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FLORIDA HEALTH AND LIFE
INSURANCE EXAM ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) | ALREADY
GRADED A+
The Accidental Death and Dismemberment (AD&D) provisions in a life insurance policy would pay additional benefits in the insured ----- CORRECT ANSWER------------is blinded in an accident N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? -----CORRECT ANSWER------------Exclusion S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? -----CORRECT ANSWER------------$50, Which of the following best describes a contingent beneficiary ----- CORRECT ANSWER------------Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured. J chooses a monthly premium payment mode on his Whole life insurance policy. Which of these statements is correct -----CORRECT ANSWER------- -----The gross premium is higher on a monthly premium mode as compared to being paid annually
Which statement is true regarding minor beneficiary -----CORRECT ANSWER------------Normally a guardian is required to be appointed in the beneficiary clause of the contract. Which premium schedule results in the lowest cost to the policyownwer? --- --CORRECT ANSWER------------Annual If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who dies first, where are the death proceeds to be directed under the uniform Simultaneous Death Act? -----CORRECT ANSWER------------Insured's contingent beneficiary Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? -----CORRECT ANSWER------------All proceeds are income tax free in the year they are received. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? -----CORRECT ANSWER------------Life income The common Disaster clause provides that if both the insured and the sole named beneficiary where to die in a common accident, which of the following is true? -----CORRECT ANSWER------------The clause provides the payment of proceeds to the insured's estate
What action should a producer take if the initial premium is NOT submitted with the application? -----CORRECT ANSWER------------Forward the application to the insurer without the initial premium All statements are true regarding the underwriting process EXCEPT ----- CORRECT ANSWER------------AIDS and HIV virus exams can be conducted in a discriminatory fashion. Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? ----- CORRECT ANSWER------------Risk Classification A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision -----CORRECT ANSWER------------Payor Provision Which of the following actions is NOT possible with Universal Life policy ----
- CORRECT ANSWER------------Premiums may be applied as a credit against income tax A life policy with death benefit and cash value that can fluctuate according to performance of its underlying investment portfolio is referred to as ----- CORRECT ANSWER------------Variable life Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? -----CORRECT ANSWER--------- ---Variable life
P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own. -----CORRECT ANSWER------------Endowment at Age 70 All of these are characteristics of Adjustable life policy, EXCEPT: ----- CORRECT ANSWER------------face amount can be adjusted using policy dividends J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? -----CORRECT ANSWER------------ 20 - pay life What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? -----CORRECT ANSWER------------Family maintenance Policy K age 45, and his wife, age 43, have three children. They purchase a Family Policy that covers K's wife to age 65. All of these situations will pay a death benefit EXCEPT: -----CORRECT ANSWER------------K's wife dies at age 66 Which statement is correct regarding the premium payment schedule for whole life policies? -----CORRECT ANSWER------------Premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured.
What does a Face Amount Plus Cash Value Policy pay upon the insured's death? -----CORRECT ANSWER------------Face amount plus the policy's cash value N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? -----CORRECT ANSWER------------Claim will be denied What provision in a life insurance policy states that the application is considered part of the contract? -----CORRECT ANSWER------------Entire Contract provision B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will -----CORRECT ANSWER------------pay the amount that the premium would have purchased at the correct age K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT -----CORRECT ANSWER------------K will forfeit the right to use the automatic loan provision upon reinstatement Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? -----CORRECT ANSWER------------Payor clause
Which of the following is an example of a nonforfeiture option? ----- CORRECT ANSWER------------Reduced paid- up option K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Divided Option should she chose? ----- CORRECT ANSWER------------Paid-Up Additional Insurance A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? -----CORRECT ANSWER------------waiver of premium A cost of living rider gives the insured -----CORRECT ANSWER------------ additional death benefits B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes? -----CORRECT ANSWER------------Interest only All of these statements about the waiver of premium provision are correct, EXCEPT: -----CORRECT ANSWER------------Insured must be eligible for social security disability of claim to be accepted. Whose life is covered on a life insurance policy that contains a payor benefit clause -----CORRECT ANSWER------------Child
Which of these actions should a producer take when submitting an insurance application to an insurer? -----CORRECT ANSWER------------ Inform the insurer the relevant information not included on the application T is given a receipt after completing a life insurance application and paying the initial premium. Under this Situation T's coverage is -----CORRECT ANSWER------------conditional, depending on the insurer's underwriting guidelines Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? -----CORRECT ANSWER------------Policy was returned within the free-look period, premium will be fully refunded Life insurance companies are required to establish and maintain a anti- money laundering compliance program according to which federal regulation? -----CORRECT ANSWER------------USA PATRIOT Act A life insurance application must be signed by all these EXCEPT ----- CORRECT ANSWER------------Beneficiary T cash surrenders a recently-issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red- flagged for violation of -----CORRECT ANSWER------------anti-money laundering rules
