LIFE INSURANCE Flashcards
(150 cards)
1
Q
Discount Medical Plan Organizations (DMPOs) are medical providers who have negotiated with healthcare professionals to accept a discounted fee at the time the service is performed.
A
DMPO
2
Q
Hospice care focuses on providing pain management and comfort, rather than curing an individual’s ailments. Hospice care is typically for individuals with terminal illnesses.
A
Hospice care
3
Q
Which of the following allows uninsurable individuals to obtain coverage through pool coverage?
A
Comprehensive Health Association
4
Q
What type of rating method are small employer health policy carriers in Florida required to use for establishing premium rates?
A
Modified community rating
5
Q
When Sally was given a substandard rating for her insurance as the result of a consumer report, the ___________ gives her the right to questions the source and validity of the information.
A
Fair Credit Reporting Act
6
Q
Agents must keep premium transaction records for a minimum of:
A
Agents must keep premium transaction records for a minimum of 3 years.
7
Q
A producer cannot change or waive any provisions in an insurance contract. This is stipulated in the:
A
Entire contract provision
8
Q
Which of the following words can be used in health insurance policy advertisement?
A
More
9
Q
What right of renewability does not guarantee insurability, allowing the insurer to cancel on certain dates?
A
Optionally renewable
10
Q
What is a person who can also receive information for a policyholder’s life policy?
A
A secondary addressee
11
Q
Bob bought a policy that covers cancer only. It is considered a:
A
Limited plan
12
Q
Except for direct response policies, when must a Medicare supplement policy outline of coverage must be delivered to an applicant?
A
At the time of application
13
Q
What type of care is provided to assist an individual with ADLs, performed by a medical non-professional under a physician’s orders?
A
Custodial care
14
Q
Inducing a policyholder to change policies within the same insurance company without regard to bad consequences is:
A
Churning
15
Q
In Florida, group life insurance contracts must cover at least:
A
1 person
16
Q
Who must sign the notice regarding replacement?
A
The applicant and the producer
17
Q
Which of the following is required in order for an insurance application to be considered complete?
A
The signature of the insured (unless not an adult).
18
Q
Which of the following types of policy cannot be third-party ownership?
A
Modified life
19
Q
A variable whole life policy would be the most appropriate for:
A
A 34 year old executive with a lawyer wife and a child
20
Q
What type of marketing fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance?
A
Cold lead advertising
21
Q
In which clause would the insurance company’s promise to pay be included?
A
Insuring clause
22
Q
In Florida, insurance is regulated by all the following, EXCEPT:
A
U.S. court system
23
Q
What is a medical provider who has negotiated with healthcare professionals to accept a discounted fee at the time the service is performed?
A
DMPO
24
Q
Suitability information for a prospective client would include all the following, EXCEPT:
A
Race
25
The policy for employee group life insurance is paid by:
Employee or employer, or both
26
A guaranteed insurability rider allows the insured to protect against insurability risk. What is NOT protected?
Premiums
27
When a person buys insurance, the insurer is obligated to pay uncertain benefits in the future which are called:
Conditional
28
The buyer's guide is usually given to the purchaser at the time of:
Application
29
The Insurance Department may place on probation, suspend, revoke or refuse to issue or renew an insurance producer license for which of the following reasons?
Failing to pay child support
30
A health insurance policy that covers family members must cover adopted children:
From the moment of placement in the residence
31
Amanda has how many days to submit her proof of loss to her insurer for her health claim?
Proof of loss must be submitted to the insurer within 90 days of the date of loss.
32
Amanda has how many days to submit her proof of loss to her insurer for her health claim
Proof of loss must be submitted to the insurer within 90 days of the date of loss.
33
What kind of contract uses periodic payments as a way to systematically liquidate assets?
An annuity is a way to provide liquidation of an estate.
34
Who is responsible for supervising insurance fraud and insurance consumer protection in Florida?
