Life, Health & Variable Annuity Overall Review

Purchase Curriculum Members Sign-in Help

Life, Health & Variable Annuity Overall Review 1. All of the following characteristics apply to a Partnership disability buy-sell agreement except: Having a lengthy elimination period Setting forth the terms for buying the partners share Providing for lump sum payments of benefits Providing for a death benefit 2. Optional Provisions 1 and 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following? They permit the insurer to cancel the policy. They allow the insurer to request the insured to fill out a new application, to correct previous misstatements or alter information that has changed since the application was originally submitted. They allow the insurer to charge a 'back-end' premium to make up for the premium the insurer would have charged had the true situation been known. They permit the insurer to pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established. 3. Ordinary Life policies must include all of the following provisions EXCEPT: Entire Contract Clause (application included) Consideration Clause Suicide Clause Accidental Death Rider 4. The Financial Services Commission consists of all the following except: The Chief Financial Officer The Governor The Agriculture Commissioner The Insurance Commissioner 5. Which of the following statements concerning the Health Care & Insurance Reform Act of 1993 is true? It governs group and individual health insurance provisions It governs group health insurance provisions It governs individual health insurance provisions 6. When an application for health insurance is submitted without an initial premium, the earliest effective date is: The date the application is taken by the agent. The date the insurance company issues the policy. The date the policy is received by the agent. The date the policy is delivered to the prospect by the agent and the premium is collected. 7. Pover Tee is named by the insured, Kik LeBucket, as the first in line to receive the death benefit provided by Kik's accident policy. Their daughter, Spoilt Chile, is named as second in line to receive the benefit. Which statement is correct? PoverTee is the primary beneficiary and Spoilt Chile is the contingent beneficiary. PoverTee is the contingent beneficiary and Kik is the priamary beneficiary. Kik is the primary beneficiary and Spoilt Chile is the contingent beneficiary. Both Pover Tee and Spoilt Chile are primary beneficiaries. 8. The factor in premium computation that has to do with the record-keeping and statistical analysis insurance companies perform is: expense loading reserves claims expierence policy fees 9. Under a life income annuity option which of the following is true? The older the annuitant the smaller the monthly payment. The older the annuitant the longer the payment period. The younger the annuitant the shorter the payment period. The older the annuitant the larger the monthly payment. 10. A person who desires protection permanently but does not want to pay premiums indefinitely would purchase which of the following? indeterminate whole life modified whole life whole life limited pay life 11. Stagmite purchases a major medical policy with a $100 annual deductible, 80/20 co-insurance and a stop loss of $5000. If Stagmite were to incur covered expenses of $10,100, how much would Stag be out of pocket? $5000 $5100 $2000 $2100 12. The minimum grace period in a health insurance policy paid on a quarterly basis is: 7 days 10 days 30 days 31 days 13. A company that is licensed to sell insurance in a particular state is a domestic company an alien company a nonadmitted company an authorized company 14. Which of the following most accurately and completely describes an application? A form furnished by the insurer requesting certain inofrmation to become part of the insurance policy A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application An oral request from an agent to an insurer to issue an insurance policy An application can be any of the above. 15. All of the following statements concerning a family plan life insurance policy are true except: coverage for children is normally term children born later are immediately covered the coverage for children will usually terminate at age 18 or 21 the children's term can be converted 16. A field underwriter: decides who will be issued the policy. is responsible to agents in the field. is the agent. supervises agents in the field. 