Florida Life & Health Insurance License exam flashcards

All 192 questions

From the free lessons, each with its answer and why. The full course adds questions from every lesson.

What makes traditional whole life insurance "permanent" coverage?

As long as premiums are paid, the policy stays in force for the insured's entire life.

Whole life is permanent because it is designed to remain in force for the insured's whole life, provided premiums are paid. The death benefit is guaranteed rather than dependent on death occurring before an arbitrary end date, which is what distinguishes it from term insurance.

Types of life policies and features · From Traditional whole life products

Which statement best describes single-premium whole life?

The entire cost of the policy is paid in one lump sum at issue, leaving no future premium obligation.

In single-premium whole life the whole cost is paid at issue in one lump sum. There is no further premium obligation, and the policy still carries the usual whole life guarantees, including cash value.

Types of life policies and features · From Traditional whole life products

A participating whole life policy is typically issued by which type of insurer?

A mutual insurer

Participating policies are issued by mutual insurers, or as a participating line from a stock insurer. A participating policy may pay dividends when the insurer's experience is more favorable than assumed.

Types of life policies and features · From Traditional whole life products

Under Florida's Standard Nonforfeiture Law, after how many full years of premium payment must an ordinary life insurance policy grant a paid-up nonforfeiture benefit when a premium goes into default?

1 full year

Fla. Stat. § 627.476(2)(a) requires that, after premiums have been paid for at least 1 full year in the case of ordinary insurance (3 full years for industrial insurance), the insurer grant a paid-up nonforfeiture benefit on default.

Source: Fla. Stat. § 627.476(2)(a) ·Types of life policies and features · From Traditional whole life products

For Florida life insurance policy forms filed on or after October 1, 1990, which nonforfeiture benefit must the form include?

A reduced paid-up nonforfeiture benefit

Fla. Stat. § 627.476(2)(a) provides that all policy forms filed on or after October 1, 1990, shall include, but not be limited to, a reduced paid-up nonforfeiture benefit.

Source: Fla. Stat. § 627.476(2)(a) ·Types of life policies and features · From Traditional whole life products

Which statement correctly describes a dividend on a participating whole life policy?

A return of excess premium paid when the insurer's actual mortality, expense, and investment experience is more favorable than assumed in pricing

A dividend is a return of excess premium. It is paid when the insurer's actual mortality, expense, and investment results are more favorable than the assumptions used to price the policy. Dividends are not guaranteed.

Types of life policies and features · From Traditional whole life products

Under Florida law, which characteristic defines "industrial life insurance"?

Premiums payable monthly or more often, the policy marked "industrial policy" or "weekly premium policy," issued by an insurer collecting through an agent's debit system

Fla. Stat. § 627.502(1) defines industrial life insurance as life insurance written under policies with premiums payable monthly or more often, bearing the words "industrial policy" or "weekly premium policy" or similar, issued by an insurer operating under a system of collecting a debit by its agent.

Source: Fla. Stat. § 627.502(1) ·Types of life policies and features · From Traditional whole life products

Beginning on what date may a Florida life insurer no longer write a new policy of industrial life insurance?

July 1, 2021

Fla. Stat. § 627.502(3) provides that beginning July 1, 2021, a life insurer may not write a new policy of industrial life insurance. Insurers servicing existing industrial policies must continue to report on them.

Source: Fla. Stat. § 627.502(3) ·Types of life policies and features · From Traditional whole life products

What does a "level premium" guarantee in a traditional whole life policy?

The premium never increases, even as the insured ages and mortality risk rises.

The level premium is one of whole life's three guarantees: it never increases, even as the insured ages and the mortality risk the insurer carries rises.

Types of life policies and features · From Traditional whole life products

How does the guaranteed minimum cash value of a traditional whole life policy grow?

On a schedule set out in the policy from the day it is issued

The guaranteed minimum cash value grows on a schedule that is set out in the policy at issue. It is one of the three guarantees, and it does not depend on market performance or on dividends.

Types of life policies and features · From Traditional whole life products

"Ordinary whole life" is another name for which premium-payment design?

Straight whole life, with premiums payable for the insured's entire life

Straight whole life is also called ordinary whole life. Its premiums are payable for the insured's entire life.

Types of life policies and features · From Traditional whole life products

What is the purpose of state nonforfeiture law as it applies to whole life insurance?

To require the insurer to give an owner who stops paying premiums one of several options for the cash value rather than simply keeping everything paid in

Nonforfeiture law protects the cash value: if the owner stops paying premiums, the insurer must offer a cash surrender, a reduced paid-up policy, or extended term insurance instead of keeping everything that was paid in.

Types of life policies and features · From Traditional whole life products

What event triggers the benefit under a waiver of premium rider?

The insured becomes totally disabled

Waiver of premium is a disability rider: total disability of the insured is what starts it, and the insurer then pays the premiums that fall due while that disability lasts.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

How long is the elimination (waiting) period on a typical waiver of premium rider before the waiver takes effect?

About six months of continuous total disability

The standard elimination period on waiver of premium is roughly six months. Premiums falling due during that wait must still be paid, and are typically refunded once the claim is approved.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Under a typical waiver of premium rider, how is total disability usually defined during the first two years of the claim?

Inability to perform the duties of the insured's own occupation

Most waiver riders use an own-occupation standard for roughly the first two years and then tighten to an any-occupation standard: inability to perform any occupation the insured is reasonably suited to by education, training, or experience.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

While premiums are being waived under a waiver of premium rider, what happens to the policy's cash value, dividends, and death benefit?

All three continue exactly as if the premiums were being paid

The whole point of the rider is that the contract carries on untouched: the insurer's payment stands in for the owner's, so cash value keeps building, dividends keep being credited, and the face amount is unchanged.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

A waiver of premium rider typically requires that the insured's disability begin before which point?