The Chief Financial Officer
35
In a long-term care policy, pre-existing conditions must be covered after:
: 6 months from the effective date of coverage
36
Jeff was injured in a car wreck. How many day does he have to provide a notice of claim to his insurer?
A notice of claim must be given to the insurer within 20 days.
37
A mutual insurance company formed to insure people in the same business is:
A risk retention group
38
What is the maximum liability of the Florida Life and Health Guaranty Association for death benefits or health insurance claims?
$300,000
39
How many hours of continuing education are required every 2 years for Florida life and health agents who have been licensed for at least 6 years, but less than 25 years?
20 hours
40
The standard nonforfeiture credit for a long-term care policy is what percentage of the sum of all premiums paid?
The standard nonforfeiture credit for a long-term care policy is equal to 100% of the sum of all premiums paid.
41
The standard nonforfeiture credit for a long-term care policy is equal to 100% of the sum of all premiums paid.
The increases occur randomly.
42
Which care program requires the insured to select a primary care physician?
HMO's require the insured to select a primary care physician.
43
Medicare Advantage Plans include all the following, EXCEPT:
EPOs
44
Ramon recently purchased a Life Insurance policy from Acme Insurance Company. Upon reading the terms of the policy, Ramon finds the policy contains a package for Legal Defense insurance, he did not request. What illegal trade practice is this?
Ramon has fallen victim to the Unfair Trade practice of sliding.
45
Nick's life policy lapsed, which Nonforfeiture option would allow the insurer to use the cash value to buy a whole life policy?
The reduced paid-up option would allow the insurer to use the cash value to buy another paid up whole life policy.
46
What consist of 2 or more employers or labor unions seeking group health insurance coverage by joining together to form a larger group?
Multiple Employer Welfare Arrangements (MEWAs) consist of 2 or more employers
47
Physicians and medical facilities provide services on a contracted price in:
PPOs pay for services on a contracted price known a fee-for-service basis.
48
Direct response life insurance advertisements may contain which of the following phrases?
"Save money"
49
Health insurance policies issued in Florida cannot exclude coverage for which of the following?
Hiv
50
What act is meant to promote the availability of health insurance coverage to small employers in Florida?
Florida Employee Health Care Access Act
51
Except for direct response policies, when must a Medicare supplement policy Buyer's guide be delivered to an applicant?
At the time of application
52
Question text
Florida insurance laws are administered by all the following, EXCEPT:
The Florida legislature.
53
Which of the following is not considered "transacting" insurance?
Investigation.
54
Question text
Jamie has a renewable term policy. Which of the following is not an incorrect statement about this type of policy.
Renewability is the insurer's option - is the only correct statement
55
The life insurance rider that pays the face amount plus the total premiums paid into the policy is known as:
Return of premium
56
Does a loan on the cash value of a life insurance policy accrue interest, and if so, how is the interest handled?
Yes, the interest can be paid annually, or added to the loan.
57
With a Guaranteed Insurability rider on a Disability Income policy, the:
The insured can buy additional disability income coverage without proving evidence of insurability.
58
Life insurance applications require a signature from:
A life insurance application requires the agent, proposed insured, and the policy owner if different from the insured to sign it.
59
Question text
What type of care is nursing care and rehabilitation needed on a daily basis that is performed by a medical professional under a physician's orders?
Skilled care
60
Question text
What is an entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers?
Prepaid limited health service organization (PLHSO) i
61
,
Question text
Who of the following is NOT on the Financial Services Commission?
The Florida Commissioner of Insurance
62
Question text
What is the minimum grace period for group life insurance policies in Florida?
31 days for group life
63
Question text
When an insured completed his health policy application, his producer did not take a premium when he submitted it to the insurer. When the producer delivers the policy to the applicant, he needs to do all of the following EXCEPT:
The producer does not need to issue the applicant a conditional receipt when he delivers the policy
64
How does the IRS treat disability income benefits when the employer pays the policy premiums?
