Health and Life Insurance Exam Guide

Florida Health and Life Insurance State Exam Practice Part 1 Which Accident and Health policy provision addresses preexisting conditions? Time Limit on Certain Defenses Which of the following individual health insurance policies will provide the broadest protection? Major Medical Which of the following situations does NOT apply to the Florida Replacement Rule? An existing policyholder purchases an additional policy from the same insurer Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance Return to the customer, collect a new check made out to the company. The insurance company returns the check back to J insurance company, and send the new check out to the insurance because the check is made out to J instead of the insurance company company. What action should J take? Under which of the following circumstances will the benefits under COBRA continuation coverage end? All group health plans are terminated by the employer Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? Garunteed Renewable An incomplete life insurance application submitted to an insurer will result in which of these actions? Application will be returned to the writting agent The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond 6 Months Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? Entire cash surrender value is taxable Which of these is considered a mandatory provision? Payment of Claims Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? Issue the policy with an altered Time of Payment of Claims provision Which of the following phrases refers to the fees charged by a healthcare professional? Usual, customary, and reasonable 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? The full face amount 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 No benefits are available during the elimination period. Who does an agent represent during the solicitation or insurance? The insurance company Which of the following costs would a Basic Hospital/Surgical policy likely cover? Sugically removing a facial birthmark Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as: Premiums paid by an employer for an employee's coverage are deductible by the employer as a buisness expense What must the policyowner provide to the insurer for validation that a loss has occurred? proof of loss Association Plans that are designed to provide health benefits to their members are regulated by the state because They are insured by and authorized insurer Which of the following statements is CORRECT about the period in which a Term Policy can be converted? It varies according to contracts When does a life insurance contract become effective if the initial premium is not collected during the application process? When producer delives policy and collects initial premium 1/7 A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: Policy Loan Provision Medicare Part A and Part B do no pay for: Dental Work When a misrepresentation on a life insurance policy application is Void the policy only if it is discovered during the Contestable period discovered, what action may an insurance company take? and proven to be material The insuring Clause States the scope and limits of the coverage An applicant's medical information recieved from the Medical Information Bureau (MIB) may be furnished to the: Applicant's physician K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? Daughter K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? Primary Beneficiary. Which of the following is NOT considered rebating Sharing commissions with an agent licensed in the same line of buisness Which of the following employer tasks does a Professional Employer Organization normally handle? Administration tasks What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? Decreasing Term Which action could result in a hearing being ordered by the Department of Financial Services? Performing insurance transactions without a license What kind of special need would a policyowner require with an Adjustable Life insurance policy? Flexible Premiums The premiums paid by an employer for his employee's group life insurance are usually considered to be: Tax deductible to the employer Which of the following consists of an offer, acceptance, and consideration? Contract Which of the following statements is true about most Blue Cross/Blue Shield organizations? They are non-profit organizations Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: Signed HIPAA disclosure Which of the following characteristics is associated with a large group disability income policy? No medical underwritting When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? Change of Occupation Provision 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 Conditional Recipt T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the A conditional recipt binds the insurer to coverage as the date of application or medical examination, whichever is later. Assuming the application or medical exam, provided the proposed insured that T is an acceptable risk, what item is given to T? is determined to be an aceptable risk When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): Exclusion is owned exclusively by it's shareholders A Stock insurance Company A stock insurance company is best defined as an incorperated 2/7 company that has its capital divided into shares and is owned exclusively by its shareholders. When an insurance application is taken by a producer, which of Any changes made on the applicationrequire the applicants initials these statements is true? All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT an agents comission Which of the following claims are typically excluded from Medical expense policies? Intentionally Self-Inflicted injuries 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 of certain Defenses If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? contributory What do families pay that are covered by the Florida Healthy Kids Corporation? A Portion of the premium A comprehensive major medical health insurance policy contains an Eligible Expenses 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 servives A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: $300,000 G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? The insured The minimum age at which a person can sign a life insurance application is 15 Years Which of these would be considered a Limited-Pay Life policy? Life Paid-Up at age 70 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? All of the employees must be notified of the cancellation either by the insurance company or through J Which of the following provisions is NOT required in HMO contracts/certificates? Seven-day Grace Period Twisting J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty The unfair trade practice of replacing an insurance policy from one of? insurer to another based on misrepresentation Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT? Premiums normally increase at the time of renewal M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take? Pay face amount minus the past due premium Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? annuity Which of the following factors affects the amount of monthly disability benefits payable under Social Security? The amount of benefits availible from other sources Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT? the income from the TSA is recieved tax-free 3/7 M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT: Free-look period has expired 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 The proceeds would be reduced based on whatever the premium age at issue had been 59. What would the normal procedure be would have been if purchased at age 59 under the misstatement of age provision in regard to the payment of the death claim? If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called: noncancellable Which of the following is NOT included in an annuity contract? AD&D rider Disability policies do NOT normally pay for disabilities arising from which of the following? War All of these are considered sources of underwriting information about an applicant, EXCEPT: Rating Services Taking receipt of premiums and holding them for the insurance company is an example of: Fiduciary Responsibillity The guarantee of insurability option provides a long-term care policyowner the ability to: buy additional coverage at a later date Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA). 