A stated age, commonly 60 or 65

The rider covers disabilities that start before a stated age, commonly 60 or 65, and the rider itself expires at that age; a disability that first arises afterward is not covered.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

On a universal life policy, the waiver of premium concept normally appears under which name?

Waiver of monthly deduction

Universal life has no fixed premium to waive, so the rider instead absorbs the monthly cost of insurance and expense charges; it is sold as waiver of monthly deduction or waiver of a specified premium.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

On what kind of policy is a payor benefit rider normally found?

A juvenile policy insuring a child

The payor benefit is the juvenile-policy rider: it protects a child's coverage against the death or total disability of the adult who pays for it.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Under a payor benefit rider, whose death or total disability triggers the waiver?

The payor's -- typically the parent or grandparent paying the premiums

The defining feature of the payor rider is that the triggering life is the payor's, not the insured child's. That is also why the payor must be underwritten for the rider.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

When a payor benefit rider is in force and the payor dies, premiums are normally waived until what point?

Until the child reaches a stated age, commonly 21 or 25

The waiver runs to a stated age of the insured child, commonly 21 or 25, on the assumption that the child can take over the premiums as an adult. The policy stays in force on the child's life throughout.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

What right does a guaranteed insurability rider give the policyowner?

The right to buy additional coverage at stated future dates without proving insurability

The rider sells future access to the underwriting desk. At each option date the owner may purchase a further block of coverage up to the stated option amount, and the insured's health at that moment is irrelevant.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

On a typical guaranteed insurability rider, when do the scheduled option dates fall?

Roughly every three years across the insured's mid-twenties to about age 40

The usual schedule is an option about every three years from roughly age 25 to age 40, with the rider expiring at the last option date.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

In addition to the scheduled dates, most guaranteed insurability riders allow an option to be exercised on which life events?

Marriage, or the birth or adoption of a child

These are the rider's alternate option dates. They let the owner buy coverage when the need actually appears rather than waiting for the next scheduled date.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

At what rate is coverage purchased under a guaranteed insurability option priced?

At the insured's attained age when the option is exercised

The rider waives evidence of insurability, not the cost of insurance. New coverage is priced at the insured's attained age, so it costs more than the original block did.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

What does an accidental death benefit rider pay?

An additional amount on top of the policy's face amount when death results from accidental bodily injury

The rider is an addition, not a substitute. Where the rider amount equals the base face amount, the total payable is twice the face, which is why the rider is nicknamed double indemnity.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Under a typical accidental death benefit rider, the accidental injury must cause death in what way?

Independently of all other causes

The standard wording requires the injury to be the cause of death independent of all other causes, which is what excludes deaths where disease is a contributing cause.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Within what period after the accident must death normally occur for an accidental death benefit to be payable?

About 90 days

Standard riders require death within a stated period after the accident, commonly 90 days. A death outside that window pays the base face amount only.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

At roughly what point does an accidental death benefit rider typically terminate?

At a stated age such as 65 or 70

Accidental death riders are age-limited, typically ending around 65 or 70, after which the base policy alone remains in force.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Under an accidental death and dismemberment rider, what is the capital sum?

The smaller amount, usually half the principal sum, payable for a single loss such as one hand or the sight of one eye

The principal sum is the full amount payable for accidental death or for two losses; the capital sum is the reduced amount, usually half, payable for a single loss.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

What is generally true of the cost of a rider attached to a life insurance policy?

It carries its own charge on top of the base policy's premium

A rider is a priced benefit. Its charge is additional to the base premium, which is why riders are usually underwritten and added at issue rather than thrown in later.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

What happens to the riders on a life insurance policy if the base policy is surrendered?

They terminate with it -- a rider cannot stand alone

Riders are supplemental to the base contract. Surrendering or lapsing the policy ends every rider attached to it; none continues as separate coverage.

Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Under Florida law, what limit applies to a rider or other provision added to an insurance policy?

It may not be inconsistent with or contradictory to any standard or uniform provision required to be used

Section 627.412(2) forbids a provision inconsistent with or contradictory to a required standard or uniform provision, though the office may approve a substitute provision it considers not less favorable to the insured or beneficiary.

Source: Fla. Stat. § 627.412(2) ·Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Florida requires that each of the optional benefits and charges provided under an industrial life insurance policy be treated how?

Separately priced, with the prices set forth in the policy clearly, conspicuously, and understandably

Section 627.522(2) requires that each optional benefit and charge under an industrial life policy be separately priced and that the prices appear in the policy in a clear, conspicuous, and understandable manner.

Source: Fla. Stat. § 627.522(2) ·Life policy riders, provisions, options, and exclusions · From Waiver, guaranteed-insurability, payor, and accidental-death riders

Which part of a life insurance application is completed and signed by the producer alone and is not shown to the applicant?

The producer's report, also called the agent's statement.

The producer's report records the producer's own observations -- how long the producer has known the applicant, whether the coverage is a replacement, anything bearing on the risk. It is signed by the producer only and is not shown to the applicant.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

How are the applicant's statements on a life insurance application generally treated?

As representations -- statements believed true to the best of the applicant's knowledge.

Application answers are representations: statements the applicant believes to be true to the best of his or her knowledge. They are not warranties, which would have to be literally true, and they are not mere opinions -- the applicant is accountable for answering truthfully and completely.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

A life application is being taken on the life of a 10-year-old child. Who signs as the insured?

A parent or guardian signs on the child's behalf.

A minor lacks legal capacity to execute the application, so a parent or guardian signs on the child's behalf. The producer never signs for an applicant or insured.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Under Florida law, when may a life agent place life coverage on a person who is not the agent's family member while naming the agent as beneficiary?

Only when the agent has an insurable interest in the insured's life.

A life agent may not place or modify life coverage on the life of a non-family member when the agent or a family member of the agent is the named beneficiary, unless the agent or family member has an insurable interest in that person's life (Fla. Stat. s. 626.798(1)).

