2-15 Final

The Patriot Act was adopted in 2001 to help

Filter illegal immigrants out of the US healthcare system
Empower American citizens to detain individuals suspected of terrorist behavior without consequence
Identify financial anomalies which may potentially uncover terrorist money laundering activities
Keep illegal immigrants out of the US workforce

The term “Compliance Date” refers to;

The date a licensee complies with an official Department request for information.
Continued Education, specifically the last calendar day of the licensee’s birth month
The effective date of an insurer appointment
The date a licensee completes their required continued education

Licensees are required to archive information pertaining premiums collected for a minimum of,

Two Years
Three Years
Five Years
Insurers, not licensees are responsible for archiving premium payment information.

How many days do licensees have to notify the DFS of a change in phone number (OR) e-mail address?

Agents are not required to update their phone number or e-mail.
20 Days
30 Days
90 Days

The Chief Financial Officer is the head of the,

Department of Insurance Regulation
Department of Financial Regulation
Department of Financial Services
Florida Banking Industry

The Department of Financial Services is responsible for overseeing all the following EXCEPT,

Unauthorized Entities
Insurance Agents & Brokers
Insurance Agencies
Domestic Insurers

The Office of Insurance Regulation (OIR) is responsible for,

Monitoring the daily activities of Insurance Agents & Agencies.
Customer Service
Distributing important insurance industry updates to licensees.
Regulating the activities of insurers.

Which of the following best expresses how insurer appointments are handled?

The DFS sends licensees a renewal notification 60 days prior to expiration.
Appointment statuses are updated in the agents e-appoint profile 60-days prior to expiration.
Appointing entities must provide the licensee with a 60-Day notice if they’re going to terminate their appointment and notify the DFS of the reason for the termination within 30-Days after the termination.
Insurers take appointment fees out of the agents’ sales and can send proof of payment by mail or email.

What is the penalty for an agent who intentionally conducts the business of insurance without proper authorization?

The agent is subject to administrative fines from the Department.
The agent is guilty of a misdemeanor and subject to administrative fines.
Guilty of a third-degree felony.
The Office of Insurance Regulations will immediately revoke the agent’s license

Which entity acts as the criminal justice agency for the Florida Insurance Marketplaces and includes the Bureau of Fire and Arson Investigations?

Department of Financial Services
Division of Investigative and Forensic Services
DFS Division of the State Fire Marshal
Division of Insurance Agent and Agency Services

Which of the following entities evaluates the financial solvency of an insurer to ensure they’re capable of paying claims?

Chief Financial Officer (CFO)
Department of Financial Services (DFS)
Office of Insurance Regulation (OIR)
Office of Financial Regulations (OFR)

A statement made by the insurance applicant which is GUARANTEED to be TRUE is called a,

Representation
Warranty
Material Statement
Absolute Declaration

Spreading harmful rumors about another individual or entity is an Unfair Business Practice referred to as,

Professional discrimination
Coercion
Defamation
Slander

Tom’s family owns a trucking company. Tom gets an insurance license to manage the policies associated with the family business. If Tom never sells policies to anyone outside of the trucking company, he be guilty of,

Controlled Business
Illegal Dealings
Unfair Competition
Tom did nothing wrong

When an agent receives a request for information from the Division of Customer Service, how long do they have to respond?

14 Days
20 Days
30 Days
The DFS Division of Consumer Service does not request information from agents.

Which of the following is NOT a regulatory responsibility of the Office of Insurance Regulations?

Attracting new insurers to Florida.
Auditing insurance agency records.
Auditing the financial soundness of insurers.
Issuing Certificates of Authority

Which of the following entities has investigators who are sworn law enforcement with the authority to detain suspects?

Office of Financial Regulation (OFR)
Bureau of Financial Investigations (BFI)
Department of Financial Services (DFS)
Division of Investigative and Forensic Services (DIFS)

The DFS Division of Consumer Services has the authority to,

Impose fines for failing to reply to a request for information.
Conduct Investigations
Suspend an agent or agency license
Terminate an insurer appointment

The DFS Division of Investigative and Forensic Services has the authority to do all the following EXCEPT,

Collect evidence
Detain people caught in the act of a crime
Investigate Insurance Fraud
Terminate an agent's appointment

Insurance related activities which pertain to; rate making, policy forms, market conduct, claims, issuance of certificates of authority, matters of insurer solvency, vatical settlements, premium financing, and administrative supervision is the responsibility of,

Office of Insurance Regulations (OIR)
Department of Financial Services (DFS)
Chief Financial Officer (CFO)
Governor

Long-Term Care Partnership programs are between the LTC Insurer and,

The Preferred Provider Organization supplying the Skilled and Intermediate nursing care.
Life insurance companies who pay for Long-Term Care via riders.
State governments to help contain Medicaid Expenses.
Private Medicare Advantage Providers.

Which of the following entities is responsible for regulating securities and other financial products offered by banks and lending institutions?

Financial Services Commission (FSC)
Office of Insurance Regulations (OIR)
Office of Financial Regulations (OFR)
National Association of Insurance Commissioners (NAIC)

The responsibilities of the State Fire Marshal belong to,

Governor
Chief Financial Officer (CFO)
Department of Financial Services (DFS)
Bureau of Investigative and Forensic Services

Which of the following best describes a Representation on an insurance contract?

