Pearson vue insurance test

Under a Graded Premium policy, the premiums

Are lower during the policies early years

Which of the circumstances is a business disability buy-sell policy designed to help in the sale of business.

Business owner becoming disabled

A life insurance policy owner may sell their policy to a __________ in order to receive a percentage of the policy's face value.

Viatical settlement provider

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?

Fixed deferred

What is the primary factor that determines the benefits paid under a disability income policy.

Wages

This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied

Common accident deductible

What is the consideration given by a insurer in the consideration clause of a life policy?

Promise to pay a death benefit to a named beneficiary

Why is an applicants required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicant's knowledge

Which of these statements about guaranteed insurability option rider is not trye?

Evidence of insurability is required when the option is exercised

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

$25,000

Medicaid was designed to assist individuals who are

Below a specific income limit

K made a fraudulent statement on her health insurance policy application. In the event of a claim on this policy, the insurance company is required to pay

Nothing

An application for Medicare Supplement coverage may NOT be denied by the insurer if the application was submitted within ________ month(s) after the applicant reaches the age of 65.

6

A "reimbursement policy" pays what amount of covered Long-term care expenses?

Actual covered expenses up to the daily maximum

An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$6,000

Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?

Grace period

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life income

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified whole life

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Disability income

Which type of policy benefits to a policyholder covered under a hospital expense policy?

Reimbursement

The amount of monthly disability benefits payable under Social Security is affected by which of the following factors?

Amount of the benefits available from other sources

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the suicide clause of the policy

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

20 days

How does group insurance differ from individual insurance?

Premiums are lower

How can an agent-in-charge have more than one location?

Only if the agent in charge is present when insurance activity occurs

Insurers/agents must, in Florida, offer and issue all small employer health plans on a _________ basis:

Guaranteed issue

Which is true concerning a Variable Universal Life policy?

Policyowner controls where the investment will go and selects the amount of the premium payment

An agent's license can be suspended or revoked by

writing primarily controlled business

All of the following entries are classified under the four principal areas of Florida insurance law EXCEPT

An agents commission

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Proceeds will go to the contingent beneficiary

The guarantee of insurability option provides a long-term care policyowner the ability to:

Buy additional coverage at a later date

Quarterly premium payments increase the annual cost of insurance because

Interest to the insurer is decreased while the administrative costs are increased

Which of the following claims are typically excluded from medical expense policies?

Intentionally self-inflicted injuries

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of

Misrepresentation

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

The initial premium

Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract

Once each year

What does a 401(k) plan generally provide its participants?

Salary-deferral contributions

Within how many days after policy delivery can a Medicare supplement policy be returned for 100% premium refund?

30 days

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

Pay the amount that the premium would have purchased at the correct age

An insurance company incorporated under the laws of the state in which its home office is located is called a(n) __________ company.

Domestic

T is given a receipt After completing a life insurance application and paying the initial premium. Under this situation, T's coverage is

Conditional, depending on the insurer's underwriting guidelines

An individual participant received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20% is withheld for income taxes

A life insurance policy's grace period entitles the insured a period of no less than ________ days to make the premium payment.

30 days

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?

F

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

5 months

All of the following are eligibility requirements for an association group EXCEPT

Contributory plans require a minimum of 25 participants

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on pre-existing conditions for up to 12 months

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?

Aviation exclusion

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

Upon satisfying the elimination period requirement

According to Florida law, a group life insurance policy requires a minimum of how many insureds?

No minimum

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable

Florida's 14-day free-look period for life insurance policies begins at the

Date of delivery

J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?

All of the employees must be notified of the cancellation either by the insurance company or through J

A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?

Inablity of the insured to perform more than 2 Activites of Daily Living (ADL's)

W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?

The proceeds would be reduced based on whatever the premium would have been if purchased at age 59

According to Florida law, which of the following situations would a dependent handicapped child not be covered under a family health policy?

The premiums for the handicapped child are not paid

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?

All proceeds are income tax free in the year they are received

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for

Modified whole life

Florida requires that coverage for newborns begins "from the moment of birth" and continues for

18 months

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

Renewable

K is insured under a Group Life Insurance policy. K is considered to be a(n)

Certificate holder

The policy summary contains specific information on all of the following, EXCEPT

Commission

All of these are considered to be a benefit under Social Security, EXCEPT for:

Unemployment

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have

Insurable interest in the proposed insured

Major Medical policies typically:

Contain a deductible and coinsurance

The Automatic Premium Loan provision is designed to:

avoid a policy lapse

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

If an agent would like to sell Variable annuities, which state examination must the agent pass?

Life and variable contracts

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n)

Anti-money laundering violation

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?

Return of premium rider

A life insurance application must be signed by all of these, EXCEPT:

Beneficiary

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

Risk classification

Which of the following is NOT required on every insurance application sold in Florida?

Address and phone number of the agent

Who does an agent represent during the solicitation of insurance?

The insurance company

An insurance company can contest a life insurance contract due to application fraud within

2 years

An example of unfair claims settlement practice is

turning down a claim without providing the basis of denial

A _____ day notice to the policyholder is required for any health insurer that wishes to cancel a health insurance policy.

45

A mutual insurance company and a stock insurance company have one main difference between them. What is this major contrast?

Stock company is owned by its stockholders. Mutual company is owned by its policyholders.

What is the basic function of an annuity?

The systematic liquidation of accumulated funds.

Under which circumstances may a licensed agent in Florida represent an unauthorized entity?

Never

When is it acceptable to share commissions with another agent?

As long as both agents are licensed for the same lines of insurance

The consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

Which entity approves the insurance policy forms used in Florida?

Office of insurance regulation (OIR)

An employer that offers a qualified retirement plan to its employees is eligible to

Make tax-deductible contributions to the plan

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

At future dates specified in the contract with no evidence of insurability required

In Florida, the underwriting and issuance of a master group health policy requires that all employees

Are eligible to participate, regardless of their individual health history

T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as

Fiduciary responsibility

All of the following are nonforfeiture options EXCEPT:

Automatic Premium loan option

What is Florida's definition of Life insurance replacement?

A transaction in which a new policy is bought, and an old policy is terminated

Which of the following is the best description of 'insurer'

Any person, corporation, association, or society that writes insurance contracts

Which of the following is NOT an unfair claim settlement practice?

Needing written documentation of claim details

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

Interest only

_______ of personal life insurance premiums is usually deductible for federal income tax purposes

0%

Dental care coverage is designed to cover the costs of all of the following EXCEPT

Loss of income

Which of these is NOT considered to be a cost connected with an individual's death?

Business expenses

When replacing or exchanging an annuity, the agent must disclose to the annuitant

The possible tax ramifications as a result of the transaction

All of the following will result in the suspension of an agent's license EXCEPT

Acting with fiduciary responsibility