on January 8, an applicant filled out an application of a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective -----CORRECT ANSWER------------January 26 Before a life insurance policy is issued, which of these components of the contract is required? -----CORRECT ANSWER------------Applicant's signature on application Before a life policy is issued, which of these contract elements is necessary? -----CORRECT ANSWER------------A signed application by the prospect P is a producer who notices 5 questions on a life application were not answered. What actions should P take? -----CORRECT ANSWER------------ Set up meeting with the applicant to answer the remaining questions. An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be -----CORRECT ANSWER------------converted to an individual permanent policy at an individual rate Which of the following statements about non contributory employee group life insurance is FALSE? -----CORRECT ANSWER------------A minimum number of employees is required to participate
what type of group insurance plan involves employees sharing the cost? --- --CORRECT ANSWER------------contributory plan N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? ----- CORRECT ANSWER------------Fixed Deffered A contract owner terminates an annuity before the income payment period begins. The owner will the receive -----CORRECT ANSWER------------ current contact surrender value T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? -----CORRECT ANSWER--------- ---Life Annuity with Period Certain How does an indexed annuity differ from a fixed annuity? -----CORRECT ANSWER------------Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index P, aged 50, purchased an annuity that P will fund with $500/month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? -----CORRECT ANSWER------------ Deffered
K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase? -----CORRECT ANSWER------------Single premium Immediate Joint with Survivor Annuity S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? -----CORRECT ANSWER------------Single Premium T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company -----CORRECT ANSWER------------does NOT have to make any further payments An immediate annuity consists of a -----CORRECT ANSWER------------ Single Premium Variable annuities may invest premiums in each of the following, EXCEPT: -----CORRECT ANSWER------------Insurer's corporate business account What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? -----CORRECT ANSWER------------ Primary Insurance amount (PIA)
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? -----CORRECT ANSWER------------50% At the age of 45, an individual withdraws $50,000 from his Qualified Profit- Sharing Plan and then deposits this amount into a personal savings account. This action would result in -----CORRECT ANSWER------------ Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified plan. When funds are shifted straight from one IRA to another IRA, what percentage of the tax s withheld? -----CORRECT ANSWER------------none What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan ----- CORRECT ANSWER------------ 100 In an individual retirement account (IRA), rollover contributions are ----- CORRECT ANSWER------------Not limited by dollar amount Which of these retirement plans can be started by an employee, even if another plan is in existence? -----CORRECT ANSWER------------Individual Retirement Account (IRA) What type of employee welfare plans are not subject to ERISA regulations - ----CORRECT ANSWER------------Church plans
According to Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? ------CORRECT ANSWER------------31 days G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? ------CORRECT ANSWER------------10 years E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? ------ CORRECT ANSWER------------F The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for: ------CORRECT ANSWER------------health information What do Dread Disease policies cover? ------CORRECT ANSWER------------ A specific disease or illness When an insurance application is taken by a producer, which of these statements is true? ------CORRECT ANSWER------------Any changes made on the application require the applicant's initials
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: ------CORRECT ANSWER------------P only Which of the following is considered an accurate statement of an unfair trade practice? ------CORRECT ANSWER------------Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company Which of the following is an example of an Unfair Trade Practice? ------ CORRECT ANSWER------------Coercison The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: ------CORRECT ANSWER------------protect the producer Which of these actions should a producer take when submitting an insurance application to an insurer? ------CORRECT ANSWER------------ Inform insurer of relevant information not included on the application A Health Reimbursement Arrangement MUST be established: ------ CORRECT ANSWER------------by the employer
If an individual has an Accidental Death and Dismemberment policy and dies, and autopsy can be performed in all these situations, EXCEPT: ------ CORRECT ANSWER------------When the state prohibits this by law P is a producer who notices 5 questions on a life application were not answered. What actions should P take? ------CORRECT ANSWER-----------
- Set up a meeting with the applicant to answer the remaining questions A disability elimination period is best described as a: ------CORRECT ANSWER------------time deductible Which type of insurance company allows their policyowners to elect a governing body? ------CORRECT ANSWER------------Mutual Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE? ------CORRECT ANSWER------------Each partner owns a $500,000 policy on their partner's life N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? ------CORRECT ANSWER------------Exclusion A policyowner's rights are limited under which beneficiary designation? -----
- CORRECT ANSWER------------Irrecovable