Representations are the approximations made by either an agent or insurer during an insurance sales presentation and, should not be considered part of the insurance contract.
Representations are statements made by the applicant which are not considered part of the application and therefore not required to be 100% accurate.
Representations are the future investment projections contained within a variable product prospectus.
Representations are the promises insurers make within the insuring clause of an insurance policy.

Carl is a licensed insurance agent in Florida. Last Saturday, Carl was pulled over at a checkpoint and arrested for DUI. Which of the following best describes Carl’s responsibility to report the incident?

Carl’s only obligation is to hire an attorney to fight the validity of the checkpoint.
Carl must immediately notify his auto insurance company of the arrest.
Carl must notify the Department of Financial Services within 30-Days of an arrest.
Once convicted, Carl has 30-Days to report the conviction to the Department of Financial Services.

What is an Un-Affiliated Insurance Agent?

Unaffiliated insurance agents are independent agents who appointed directly with the insurer.
Unaffiliated agents are self-appointed and can sell consulting services, however, cannot sell policies or receive insurer commissions.
Being an Unaffiliated Agents is a 3rd degree felony.
Unaffiliated Agents work in an administrative capacity within the Department of Financial Services

How much notice are insurers required to give the agent if, they intend on terminating the agent’s appointment?

20 Days
30 Days
45 Days
60 Days

How long are insurance agents required to keep relevant paperwork pertaining to the policies they have sold?

Five Years
Three Years
Two Years
One Year

Which of the following statements is true about the Florida Guarantee Association (FLGA)?

Florida’s Guarantee Association is run by an elected board of directors.
The Florida Guarantee Association is headed by the Members of the Governor’s Cabinet.
The Florida Guarantee Association is under the regulatory supervision of the Florida Financial Services Commission.
One half of a percent of every insurance policy sold in Florida is deposited in the Florida Guarantee Association fund.

A regularly scheduled insurer audit by the Office of Insurance Regulations identifies financial distress. The OIR believes the insurer should be able to correct their operational problems. Which of the following best describes this insurer?

Insolvent
Impaired
Financially Incompetent
Rehabilitated

Carl is an insurance agent. To pump up sales he runs a marketing campaign that promises a $250 gift card to anyone who purchases a policy before the end of the month. This type of marketing is,

Common practice. Carl just needs to make sure the clients don’t cancel since he can’t ask for the $250 back.
Illegal. Carl must run the campaign for at least one month so he does not discriminate against prospects who purchased policies in the beginning of the month before the incentive.
You should tell Carl giving people who buy policies from him a $250 gift card is an illegal rebate.
If Carl registers his rebate with the insurer, he’s permitted to give away as much as he can afford.

When an insurer can no longer meet their financial obligations, they are deemed an,

Impaired Insurer
Insolvent Insurer
High Risk Insurer
Alien Insurer

An insurer can no long meet their financial obligations. They declare bankruptcy. Which of the following best describes the next step in the insurer bankruptcy process?

The OIR revokes their certificate of authority so they can no longer sell policies in Florida.
If the insurer is based out of Florida, the Department of Financial Services will be appointed the liquidator. All assets received will be distributed according to the insurance code.
The Florida Guarantee Association takes over the day-to-day operations to settle outstanding claims.
Call the policyholders and help them find replacement policies.

A professional insurance introduction identifies the “Who” and “What” aspects of the conversation. At minimum, a proper Agent introduction should clearly identify,

To protect against identity theft, licensees are only required to disclose personal information after the application has been completed and they’ve received an initial premium payment. The agent & insurer information is required to be on the policy summary.
To protect the consumer, licensees must identify their full name, appropriate professional designation & their intent to solicit insurance.
To properly classify prospects, agent introductions should collect all the minimum follow-up information like; their name, contact information and type of insurance they’d like to purchase.
Aside from acting in accordance with professional minimum standards, the DFS has no specific requirements for Insurance Agent Introductions.

Sliding occurs when,

Sliding happens when an insurance Agent replaces a policy with another from the same insurer to earn a commission.
Sliding occurs when an insurance agent replaces an existing policy with one from a different insurer so they can earn a new commission.
Sliding occurs when an insurance agent bundles services and presents them as an inseparable package deal.
Sliding occurs when an insurance agent pays kickbacks to un-licensed entities for referrals.

The Fair Credit Reporting Act was adopted in 1970 to,

Make sure Ratings Agencies report insurer financials fairly.
Protect consumers from false or inaccurate creditor and insurer reporting.
Protect businesses from unfair lending practices due to discrimination.
Provide consumers with a way to access credit to pay for healthcare hospital admissions.

Jethro likes to steal things for fun. His behavior would be considered a,

Pure Risk
Morale Hazard
Moral Hazard
Ethical Violation

Karen was arrested for Felony DUI. Since she put herself and others at risk, her behavior would be considered a,

Pure Risk
Morale Hazard
Moral Risk
Civil Peril

Which of the following methods of risk management is most ineffective?

Risk Avoidance
Risk Retention
Risk Transfer
Risk Reduction

Twisting occurs when,

Improperly replacing an existing insurance policy with another from the same insurer.
Improperly replacing an existing insurance policy with a policy from a different insurer.
Insurance agents embellish the value proposition associated with the policy they are selling.
Insurers burry terms and conditions deep inside of the contract.