17. Golan Hites purchases a health insurance policy and is told that the insurance company cannot raise the premium or terminate the coverage. Which of the following types of renewability clauses does this policy contain? Optionally Renewable Conditionally Renewable Provisionally Renewable Noncancelable, Guaranteed Renewable 18. For the benefit of a lower premium, Tommy stated on his insurance application that he was five years younger than his actual age. The policy was issued as applied for and 15 months later Tommy died in an automobile accident. Which course of action would the insurance company take? The claim would be denied. The full benefit would be paid. The higher premium would be subtracted from the benefit. A reduced benefit would be paid. 19. Which of the following statements about the role of the agent in completing Health Insurance applications is true? I. The agent must understand the importance of Moral Risk. II. Problems with claims will probably occur if the agent fails to include all pertinent facts and medical history on forms. I only II only I and II Neither I nor II 20. Which of the following acts could constitute defamation? Using a reporting agency, such as Standard & Poors, to illustrate a company's ability to pay future obligations copying, for circulation, a newspaper article regarding a company's unstable financial condition none of the above 21. Which of the following provisions in a disability policy protects an insurance company against pre-existing conditions? Recurrent Disability Probationary Period Elimination (Waiting) Period Residual Disability 22. Which of the following is a distinguishing element of an insurance contract? consideration competent parties incontestability offer and acceptance 23. A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to this policy? Guaranteed insurability Impairment Rider Multiple indemnity Waiver of premium 24. A recurrent disability is normally considered: I. to be a problem that the insurance company cannot be expected to cover over and over II. for repeat coverage if the insured has worked a specified period after completing a previous indemnity period I only II only I and II Neither I nor II 25. All of the following are penalties provided for the violation of any of the provisions of the agents' qualification laws except: A minimum fine of $500 and not more than $5000 A minimum fine of $500 and not more than $3500 Imprisonment of not more than 6 months Suspension or revocation of the agents' license 26. Larry was a brick layer who had puchased a $5000 per month disability policy back in brick-laying school. He was issued a standard policy which he had been paying premiums for five years. In the evenings he finished medical school and has since been practicing medicine as a surgeon. Having sliced off his hand with a scaple he submits a claim. Which course of action would the company most likely follow? the company would pay the $5000 the company would pay a higher benefit to reflect what the premium would have purchased at a surgeon's occupational classification the company would pay the $5000 and refund any premium the company would deny the claim 27. A Guaranteed Insurability clause can be attached to which of the following types of health policies? A Hospital Indemnity policy Disability income policy Major Medical policy Cancer Policy 28. A Coverdell Savings Account is: A means of saving for education with pre-tax dollars A retirement account funded with pre-tax dollars An after tax savings vehicle for education A retirement account covering Dell employees 29. The purpose of the grace period is to: protect the insurance company against adverse selection. protect the policyholder against unintentional lapses. permit the beneficiary to establish an insurable interest. permit the insurance company to determine the cause of death. 30. With a blanket policy, individuals receive neither a policy or a certificate. true false 31. Health insurance may be written by all the following types of companies except: Life Casualty Surety Home Service 32. "Under no circumstances are you to send me the money", Joe told his insurance company when he turned 65. Joe had an endowment policy for $50,000 that matured at age 65. He had paid in a total of $25,000 and did not want to pay the taxes quite yet desiring to delay the inevitable for as long as possible. "Too bad", said the IRS. "You're taxed." Under what rule was Joe taxed? the non-deferral rule the make it, pay it rule the rule of constructive receipt the endowment rule 33. All of the following are permitted to sell HMOs in the state of Florida except: 1. A licensed health only agent 2. An unlicensed officer of an HMO 3. A licensed life agent 2 only 2 and 3 3 only all the above 34. Ways in which employees may be classified for group life insurance include all of the following EXCEPT: By department By union or non-union status By sex or age By duties 35. The coordination of benefits provision, found in a health policy, was amended to require or allow a greater degree of coordination when an insured was covered by more than one policy as long as the insured is reimbursed for 100% of the covered expenses. To which of the following policies does this provision apply? 1. Between group & individual insurance 2. Hospital Indemnity type policies 3. Medicare supplement insurance 4. A.D.