Source: Fla. Stat. s. 626.798(1) ·Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

What is the insurer's usual response to an application that arrives with a health question unanswered?

Return it to the producer to be completed before underwriting begins.

An incomplete application is normally returned to the producer to be completed before underwriting begins. That delays coverage, which is why the producer reviews every page before the applicant signs.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Why does the producer's signature appear on a life insurance application?

To witness the applicant's signature and attest to the producer's report.

The producer signs as the witness to the applicant's signature and to the producer's report. The signature attests that the producer saw the application completed and signed; it does not make the producer a party to the contract or a guarantor of the answers.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Which item belongs in Part 1, the general or nonmedical section, of a life application?

The beneficiary designation.

Part 1 collects identifying information, the plan and face amount, the beneficiary designation, other insurance, and replacement questions. Medications and exam findings belong to Part 2, and the producer's acquaintance with the applicant belongs to the producer's report.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Once a life policy is issued, what role does the application typically play?

It is attached to the policy and becomes part of the contract.

The application is usually attached to and made part of the issued policy. Years later it is the document a claims examiner reads when deciding whether a death benefit is payable, which is why its mechanics matter.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

What does a signed authorization on the application permit the insurer to do?

Obtain the proposed insured's medical records and consumer reports.

The authorization is the proposed insured's signed consent for the insurer to obtain medical records and consumer reports for underwriting. It is accompanied by the required notices about the insurer's information practices.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Under Florida's rule, what does 'insurable interest' mean when applied to a life agent named as beneficiary?

An actual, lawful, and substantial economic interest in the insured's continued life, or a reasonable expectation of benefit from it.

The statute defines insurable interest as the agent or family member having an actual, lawful, and substantial economic interest in the safety and preservation of the insured's life, or a reasonable expectation of benefit or advantage from the insured's continued life (Fla. Stat. s. 626.798(3)(b)).

Source: Fla. Stat. s. 626.798(3)(b) ·Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

What is typically collected with the application when the producer wants coverage to begin under a conditional receipt?

The initial premium.

A conditional receipt is given when the initial premium is collected with the application. If no premium is collected, the application is marked as submitted without premium and a statement of good health will be required at delivery instead.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Which part of the application would contain the questions a paramedical examiner completes?

Part 2, the medical section.

Part 2 is the medical section: health history, medications, tobacco use, and the questions a paramedical examiner or physician completes when an exam is required.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

Which entry on the application does the proposed insured's signature specifically attest to?

The health statements and the authorization to investigate them.

The proposed insured must sign because the application contains that person's health statements and the authorization for the insurer to obtain records about them. The producer's report, the underwriting class, and the premium are not the insured's statements.

Completing the life application, underwriting, and delivering the policy · From Application mechanics: signatures, changes, and incomplete applications

In a life insurance contract, which party applies for the coverage, pays the premium, and holds the legal rights in the policy?

The owner

The owner, also called the applicant or policyowner, is the party who applies for the contract, pays the premium, and holds the incidents of ownership. The insured is the life covered, the beneficiary is who is paid at death, and the insurer is the company issuing the contract.

Retirement and other life insurance concepts · From Third-party ownership of life insurance

Florida's Insurance Code provides that the word 'insured' shall not be construed as preventing what?

A person other than the insured, with a proper insurable interest, from applying for and owning a policy covering the insured

Fla. Stat. 627.631 states that the word 'insured' shall not be construed as preventing a person other than the insured, with a proper insurable interest, from making application for and owning a policy covering the insured, or from being entitled to the benefits and rights under it. It is the Code's express statement of the third-party ownership principle.

Source: Fla. Stat. 627.631 ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

Under Florida law, for whose benefit may an individual of legal capacity insure his or her own life?

Any person

Fla. Stat. 627.404(1) provides that any individual of legal capacity may procure an insurance contract on his or her own life for the benefit of any person. The insurable interest requirement applies when someone procures insurance on another person's life, not when a person insures his or her own life.

Source: Fla. Stat. 627.404(1) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

When must a third-party owner have an insurable interest in the insured under Florida law?

At the time the contract was made; it need not exist after the inception date

Fla. Stat. 627.404(1) requires the insurable interest to exist at the time the contract was made and adds expressly that the interest need not exist after the inception date of coverage. Life insurance tests insurable interest at inception, not at the time of loss.

Source: Fla. Stat. 627.404(1) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

Under Florida law, on what basis does a mother have an insurable interest in the life of her adult son?

She is closely related to him by blood and has a substantial interest engendered by love and affection.

Fla. Stat. 627.404(2)(b)2 recognises an insurable interest in the life of another person to whom the individual is closely related by blood or by law and in whom the individual has a substantial interest engendered by love and affection. A parent-child relationship is the classic example; no financial dependency or expectation of inheritance is required.

Source: Fla. Stat. 627.404(2)(b) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

When does a trust have an insurable interest in the life of the individual who created it, under Florida law?

When the insured is the grantor and the proceeds are primarily for the benefit of trust beneficiaries who have an insurable interest in the insured's life.

Fla. Stat. 627.404(2)(b)5 gives a trust, or its trustee, an insurable interest in the life of an insured under a policy the trust owns when the insured is the grantor (or a person closely related to the grantor, or a person in whom the grantor has an insurable interest), provided the proceeds are primarily for the benefit of trust beneficiaries who themselves have an insurable interest in the insured. This is the statutory footing for the irrevocable life insurance trust.

Source: Fla. Stat. 627.404(2)(b) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

A 501(c)(3) charity wants to own a life insurance policy on a long-time donor. What does Florida law require for the charity to have an insurable interest?

The donor must consent in writing to the charity's ownership or purchase of the insurance.

Fla. Stat. 627.404(2)(b)7 gives a charitable organization meeting the requirements of section 501(c)(3) of the Internal Revenue Code an insurable interest in the life of any person who consents in writing to the organization's ownership or purchase of that insurance. Written consent is the sole statutory condition.