Carl, a Licensed & Authorized Life Insurance Agent. He often helps his clients access policy cash values to purchase new policies from the same insurer. Which of the following best describes this transaction?

If Carl doesn’t have a reasonable basis for believing this transaction will be beneficial to the policy owner, he’s guilty or churning.
Normal and typical since policy owners receive favorable interest rates on policy loans and don’t need to repay them.
When an agent convinces a policy owner to access or surrender policy cash values in one policy to purchase another policy with the same insurer is considered Twisting.
This is an example of rebating and as long as Carl provides this offer to all of his clients equally, this is not an example of unfair discrimination.

When an insurance agent knowingly submits false information or omits a material fact for personal gain it called,

Defamation
Coercion
Fraud
Unfair Discrimination

Unfair Discrimination occurs when,

An insurer charges older people more for the same policy benefit.
An Insurance Agency suggest their agents work near the areas they live.
Insurers require new underwriting to reinstate a lapsed policy.
A person is negatively underwritten because of their race or religion.

Which of the following regulators is appointed to their position?

Chief Financial Officer (CFO)
Director of the Financial Services Commission
Commissioner / Director of the Office of Insurance Regulations
The Florida Fire Marshal

Which of the following statements about investigators from the Office of Insurance Regulations is NOT TRUE?

Office investigators are sworn law enforcement officers with the authority to detain suspects.
Office is responsible for reviewing the policy forms insurers use.
OIR is responsible for auditing the financial soundness of insurers.
OIR issues Certificates of Authority to insurers.

If a consumer makes a formal complaint to the Division of Consumer Services, how many days does the Agent have to respond to a request for information?

10 Days
20 Days
30 Days
31 Days

How long is Social Security Disability Insurance elimination period?

30 Days
120 Days
5 Months
12 Months

When does a person under 65 become eligible to enroll in Original Medicare?

When they have paid 40-quarters of FICA payroll taxes.
People become eligible for Medicare after they’ve been disabled for 24-months
Initial enrollment period for Medicare begins three (3) months prior to the persons 65th birthday.
To qualify for Medicare, your income must not be above a certain limit.

How many days of Skilled Nursing Care does the Medicare initial deductible cover?

20 Days
30 Days
60 Days
190 Days

Which of the following statements about Medicare Part-A is CORRECT?

Part-A provides coverage to low-income Medicaid beneficiaries.
Medicare Part-A beneficiaries receive 90-days of hospitalization each benefit period.
Everyone is required to pay a monthly premium for Part-A benefits however, people with higher incomes pay more.
Medicare Part-A provides Hospitalization, physician services & drug benefits wrapped up in one plan.

Original Medicare Part-B covers,

In-Patient Hospitalization and Long-Term Care
Prescription Drug Benefits
Physician Services
Basic hospitalization and physician services

Which of the following best describes the cost of Medicare Part-A hospitalization benefits?

The beneficiary is responsible for an initial deductible for the 1st 60-days of care.
Beneficiaries are responsible for an initial deductible for the 1st 60-days of care and a daily copayment from the 61 through 90th day.
Most people receive Medicare Part-A without paying a premium.
The copayment for Part-A hospitalization is 25% of the initial deductible.

Medicare Part-C Covers,

90-Days of in-Patient hospitalization each benefit period
Physician Services
Prescription Drugs
Medicare Part-C replaces the individual Medicare components with an all-inclusive comprehensive plan provided by PRIVATE Insurers.

Medicare Part-D Covers

90-Days of in-Patient hospitalization each benefit period
Physician services
Prescription Drugs
Supplemental benefits which compliment Original Medicare (Medigap)

Medicare Part-A covers

Prescription drugs, dental & vision.
In-Patient hospitalization.
Physicians, diagnostic testing, and a wide range of custodial services.
Long-Term Care and Hospice for seniors

Flo has been selling insurance for this progressive company for the past 25-Years. She paid FICA Payroll Taxes the entire time. Which of the following best explains Flo’s cost for Original Medicare?

Everyone is required to pay a monthly premium, an initial deductible, and copays.
People who qualify for full Social Security benefits receive Part-A without having to pay a monthly premium however, Part-B requires a monthly premium payment.
Original Medicare is free to people who qualify for Social Security OASDI benefits
Since she's paid 40-quarters of FICA Payroll taxes she'll receive Original Medicare for free.

Which of the following people has the authority to change an irrevocable beneficiary?

Only the policy-owner can change a beneficiary.
Policy-owner and their surviving spouse
The insurer if they discover the irrevocable beneficiary has no insurable interest in the insured.
Only the irrevocable beneficiary themselves can relinquish / assign away their rights to the policy benefit.

Why is Term Life insurance significantly cheaper than Whole Life and Universal Life Insurance policies?

Term policies limit death benefits to One Million Dollars or less.
Term polices only provide insurance protection while Whole Life & Universal polices also have a saving element which creates the policy cash value.
Universal life insurance provides the policy-owner with the ability to skip payments and increase benefit amounts without providing evidence of insurability.
Whole life and Universal Life policies include special features like Cost-of-Living Increases, Automatic premium loan provisions and Double Indemnity Riders.

WHY are Accidental Death and Dismemberment Riders referred to as Double indemnity Riders?

They are used in Joint Life Policies to cover a husband and wife.
The benefit is paid equally to two primary beneficiaries over a specified period.
The policy pays double when death or qualifying injury occurs under specific circumstances.
They provide benefits for two different occurrences, death, and non-fatal injuries.