20 Which of the following health insurance policy provisions specifies the health care services a policy will provide? Insuring Clause What benefit does the Payor clause on a Juvenile Life policy provide? premiums are waved if the payor becomes disabled In Florida, most life insurance policies have a contestability period of 2 Years March 1 Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from JanuThe elimination period of the time between the onset of a disability, ary 1 until January 15. Z then becomes disabled from an accident and the time you are eligibe for benefits. It is best thought of as a on February 1 and the disability lasts until July 1 the same year. deductible period for your policy. After a 30-Day Elimination period, Z will become eligible to receive benefits starting on: Z will become eligible for recieving benefits on March 1. When does a Guaranteed Insurability Rider allow the insured to at future dates specifies in the contrac with no evidence of insurbuy additional coverage? ability required Which is true concerning a Variable Life Universal Life Policy? Policyowner controls where the investment will go and selects the amount of the premium payment A whole life insurance policy endows when the: Cash Value equals the death benefit Health insurance benefits NOT covered due to an act of war are: excluded by the insurer in the contract provisions When applied to Whole Life insurance, the word "straight" denotes: the duration of premium payments Which statement is TRUE in regards to a policy loan? Past-due interest on a policy loan is added to the total debt WHat is the purpose of the U.S.A. Patriot Act? detect and deter terrorism The insurer must provide a prospective buyer with a(n) Buyer's Guide and Policy Summary The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): Insuring Agreement S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? Automatic Policy Loan 4/7 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 Which requirement must be met for an association to be eligible for a group life plan? Group was formed for a purpose other than acquiring insurance A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy's face value. viatical settlement provider A life policy loan in Florida cannot charge a fixed rate of interest higher than 10% Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? Joint Life When is the face amount of a Whole Life policy paid? When the insured dies or at the policy's maturity date, whichever happens first According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with A Buyer's Guide and Policy Summary With Optionally Renewable Health policies, the insurer may: review the policy annually and determine whether or not to renew it How does group insurance differ from individual insurance? Premiums are Lower What type of life insurance incorporates flexible premiums and an adjustable death benefit? Univeral Life Which of the following statements BEST describes dental care indemnity coverage? Services are reimbursed after insurer receives the invoice According to Florida law, a Group Life insurance policy requires a minimum of how many insureds? No Minimum Any changes made on an insurance application requires the initials of whom? Applicant When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: Entire Contract Provision Within how many days after policy delivery can a Medicare Supplement policy be returned for a 100% premium refund? 30 In Florida, an element of an insurance transaction would be issuing insurance contract 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 to an individual policy upon employment termination What do Dread Disease policies cover? A specific disease or illness What type of renewability guarantees premium rates and renewability? Noncancellable According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? Marital Status All of the following will result in the suspension of an agent's license EXCEPT acting with a fiduciary responsibility According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: two years from the date of the policy was issued What does the ownership clause in a life insurance policy state? Who the policyowner is and what rights the policyowner is entitled to In Florida, monthly-premium health insurance policies must provide a grace period of at least 10 days date of delivery 5/7 Florida's 14-day free-look period for life insurance policies begins at the P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? P will still recieve declared dividends What is the main reason for regulating the insurance industry? maintain solvency of insurance companies A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: mandatory income tax withholding on the transfer amount Which of the following is NOT an unfair claim settlement practice? Needing written documentation of claim details Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? misrepresentation 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 In Florida, a health policy that is paid on a quarterly basis requires a grace period of 31 days N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? Claim will be denied 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 What are adjustable rates for life policy loans in Florida based on? Moody's corporate bond index 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 these features would allow D to continue receiving benefits? Residual Benefit Clause P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? Claim will be denied What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Premiums may increase at the time of renewal A medical care provider which typically delivers health services at its own local medical facility is known as a: HMO The investment gains from a Universal Life Policy usually go toward: the cash value According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? The premiums for the handicapped child are not paid The Florida Employee Health Care Access Act was established to group health insurance available to employers with up to 50 emmake ployees When is a Group Health policy required to provide coverage for a newborn child? at the moment of birth Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? Buisness Overhead Expense In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? Naturopaths Which of the following BEST describes a short-term medical expense policy? nonrenewable 6/7 An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? Gender A policy loan is made possible by which of these life insurance policy features? Cash Value Provision 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 Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? Entire Contract What is Florida's definition of Life insurance replacement? A transaction in which a new policy is bought and an old policy is terminated What percentage of eligible persons must a policy cover in a noncontributory group? %100 Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Risk Classification Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product? Buyer's Guide At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? at the time of the appliation What would be an accurate definition of "controlled business"? Insurance business that is written on the agent's own life, property, or interests 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? Policy was returned within the free-look period, premium will be fully refunded An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ____ company. domestic Which of the following is NOT required in the Outline of Coverage for a health insurance policy? projection of the policy's future costs Who makes the legally enforceable promises in a unilateral insurance policy? Insurance Company Upon reaching the limiting age, a handicapped child can extend only if the child is incapable of employment and chiefly dependent their health insurance coverage as a dependent on the policyowner Which of the following types of policies pays a benefit if the insured goes blind? AD&D A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent's license will terminate if a certain period of time elapses without being appointed. How long is this period of time? 48 Months Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? Each Partner must own a policy on the other partners 7/7