Source: Fla. Stat. 627.404(2)(b) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

Under Florida law, when must a business entity obtain a key employee's written consent to insure that employee's life?

Before the insurance is purchased

Fla. Stat. 627.404(2)(b)9 gives a business entity an insurable interest in its owners, directors, officers, partners, managers, and key employees or key persons if consent is obtained in writing from the key employees or persons before the insurance is purchased. The business may not retaliate against anyone who declines.

Source: Fla. Stat. 627.404(2)(b) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

In a typical key person life insurance arrangement, which party is the owner, the premium payer, and the beneficiary?

The business

In key person insurance the business is owner, premium payer, and beneficiary on the life of an employee whose loss would hurt the business financially. The employee is the insured only, and must give written consent under Florida law before the coverage is purchased.

Retirement and other life insurance concepts · From Third-party ownership of life insurance

Under Florida's definitions, what is credit life insurance?

Insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction

Fla. Stat. 627.677(1) defines credit life insurance as insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction. It comes in group, franchise, and individual forms, and in each the coverage is written in favour of the creditor, making it a form of third-party ownership.

Source: Fla. Stat. 627.677(1) ·Retirement and other life insurance concepts · From Third-party ownership of life insurance

A policyowner replaces his brother with his niece as beneficiary. What effect does this have on ownership of the policy?

None; ownership stays exactly where it was.

Naming a new beneficiary changes who is paid at death but leaves ownership exactly where it was. Only an assignment changes the owner. The former beneficiary retains nothing, and the insurer never holds ownership of the policy.

Retirement and other life insurance concepts · From Third-party ownership of life insurance

What does a disability income policy primarily pay?

A periodic, usually monthly, benefit that replaces part of the insured's earned income while he or she cannot work

Disability income insurance replaces a paycheck: it pays a periodic, usually monthly, benefit while the insured cannot work because of sickness or injury. It does not reimburse medical expenses.

Types of health policies · From Disability income and accidental death and dismemberment policies

Under an own-occupation definition of total disability, when is the insured considered totally disabled?

When unable to perform the material duties of his or her own occupation

Own occupation is the most liberal definition of total disability: the insured is totally disabled if unable to perform the duties of his or her own job, even if able to work in some other occupation.

Types of health policies · From Disability income and accidental death and dismemberment policies

What is the elimination period in a disability income policy?

The waiting period at the start of a disability during which no benefits are paid

The elimination period is measured from the start of disability; no benefits are payable during it. It works like a deductible expressed in time rather than dollars.

Types of health policies · From Disability income and accidental death and dismemberment policies

In a disability income policy, what does the benefit period describe?

How long benefits will be paid once they begin

The benefit period is the maximum length of time benefits are paid for a disability, for example two years, five years, or to age 65.

Types of health policies · From Disability income and accidental death and dismemberment policies

How do short-term and long-term disability income coverage generally differ?

Short-term pays for a few months up to about two years; long-term pays for many years, often to age 65

The main distinction is the benefit period: short-term disability generally pays for a few months up to about two years, while long-term disability pays for years, often to age 65.

Types of health policies · From Disability income and accidental death and dismemberment policies

What does a partial disability benefit provide?

A reduced benefit when the insured can perform some, but not all, of the duties of his or her occupation

Partial disability pays a reduced benefit, often a percentage of the total disability benefit, when the insured can still perform some but not all important job duties.

Types of health policies · From Disability income and accidental death and dismemberment policies

Under a presumptive disability provision, which loss is automatically treated as total disability?

Total and permanent loss of sight in both eyes

Presumptive disability treats certain severe losses, such as total loss of sight, hearing or speech, or loss of the use of two limbs, as total disability automatically.

Types of health policies · From Disability income and accidental death and dismemberment policies

What does a waiver of premium provision in a disability income policy do?

Excuses premium payments after the insured has been totally disabled for a set period, commonly 90 days

Waiver of premium stops premium payments once the insured has been totally disabled for a stated period, commonly 90 days, so the coverage stays in force while the insured is not working.

Types of health policies · From Disability income and accidental death and dismemberment policies

Which disability income rider increases benefits during a long disability to help them keep pace with inflation?

Cost-of-living adjustment rider

A cost-of-living adjustment rider increases benefits during a disability, typically tied to an inflation index, so a long-term claim keeps its purchasing power.

Types of health policies · From Disability income and accidental death and dismemberment policies

What is the purpose of a Social Security (social insurance) substitute rider?

To pay an additional benefit if the insured's Social Security or similar social insurance disability benefits are denied or reduced

A social insurance substitute rider pays an extra benefit when social insurance disability benefits, such as Social Security, are denied or reduced, filling the gap the insured was counting on.

Types of health policies · From Disability income and accidental death and dismemberment policies

What does business overhead expense insurance pay when a business owner becomes disabled?

The business's ongoing operating costs, such as rent, utilities and employee salaries

Business overhead expense insurance reimburses the business for fixed operating expenses, such as rent, utilities and staff salaries, while the owner is disabled, keeping the business running.

Types of health policies · From Disability income and accidental death and dismemberment policies

Under Florida law, for individual or group disability insurance policies issued in the state on or after October 1, 1992, what does sickness disability include?

A restriction of a health care practitioner's ability to practice imposed by the state licensing board because the practitioner tested positive for HIV

Fla. Stat. 627.4237 provides that sickness disability, or disability due to sickness, in individual or group disability policies issued on or after October 1, 1992, includes a restriction of a health care practitioner's ability to perform his or her occupation imposed by the state licensing board as a result of testing positive on an HIV test.

Source: Fla. Stat. 627.4237 ·Types of health policies · From Disability income and accidental death and dismemberment policies

Under Florida's Employee Health Care Access Act, which kinds of coverage are excluded from the definition of a health benefit plan?