What is the purpose of a Payor Provision / Rider?

It’s the portion of the contract which sets forth the premium payment and guaranteed renewal schedule.
Allows the policy-owner to identify a policy co-signer who becomes the second address responsible for premium payments
Waives the premium obligation if the payor of a juvenile insurance policy becomes totally disabled.
Allows policy-owners to add dependents to a policy after it’s gone in force.

What is the purpose of a Grace Period Provision?

Provides the policy-owner with 14-Days to review the policy and return it for a 100% premium refund.
Prevents the policy from lapsing if the premium payment isn’t made by the due date.
It’s part of the entire contract provision which identifies the length of policy elimination periods.
Grace periods begin once the application is submitted to the insurer and ends when the policy is delivered.

To qualify for SSI Disability Income benefits the person must be expected to be disabled for at least 12-months. How long do they need to be disabled to qualify for Medicare benefits?

18 Months
24 Months
36 Months
48 Months

Which of the following is not an example of unfair discrimination?

Carla encourages her agents to look for prospects in the communities they live in.
Ralph tells his agents to concentrate their efforts in single family communities because, people there make more.
An insurer doesn’t discriminate against race however, they negatively underwrite applicants who live in densely populated cities.
Giving a small gifts worth approximately $250 to a few of your biggest clients.

What type of insurance strategy provides no cash value and does not pay a benefit if death doesn’t occur?

A newly implemented whole life policy within the contestability period.
Term Life Insurance
Variable Whole Life Insurance
Endowment Policies

Which of the following is NOT a characteristic of whole life insurance?

When the policy-owner turns 100, they receive their death benefit regardless of if death occurs.
Whole Life Insurance only provides a benefit for a stated period like 10, 20 or, 30 years.
Whole Life Insurance has a cash value
Traditional Whole life premiums are calculated with the assumption the policyowner will be paying premiums until the age 100.

Which of the following best describes the structure of a Straight Whole Life policy?

Policy-owners make scheduled premium payments until the policy matures on their 100th Birthday.
Straight Whole Life provides a death benefit which is annuitized over the beneficiary’s lifetime.
Straight whole life policies are not available to the LGBTQ+ community.
Straight whole life is a smaller final expense type policy intended to cover the cost of a funeral and approximately three (3) years of expenses.

What is Limited Pay Whole Life?

Limited pay policy benefits are tied to the cash values in the policy. Limited pay policy-owners must have at least 3-years’ worth of cash value to qualify for full benefits.
b. Limited pay policies are also called Double Indemnity policies because, they pay double the benefit amount if the policy-owner dies in an accident.
Limited pay policies allow the policy-owner to shorten the duration of the premium payments. Instead of paying premiums until age 100 they choose a specified period like 10, 20 or 30-years.
Limited pay policies are the most restrictive strategies allowed by the DFS. For these policies to pay, the death or injury must have been the result of a Pure Accident.

How does a Whole Life Insurance policy become a Modified Endowment Contract?

By overfunding the cash value of whole life strategy without increasing the insurance benefit.
When a policy-owner increases the death benefits without providing evidence of insurability.
Modified Endowment Contracts are created when a policy-owner exercises their right to increase policy benefits in sync with the Consumer Price Index
Cost of Living Rider, Increasing the without increasing the insurance creates

Non-forfeiture means the cash values associated with a surrendered whole life policy belong to the,

Beneficiary as identified in the insurance policy.
Policy-owners
Applicant provided they return the policy within 14-days
Insurer

What is the 7-Pay Test used for?

The 7-Pay Test is a longer than average seven-month elimination period which dramatically reduces the cost of coverage.
A 7-month open enrollment period for sub-standard risk who have had no health issues within the last 7-quarters / 21-months.
The 7-Pay test is used to determine if a life insurance policy has been overfunded to the point of losing its favorable tax status.
The life 7-Pay test occurs when a policy-owner attempts to qualify for a premium discount.

Which of the following policies is designed to cover a couple (or) two individuals?

Joint Life Policies
Juvenile Insurance Policies
Multiple Protection Policies
Contributory Group Life Policies

When converting a term policy into whole life strategy, premiums are calculated on either the policyowners Attained Age or their Original Age. Which of these provisions would you recommend and why?

Agents shouldn’t interfere with the prospects decision making process. It’s best to let prospects decide and just deliver the application to the insurer for underwriting.
The attained age is the best option because the policyowner doesn’t need to provide evidence f insurability.
The Original Age is significantly more beneficial because, the new policy premium is based on the age you first obtained your original term policy.
Neither the attained nor original age methods have an impact on premium payments when converting a policy.

Which of the following life insurance policies has a death benefit designed to fluctuate with investment performance?

Adjustable whole life
Universal Whole Life Insurance
Traditional Whole Life
Variable Life Insurance

Carl has a Universal Life Insurance policy. He takes out a policy loan against his cash value. He dies before repaying the loan. How does this outstanding loan against his cash value impact the policy benefit?

The benefit is reduced to reflect the amount of coverage the new cash value could purchase.
The death benefit will be reduced by the amount of the outstanding loan.
The beneficiary would need to repay the loan before the insurer can pay the benefit.
The loan has no impact on the benefit.

Which of the following statements about BASIC Whole Life Insurance is not correct?

