Insurance Exam Part 4 – Flashcards
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In Florida, the underwriting and issuance of a master group health policy requires that all employees are eligible to participate, regardless of their individual health history need to be individually approved or declined during the underwriting process must contribute toward the group health policy's premiums take a physical examination before the master policy is issued
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are eligible to participate, regardless of their individual health history- The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate, regardless of individual health history.
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Which of the following situations does NOT apply to the Florida Replacement Rule? An existing policy is reissued with a reduction in cash value A new policy is issued while an existing one is surrendered An existing policy is subject to extensive borrowing An existing policyholder purchases an additional policy from the same insurer
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An existing policyholder purchases an additional policy from the same insurer- Florida's Replacement Rule applies to all of these situations EXCEPT "An existing policyholder purchases an additional policy from the same insurer".
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Which of the following situations are NOT subject to Florida life insurance laws? Insurance companies' day-to-day operations Insurance companies' life policy replacement requirements Insurance companies' setting of life insurance policy rates Insurance companies' guidelines for paying a life insurance claim
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Insurance companies' day-to-day operations- Florida life insurance laws apply to all of these situations EXCEPT "Insurance companies' day-to-day operations".
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Association Plans that are designed to provide health benefits to their members are regulated by the state because they are insured by an authorized insurer they conduct business in Florida they provide a service to their members they require a certain level of member participation
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they are insured by an authorized insurer- The correct answer is "they are insured by an authorized insurer". Association Plans must be fully insured by an authorized insurer. The insurer is subject to state regulation.
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What percentage of eligible persons must a policy cover in a noncontributory group? 25% 50% 75% 100%
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100%- In a noncontributory group, the policy must cover 100% of eligible persons
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Which of the following is NOT a consequence for placing business with an unauthorized insurer? Third degree felony First degree misdemeanor Insurance license revoked Responsible for unpaid claims
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First degree misdemeanor- All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.
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An applicant who pays the initial premium at the time of application is typically given a(n) official receipt conditional receipt binding receipt certified receipt
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conditional receipt- A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.
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Group Life policies in Florida are required to contain a conversion privilege that allows for conversion with evidence of insurability to an individual policy for a stated period of time only if the premiums are paid by the employer to an individual policy at anytime
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to an individual policy for a stated period of time- In Florida, Group Life policies must contain a conversion privilege that allows for conversion to an individual policy for a specified period of time.
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All of these are a prerequisite for becoming a licensed agent EXCEPT Complete a prelicensing course Resident of Florida Be at least 18 years old Graduate from high school
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Graduate from high school- Graduating from high school is not a prerequisite for becoming a licensed agent.
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Which of the following is NOT an unfair claim settlement practice? Failing to acknowledge and act promptly with respect to an insurance claim Compelling an insured to initiate a lawsuit by offering less on an insurance claim Failing to accept or deny a claim within reasonable time after proof of loss is submitted Needing written documentation of claim details
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Needing written documentation of claim details- All of these are unfair claim settlement practices except "Needing written documentation of claim details".
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Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? Notice to existing and replacing insurers of intention to replace A list of all policies the agent has replaced in the last 3 years A statement made by the agent that NAIC guidelines have been met during the replacement process A copy of the agent's insurance license
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Notice to existing and replacing insurers of intention to replace- When replacing an existing life insurance policy, an agent must submit notice to existing insurer and replacing insurer of intentions.
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Which of the following provisions is NOT required in HMO contracts/certificates? Enrollment Rates shall not be excessive No pre-existing exclusions for children Seven-day grace period
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Seven-day grace period- A grace period of no less than 10 days must be expressly included in an HMO contract.
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At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Before the appointment is scheduled Upon completion of the application At the policy's delivery When the insurer receives the MIB report
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Upon completion of the application- An applicant for life insurance must be informed of their rights upon completion of the application.
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Non-occupational disability coverage is designed for 24 hour protection those who are exempt from Workers' Compensation coverage sole proprietors and self-employed individuals employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
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employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation- Non-occupational disability coverage is designed for employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation.