& D. policies 1 1 & 2 2 & 3 all the above 36. What type of term insurance is utilized in a Family Maintenance Plan? Increasing Decreasing Level Graded 37. In noncontributory group plans, how many eligible employees must be covered by the plan? At least 50% Usually 75% or more At least 90% 100% 38. Which of the following is correct concerning the grace period for folks aged 64 & over? 1. They are afforded an additional 31 days of grace 2. They are afforded an additional 21 days of grace 3. Does not apply to policies held less than one year 4. Have no idea what you are talking about 1 only 1 & 3 2 & 3 4 39. Qualified corporate retirement programs must meet all requirements below EXCEPT: Must be for the exclusive benefit of employees. Life Insurance benefits must be incidental to retirement benefits. Cannot be discriminatory by sex. Employee contributions must be vested by 3 years. 40. The suicide clause provides that proceeds will never be paid in cases of self-destruction. True False 41. Which of the following statements is not correct regarding an association group? must have been in existence for one year must be a natural group if the plan is non contributory all members must participate if the plan is contributory at least 100 members must participate 42. All of the following are unique elements of an insurance contract except? Insurable Interest Valued, Indemnity Adhesion Consideration 43. Which of the following statements is true about the conditional receipt issued to an applicant for an individual disability income policy? Coverage begins immediately as of the date of the conditional receipt. An agent should give an applicant the conditional receipt after taking an application, even if the applicant has not been paid the premium. If an applicant is an acceptable risk, the conditional receipt binds the insurance company as of either date of the receipt or date of the medical exam, whichever is later. If unfavorable information is discovered during the underwriting process, the conditional receipt guarantees standard coverage. 44. Select the correct statement about long-term care policies. They are usually issued non-cancelable. Most LTC policies are guaranteed renewable up to age 70, after which they revert to optionally renewable policies. The best such policies are those that will pay benefits regardless of the level of care required by the insured. Virtually all LTC policies require prior hospitalization before benefits will be paid. 45. Which of the following statements best describes an element of an insurable risk? 1. The loss must be due to chance. 2. The loss must be definite and measurable. 3. The loss must not be catastrophic. 4. The loss exposures to be insured must be large. 1 & 2 1, 2, & 3 2 & 3 All the above 46. Which statement concerning commercial companies is not true? They function on the reimbursement approach. They have a right of assignment built into many policies. They are not debit companies. May be monoline companies. 47. The exclusion ratio for a Variable Annuity is 100% 75% 50% 25% 48. The annuity rule would be applied to all of the following except: Fixed period option Fixed amount option Life income option Lump-sum cash option 49. A licensed insurance company that is domiciled in, and is permitted to do business in, the licensing state is called: A fraternal company A permitted company An authorized company A domestic company 50. The Florida Health Insurance Coverage Continuation Act (HICCA) Applies to companies with 20 or more employees Coverage may be extended for 24 months Allows companies to charge 115% of the regular group rate Big Dawg is trying to fool us, no such thing 51. Bill Wilson wants to obtain a life insurance policy on his employee, Kenneth Myers, and names Kenneth's wife, Susan, as the beneficiary. Signatures of which of the following would be legally required on the application? 1. Bill 2. Kenneth Myers 3. Susan 1 only 1 and 2 only 2 and 3 only 1, 2 and 3 52. The agencies of state government involved in the regulation of the Insurance business in the state of Florida are: The state legislature The Department of Financial Services The state courts all of the above 53. Which of the following, regarding insurance company financial conditions is/are true? 1. a company must file annual financial statements 2. a company must file a financial statment every 3 years 3. