question

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?

answer

Irrevocable beneficiary

question

A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?

answer

Revocable

question

Which statement is true regarding a minor beneficiary

answer

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

question

A level premium indicates

answer

the premium is fixed for the entire duration of the contract

question

An incomplete life insurance application submitted to an insurer will result in which of these actions?

answer

Application will be returned to the writing agent

question

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

answer

Risk classification

question

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used?

answer

Conditional

question

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

question

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 application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?

answer

Conditional receipt

question

What is being delivered during a policy delivery?

answer

Insurance contract to the proposed insured

question

Which of these actions should a producer take when submitting an insurance application to an insurer?

answer

Inform insurer of relevant information not included on the application

question

Under a trustee group life policy, who would be eligible for a certificate of coverage?

answer

Employee

question

Group life insurance policies are generally written as

answer

annually renewable term

question

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a

answer

$25,000 individual whole life policy

question

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

question

Which of these statements concerning an Individual Straight Life annuity is accurate?

answer

Payments are made to an annuitant for life

question

An individual who purchases a Life annuity is given protection against

answer

the risk of living longer than expected

question

To be eligible for Social Security disability benefits, an employee must be unable to perform

answer

any occupation

question

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?

answer

Annuity

question

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

answer

59 1/2

question

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

answer

Company X

question

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

question

Which statement regarding a Key Employee Life policy is NOT true?

answer

The beneficiary is named by the key employee

question

Who elects the governing body of a mutual insurance company?

answer

policyholders

question

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

answer

at future dates specified in the contract with no evidence of insurability required

question

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

answer

beneficiary's age

question

Which of these provisions require proof of insurability after a policy has lapsed?

answer

Reinstatement

question

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and

answer

the initial premium

question

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

answer

Reinstatement

question

The incontestable clause allows an insurer to

answer

contest a claim during the contestable period

question

Which of the following statements is CORRECT about accelerated death benefits?

answer

Must have a terminal illness to qualify

question

Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?

answer

Payor clause

question

Which of these is NOT considered to be a right given to a policyowner?

answer

Modify a provision in the insurance contract

question

What benefit does the Payor clause on a Juvenile Life policy provide?

answer

Premiums are waived if payor becomes disabled

question

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

answer

Accidental Death and Dismemberment provision

question

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the

answer

Insuring clause

question

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

answer

Waiver of Premium

question

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

answer

50,000

question

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the

answer

Policy Loan provision

question

What kind of special need would a policyowner require with an Adjustable Life insurance policy?

answer

flexible premiums

question

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

answer

Conversion provision

question

How long does the coverage normally remain on a limited-pay life policy?

answer

age 100

question

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

answer

Whole Life

question

Which of these is an element of a Variable Life policy?

answer

A fixed, level premium

question

The amount of coverage on a group credit life policy is limited to

answer

the insured's total loan value

question

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

answer

Universal Life

question

Which statement is correct regarding the premium payment schedule for whole life policies?

answer

Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured

question

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as

answer

Variable Life

question

The investment gains from a Universal Life Policy usually go toward

answer

the cash value

question

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

question

A 15-year mortgage is best protected by what kind of life policy?

answer

15-year decreasing term

question

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called

answer

Limited-Pay Life

question

Which of these life products is NOT considered interest-sensitive?

answer

Modified Whole Life

question

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?

answer

Conversion

question

When is the face amount paid under a Joint Life and Survivor policy?

answer

upon death of the last insured

question

What kind of life insurance product covers children under their parent's policy?

answer

Term rider

question

Which of these characteristics is consistent with a Straight Life policy?

answer

Premiums are payable for as long as there is insurance coverage in force

question

Which statement is true concerning a Variable Universal Life policy?

answer

Policyowner controls where the investment will go and selects the amount of the premium payment

question

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have

answer

insurable interest in the proposed insured

question

The part of a life insurance policy guaranteed to be true is called a(n)

answer

warranty

question

How does group insurance differ from individual insurance?

answer

Premiums are lower

question

Which of the following statements is correct regarding an employer/employee group health plan?

answer

the employer receives a master policy and the employees receive certificates

question

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

answer

Less restrictive

question

The reason for a business having a Business Overhead Expense Disability Plan is to cover

answer

fixed business expenses

question

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

question

A Business Overhead Expense policy

answer

covers business expenses such as rent and utilities

question

Which type of provider is known for stressing preventative medical care?

answer

Health Maintenance Organizations (HMO's)

question

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a

answer

Primary Care Physician

question

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)

answer

closed panel

question

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

answer

Determined by the terms of the policy

question

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

answer

Her group health plan

question

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

answer

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

question

Which of the following situations does a Critical Illness plan cover?

answer

Leukemia

question

Which of the following statements BEST describes dental care indemnity coverage?

answer

Services are reimbursed after insurer receives the invoice

question

Comprehensive Major Medical policies usually combine

answer

Major Medical with Basic Hospital/Surgical coverage

question

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

answer

Discourages overutilization of the insurance coverage

question

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

answer

"$2,100". In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100.

question

Which of the following phrases refers to the fees charged by a healthcare professional?

answer

Usual, customary, and reasonable expenses

question

Basic Hospital and Surgical policy benefits are

answer

lower than the actual expenses incurred

question

A characteristic of Preferred Provider Organizations (PPOs) would be:

answer

Discounted fees for the patient

question

The individual most likely to buy a Medicare Supplement policy would be a(n)

answer

68-year old male covered by Medicare

question

The Notice of Claims provision requires a policyowner to

answer

notify an insurer of a claim within a specified time

question

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?

answer

Submit the claim in any form

question

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?

answer

Entire Contract

question

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is

answer

Time Limit on Certain Defenses

question

The provision that defines to whom the insurer will pay benefits to is called

answer

Payment of Claims

question

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?