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What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age
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Wages- The major factor in determining the benefit amount paid under a disability income policy is wages.
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Medicare Part B does NOT cover occupational therapy inpatient hospital services physician and surgeon services medical equipment rental
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inpatient hospital services- Medicare Part B is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services, and supplies not covered under Part A.
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What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate
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Certificate- Employees covered by an employer health plan are issued an insurance certificate.
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In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments Whenever an insured is unable to work During the time an insured is confined in a hospital Following an accidental injury, but not during sickness After an insured has become totally disabled as defined in the policy
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After an insured has become totally disabled as defined in the policy- The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.
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An agent's license can be suspended or revoked by writing primarily controlled business not meeting annual sales quota replacing an existing insurance policy with a new one issuing a binding receipt
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writing primarily controlled business- An agent's license can be suspended or revoked by writing primarily controlled business.
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Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against? People of different religions People that are married People that smoke People of different races
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People that smoke- A life insurance company may make policy rate discriminations against people that smoke.
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Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years. 3 4 5 6
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5- Florida requires that an insurance agent must complete 5 hours of continuing education on the subject of law and ethics every two years.
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An example of sliding would be speaking maliciously of an insurer intending to harm charging for an additional product without the applicant's consent replacing an existing insurance policy with a new one inducing an applicant to purchase an insurance policy by returning some of the premium
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charging for an additional product without the applicant's consent- Sliding involves selling additional coverage to an insurance applicant who doesn't want or need it. An agent will often "slide" this additional coverage in without the customer's knowledge or consent.
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How can an agent-in-charge have more than one location? Only if the locations are in Florida By keeping all locations within a close proximity An agent-in-charge can only have one location Only if the agent-in-charge is present when insurance activity occurs
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Only if the agent-in-charge is present when insurance activity occurs- Multiple locations are allowed as long as the agent-in-charge is present when insurance activity occurs.
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Which of the following acts is an agent NOT authorized to do on behalf of an insurer? Accept premiums from policyowners Complete insurance applications Authorize claim payments Ask health related questions
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Authorize claim payments- Agents do not authorize payment of claims
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Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? Coercion Fraud Misrepresentation Sliding
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Misrepresentation- An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation.
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Which of the following is NOT considered rebating? Sharing commissions with an agent licensed in the same line of business Returning premium to a client as an inducement for purchasing a policy Giving something of value to an insured in exchange for their business Offering special dividends
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Sharing commissions with an agent licensed in the same line of business- Sharing commissions with other licensed agents is not considered rebating.
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An example of an unfair claims practice would be requesting a third-party arbitrator to resolve a disagreement failing to effectuate prompt, fair, and equitable settlements of a claim paying a claim promptly after receiving proof of loss requiring the insured to give a statement under oath
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failing to effectuate prompt, fair, and equitable settlements of a claim- Failing to effectuate prompt, fair, and equitable settlements of claims is considered to be an unfair claims practice.
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Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer? Rebating Coercion Sliding Misrepresentation
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Misrepresentation- Making a fraudulent statement on an insurance application would be considered an act of misrepresentation.
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An example of rebating would be a mutual insurance company paying dividends to its policyowners reducing the premiums across the board for a specific risk class offering a client something of value not stated in the contract in exchange for their business using intimidation in order to restrain or monopolize the business of insurance.
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offering a client something of value not stated in the contract in exchange for their business- Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.
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Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent only if the child is incapable of employment and chiefly dependent on the policyowner for up to an additional 10 years only only if physically disabled only if mentally disabled
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only if the child is incapable of employment and chiefly dependent on the policyowner- Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.
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How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated? 31 45 60 120
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45- If the insurer takes no action within 45 days, the policy will be reinstated automatically.
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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 reasonable trust ethical behavior legal competence
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fiduciary responsibility- Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes.
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Which action could result in a hearing being ordered by the Department of Financial Services? Representing a foreign insurer Sharing commissions with another licensed agent Performing insurance transactions without a license Conducting insurance business in this state while being a resident of another
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Performing insurance transactions without a license- A hearing may be conducted if anyone is suspected of engaging in the business of insurance without a license.