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition annually 4. the Office of Insurance Regulation will carry out a complete examination of a company's financial condition every 3 years 1 & 3 1 & 4 2 & 3 2 & 4 54. A guaranteed insurability rider may be attached to: a basic dental hospital plan dental plans disability plans major medical plans 55. What is the maximum annual contribution an eligible person may make to an Individual Retirement Account (IRA)? $1,500 or 15% of earned income, whichever is less. The greater of $3,000 or 20% of salary or wages. $7,500 or 15% of annual income, whichever is less. The lesser of $4000.00 or 100% of income 56. Which of the following statements concerning HMO "open enrollments" is not true? Open enrollment must be offered every year Open enrollment period lasts no less than 30 days During open enrollment, eligible members may enroll regardless of health condition Open enrollment must be offered every 18 months 57. A limited risk policy covers: risks not covered by accident and health policies specific risks all risks unusual types of risks 58. Many major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses: the insurer pays 100% of remaining covered charges. This is referred to as the: maximum benefit benefit restoration coinsurance percentage stop-loss limit 59. Which of the following statements concerning Blue Cross/Blue shield is/are correct? They are known as commercial insurers The physicians are pre-paid They operate on a capitation arrangement They have contractual arrangements with hospitals and physicians 60. Where would information relating to the identity of the agent, the company, the policy and each rider be found? buyer's guide declarations page policy summary initial receipt 61. When changing from a whole life to a variable life policy, the agent must provide notification to the policyowner within how many days? 10 days 15 days 30 days 45 days 62. Which of the following best describes the normal conversion benefit available to terminated employees under a group life insurance policy? The employees may convert to an individual term policy within 31 days by submitting evidence of insurability. The employee may convert to an individual whole life policy within 31 days by submitting evidence of insurability. The employee may convert to an individual term policy within 31 days without submitting evidence of insurability. The employee may convert to an individual whole life policy within 31 days without submitting evidence of insurability. 63. An unlicensed salaried officer of an insurance company may sell life insurance in the state of Florida. True False 64. Under the Basic Hospital Expense policy, what would not be covered under the miscellaneous expense benefit? anesthesia anesthesiologist use of the operating room drugs 65. In a viatical settlement the viator is: the person buying the policy the insured the agent acting on behalf of the person selling the policy the agent acting on behalf of the person buying the policy 66. An Annuitant receives monthly payments from a variable annuity under a joint and 2/3rds survivor option. If the primary annuitant dies what will the surviving annuitant receive? Two thirds of the primary annuitants last check for life. The dollar value of two thirds of the annuity units that were being distributed monthly to the primary annuitant for life. Two thirds of the annuity units accumulated by the annuitant. A cash distribution of two thirds of the primary annuitants reserve. 67. Which is not a qualified retirement plan? A Defined benefit plan A salary continuation plan Keogh Plan S.E.P. 68. To be considered chronically ill and qualify for benefits under an accelerated benefit rider, a licensed health care practitioner must certify that the person is unable to perform: at least two activities of daily living for 90 days at least three activities of daily living for 60 days at least two activities of daily living for 60 days at least three activities of daily living for 90 days 69. What is the minimum number of employees required in Florida for group insurance? 1 3 5 8 70. Tom is receiving 100 annuity units each month. If the variable annuity company's seperate account was worth $90,000,000 and they had 3,000,000 annuity units outstanding, how much would Tom's check be? $300 none of the above $2700 $3000 71. Disability Income payments must be paid at least: Weekly Monthly Quarterly Annually 72. The statement " there is no attempt to value financial loss" would be applied to which of the following? A valued contract An indemnity contract The doctrine of subrogation All of the above 73. The time period specified in the Free Look provision begins: when the policy is issued when the policy is delivered when the application is signed when the application is approved 74. The incontestable clause cannot be used for: 1) Intent to murder 2) Impersonation 3) Misrepresentation 4) If insured did not pay premiums 1 only 1 & 2 3 only 3 & 4 75. The Viatical Settlement Act includes all of the following except: licensing of viatical settlement providers allows licensed agents to perform the functions of a viatical broker regulates terms of viatical agreements viatical providers are regulated by Dept. of Viatical Settlements 76. How often must an annuitant be informed of the number of units and the value of those units? yearly monthly quarterly bi-annually 77. All of the following are covered under the social security system except: civil service workers hired after 1984 certain railroad workers elected federal officials retired military personnel 78. The two major factors used to determine the legal reserve required for life insurance policies include: I. The type of company II. Mortality Tables III. The Morbidity Table IV. The assumed interest rate I and II II and III III and IV II and IV 79. Giving a prospect or policy owner anything of significant value as an inducement to buy insurance is called: Discounting Misrepresentation Rebating Twisting 80. The policyowner has how many days, after the maturity date, to exercise an annuity option before the rule of construtive receipt takes effect? 