answer

States the scope and limits of the coverage

question

What must the policyowner provide to the insurer for validation that a loss has occurred?

answer

Proof of Loss

question

Health insurance benefits NOT covered due to an act of war are

answer

excluded by the insurer in the contract provisions

question

Which Accident and Health policy provision addresses preexisting conditions?

answer

Time Limit on Certain Defenses

question

J, an Accidental Death and Dismemberment (AD) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?

answer

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

question

When does a Probationary Period provision become effective in a health insurance contract?

answer

At the policy's inception

question

Which of the following BEST describes a short-term medical expense policy?

answer

Nonrenewable

question

The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the

answer

Insuring clause

question

Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires?

answer

An insured must settle a claim within 60 days after Proof of Loss is submitted

question

What is the purpose of the Time of Payment of Claims provision?

answer

Prevents delayed claim payments made by the insurer

question

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

answer

Reinstatement

question

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?

answer

The insured

question

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

answer

Waiver of Premium

question

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

answer

Applicant's monthly income

question

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

answer

converted to an individual permanent policy at an individual rate

question

Which of these do NOT constitute policy delivery?

answer

Policy issued with a rating

question

Which parts of a life insurance policy are guaranteed to be true?

answer

Warranty

question

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

answer

Entire cash surrender value is taxable

question

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is

answer

the cost

question

The Consideration clause of an insurance contract includes

answer

the schedule and amount of premium payments

question

All students attending a large university could be covered by

answer

a blanket policy

question

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 which of the following?

answer

Residual disability

question

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

Disability Income

question

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the

answer

Recurrent Disability provision

question

Disability policies do NOT normally pay for disabilities arising from which of the following?

answer

War

question

An insurance company licensed in Florida and domiciled in Pennsylvania is known as

answer

a foreign company

question

A producer who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of

answer

coercion

question

According to Florida law, how often must a variable annuity policyholder be informed of the accumulated value of the contract during the premium payment period?

answer

At least once each year

question

Which of the following actions is an example of unfair discrimination?

answer

Providing different terms of coverage for different policyowners in the same risk classification

question

In Florida, a foreign insurance company is a company that

answer

is formed under the laws of a state other than Florida

question

A newly licensed agent MUST satisfy a continuing education requirement of how many hours every two years?

answer

24

question

Dread Disease policies cover

answer

a single disease or illness only

question

Issued Medicare Supplement policies may be returned for a premium refund within a MAXIMUM of how many days after delivery?

answer

30

question

Under Florida law, adjustable rates for life insurance policy loans are based on

answer

Moody's corporate bond index

question

Florida's insurance law that governs group life insurance conversion privileges provides that the

answer

individual policies do not require evidence of insurability

question

Which of these acts is considered to be an unfair trade practice?

answer

Making a material misrepresentation to an insured

question

All licensees are required to notify the Department of Financial Services of a change in address within how many days?

answer

30

question

Which of the following is NOT an eligibility requirement for an association group?

answer

A minimum of 25 participants is required for a contributory plan

question

Variable annuities are regulated by both the

answer

Department of Financial Services and the Securities Exchange Commission

question

Which of the following options is NOT a Nonforfeiture Option?

answer

Automatic premium loan

question

The agent's primary responsibility in the application process is to the

answer

insurer

question

According to the insurance code, an agent's controlled business may NOT exceed a maximum of

answer

50%

question

Association Plans established to provide health benefits to members are subject to state regulation because they

answer

must be fully insured by an authorized insurer

question

Florida Insurance Law requires the minimum grace period on a health insurance policy paid on a quarterly basis is

answer

31 days

question

Which action would NOT result in suspension of an agent's license?

answer

Acting as a fiduciary

question

Florida insurance law requires that if a Medicare Supplement policy is sold, the agent must deliver an Outline of Coverage to the applicant no later than

answer

when the application is taken

question

All of the following are possible consequences for placing with an unauthorized insurer EXCEPT

answer

conviction of a first degree misdemeanor

question

In Florida, Group Life policies must contain a conversion privilege that

answer

allows for conversion to an individual policy for a specified period of time

question

When an employee covered on a Group Life policy leaves the group, the conversion privilege gives the employee the right to

answer

convert to an individual policy upon termination of employment

question

Under Florida insurance law, the minimum number of insureds required for a Group Life insurance policy is

answer

no minimum

question

To receive a percentage of the policy face value, an owner of a life policy may sell the policy to a(n)

answer

viatical settlement provider

question

All of the following are unfair claim settlement practices EXCEPT

answer

requiring written documentation of claim details

question

Which of the following statements about unfair trade practices is true?

answer

Twisting is a misrepresentation made by an agent in order to induce a policyholder to lapse a policy and switch insurance companies

question

According to Florida statutes, all of the following provisions must be contained in a Medicare Supplement policy EXCEPT

answer

A 12-month limitation on pre-existing conditions

question

HMO contracts/certificates or member handbooks must contain all of the following provisions EXCEPT

answer

five-day grace period

question

A mutual insurance company is owned by its

answer

policyholders

question

Florida's rules on disclosure require an insurance company to provide a purchaser of life insurance with

answer

a Buyer's Guide and a Policy Summary

question

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?

answer

20-Pay Life accumulates cash value faster than Straight Life

question

P died five 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

question

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

answer

Portion of the premiums paid for by the employer may be a tax deduction

question

All of these statements concerning Settlement Options are true EXCEPT

answer

Only the beneficiary may select

question

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

answer

Variable Life

question

Which statement is TRUE in regards to a policy loan?

answer

Past-due interest on a policy loan is added to the total debt

question

Which of these types of coverage is best described as a short term medical policy?

answer

interim coverage

insurance exam #2 – Flashcards

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