Accident-only and disability income insurance, among other limited or supplemental coverages

Fla. Stat. 627.6699(3)(k) defines a health benefit plan as a hospital or medical policy or certificate, a hospital or medical service plan contract, or an HMO subscriber contract, and excludes accident-only, disability income and several other limited or supplemental coverages.

Source: Fla. Stat. 627.6699(3)(k) ·Types of health policies · From Disability income and accidental death and dismemberment policies

What kind of loss does an accidental death and dismemberment policy cover?

Death or dismemberment caused by an accident only

AD&D is accident-only coverage: it pays a stated sum for accidental death or for specified losses of limbs or sight caused by an accident, never for sickness.

Types of health policies · From Disability income and accidental death and dismemberment policies

In an AD&D policy, what is the principal sum?

The full face amount, paid for accidental death or for loss of two hands, two feet or the sight of both eyes

The principal sum is the full face amount of an AD&D policy, payable for accidental death and for the most severe dismemberments, such as loss of both hands, both feet or the sight of both eyes.

Types of health policies · From Disability income and accidental death and dismemberment policies

AD&D policies generally require the death or dismemberment to occur within a set time after the accident. What period is commonly used?

90 days

AD&D policies generally require the death or loss to occur within a stated period after the accident, commonly 90 days, which links the loss to the accident.

Types of health policies · From Disability income and accidental death and dismemberment policies

A traveler buys coverage that pays only for death or injury from an accident while a passenger on a common carrier during a trip. What kind of policy is this?

A limited-risk policy

Limited-risk policies cover only a specified hazard, such as travel or common-carrier accidents, rather than accidents generally.

Types of health policies · From Disability income and accidental death and dismemberment policies

Under Florida's blanket health insurance law, a newspaper can be the policyholder of a blanket policy covering its independent contractor delivery persons. Which benefits may that policy contain?

Coverage only for accident or disability income insurance, or any combination of them, among other limited benefits

Fla. Stat. 627.659(6) allows a blanket policy issued to a newspaper or other publisher, covering independent contractor delivery persons, to include coverage only for accident or disability income insurance or any combination, as well as other listed limited benefits.

Source: Fla. Stat. 627.659(6) ·Types of health policies · From Disability income and accidental death and dismemberment policies

Under the entire contract provision of a health insurance policy, what makes up the entire contract?

The policy, including its endorsements and any attached papers

The entire contract provision says the policy, including endorsements and attached papers, is the entire contract. Nothing outside it can add to or change its terms.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under the entire contract; changes provision, what is required for a change to a health policy to be valid?

Approval by an executive officer of the insurer, endorsed on or attached to the policy

A change is valid only if an executive officer of the insurer approves it and the approval is endorsed on or attached to the policy.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Why are certain provisions required in every individual health insurance policy?

So that buyers get the same basic protections no matter which insurer writes the policy

The mandatory uniform provisions give every buyer of an individual health policy the same basic contractual protections, whichever insurer writes the policy.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Which two mandatory health policy provisions protect the insured against losing coverage because of a late premium?

Grace period and reinstatement

The grace period keeps the policy in force while a late renewal premium is paid, and reinstatement revives a policy that has lapsed. Entire contract and the time limit on certain defenses concern the contract's terms and the application.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under the time limit on certain defenses provision, how long after the date of issue can an insurer use a non-fraudulent application misstatement to void a health policy?

2 years

The time limit on certain defenses allows the insurer to use application misstatements for 2 years from the date of issue. After that, only fraudulent misstatements remain available.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

After a health policy has been in force for 2 years, which kind of application misstatement can the insurer still use to void it or deny a claim?

A fraudulent misstatement

The time limit on certain defenses bars the use of misstatements after 2 years except fraudulent misstatements. Fraud remains a defense.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

After a health policy has been in force for 2 years, when may the insurer deny a claim because the condition existed before the policy's effective date?

Only if the policy excluded that condition by name or specific description

Under the time limit on certain defenses, after 2 years no claim can be reduced or denied because a condition existed before the effective date unless the policy excluded it by name or specific description.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

What alternative time limit wording may a noncancellable or guaranteed renewable health policy use?

After 2 years in force, the policy becomes incontestable as to statements in the application

A noncancellable or guaranteed renewable policy may state that after 2 years in force, not counting periods of disability, it becomes incontestable as to the statements in the application.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

What is the health insurance mandatory provision that serves as its version of the incontestable clause called?

Time limit on certain defenses

In health insurance, the provision limiting how long the insurer can use application misstatements is called the time limit on certain defenses.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under Florida's required health grace period wording, what is the minimum grace period for a policy with monthly premiums?

10 days

Fla. Stat. § 627.608 requires a grace period of not less than 10 days for a monthly premium policy.

Source: Fla. Stat. § 627.608 ·Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under Florida's required health grace period wording, what is the minimum grace period for a policy with weekly premiums?

7 days

Fla. Stat. § 627.608 requires a grace period of not less than 7 days for a weekly premium policy.

Source: Fla. Stat. § 627.608 ·Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under Florida's required health grace period wording, what is the minimum grace period for a policy with quarterly or annual premiums?

31 days

Fla. Stat. § 627.608 requires a grace period of not less than 31 days for all policies other than weekly or monthly premium policies.

Source: Fla. Stat. § 627.608 ·Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

What is the status of a health policy during its grace period?

It stays in force

Florida's required wording states that during the grace period the policy will stay in force (Fla. Stat. § 627.608).

Source: Fla. Stat. § 627.608 ·Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

What happens to a health policy when the grace period ends and the renewal premium still has not been paid?

The policy lapses

If the grace period ends without payment, the policy lapses. Reinstatement is the mechanism for bringing it back.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Under the reinstatement provision, what happens if the insurer accepts a late premium after lapse without requiring a reinstatement application?