Traditional Whole Life premiums are typically paid until the policy-owner turns 100-years old.
20-Year Limited Pay policies only require the policy-owner to pay premiums for 20-years.
Premiums must be deposited into a separate account if the policy-owner wants to earn higher than average returns on the policy cash value.
Single Premium Policies are funded with one single lump-sum premium payment.

Which of the following is not a characteristic of Variable Universal Life (VUL) Insurance policies?

Death benefits and accumulated cash value is paid to the beneficiary.
Policy cash values are not guaranteed and will fluctuate in sync with investment performance.
VUL Death benefits include the insurance benefit and policy cash value.
Policy-owners assume the risk for their Self-Directed Variable investment options.

Which of the following life insurance strategies requires agents to deliver a prospectus to help explain the financial risk associated with the policy?

All life insurance companies in Florida must provide applicants with a prospectus when a completed application and initial premium is collected.
Single Premium policies require agents to deliver a prospectus so applicants can easily identify the risk associated with allocating a large single lump-sum of cash into a life insurance policy.
Variable Whole Life Insurance
Only products regulated by the Office of Financial Regulations are required to provide a prospectus to help project the future growth of the fund.

Which of the following whole life insurance strategies provides the Policyowner the potential to earn higher cash value gains without changing policy benefits or sacrificing cash values in a down market?

Ordinary Life Insurance
Adjustable Life Insurance
Indexed Universal Life Insurance
Variable Universal Life Insurance

Which of the following whole life insurance strategies are classified as a securities contract?

Indexed Life and Annuity strategies
Variable Life and Annuity products
Multiple Protection Policies
Adjustable Life Insurance Polices

Which of the following is the most basic type of term life insurance policy?

Level Term Policy
Annually Renewable Term (ART) policy
Whole Life Insurance
Adjustable Life Insurance

Which of the following life insurance strategies DOES NOT have a cash value?

Traditional Whole Life Insurance
Modified Endowment Contracts
Increasing Term Life Insurance with a Return of Premium Rider
All Life Insurance policies have cash values.

Which of the following life insurance strategies provides the opportunity for larger than average investment gains however, the investment risk is retained by the policyowner?

Variable Term Life Insurance
Variable Insurance Products
Indexed Universal Life Insurance
Variable Increasing Term Life Insurance with Return of Premium Rider

In life insurance discussion, what does the word corridor refer to?

The corridor refers to the elimination period when the policy is still in underwriting and no benefits are due if the policy is not issued.
Corridor indicates the policy-owner needs to increase their policy benefits to accommodate gains and avoid losing tax favorable treatment.
A corridor refers to the period between the premium due date and the last day of the policy grace period.
Corridors are hallways and have nothing to do with the business of insurance.

How many days is the Free Look Provision associated with a traditional life insurance issued to an individual?

7
14
30
31

Which of the following is not associated with a Reinstatement Provision?

Policy-owners may reinstate a policy without evidence of insurability if loans and premiums are paid-up.
b. Policy-owner must repay all past due premiums before the policy is reinstated.
Outstanding loans against the cash value must be paid.
No new suicide exclusion period is required.

Which component of the insurance contract identifies the amount and frequency of premium payments

Entire Contract Provision
Consideration Clause
Insuring Clause
Incontestable Clause

Which component of the life insurance contract identifies the insurers promise to pay a benefit?

Entire Contract Provision
Consideration Clause
Insuring Clause
Incontestable Clause

Which of the following prohibits insurers from adding new terms and conditions to an insurance contract/policy without the policy-owner approval?

Entire Contract Provision
Consideration Clause
Insuring Clause
Incontestable Clause

Which of the following feature of a life insurance policy allows the policyowner to pay their premium after the established due date without being in danger of the policy lapsing?

Free Look Provision
Grace Period Provision
Automatic Premium Loan Provision
Non-Forfeiture Provision

Which of the following terms/conditions associated with a life insurance policy prevents the insurer from disputing a death claim after a certain timeframe has passed?

Grace Period Provision
Incontestable Clause
Free Look Provision
Nonforfeiture Clause

The assignment provision associated with a life insurance policy defines all the following except,

Policy ownership transfer procedures.
Collateral Assignment procedures
Absolute Assignment procedures
Procedure for revoking an irrevocable beneficiary.

Which of the following best describes an annuity which has been funded with a lump sum of money and begins paying an income benefit one month after funding?

Universal Variable Immediate Annuity.
Modified Endowment Annuity
Single Premium Immediate Annuity
Single premium Deferred Annuity

Which of the following pauses policy premiums while the policyowner is suffering from a total disability?

Disability Income Rider
Grace Period Provision
Waiver of Premium Rider
Accidental Death & Dismemberment

Which of the following allows the policyowner to purchase additional amounts of insurance after the policy had been in force without, having to provide the insurer with evidence of insurability?

Waiver of Premium Rider
Guaranteed Insurability
Automatic Premium Loan Rider
Automatic Increase Rider

Which of the following protects Juvenile policies from lapsing if the adult responsible for paying the premium is disabled or dies?

Disability Income Rider
Automatic Premium Loan Rider
Payor Provision
Waiver of Premium Rider

Which of the following pays double the policy benefit if death occurs under stated conditions?

Accidental Death and Dismemberment Rider.
Payor Provision (OR) Rider
Disability Income Rider
Accelerated Benefits Provision

Which of the following is sometimes referred to as the Family (OR) Children’s Rider because, it allows the policyowner to include a family member(s) to their policy?