They are fully taxable
65
What is the purpose of the Florida Life and Health Guaranty Association?
To protect policy holders and insureds from insurers who cannot fulfill their financial obligations
66
What right of renewability guarantees insurability, but does not guarantee premiums?
A guaranteed renewable policy does not allow the insurer to cancel the policy, but it allows the insurer to increase the premiums.
67
The insurer has a maximum of how many days after receiving notice of a claim to provide claims forms?
Claims forms must be provided to the claimant a maximum of 15 days after receiving a notice of claim
68
If James has an increasing term policy, which of the following must increase?
The death benefit
69
The definition of "Medicare eligible expense" for a Medicare supplement policy cannot be:
More restrictive than Medicare's
70
What percentage of the benefits received from a health insurance company after an accident are taxable?
%100
71
Which of the following would NOT be considered unfair discrimination?
Discrimination based on occupation
72
Which of the following is an effective and legal way to deliver a policy?
All of the above
73
In what provision does this statement appear: "Benefits are subject to all the provisions, conditions and exclusions of the policy?"
The insuring clause details the terms of the policy and what the insurance company will do in return for the premiums paid. It emphasizes the conditions and exclusions that are present in the policy.
The correct answer is: Insuring clause
74
All of the following are true about a Medical Expense policy, EXCEPT:
Available on a group basis only
75
Which of the following is not an option for handling the designation of minor beneficiaries on a life policy?
Set up a tertiary beneficiary to receive the proceeds
76
How much time does an individual have to convert to a new individual life policy after they are terminated from employment covered by a group life policy?
Under a group life policy, if a member's coverage is terminated, the member and dependents may convert their group coverage to individual life coverage. The individual must apply for individual coverage within 31 days after the date of their coverage termination.
The correct answer is: 31 days
77
A schedule that reimburses based on general costs in the geographical area is known as:
URC (Usual, reasonable and customary)
78
James has agreed to purchase insurance. When will the coverage be in force?
When the agent delivers the policy to the insured
79
All of the following are true concerning taxation of medical benefits, EXCEPT:
Medical expenses deducted from income tax become taxable in the next year if they are reimbursed after the deduction is taken.
80
Which of the following is described as charging insureds additional fees without their consent?
Sliding occurs when agents or insurers charge applicants additional charges without applicants' consent.
81
Thomas submitted an application for health insurance with the full first premium and was issued a conditional receipt. On which provision of the contract is the application and premium payment based?
The insured's consideration is the completed application and the initial premium.
82
How much time before coverage is in effect for a Medicare supplemental policy that replaces another Medicare supplemental policy that was held for 1 year?
Immediately
83
Riders and endorsements can be used to accomplish any of the following, EXCEPT:
Modify the time limit for certain defense clause
84
After Michelle filed her income taxes, she received a check from the insurance company that reimbursed her for some of the expenses she deducted. What is the tax situation for these benefits?
Michelle should file an amended return, since reimbursed medical expenses do not count toward the 10% threshold.
85
Which of the following is not a characteristic of a group life insurance plan?
Individual selection of benefits
86
What type of health insurance policy states that the insurance company may not cancel the policy, but they may increase the rates on a specified class of insureds?
A guaranteed renewable policy allows the insurance company to increase rates on the policy anniversary, but it may not cancel the policy.
87
Which of the following policies is a special risk policy?
Travel accident
88
The insuring clause on the face of a life insurance policy contains all the following, EXCEPT:
Name of the beneficiary
89
An individual annuity may serve any of the following purposes, EXCEPT:
Short term savings account
90
All of the following provisions are mandatory under the uniform NAIC law, EXCEPT:
Coinsurance Provision
91
Florida insurance laws are administered by all the following, EXCEPT:
The Florida legislature
92
Mark names his wife and children as beneficiaries on his life policy. They would not be considered:
Other insureds
93
Which of the following statements is not true about a straight whole life policy?
The cash value goes to the beneficiary upon the death of the insured.