15 days 30 days 45 days 60 days 81. Variable annuity companies can be classified as : Closed-end investment companies Open-end investment companies Bonded companies Open-end or Closed-end investment companies 82. The "Spendthrift Clause" enables a beneficiary to collect all policy proceeds even though: The insured was disabled and owed the last premium There were policy loans against the cash value The Insured had large outstanding debts The beneficiary will probably blow the money 83. Incurred medical expenses that are not reimbursed may be deducted only to the extent that they exceed: 25% of adjusted gross income 7.5% of A.G.I.. 25% of ordinary income 7.5% of ordinary income 84. Which of the following statements about health service organizations is true? They provide Loss of Income benefits to policyowners. They provide benefit payments directly to the hospitals and physicians providing service. They reimburse policyowners directly for physicians' fees. They reimburse policyowners directly for all medical expenses. 85. Which of the following statements concerning a mail order company in Florida is not true? the company must be authorized to do business in the state the policy must be delivered by a licensed agent a mail order company requires no personal agent solicitation does not require an appointed agent 86. From a TAX standpoint, when a policy-owner surrenders a life Insurance policy and receives a lump-sum payment of the cash value, which of the following applies? A lump-sum payment is totally exempt The lump sum, less the policyowners cost basis, is taxable as ordinary income The lump sum, less the policyowner's cost basis, is taxable as capital gains The lump sum payment is taxable under the annuity rule 87. Which statement concerning HMO's is correct? Open panel HMO doctors are currently accepting new subscribers. Closed Panel HMO doctors have discontinued their association with the HMO. Open panel HMO doctors have their own patients as well as work with the HMO. I am tired, tired, tired of all this. 88. Under a viatical settlement arrangement, an insured received $80,000 for his $100,000 life insurance policy. Which of the following statements are true? 1. The $80,000 will be tax free. 2. The $80,000 will be taxable. 3. The $20,000 gain paid to the buyer will tax free. 4. The $20,000 gain paid to the buyer will be taxable. 1 & 3 2 & 3 1 & 4 2 & 4 89. All the following are examples of non-qualified plans except: simple plans salary continuation plans deferred compensation plans split dollar plans 90. Which type of annuity plan allows for pre-tax dollars to be invested? 501 c 3 403 b terminus remaindus trustus no wonus pitifulmus 91. Juilie's group health insurance became effective March 1. She found out March 7 that she was three months pregnant. Which of the following statements are true? The pregancy is covered because there is no pre-existing condition for maternity There would be no coverage as maternity is excluded as a preexisting condition. 92. Which is not considered a group permanent plan? group paid-up group universal life group credit life group ordinary life 93. Sigmund buys a $10,000 life insurance policy on Guirty with a payor provision. Sigmund dies 4 years later. What happens to the premium? Policy is paid up for life Premiums are waived until Guirty reaches age 25 Premiums must be paid by Guirty until age 25 Guirty is responsible to pay all premiums 94. The human life value tried to measure what a life was worth in economic value to a family. Which of the following statements would be true of this approach? It replaced the needs approach as a more accurate measuring stick. It calculated other sources of income. Inflation was not taken into account. It is still one of the mose widely used formulas in the financial services arena. 95. Which of the following is true about coinsurance? Coinsurance applies to the deductible as well as to claim payments. Premiums are higher for a policy that contains a coinsurance provision than for one that does not. It helps control overutilization of benefits. Insurance companies can change the coinsurance ratio after the policy has been issued. 