Other Insureds Rider
Family Plan Provision
Dependent Rider
Conversion Privilege

Which of the following Rider / Provision allows the policy-owner to receive a set monthly income to help pay for the cost of confinement in a nursing home?

Medicare Rider
Social Security Provision
Critical Care Rider
Long-Term Care Rider

Which of the following riders increases the death benefit amount by the total number of premium payments made?

Return of Premium Rider
Premium Rebate Rider
Cost of Living Rider
Accelerated Benefits Provision

Which of the following Provisions / Riders protects the policy-owner by preventing unauthorized changes to the policy contract without written approval?

Insuring Clause
Consideration Clause
Entire Contract Provision
Incontestable Clause

Which of the following sets forth the insurers promise to pay a benefit upon the insured’s death?

Insuring Clause
Consideration Clause
Entire Contract Clause
Incontestable Clause

Which of the following allows the policy-owner to review their policy and return it for a complete premium refund?

Incontestable Clause
Free Look Period
Entire Contract Provision
Consideration Clause

In the business of insurance, the term consideration pertains to…

The value given in exchange for a contractual promise.
Free Look Provision
Insuring Clause
Grace Period Provision

All the following are policy-owner rights EXCEPT…

The ability to designate (OR) change beneficiaries.
Select how death benefits are paid.
The ability to receive policy dividends.
Right to increase policy face values without providing evidence of insurability.

Which of the following provisions allows the policy-owner to reinstate a policy after it lapses for non-payment?

Re-Entry Option
Reinstatement Provision
Grace Period Provision
Insuring Clause

Which of the following provides the policyowner with the right to borrow against their policy cash value?

Automatic Premium Loan Provision
Policy Loan Provision
Waiver of Premium Rider
Cash Surrender Option

Non-forfeiture identifies,

Penalties associated with surrendering a life insurance policy early.
Minimum amount of time a policy must be in force before no termination penalties apply
Penalties for lying on an insurance policy application.
Policy-owners’ rights to their policy cash value.

What type of insurance company is owned by the policyowners?

Mutual Insurer
Stock Insurer
Reciprocal Insurer
Reinsurer

Which of the following types of insurance policies pay policyowners a dividend when the insurer has positive yearly earnings?

Reinsurer
Stock Insurer
Mutual Insurer
Loyds of London

Which of the following types of insurers provides insurance coverage to other insurers?

Mutual Insurer
Stock Insurer
Reciprocal Insurers
Reinsurers

Which of the following is a characteristic of a Reciprocal Insurer?

The policy-owners themselves insure the risk of other policy-owners
Policy-owners participate in dividends.
Policy-owners are shareholders.
They have memberships based on religious, national, or ethnic lines.

Which of the following types of insurers is a non-profit with a lodge type system that includes ritualistic work?

Reciprocal Insurers
Fraternal Benefit Societies
Lloyds of London
Reinsurers

The primary purpose of health insurance is to,

Help improve the overall health of society.
Guarantee the public has assess to Doctors and Hospitals.
Minimize the financial impact associated with caring for an injury or illness.
Provide care for individuals who have experienced an injury or illness.

The concept of risk pertains to the “uncertainty’ associated with losses. What type of losses will an insurer most likely not cover?

Pure Risk like those associated with injuries obtained in a random accident.
Speculative Risk where both a chance for gains and losses exists.
Moral Hazards which pertain to personal bad habits like illegal drug use.
Injuries sustained in extreme situations the insured chose to participate in.

When a person demonstrates an indifference to their personal wellbeing, their deemed a,

Moral Risk
Morale Hazard
Physical Hazard
Speculative Hazard

If an individual were to have a drug or alcohol addiction, their behavior would deem them a,

Moral Hazard
Moral RIsk
Morale Hazard
Pure Risk

What is the name of the statistical concept insurers use to predict the likelihood of an accident, illness, or death occurring within a large random cross section of the population?

Mortality Tables
Law of Large Numbers
Cost of Living index
The Law of Probability

The purpose of disability Income Insurance is to,

Protect employers against having to pay the income of employees injured on the job.
Pay the full salary of a disabled individual for up to 6-months, thereafter the policy will only pay up to 50% for the remainder of the individuals’ disability.
Pay household expenses when a primary breadwinner becomes disabled due to a sickness or work-related injury.
Provide a stated amount of income over a predetermined timeframe in the event the insured cannot work due to a disabling illness or injury.

Which of the following best describes the rationale behind how disability income benefit amounts are calculated for employees?

Disability income benefits mirror the insureds yearly salary minus any applicable premium payments which may be due.
Disability income benefits represent only a fraction (percentage) of the insured’s yearly income.
Disability income is purchased in increments like life insurance and therefore, the insured can purchase as much income benefits as they can afford.
Disability income benefits pay typically up to 60% of the yearly salary to the disabled individual and pays the remaining 40% to the employer to compensate for the cost of hiring temporary labor.

Jones is interest in obtaining Disability Income Insurance however, he has an extremely hazardous profession which deems him uninsurable. What type of recommendation or advice could you offer Mr. Jones?