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Defamation occurs when an agent makes a false statement intended to malign another insurer replace an existing insurance policy with another restrict fair trade misrepresent the provisions of an insurance policy
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malign another insurer- Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business.
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Which of the following medical expenses does Cancer insurance NOT cover? Chemotherapy Radiation treatment Physician visit Arthritis
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Arthritis- Cancer insurance typically covers all of these medical expenses except for arthritis.
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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? A straight life annuity A variable annuity An immediate annuity A deferred annuity
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An immediate annuity- An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.
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Which mode of payment is NOT used by health insurance policies? Monthly premium Annual premium Single premium Semi-annual premium
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Single premium- Single premium is not used when paying for health insurance policies.
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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? Conditionally Renewable Noncancellable Guaranteed Renewable Optionally Renewable
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Guaranteed Renewable- The renewal provision in a guaranteed renewable policy specifies that the policy must be renewed (as long as premiums are paid) until the insured reaches a specified age. These usually have increasing premiums.
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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 Waiver Benefit clause Concurrent Benefit clause Guaranteed Benefit clause
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Residual Benefit clause- A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income.
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The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? Social Security Disability Income Medicare Supplements Medicaid COBRA
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Social Security Disability Income- Social Security Disability Income pays benefits that are based on a percentage of an individual's Primary Insurance Amount (PIA).
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P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? $20,000 $14,000 $6,000 $0
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$0- Disability income benefits that derive from an individual policy which was paid entirely by the policyowner is not subject to federal income tax.
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A major medical policy typically provides benefits for surgical expenses only, subject to policy limits contains more limitations than a Basic Hospital, Medical, or Surgical policy contains a 60-day Elimination period for losses due to accident provides benefits for reasonable and necessary medical expenses, subject to policy limits
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provides benefits for reasonable and necessary medical expenses, subject to policy limits- A major medical policy provides benefits for reasonable and necessary medical expenses, subject to policy limits.
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The Coordination of Benefits provision allows an insured covered by two health plans to make a profit on a covered loss prevents an insured covered by two health plans from making a profit on a covered loss allows an insurer to defer paying a claim for a work-related injury until Workers' Compensation Benefits have expired prevents an insured to change insurers during a claim for a covered loss
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prevents an insured covered by two health plans from making a profit on a covered loss- The Coordination of Benefits prevents an insured covered by two health plans from making a profit on a covered loss.
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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? Key Employer Disability Disability Income Business Overhead Expense Worker's Compensation
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Business Overhead Expense- A Business Overhead Expense policy covers fixed business expenses in the event of the owner becoming unable to work due to an accident or illness.
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A "reimbursement policy" pays what amount of covered Long-Term Care expenses? All expenses regardless of the policy limits Actual covered expenses up to the daily maximum A daily dollar amount regardless of the actual incurred expenses The usual, customary, and reasonable expenses regardless of the the policy limits
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Actual covered expenses up to the daily maximum- A "reimbursement policy" pays the actual covered expenses up to the daily maximum.
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T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable? Benefits are taxable to T Benefits are tax-free to T Benefits are partially taxable to T Benefits are taxable to T's employer
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Benefits are taxable to T- When a disability income insurance plan is paid for entirely by the employer, the premiums are deductible to the employer. The benefits, in turn, are taxable to the recipient.
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An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the medical examination is given producer completes the application insurer dates the policy the first premium is paid
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insurer dates the policy- An insurance company can usually contest the information contained in an accident and health application for two years from the date the insurance company dates the policy.
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Which of the following does Social Security NOT provide benefits for? Survivorship Dismemberment Disability Retirement
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Dismemberment- Social Security provides for all of these types of benefits EXCEPT dismemberment.
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The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to continue group health benefits take out an individual health policy transfer their coverage to another insurer convert to disability coverage
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continue group health benefits- The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to continue group health benefits.
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K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered optionally renewable conditionally renewable guaranteed renewable noncancellable
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guaranteed renewable- Guaranteed renewable is best described as a policy that must be renewed and premium rate increases can only be applied if for an entire class of insureds.