96. A health insurance policy becomes effective when the first premium has been paid and the: application has been approved by the insurance company application has been received by the insurance company's home office medical examination has been completed agent has issued a conditional receipt to the proposed insured 97. Florida Law requires what percentage of participation in a non-contributory plan? 0% 25% 75% 100% 98. Which of the following statements concerning annuities are true? 1. Annuities liquidate estates, life insurance creates an estate 2. Most annuities guarantee a death benefit 3. May accept periodic payments during the annuity period 4. Immediate annuities may be funded with fixed or periodic payments 1 only 1 & 2 1, 2, & 3 all the above 99. In order to comply with the Fair Credit Reporting Act, at which of the following times must an agent notify an applicant that a credit report may be requested? at the initial interview at the time of the application when the applicant's credit is actually checked when the policy is delivered 100. The insured died during the Grace Period of her life insurance policy and had not paid the required annual premium. The insurance company is obligated to pay which of the following to the beneficiary? The cash value of the policy, if any The full face amount of the policy The face amount of the policy less any earned premiums A refund of any premiums paid 101. All of the following relate to Owner's Rights EXCEPT: The Reinstatement Provision The Listed Exclusions The Free Look Provision The Incontestable Provision 102. Which of the following statements is true about a policy assignment? It permits the beneficiary to designate the person or persons to receive the benefits. It is valid during the insured's lifetime only, because the death benefit is payable to the named beneficiary. It transfers the owner's rights under the policy to the extent expressed in the assignment form. It is the same as a beneficiary designation. 103. Which is correct concerning a GRADED PREMIUM WHOLE LIFE policy? It is a form of term insurance. Premiums are reduced each year during the early policy years and then remain level. Premiums are payable to age 65. Premiums start low, increasing each year during the early years of the contract and then remain constant for life. 104. Fines and penalties for violating provisions of the life agents qualification laws include: Denial, suspension, revocation and non-renewal of license Misdemeanor fine of not less than $500 nor more than $3500 Imprisonment for not more than six months as well B above All of the above 105. Robert named Becky as an absolute irrevocable beneficiary. If Becky dies before Robert: All rights revert back to Robert. Becky's estate will still have an interest in the policy. One should never name an absolute irrevocable beneficiary 106. The applicant chooses the length of the premium-paying period when selecting the type of policy that should best meet his/her objectives. Which type of policy has the highest initial premium and shortest pay period? Single premium life policy 10 pay life policy Variable life policy Endowment policy 107. The Self-Employed Individual Retirement Act of 1962 created which plan? Simplified Employee Pension Individual Retirement Account Keogh Plan 401k Plans 108. Billy Bob is covered under his employer's group health insurance plan. His family is also covered. Billy Bob's 16 daughter becomes pregnant. The baby is born premature and the Bob family is at a loss as to how they will pay these medical costs. Which statement by the agent would be the most correct? "There is no coverage for 18 months" "the insurance company will pay the bills, for 18 months" "the baby is covered for 18 months" "wasn't me" 109. An annuity which pays out a minimum guaranteed amount for a specified period or number of years is a: Fixed Benefit Fixed Period Lump Sum Period Certain 110. Which of the following statements concerning the differences between IRA's and Simplified Employee Pension plans is/are correct? 1. Contribution limits are 25% or $30000 for SEPs, $4000 for IRAs 2. Both are individual accounts 3. Contribution limits are 25% of the employee's income or $44,000 ,whichever is less for SEPs, & $4000 for IRAs 4. SARSEPs are no longer allowed 1 only 1 & 2 2 & 3 only 4 only 111. All of the following are considered to be the three primary premiums factors to health insurance except: Interest Morality Morbidity Expense 112. To determine the amount of income that is considered taxable from a life annuity, an exclusion ratio is used. Which of the following would be correct? The amount invested divided by the life expectancy The amount invested divided by the expected interest rate The amount invested divided by the expected return The full amount would be considered as taxable income 113. How is the Medical Information Bureau funded? It is funded by the states and authorized insurance companies. It is funded by the states. It is funded by more than 700 member insurance companies. It is funded by the states and the federal government. 