94
Which of the following is not a characteristic of a first to die joint life insurance policy?
The premiums are always a lot higher than if each life was insured separately.
95
To prevent major illness devastation, a self-employed person might consider:
A high deductible health plan in conjunction with a health savings account
96
What is the waiting period under the waiver of premium rider before the first premium will be waived?
There is usually a waiting period of 3 or 6 months once the policy owner becomes disabled before the first premium will be waived. The waiver would then continue for the duration of the disability.
97
To fall under the common disaster provision, most policies specify that the death of the primary beneficiary must occur:
30 - 90 days of the accident
98
Which of the following is a characteristic of an interest sensitive whole life policy?
Interest - Sensitive ( Current Assumption) Whole Life has flexible premiums, a guaranteed minimum death benefit, and a guaranteed minimum rate of return.
The correct answer is: All of the above
99
If death benefits are provided in a lump sum, the payment must include interest from:
The correct answer is: The date the insurer receives written proof of death of the insured
100
One of the features an insurance company can utilize to limit claims for pre-existing conditions is:
The correct answer is: A probationary period
101
If a company fails to respond to a request for reinstatement, the policy will automatically reinstate in how many days?
The correct answer is: 45 days
102
Which provision prevents an agent or a company from changing the insurance contract after it is issued?
The correct answer is: The entire contract clause
103
Susan bought an accidental death coverage for her car loan. If Susan dies as a result of an accident, what benefits will be payable?
The correct answer is: A benefit of the outstanding balance will be paid to the lender.
104
Steve bought a 20-year, $200,000 decreasing term policy in 2001 and a $500,000 whole life policy. Steve died in 2006. What were the total benefits payable to his beneficiary?
The correct answer is: $650,000
105
When Sidney passed away, it was discovered that he had always been listed as female. How did this discovery affect the policy benefits?
The correct answer is: The death benefit was decreased.
106
The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information, EXCEPT:
The correct answer is: An individual's character
107
Which of the following would NOT be considered unfair discrimination?
The correct answer is: Discrimination based on hobbies
108
Which of the following must take place in order for a policy to be in effect?
The correct answer is: All of the above
109
Jim has a life policy with a face value of $250,000 and a total of $25,000 in loans and interest outstanding on the policy. He is killed in a skiing accident. With his double indemnity rider, how much in benefits will the policy pay?
The correct answer is: $475,000
110
Edwin's group contract has a $5,000 basic hospital expense allowance with a $500 deductible and 80/20 coinsurance for a supplemental major medical expense. Edwin has a hospital bill of $4,000 and a surgeon bill of $2,000. How much does Edwin owe?
The correct answer is: $800
111
Which of the following is not an issue in which an insurance contract would normally be voided?
The correct answer is: Subrogation and representations
112
The AD&D (accidental death and dismemberment) rider provides additional benefits if:
The correct answer is: The insured loses the sight in an eye as a result of an accident
113
When the only logical beneficiary is a minor, all of the following options are available, EXCEPT:
The correct answer is: The benefits can go directly to the estate of the insured.
114
What life insurance policy provides a blend of the benefits of traditional whole life and universal life?
Interest-sensitive whole life is a mixture of traditional whole life and universal life.
The correct answer is: Interest-sensitive whole life
115
What is a provider of health care, or a group of providers of health care, that has entered into a written agreement with the insurer to provide benefits under a health insurance policy and provides reasonable access to health care providers?
Exclusive Provider Organization (EPO) is a provider of health care, or a group of providers of health care, that has entered into a written agreement with the insurer to provide benefits under a health insurance policy and provides reasonable access to health care providers.
The correct answer is: EPO
116
Which of the following is not an example of a plausible third party ownership situation?
A woman owning a policy on an ex-boyfriend would not be allowed, and consequently not be an example of a third party ownership situation.
The correct answer is: A woman that owns a policy on an ex-boyfriend
117
In Florida, what is the maximum interest rate that may be charged for late payments for individual insurance polices?
