1. An employer pays $90 of a $100 group disability premium, and the employee pays the other $10. The disability benefit under the plan is $1,000/month. If the employee becomes disabled and receives the full benefit, how much, if any, of the monthly benefi
900
2. Basic surgical expense policies generally provide coverage for all of the following EXCEPT
miscellaneous expenses, such as lab fees and X-rays
3. When surrendering whole life for a reduced paid-up policy, the cash value of the new policy will:
mature at age 100
4. On August 9, Albert made an application for life insurance that his agent submitted a day later without a premium payment. On August 21, the insurer issued the policy as applied for and on August 24, the agent delivered the policy and collected the ini
August 21
5. Jackie and her husband, Bruce, have an annuity that pays them $2,200 a month. Under a joint and full survivor payout option, if Jackie dies first which of the following will occur?
Bruce will receive payments for the rest of his lifetime.
6. All of the following statements regarding policy replacement are correct EXCEPT
premiums for replacement policies are generally lower than premiums for the existing policy they replace
7. Which of the following is CORRECT regarding taxation of life insurance premiums?
Premium for life insurance used to secure a business loan is tax-deductible.
8. Which is not a primary premium factor?
dividends
9. All of the following are characteristics of group health insurance plans EXCEPT
the parties to a group health contract are the employer and the employees
10. Assume four individuals, all age 30, purchase the following life insurance policies. If all policies are still in force ten years later, who will have the largest cash value in his policy? Bob $100,000 straight whole life Dennis $100,000 life paid-up
Ralph
11. Roy has a renewable five-year $100,000 decreasing term policy. Which of the following statements about the policy's renewability is CORRECT?
The renewal premium will be higher than the original premium.
12. Health maintenance organizations are known for stressing the provision of
preventive care
13. A universal life policy expires when
the cash value becomes too small to pay the cost of insurance
14. As it pertains to group health insurance, COBRA stipulates that
group coverage must be extended for terminated employees up to a certain period of time at the employee's expense
15. Which of the following statements regarding policy assignments is correct?
A policy that has named an irrevocable beneficiary cannot be assigned without that beneficiary's agreement.
16. Jane, age 35, has just purchased a 20-pay whole life policy. When she turns 55, she will
cease paying premiums
17. The time of payment of claims provision requires that
claims must be paid after the insurer is notified and receives proof of loss
18. The State Guaranty Association
guarantees claims are paid if an insurer becomes insolvent
19. Which of the following is NOT included in the definition of "transacting insurance"?
underwriting a policy
20. Which of the following statements regarding the needs approach in determining the appropriate amount of life insurance is CORRECT?
The needs approach considers long-range financial goals for the family, such as retirement and college planning.
21. The period of time immediately following a disability during which benefits are not payable is the
elimination period
22. All of the following are elements of an insurable risk EXCEPT
the loss must be catastrophic
23. Which of the following describes equity index contracts?
Time frames for the product, such as five and seven years, are common.
24. Which of the following is true about elimination periods and/or probationary periods in disability income policies?
An elimination period follows the start of a disability.
25. All of the following statements about Medicare supplement (Medigap) policies are correct EXCEPT
Medigap policies cover the cost of extended nursing home care
26. Workers' compensation covers income loss resulting from
work-related disabilities
27. Which of the following is an objective of Florida's Long Term Care Partnership Program?
To contain the growth of public expenditures by encouraging consumers to purchase long-term care coverage
28. Mr. Ritchie, a taxidermist, is insured under a business overhead expense policy that pays maximum monthly benefits of $2,000. Mr. Ritchie becomes disabled. His actual monthly expenses are $2,700. The monthly benefits payable under his policy will be
$2,000
29. Mary is enrolled in Medicare Parts A and B. She is hospitalized for two weeks and sent home. Four weeks later she is readmitted to the hospital for a separate issue and stays in the hospital for a week. Under her Medicare benefits, which of the follow
She will pay neither a deductible nor a daily coinsurance amount.