114. Cloreen has a life insurance policy for $180,000. Her husband is a 50% beneficiary and each of her two children is a 25% beneficiary. Cloreen has a $30,000 loan against her policy. Cloreen dropped dead. How much does the husband receive? $75,000 $150,000 $90,000 $60,000 115. Beatrice was the owner and insured of a $100,000 life insurance policy which named her former husband as the beneficiary. She signed a change of beneficiary form the day before her death naming her new husband as beneficiary, but the home office had not yet received the form. Which course of action will the insurance company take? The company will pay the former husband, as the form was not presented before her death. The company will pay her present husband. The company will pay to the court and let the court decide. unfortunate chain of events 116. Optional Provisions 1 and 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following? cancel the policy request a revised application to correct the previous misstatements or alter information that has changed since the application was originally submitted charge a back-end premium to adjust for the premium that should have been charged for the true situation pay indemnities equal to the benefits that correspond to the premiums that have been paid 117. In a sales transaction, the agent will represent the: the company the policyowner/insured both 118. All of the following statements concerning IRA withdrawals are correct except: Mike, age 45, elects to annuitize his IRA. The 10% penalty would not apply Payments must begin by April 1 following the year in which they reach age 70 1/2 a 50% penalty is imposed if minimum distributions are not made 100% of any withdrawal will be taxed 119. Which of the following statements is not true regarding the Florida Comprehensive Health Association? no new enrollments as of 1991 guaranteed heath coverage to all, provided they could not obtain coverage elsewhere any organization selling health insurance in Florida must belong, sharing in the losses and the gains rates charged are up to 250% of standard rates 120. Personal Health Insurance policies do not normally include benefits for: injuries suffered while using an unsafe ladder injuries suffered in an auto accident rehabilitation for alcoholism a U.S. resident living abroad 121. Assessment insurers: are stock companies operates on a loss sharing by group members are becoming popular in Florida have unlimited assessments 122. All of the following statements are applicable to Medical Savings Accounts EXCEPT 1. Distributions could be taxed and penalized at 15% 2. They are meant to provide catastrophic coverage 3. They are available to all working U.S. residents under 70 1/2 4. May be used with individual as well as group insurance plans 1 & 2 1 & 4 2 & 3 all the above 123. What would cause the Chief Financial Officer to conduct a hearing? If he feels you have engaged in twisting If he heard you had participated in illegal activities If he has reasonable cause to believe you have defamed an insurance company If he feels you are engaged in actively misrepresenting insurance coverage to the public 124. The period of time following the death of a breadwinner during which the children are living at home is a/an: Loss of use period Income Period Blackout Period Dependency period 125. A Health Insurance company in a certain city contracts with an independent medical group to provide services to its subscribers. The company pays the group organization, rather than paying the individual medical practitioners. What type of structure is this? Exclusive Provider Organization Network model Staff model IPA model 126. All of the following are primary risk factors in underwriting individual health insurance policies, EXCEPT: geographical location moral hazard occupation physical condition 127. A group with 7 employees may exclude pre-existing conditions for: 3 months 1 year 6 months 2 years 128. Which of the following statements about a Renewable Term policy is true? It is renewable at the option of the insurance company. It is renewable at the option of the insured. It is renewable at the option of the insurance company, with proof of insurability. It is renewable at the option of the insured, with proof of insurability. 129. The type of health care provider that provides both the health care services and the health care coverage is a: Preferred Provider Organization Health Maintenance Organization Blue Cross/Blue Shield organization Traditional health insurance company 130. Which of the following statements regarding workers' compensation plans is correct? Benefit amounts are mandated by the federal government A worker will qualify for benefits only if his disability or illness was a result of employer negligence Benefits may be financed by private insurers, state funds or self-insurance If a worker is killed in an industrial accident, his family is entitled to a specified benefit amount to pay for burial expenses 131. The purpose of a mortality table is to: To provide the probability of death at given ages To