Suggest Mr. Jones opens a low-risk side business and apply for coverage using the new employment classification.
Sell Mr. Jones a life insurance policy which provides living benefits to beneficiaries disabled due to illness or injury.
Suggest a Non-Occupational Disability Income Policy which excludes benefits for disabilities incurred while on the job but, does pay benefits for non-work-related disabilities.
It’s illegal for a Disability Income Insurer to discriminate against a person because of occupational hazards.

Which of the following policy types is the primary form of pure accident coverage?

Worksite policies
Medical Expense Insurance
Accidental Death and Dismemberment
Disability Income

Carla has an Accidental Means Provision on her disability income insurance policies. She goes to Hawaii and jumps off a popular diving cliff into the surf below. Unfortunately, she lands awkwardly and is permanently paralyzed. Which of the following statements about Carla’s policy is true?

Her policy will pay full income benefits for two years and thereafter, benefits will be reduced to 50% of her annual income until her social security benefits kick in.
Once she’s deemed totally disabled, full income benefits begin on the fourth month.
Disability benefits wouldn’t be payable since it wasn’t a job-related injury.
Disability benefits would most likely not be payable since the injury was a result of a conscious decision Carla made and not an unexpected accident outside of her control.

What type of coverages reimburses policyowners for cost associated with obtaining medical care?

Original Medicare
Critical Illness policies
Basic Medical Expense Insurance
Health & Disability Insurance

In which method of determining surgery benefits does an insurer assign points to surgical procedures, instead of a fixed dollar amount.

Surgical Schedule
The Reasonable & Customary Approach
The Relative Value Scale
The Market-Share Approach

Which type of Medical Expense Plan reimburses the insured for either expenses not included in their Basic Medical Expense plan or takes over once Basic plan limits are exhausted?

Major Medical Expense
Supplementary Major Medical
Comprehensive Major Medical
Managed Care

Comprehensive Major Medical plans cover virtually all types of medical expenses from hospital, physician and surgeons to physical therapy, laboratory services & medical supplies. What strategies do insurers utilize to help minimalize frivolous claims and keep premiums down.

Deductibles & Coinsurance
Benefit Limits
Managed Care Case Managers
Facility Expense Limits

Jones has a Comprehensive Major Medical plan. If he were to obtain services through his insurer, he’d be responsible to pay the 1^st $500 of the procedure regardless of the procedures cost. What type of deductible strategy does Mr. Jones’s plan utilize?

Integrated Deductible
Comprehensive Deductible
Corridor Deductible
Flat Deductible

Mary has a Major Medical policy. Her policy states that she is responsible for paying an initial deductible of $1,000. Only thereafter, will her insurer pay 75% of her covered expense. In this type of agreement Ms. Mary is liable for the remaining 25% of the bill. The 25% Ms. Mary is required to pay is called,

Coinsurance
Co-Payment
Integrated Deductible
Installment Payment

Which of the following medical expense strategies provides a specified daily, weekly, or monthly payment based in the number of days the insured is hospitalized?

Limited Risk Policies
Basic Hospital Expense
Comprehensive Major Medical Expense Policies
Hospital Indemnity (AND) Fixed-Rate policies

Which of the following is a characteristic of Health-Maintenance Organizations?

They operate on a Fee-For-Service-Rendered basic, not on a pre-paid basis.
They operate on a reimbursement model which requires the subscriber to either, pay for services rendered up front and submit charges to the insurer (OR) utilize their right of assignment.
They are known for stressing preventative care with the intention of minimizing unnecessary hospital admissions and duplication of service.
When the insured receives care out-of-network, they incur higher cost and become responsible for submitting claim forms prior to receiving a benefit.

Once a Medicare Supplement policy is delivered, how long does the policyholder have to return it for complete premium refund?

10 Days
14 Days
30 Days
31 Days

Which of the following is a characteristic of a Preferred Provider Organization?

They operate on a Fee-For-Service-Rendered basic, not on a pre-paid basis.
They operate on a reimbursement model which requires the subscriber to either, pay for services rendered up front and submit charges to the insurer (OR) utilize their right of assignment.
They are known for stressing preventative care with the intention of minimizing unnecessary hospital admissions and duplication of service.
When the insured receives care out-of-network, they incur higher cost and become responsible for submitting claim forms prior to receiving a benefit.

Which of the following is a characteristic of a Point-Of-Service-Plan?

They operate on a Fee-For-Service-Rendered basic, not on a pre-paid basis.
They operate on a reimbursement model which requires the subscriber to either, pay for services rendered up front and submit charges to the insurer (OR) utilize their right of assignment.
They are known for stressing preventative care with the intention of minimizing unnecessary hospital admissions and duplication of service.
When the insured receives care out-of-network, they incur higher cost and become responsible for submitting claim forms prior to receiving a benefit.

Which of the following government insurance programs is designed to assist low-income and disabled individuals regardless of age?

Medicare
Medicaid
Social Security
State Welfare

Mary suffers severe injuries in an accident and as a result, her physician estimates the recovery process to take at least 15 months. How long must Mary wait before she’ll begin receiving Social Security Disability Income Benefits?

3 Months
5 Months
6 Months
12 Months

Which of the following does NOT provide healthcare benefits?

High Deductible Health Plans (HDHP)
Health Savings Account (HSA)
Supplementary Major Medical
Limited Risk Policies

Wu has a basic hospital/surgical expense policy which pays a hospitalization benefit of $60 per day (30-Day maximum) and $750 in miscellaneous charges. While rock climbing, Mrs. Wu suffers a severe broken leg which requires surgery. Her plan basis surgical benefits on a schedule approach assigns $550 to surgical expenses despite the typical cost for this procedure in this area is $850.