The policy is reinstated

Under the reinstatement provision, acceptance of the premium by the insurer, or by an agent authorized to accept it, without requiring an application reinstates the policy.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

An insurer requires a reinstatement application and issues a conditional receipt for the premium. If the insurer takes no action on the application, when is the policy reinstated?

On the 45th day after the date of the conditional receipt

If an application is required and a conditional receipt is issued, the policy is reinstated on approval or, lacking prior written disapproval, on the 45th day after the receipt date.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

After a health policy is reinstated, sickness is covered only if it begins when?

More than 10 days after the reinstatement date

A reinstated policy covers sickness only if it begins more than 10 days after the reinstatement date.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

When a health policy is reinstated, premiums accepted may not be applied to any period more than how long before the reinstatement date?

60 days

Under the reinstatement provision, premiums accepted on reinstatement may be applied to a period for which premium was not previously paid, but not to any period more than 60 days before the reinstatement date.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

After a health policy is reinstated, what are the rights of the insured and the insurer?

The same rights they had before the lapse, subject to any provisions endorsed in connection with the reinstatement

Under the reinstatement provision, the insured and the insurer have the same rights as before the policy lapsed, subject to any provisions endorsed on or attached to the policy in connection with the reinstatement.

Health policy provisions, clauses, and riders · From Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Medicare is established under which title of the Social Security Act?

Title XVIII

Medicare is the health insurance program created by Title XVIII of the Social Security Act. Title XIX is Medicaid, and Title II is the Social Security cash-benefit program.

Social insurance · From Medicare Parts A, B, C, and D

Which statement best describes how a person generally qualifies for Medicare?

Through their own or a spouse's work history in Social Security- or railroad-covered employment

Medicare is social insurance. Part A entitlement at 65 follows from being entitled (or able to become entitled) to Social Security or railroad retirement benefits, which in turn rests on a work record, the person's own or a spouse's. It has no income or asset test; that is Medicaid.

Source: 42 U.S.C. § 426(a) ·Social insurance · From Medicare Parts A, B, C, and D

How long must a person under age 65 have been entitled to Social Security disability benefits before becoming entitled to Medicare Part A on that basis?

24 months

A person under 65 becomes entitled to Part A after having been entitled to Social Security (or railroad retirement) disability benefits for 24 calendar months.

Source: 42 U.S.C. § 426(b) ·Social insurance · From Medicare Parts A, B, C, and D

Which condition makes a person eligible for Medicare regardless of age and without a 24-month disability waiting period?

End-stage renal disease

The three eligible groups are people 65 and older with Social Security or railroad retirement entitlement, people under 65 after 24 months of disability benefits, and certain people of any age medically determined to have end-stage renal disease.

Source: 42 U.S.C. § 1395c ·Social insurance · From Medicare Parts A, B, C, and D

Which pair of Medicare parts is together known as Original Medicare?

Parts A and B

Original Medicare is the government-run fee-for-service program made up of Part A (hospital insurance) and Part B (medical insurance). A beneficiary may instead receive A and B benefits through a Part C Medicare Advantage plan.

Source: 42 U.S.C. § 1395w-21(a)(1) ·Social insurance · From Medicare Parts A, B, C, and D

Medicare Part A is best described as:

Hospital insurance

Part A is hospital insurance: it covers hospital, related post-hospital, home health, and hospice care.

Source: 42 U.S.C. § 1395c ·Social insurance · From Medicare Parts A, B, C, and D

Most people pay no monthly premium for Medicare Part A because:

They or a spouse paid Medicare payroll taxes for at least 40 quarters

Premium-free Part A is earned through at least 40 quarters (about 10 years) of Medicare-taxed work by the person or a spouse. Those without enough credits may buy Part A.

Social insurance · From Medicare Parts A, B, C, and D

Medicare Part C is also known as:

Medicare Advantage

Part C is Medicare Advantage (originally Medicare+Choice), under which a beneficiary elects to receive Medicare benefits through a private plan instead of the original fee-for-service program.

Source: 42 U.S.C. § 1395w-21(a)(1) ·Social insurance · From Medicare Parts A, B, C, and D

To be eligible to elect a Medicare Advantage plan, a person must:

Be entitled to Part A and enrolled in Part B

A Medicare Advantage eligible individual is one who is entitled to benefits under Part A and enrolled under Part B.

Source: 42 U.S.C. § 1395w-21(a)(3) ·Social insurance · From Medicare Parts A, B, C, and D

Which statement best describes what Medicare Advantage does?

It delivers Part A and Part B benefits through a private plan instead of Original Medicare

A Medicare Advantage eligible individual may elect to receive benefits through the original fee-for-service program under Parts A and B or through enrollment in a Medicare Advantage plan. Part C is a different route to the same core benefits, not a new benefit.

Source: 42 U.S.C. § 1395w-21(a)(1) ·Social insurance · From Medicare Parts A, B, C, and D

Medicare Part D provides:

Outpatient prescription drug coverage

Part D provides qualified prescription drug coverage to Part D eligible individuals, through prescription drug plans or Medicare Advantage plans with drug coverage.

Source: 42 U.S.C. § 1395w-101(a)(1) ·Social insurance · From Medicare Parts A, B, C, and D

To be eligible for Medicare Part D, a person must be:

Entitled to Part A or enrolled in Part B

A Part D eligible individual is one who is entitled to benefits under Part A or enrolled under Part B.

Source: 42 U.S.C. § 1395w-101(a)(3)(A) ·Social insurance · From Medicare Parts A, B, C, and D

Medicare Part D prescription drug coverage first became effective on:

January 1, 2006

Coverage under prescription drug plans and MA-PD plans first became effective on January 1, 2006.

Source: 42 U.S.C. § 1395w-101(a)(2) ·Social insurance · From Medicare Parts A, B, C, and D

How long is a person's Medicare initial enrollment period?