30. Which of the following oversees the Bureau of Unclaimed Property?
Chief Financial Officer
31. Which of the following legal terms indicates that a life insurance contract contains the enforceable promises of only one party?
Unilateral
32. Which of the following statements regarding the National Association of Insurance Commissioners (NAIC) is correct?
the NAIC promotes uniformity in state insurance laws and regulations.
33. With regard to life insurance, all of the following statements are correct EXCEPT
insurable interest must be maintained throughout the life of the contract
34. Which of the following is an optional health insurance policy provision?
change of occupation
35. The amount of money an insurer sets aside to pay future claims is called a(n)
reserve
36. Which of the following is a standard optional provision for health policies?
Misstatement of age
37. When a group disability insurance plan is paid entirely by the employer, benefits paid to disabled employees are
taxable income to the employee
38. How are accumulation unit gains taxed?
Gains in accumulation units are not taxed
39. Major risk factors in health insurance underwriting include all of the following EXCEPT
marital status
40. Which of the following is known for stressing preventive health care?
Health maintenance organizations
41. Jerry has just purchased a life insurance policy and is taking time to review the policy's provisions. He will find that his policy excludes death by all of the following means EXCEPT
accident
42. Which of the following would NOT apply when a life insurance policy is reinstated after a lapse?
A new suicide exclusion period goes into effect.
43. Florida law requires annual reports for variable products be given to consumers and that the reports contain:
Dollar value of each unit
44. Florida law requires that all of the following be coverages be offered in health insurance policies EXCEPT
Coverage for women who have had a breast biopsy that reveals breast cancer
45. Which of the following is true regarding the Florida Life and Health Guarantee Association?
The Association is funded by insurance company assessments.
46. How are annuity withdrawals taxed?
LIFO
47. All of the following are mandatory provisions in health insurance policies EXCEPT
misstatement of age
48. A life insurance company is organized in Orlando where it maintains its home office. In Florida, the company is classified as a
domestic company
49. After a family's breadwinner dies, the "blackout period" generally can be defined as the period
that begins with the youngest child turns 16 and ends with the surviving parent retires
50. Which renewability provision allows an insurer to terminate a health insurance policy on any date specified in the policy and to increase the premium for any class of insureds?
Optionally renewable
51. Which of the following accurately describes the reimbursement approach?
Insurance companies reimburse insureds for hospital and doctor expenses.
52. Which of the following is CORRECT?
The MIB assists in the underwriting and claims of life insurance.
53. What formula is used to determine what portion of an annuity payout is taxable?
amount invested divided by expected return
54. What is the time limit that most insurers impose for reinstating a surrendered policy?
three years or as long as seven years
55. The surviving spouse may begin receiving retirement benefits as early as what age?
60
56. Which of the following constitutes an insurable interest?
The policy owner must expect to suffer a loss when the insured dies or becomes disabled.
57. All of the following approaches are used by insurers to determine benefits payable under basic surgical expense insurance EXCEPT
traditional net cost method
58. What constitutes "consideration" for a life insurance policy?
Application and initial premium
59. Which of the following may qualify as sliding:
Adding additional coverage to a policy and indicating that it is included in the original premium.
60. All of the following statements about variable annuities are correct EXCEPT
An annuitized variable annuity will provide a level income amount to the annuitant for life.
61. What does the Buyer's Guide do?
It helps buyers choose the most suitable plan.
62. Randy's premium payment was due on June 1, but the company did not receive it until June 28. Which policy provision kept Randy's policy from lapsing?
Grace period
63. Which of the following best describes a vested employee?
A former employee who has been allowed to keep all of the employer's contributions, typically due to continued employment with that employer for a number of years.
64. Under the Affordable Care Act, which of the following may an insurance company increase and still maintain grandfathered status for a health insurance plan?
premium amount
65. A child may receive Social Security benefits after a parent dies until any of the following ages EXCEPT
16
66. Which of the following is NOT a typical type of long-term care coverage?
Hospice care
67. Which of the following would probably NOT be considered in underwriting a health insurance risk?
Marital status
68. Jack bought $200,000 of five-year level term insurance. Which of the following is correct of Jack's coverage?
The policy will pay $200,000 tax free if Jack dies within five years.