provide the expectation of life at given ages Both Neither 132. A M.E.W.A is not: a type of Multiple Employer Trust fully insured fully self-insured taxd exempt 133. Munch withdraws $2,000 of accumulated dividends from his life insurance policy. What will be the TAX RESULT? I. Accumulated dividends & any interest credited will be tax exempt. II. Accumulated dividends will be taxable income to Munch. III. The dividends are exempt from income tax, but any interest credited will be taxable. I only II only III only I & II 134. If the insured purchased a Long Term Care policy with a payable benefit of $130 per day and the actual cost of the facility was $120 per day, what would the policy pay? $120 per day $130 per day No more than the average cost per day in a given geographical area HIPPA limits benefits to $220 per day 135. When an applicant applies for insurance by completing an application and paying one month's premium, this constitutes: Consideration and an offer to buy. An acceptance. A conditioned contract. A completed contract. 136. When does maternity coverage become effective for a group with two or more employees? 3 months 6 months 9 months immediately 137. An applicant for reinstatement may have to do all of the following EXCEPT: pay all back premiums provide evidence of insurability agree to a new suicide provision agree to a new incontestable provision 138. As compared to individual disability income policies, group disability income policies are generally: more costly and have less liberal provisions more restrictive in terms of covered medical expense less costly and have more liberal provisions tied more closely to Social Security disability benefits 139. The Department of Financial Services is concerned with: 1. Assets and investments of insurance companies 2. The types and degree of risk of investments made by insurance companies 3. Examinations of records 4. Limiting the dollar amount that can be invested in different types of investments 1, 2, 3, 4 1, 2, 3 1, 2, 4 1, 2 140. Which of the following is not considered an insurance company? Lloyd's of London Risk Retention Groups Reciprocal Insurers Assessment Insurers 141. Selling insurance through a vending machine would be: mass marketing direct selling a yank and pull a prohibited practice 142. Creditable coverage, as defined under the Health Insurance Portability & Accountability Act, includes: I. Group Health Plans II. Individual Health Plans III. Florida Comprehensive Health Association IV. Medicare & Medicaid I I & II I, II, III All the above 143. Which is not true concerning a Hospital Fixed-Rate plan? Claim costs are not affected by rising health care costs High benefits for relatively low premiums Simple underwriting and administration Benefits are paid directly to the hospital 144. Newborn hearing screening is a required coverage in Florida? True False 145. All of the following are general qualification requirements for employer-sponsored retirement plans except: life insurance benefits must be incidental to retirement benefits annuity payments must be available in the form of a joint & survivor annuity a plan must be for the exclusive benefit of employees the plan may be established by the employer, employee, or both 146. An "association group" may be eligible for group life insurance under Florida law if they meet which of the following criteria? 1. Must have been in existence for three years 2. Must hold monthly meetings 3. If the plan is contributory, a minimum of 100 members must participate 4. If the plan is non-contributory, all members must participate 1, 2, & 4 2, 3, & 4 1 & 2 3 & 4 147. Eustis Toolis had a $2000 per month disability policy with a benefit period to age 65 and a 6 month waiting period. She became disabled at age 64 1/2. How much would she receive? $2000 $1000 $12000 Nothing 148. A Life with 20 yr. period certain annuity would pay: only 20 years 20 yrs. or life of the annuitant whichever is longer until both spouses die until the first spouse dies 149. An agent takes an application for health insurance on Bone and Marrow Lykes and their family. When the agent returns to her office she discovers two unanswered questions on the application. Which action should she take? Call the Lykes and get the information over the telephone. Reconstruct the sales interview and answer the questions based on the information she can remember. Submit the application to her company as is. Go back to the Lykes and have them complete the unanswered questions. 150. An insured purchased group Credit Disability insurance to cover a loan. He was injured and disabled for 7 months. What benefits were paid under his policy? I. The insured received Disability Income benefits II. The insured's creditor received the equivalent of the monthly payment owed by the insured I only II only I and II Neither I nor II

© 2003-2006 Florida School of Insurance, Inc. All Rights Reserved

[CURRICULUM] [CLASSROOM] [HELP] [CONTACT US]