Seven months: the three months before the month of the 65th birthday, that month, and the three months after

The initial enrollment period is a seven-month window: the three months before the month a person turns 65, the birthday month, and the three months after.

Social insurance · From Medicare Parts A, B, C, and D

During which period can Medicare beneficiaries each year switch between Original Medicare and Medicare Advantage or change drug plans, with changes effective January 1?

October 15 through December 7

The annual election period runs from October 15 through December 7, when beneficiaries can switch between Original Medicare and Medicare Advantage or change Part D plans for the following year.

Social insurance · From Medicare Parts A, B, C, and D

A Medicare Advantage organization may use only agents and brokers who:

Are licensed under state law to sell its Medicare Advantage plans

Each Medicare Advantage organization must use only agents and brokers licensed under state law to sell its plans, follow any state appointment law, and report agent terminations to the state as required.

Source: 42 U.S.C. § 1395w-21(h)(7)(A) ·Social insurance · From Medicare Parts A, B, C, and D

Which definition of total disability is the most liberal for the insured?

Own occupation

Own occupation treats the insured as totally disabled when they cannot perform the material and substantial duties of their own regular occupation, even if they could work elsewhere. That makes it the easiest definition to meet and the most expensive.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Under an any-occupation definition of total disability, the insured must be unable to perform

any occupation for which they are reasonably suited by education, training, or experience

Any occupation requires that the insured be unable to perform any job for which they are reasonably suited by education, training, or experience. It is stricter than own occupation because the ability to do a different suitable job defeats the claim.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

A disability income policy uses own-occupation for the first two years of a claim and any-occupation after that. This is called a

split (modified own-occupation) definition

A split, or modified own-occupation, definition applies the own-occupation test for an initial period and the stricter any-occupation test for the remainder of the benefit period. It is common in group long-term disability.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Compared with an any-occupation policy offering the same monthly benefit, an own-occupation policy generally has

a higher premium

Own occupation is the most liberal definition, so it pays more claims and carries a higher premium than an any-occupation policy with the same benefit.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Under Florida law, a disability income policy that pays claims on total disability must, at minimum, treat a person as totally disabled during the first 12 months if the person

cannot perform the material and substantial duties of their regular occupation

Florida requires disability income policies to use at least a regular-occupation test for the first 12 months of disability: the person is totally disabled if unable to perform the material and substantial duties of their regular occupation, or the policy must be at least as favorable.

Source: Fla. Stat. § 627.4233(1)(a) ·Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

In Florida, after the first 12 months of disability, a disability income insurer may continue benefits only if the person cannot perform

any work or occupation for which they are reasonably qualified or trained

After the first 12 months, Florida lets the insurer predicate continued benefits on the person's inability to perform any work or occupation for which they are reasonably qualified or trained.

Source: Fla. Stat. § 627.4233(1)(b) ·Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Under Florida law, a life insurance policy's waiver-of-premium provision may define total disability no more restrictively than the person's inability to

perform any work or occupation for which they are reasonably qualified or trained

For a life policy that waives premium or pays on total disability, Florida says the definition may not be more restrictive than the inability to perform any work or occupation for which the person is reasonably qualified or trained.

Source: Fla. Stat. § 627.4233(2) ·Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Under Florida law, for an employee, a medical expense policy's extension of benefits for total disability may define totally disabled no more restrictively than the employee's inability to

perform any work or occupation for which they are reasonably qualified or trained

For an employee, Florida says the definition of totally disabled for extension of medical benefits may not be more restrictive than inability to perform any work or occupation for which the person is reasonably qualified or trained.

Source: Fla. Stat. § 627.4233(3)(a) ·Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Under a presumptive disability provision, which loss is typically presumed to be total disability?

Loss of sight in both eyes

Presumptive disability provisions typically deem the loss of sight in both eyes, hearing in both ears, speech, or the use of two limbs to be total disability.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Partial disability generally means the insured

can perform some, but not all, of the important duties of their occupation

Partial disability means the insured can still perform some of the important duties of their occupation, or can work only part time, but cannot do all of them.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

A partial disability benefit is commonly paid as

a flat percentage of the total disability benefit, often 50 percent

Partial disability benefits are typically a fixed percentage of the total disability benefit, commonly 50 percent, rather than an amount tied to the insured's actual income loss.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Which statement about the duration of partial disability benefits is typically true?

They are paid for a short, limited period, often a few months

Partial disability benefits are usually limited to a short period, often a few months, reflecting their role in helping the insured ease back to work.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Many policies pay partial disability benefits only if the partial disability

immediately follows a period of total disability

Many contracts require that partial disability follow a period of total disability; the partial benefit then helps the insured ease back into work.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Residual disability benefits are based primarily on

the insured's loss of income

Residual disability measures the insured's loss of income and pays a proportionate share of the total disability benefit.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Which formula describes a typical residual disability benefit?

(prior earnings minus current earnings) divided by prior earnings, times the total monthly benefit

The residual benefit is the percentage of income lost, (prior minus current) divided by prior, applied to the total monthly benefit.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

Residual disability coverage is most commonly found

in individual disability income policies for professionals, often added as a rider

Residual disability is common in individual disability income policies, especially those sold to professionals, and is often added by rider.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

A recurrent disability provision treats a new disability from the same or a related cause, occurring within a stated period after the insured returns to work, as

a continuation of the original claim

Under a recurrent disability provision, a relapse from the same or related cause within the stated window is treated as a continuation of the prior disability.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

A common time window in a recurrent disability provision, measured from the insured's return to work, is

6 months

Recurrent disability provisions commonly use a window of about 6 months after returning to work. A same-cause relapse within that time is the same claim.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

When a recurrent disability provision applies, the benefit period

continues from where it left off under the original claim

A recurrent disability is a continuation of the original claim, so the benefit period resumes where it left off rather than restarting.