Calculate how much Mrs. Wu will be required to pay on this occurrence if she incurred the following expenses.

$90 per day (6-Days)
$875 (Surgical Procedure)
$700 (Miscellaneous Expense)

$405
$455
$505
$605

Group Health Insurance contracts are agreements between which two (2) entities?

The Employer and the Employee
The Employer and the Insurer
The Insurer and the Employee
The Insurer, Employer and Employee

What is the definition of an “Natural Group”?

An employer group where none of the participants has a definable pre-existing condition.
A contributory group where the employer utilizes payroll deductions to pay the employees portion of the healthcare expense.
A group which has not been created for the sole purpose of obtaining healthcare.
A group where only voluntary basic medical plans are available.

When an employer (Or another eligible group) pays 100% of the insurance premium, the policy is considered,

Contributory
Noncontributory
An Eligible Group
A Natural Group

Lang is a healthy individual with no pre-existing conditions who works for a software company with over 500 employees. As with most full-time employees, Mr. Lang participated in the group healthcare plan sponsored by his employer. Through no fault of his own, the company decided to downsize and as a result, Mr. Lang was laid-off. Since Federal Laws protect individuals who have been fired for reasons other than gross misconduct, which of the following is true.

Mr. Lang could utilize the Conversion Privilege to transform his group insurance policy into an individual policy.
Mr. Lang may continue his group coverage for 18-months under the Consolidate Omnibus Budget Reconciliation Act of 1985 (COBRA).
Mr. Lang would lose comprehensive group coverage and only voluntary benefits would remain until canceled.
Mr. Lang would automatically qualify for an additional 36 months of group coverage the protections granted by the “Consolidate Omnibus Budget Reconciliation Act of 1985” (COBRA).

Other than Long-Term Care insurance, what other healthcare strategies provide benefits for individuals who have lost their ability to remain self-sufficient in society and perform the basic activities of daily living?

Original Medicare
Medicaid
Basic Intermediate Care
Disability Income Insurance

Insurance policies which typically provide a one-time lump sum benefit if the insured were to be diagnosed with a critical illness are called,

Fixed-Rate Policies
Limited Risk Policies
Basic Medical Expense Policies
Stop-loss policies

A type of medical expense coverage which provides a specific/specified daily, weekly or monthly payment based on the number of days the insured is hospitalized is called,

Hospital Indemnity OR Fixed-Rate Policy
Basic Hospital Expense
Health Reimbursement Policy
Supplementary Major Medical

The National Association of Insurance Commissioners (NAIC) established 12 mandatory policy provisions to protect the best interest of the insured. Which of the following policy provisions is designed to protect the insurer, not the insured?

Entire Contract Provision
Policy Reinstatement
Time limit on certain defenses
Illegal Occupation

Which of the 12 mandatory provisions protects the policyowner by ensuring, only the terms and conditions contained within the contract are relevant to the agreement, no other conditions may be “Incorporated by Reference” and no changes can be made to the policy once it’s been issued?

Entire Contract Provision
Notice of Claim
Payment of Claims
Legal Action

Assume an insurer does not submit payment for services rendered despite the fact the insured has properly submitted a notice of claim, claim forms and proof of loss. How long must the insured wait before they’re allowed to initiate legal action against the insurer?

30 Days
45 Days
60 Days
90 Days

Jessie is insured by XYZ Insurance however, he misrepresented his age on his application. Two years later after the Time Limit on Certain Defenses had expired, Jessie suffered an injury and submitted all relevant paperwork. It was then, at the time of the claim when the insurer realized Jessie was 3 years older than he stated on his application.

How would the insurer most likely handle this issue?

Since the Time Limit on Certain Defenses had lapsed, the insurer is responsible for all obligations as agreed, even if the insured lied on their application.
The insurer can adjust the benefit payable. The benefit would be adjusted down to reflect the amount of insurance the insured’s premium would have covered if they properly represented their age.
Time Limit on Certain Defenses is rendered null/void therefore, no benefit is due.
The insurer will deduct the missing premium from the benefit and payout the reduced amount as agreed.

In Florida, a health insurance policy may be issued on an individual or structured to include eligible family members like a spouse or dependent children up to the age of 30. Which of the following scenarios best describes the options available to a dependent child no longer eligible for coverage under their parent’s policy?

Typically, the insurer will provide the non-eligible dependent an opportunity to enroll onto a wholesale health plan at a discounted rate.
The non-eligible dependent would be required to apply for coverage and be subjected to underwriting like all other new applicants for coverage.
The Conversion Privilege for Dependents gives non-eligible dependents an opportunity to obtain coverage without providing evidence of insurability.
The non-eligible dependent would be able to utilize the Grace Period Provision within the original health insurance contract to obtain coverage without proving evidence of insurability.

James has a disability income policy. His policy prohibits the insurer from increasing his premium and canceling his policy for reasons other than non-payment of premium. What type of provision, rider, or clause, could grant James this type of ongoing protection?

Disability Income Protection Rider
The renewability provision within a Guaranteed Renewable Policy
The guaranteed renewable provision within a Non-cancelable Policy
No provision, rider or clause restricts the insurer from both, canceling a policy and increasing premiums.

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