Maximum percentage rate that may be charged by an insurance company on late payments for individual insurance polices is 8%.
118
The maximum duration of a long-term disability payment is usually:
The maximum benefit for a group policy is generally age 65 or a specific number of years if the insured is disabled after a specified age.
The correct answer is: Age 65 or a specified period of time if the insured is over a specified age when disabled
119
All of the following are true concerning a single premium whole life plan, EXCEPT:
Any withdrawal from a life insurance policy is subject to tax rules in effect at the time of withdrawal if the policy value has a gain over deposits, that amount is taxable.
The correct answer is: 100% of any withdrawal is tax free
120
Who are the members of the Florida Life and Health Guaranty Association?
All member insurers must be members of the association as a condition to eligibility to transact insurance in Florida. In addition, member insurers are assessed amounts to contribute to the guaranty fund for insurer insolvency.
The correct answer is: All insurers authorized by the state of Florida
121
In Florida, insurance is regulated by how many different parties?
In Florida, insurance is regulated by 4 parties: Department of Financial Services and CFO, Commissioner of the Office of Insurance Regulation, Florida state legislature, and the Florida state court system.
The correct answer is: 4
122
A hospital indemnity plan will provide:
A hospital indemnity plan will pay a daily allowance for each day the insured is in the hospital.
The correct answer is: A specific benefit based on the number of in hospital days
123
Why would someone be assessed a tax of 20% when transferring funds from one IRA to a new IRA?
A rollover requires that funds be deposited in the new IRA within 60 days of distribution from the old IRA - or a 20% tax penalty is assessed.
The correct answer is: It was more than 60 days to complete the transfer.
124
When must an insurance agent give an applicant a copy of all sales proposals for a presentation involving replacement?
Where replacement is or may be involved, the agent will leave with the applicant the original or a copy of all sales proposals used for presentation to the applicant.
The correct answer is: After to the presentation
125
In Florida, what is the minimum number of employees for a small employer health plan to be guaranteed issuer?
In Florida, all small employer health plans must be guaranteed issue to every small employer with 2 to 50 employees.
The correct answer is: 2
126
According to the Fair Credit Reporting Act, which of the following is contained consumer reports?
Consumer reports are reports about the characteristics of an individual, including the individual's general character and reputation, employment history, living arrangements, and credit worthiness.
The correct answer is: Information concerning an individual's character
127
All of the following are mandatory provisions for health policies, EXCEPT:
Waiver of premium is an optional feature.
| The correct answer is: Waiver of Premium
128
When presenting long-term care or Medicare Supplement plans, it is necessary to provide the prospect with a:
A Shoppers Guide (Outline of Coverage) is required for many sales to senior citizens.
The correct answer is: A Shoppers Guide for the product presented
129
A group long-term disability plan may contain all of the following features, EXCEPT:
Group plans are generally designed to prevent 'over insurance'. That is why the benefit is usually a maximum of payroll not to exceed a total amount, such as 60% of pay not to exceed $7,500 per month.
The correct answer is: The benefit is not usually stated as a percent of income.
130
What is also referred to as the future increase option and can be attached to disability income policies because the benefit amount is fixed, so costs remain level?
The guaranteed insurability rider can be attached to disability income policies and costs remain level.
The correct answer is: Guaranteed insurability
131
An insured has submitted notice of loss for a medical bill to the insurance company, which has not responded in a timely fashion. Under these circumstances the insured's best course of action is to:
Under the uniform claims rules, when a company fails to furnish a claim for when they have been notified of a loss, the insured may submit proof of loss in any reasonable form, and the company is bound to accept it.
The correct answer is: Submit the proof of loss in any form and the insurance company is required to accept that and consider the claim
132
Most group contracts contain which of the following major provisions?
A typical group plan has provisions, selected by the employer, that specify coverage amounts, effective date of coverage, beneficiaries, settlement options, conversion privilege and 31 day continuation of coverage options.