69. Which is the purpose of insurance?
It spreads financial risk over a large group.
70. Individual health insurance policies are typically written on which basis?
Nonparticipating
71. Under the notice of claims provision of a health insurance policy, a policy owner must provide notification of loss within a reasonable period of time, usually
20 days after an occurrence or a commencement of a loss
72. With regard to insurable risks, which of the following statements is NOT correct?
An insurable risk must involve loss that is within the insured's control.
73. Beth's health insurance policy contains a provision that allows her to renew coverage up to age 65. However, the policy also states that should Beth lose her job, the insurance company will cancel the policy, regardless of Beth's age. In terms of rene
Conditionally renewable
74. A licensed agent legally represents
the insurer
75. Under which of the following beneficiary designations would a policy owner be limited to exercising rights which are only consented by the beneficiary?
irrevocable
76. Bill's medical expense policy states that it will pay him a flat $50 a day for each day he is hospitalized. The policy pays benefits on which basis?
Indemnity
77. Which of the following insurance companies is owned by its policyholders?
Mutual insurer
78. By most insurers' definitions, "partial disability" is the
inability of the insured to perform certain important duties of his or her job
79. Which of the following would NOT be able to contribute to a Traditional IRA?
Darlene, age 72, a flight attendant with a Roth IRA.
80. Alice has a major medical policy with a $500 deductible and an 80/20 coinsurance provision. If she receives a hospital bill for $7,500 of covered expenses, how much of that bill will she have to pay?
$1,900
81. Assume a home catches fire after it is struck by lightning and the fire destroys the structure and contents. By insurance definition, the fire is the
peril
82. A reinsurer
assumes a portion of the risk from another insurer
83. A company with three partners is considering a buy-sell plan. All of the following statements pertaining to buy-sell plans and this partnership are correct EXCEPT
no benefits will accrue to the partnership from the buy-sell agreement until one of the partners dies
84. A waiver of premium provision may be included with which kind of health insurance policy?
Disability income
85. Which definition of total disability creates the highest premium for the insured?
Own occupation
86. Which of the following statements regarding morbidity tables is correct?
They indicate the average number of individuals from a given group who will become disabled.
87. A life insurance company organized in Mississippi, with its home office in New Jersey, is licensed to conduct business in Wisconsin. In Wisconsin, this company is classified as a(n)
foreign company
88. All of the following statements are true of preferred provider organizations EXCEPT
PPOs operate on a prepaid basis
89. After a week in the hospital, Lola receives a bill for $9,000 of covered expenses. Her major medical policy has a $250 deductible and a 75/25 coinsurance feature. How much of the total expense will Lola's policy cover?
6,563
90. Michael has a $50,000 life insurance policy and has named Jackson as the only beneficiary. They are both killed together instantly in a car accident. The Uniform Simultaneous Death Act states that the proceeds will be paid to whose estate?
Michael's estate
91. Which of the following statements about assignment is NOT correct?
The insured must approve an assignment.
92. All of the following benefits are available under Social Security EXCEPT
welfare benefits
93. Which of the following types of agent authority is specifically set forth in writing in the agent's contract?
Express
94. Statements made by an applicant for life insurance that are guaranteed to be true are
warranties
95. In which of the following situations would the premium payor of a life insurance policy be able to deduct the premium payments for tax purposes?
Leland, a local board member of the United Way, assigns his $25,000 whole life policy to that organization, but continues to make the premium payments.
96. Which provision of a life insurance policy states that nothing in the policy may be "incorporated by reference"?
Entire contract clause
97. The minimum number of persons to be insured under a group health insurance plan is established by
state law
98. Mr. A purchased a Hospital Indemnity policy to protect against catastrophic medical expenses. This would be an example of:
risk transference
99. Basic hospital expense insurance provides coverage for all of the following EXCEPT
physician services
100. Frank is the insured in a $40,000 five-year level term policy issued in 2000. He died in 2006. His beneficiary received
nothing