social Security NOT provide benefits for?
Dismemberment
184
Common exclusions of the continuation of a group coverage include?
All of the above (Dental, Vision, and other prescription Drugs)
185
Which statement is true regarding minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary cause of the contract.
186
The policy summary contains specific information on all of the following, EXCEPT?
Commission
187
W is a 39-year-old female who purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices, EXCEPT a(n)?
Immediate Annuity
188
What type of life policy covers two lives and pays face amount after the first ones dies?
Joint Life Policy
189
S buys a $50,000 whole life policy with an Accidental Death and Dismemberment Rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
$50,000
190
Which required disclosure helps a buyer chose the amount and type of insurance to buy, and how to save money by comparing cost of similar policies?
Buyers Guide
191
N is a student pilot with a large life insurance policy. Which of these features would limit the insurers obligation in the event N was killed while flying as a student polit?
Exclusion
192
Which of the following statements BEST describes the intent of a coinsurance clause in a major medical policy?
Discourages overutilization of the insurance coverage.
193
Florida's 14 day free-look period of life insurance policies begins at:
Date of delivery
194
Who is normally considered to be the owner of a 403(b)-tax sheltered annuity.
The employee
195
Which of these is considered a statement that is assured to be true in every respects?
Warranty
196
J has disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Non-Occupational Coverage
197
Additional coverage can be added to a whole life policy by adding a(n):
Decreasing term rider
198
At what point does an informal agreement become a binding contract?
When consideration is provided by one of the parties to the contract
199
Which of these is NOT a legal entity for selling life insurance in FL?
Risk Management Advisors
200
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?
The proceeds would be reduced based on whatever the premium would have been if purchased at age 59.
201
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing Term