The correct answer is: All of the above
133
Which of the following is not true about variable universal life policies?
Variable universal life DOES provide with the policyowner with access to cash values via policy loans and withdrawals.
The correct answer is: They have no provision for policy loans and withdrawals.
134
A couple has created a large estate during their marriage. Their tax attorney has designed a plan that will have no impact when one of the partners dies, but there will be a substantial liability when the second partner dies. An economical solution for funding the estate tax liability with life insurance is:
Survivorship life or a second to die policy would most likely fit their needs best.
The correct answer is: Survivorship life
135
Which of the following statements is not true about non-qualified retirement plans?
Taxes on a non-qualified plan can be deferred by transferring the money received in a lump sum payment into an IRA.
The correct answer is: Taxes cannot be deferred on a lump sum payment.
136
Making misleading statements to trick a policyholder into forfeiting a life policy so they will switch insurance companies is:
Twisting is knowingly making misleading representations or incomplete or fraudulent comparisons of insurance policies in order to induce a person to lapse, forfeit, surrender, terminate, retain, assign, or convert a policy in order to sell a policy for another company.
The correct answer is: Twisting
137
What type of care is nursing care and rehabilitation needed on an (occasional basis) that is performed by a medical professional under a physician's orders?
Intermediate care is nursing care and rehabilitation needed on an occasional basis, performed by a medical professional under a physician's orders.
The correct answer is: Intermediate care
138
A group plan's underwriting varies from individual plan underwriting in all of the following ways, EXCEPT:
A participant in a group plan receives a certificate.
| The correct answer is: Participants in a group receive individual policies as evidence of coverage.
139
In the claims payment provisions in a health policy, the standard time for a company to deliver a claim form once it has been notified of a loss is:
The insurance company has 15 days to provide a claim form under the uniform claims provision clause.
The correct answer is: 15 days
140
Using force or compelling a person to purchase an insurance policy is an unfair trade practice.
Coercion
141
On January 3, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on January 15. On January 20, the insurer issued the policy standard, and the producer delivers it on January 22. When is coverage effective?
Coverage begins on January 22, after the statement of good health is signed, and the initial premium is paid.
The correct answer is: January 22, after the statement of good health is signed, and the initial premium is paid.
142
Barbara allows her comprehensive major medical plan to lapse. If her policy is reinstated on March 20th and she contracts mononucleosis on March 29th, what benefits will she receive?
Upon reinstatement, accident is covered immediately, but sickness reinstatement is not covered until a 10-day waiting period has been fulfilled.
The correct answer is: None
143
An Accident and Health policy contains a Consideration clause which states:
The statement that the applicant pays the initial premium is contained in the Consideration clause.
The correct answer is: That the applicant pays the initial premium.
144
What are the two most common adjustments made during a month with a universal life insurance policy?
Each month, the cost of the death protection is deducted from the cash value, and the current interest rate is credited.
The correct answer is: Cost of death protection deducted and current interest rate credited
145
Paul has a basic medical policy. It will pay for:
Doctor visits are covered under basic medical policies.
| The correct answer is: Doctor visits
146
Which of the following statements is not true about the tax liabilities for individual life insurance policies?
Policy loans are not taxable as income because they are regarded as a debt against the policy.
The correct answer is: Policy loans are taxable as income.
147
What part of the policy directs the insurer on the recipients of benefits?
The Payment of Claims provision stipulates to whom claim payments are made.
The correct answer is: Payment of Claims provision
148
In a life policy, a statement of good health is needed when:
A statement of good health is needed when the application does not include the initial premium with the application.
The correct answer is: The application does not include the premium.
149
What part of the policy directs the insurer on the recipients of benefits?
The Payment of Claims provision stipulates to whom claim payments are made.
The correct answer is: Payment of Claims provision
150
A health policy will usually exclude losses related to all of the following, EXCEPT:
The correct answer is: Losses from an auto accident when the insured was at fault