Other health insurance concepts · From Disability classifications: total, partial, recurrent, and residual

When an agent takes a health insurance application, the agent is acting as the insurer's:

Field underwriter

The agent meets the applicant, asks the questions and records the answers before anyone at the home office sees the case, which makes the agent the insurer's field underwriter.

Field underwriting procedures · From Completing the health insurance application

Which information is normally collected in Part I of a health insurance application?

The applicant's name, date of birth, occupation and the coverage requested

Part I is the general-information section: identity, age, sex, occupation, the type and amount of coverage requested and any other coverage in force or being replaced.

Field underwriting procedures · From Completing the health insurance application

Part II of a health insurance application is primarily concerned with:

The proposed insured's health history, current conditions, treatment and physicians

Part II is the medical-information section: health history, current conditions, medications, treatment and the names of physicians who have seen the proposed insured.

Field underwriting procedures · From Completing the health insurance application

Which item is typically reported in the agent's report section of a health insurance application?

Whether the new policy will replace existing coverage

The agent's report covers the agent's relationship with the applicant, observations the questions did not capture, and whether the policy replaces existing coverage.

Field underwriting procedures · From Completing the health insurance application

An insurer issues a health policy even though one question on the application was left unanswered. The insurer is generally considered to have:

Waived its right to that information

By issuing a policy with an unanswered question, the insurer is generally treated as having waived that information. It cannot later deny coverage because of the missing answer.

Field underwriting procedures · From Completing the health insurance application

Why should correction fluid never be used to change an answer on a health insurance application?

It conceals what was originally written, so the change cannot be verified as the applicant's

A strike-through with the applicant's initials shows exactly what was changed and that the applicant approved it. Correction fluid hides the original entry.

Field underwriting procedures · From Completing the health insurance application

A woman applies for health coverage on her adult son, who will be the insured. Who must sign the application?

Both the applicant and the adult son, with the agent signing as witness

The applicant signs, and if the proposed insured is a different adult, that person signs too. The agent signs as a witness to what was recorded.

Field underwriting procedures · From Completing the health insurance application

When the agent signs a health insurance application, the agent's signature serves as:

A witness to the answers and signatures recorded

The agent signs as a witness to what was recorded. The truth of the answers remains the applicant's responsibility.

Field underwriting procedures · From Completing the health insurance application

What does the authorization to release medical information signed with a health insurance application allow the insurer to do?

Obtain records from doctors, hospitals and the Medical Information Bureau

The authorization lets the insurer obtain medical information from doctors, hospitals and the Medical Information Bureau to verify and supplement the application.

Field underwriting procedures · From Completing the health insurance application

Under the federal Fair Credit Reporting Act, what must an applicant for health insurance be told?

That a consumer report or investigative consumer report may be ordered

Under the Fair Credit Reporting Act, the applicant must be told when a consumer report or investigative consumer report may be ordered.

Field underwriting procedures · From Completing the health insurance application

An applicant pays the first premium when signing a health insurance application. What does the agent give the applicant?

A conditional receipt

When the first premium comes with the application, the agent issues a conditional receipt.

Field underwriting procedures · From Completing the health insurance application

Under a conditional receipt, coverage can begin as early as:

The date of the application or of the medical exam, if the applicant is insurable as applied for

A conditional receipt can make coverage effective on the application or exam date, on the condition that the applicant is found insurable as applied for.

Field underwriting procedures · From Completing the health insurance application

When a health policy is delivered and premium is collected at delivery, the agent often obtains a statement of good health. Its purpose is to confirm that:

The insured's health has not changed since the application

A statement of good health, taken at delivery when premium was not paid with the application, confirms that nothing has changed in the insured's health since the application.

Field underwriting procedures · From Completing the health insurance application

A copy of the completed application is attached to the health policy. As a result, the application:

Becomes part of the entire contract

A copy of the application attached to the policy becomes part of the entire contract.

Field underwriting procedures · From Completing the health insurance application

In health insurance, the applicant's answers on the application are generally treated as:

Representations, or statements believed to be true

Application answers are representations, statements the applicant believes to be true, rather than guarantees of absolute truth.

Field underwriting procedures · From Completing the health insurance application

A misrepresentation on a health insurance application is considered material when it:

Would have changed the insurer's decision to issue the policy or its terms

A material misrepresentation is one that would have changed the insurer's decision. Only a material misrepresentation justifies denying a claim or rescinding coverage.

Field underwriting procedures · From Completing the health insurance application

A family's application asks for the name of each doctor who has treated the proposed insureds in recent years. This question appears in which part of the application?

Part II, the medical section

Treating physicians are part of the medical information collected in Part II.

Field underwriting procedures · From Completing the health insurance application

Why is it important that the agent, acting as field underwriter, completes the application carefully?

Errors can cause delays, wrong premiums, denied claims or later rescission

A careless application leads to delays, wrong premiums, denied claims or rescission. A careful one protects the applicant, the insurer and the agent.

Field underwriting procedures · From Completing the health insurance application

A statement of good health is most commonly obtained when:

The policy is delivered and the first premium is collected at delivery

When no premium comes with the application, coverage begins at delivery, and the agent often obtains a statement of good health then.

Field underwriting procedures · From Completing the health insurance application

Under the Fair Credit Reporting Act notice requirement, what kind of report might an insurer order about a health insurance applicant?

An investigative consumer report

The Fair Credit Reporting Act requires that the applicant be told when a consumer report or investigative consumer report may be ordered.

Field underwriting procedures · From Completing the health insurance application

As used in the Florida Insurance Code, the term "Department" means which body?

The Department of Financial Services

Section 624.05(1) defines "Department" as the Department of Financial Services and adds that the term does not mean the Financial Services Commission or any office of the Commission.

Source: Fla. Stat. § 624.05(1) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Under the Florida Insurance Code's definitions, the term "Office" refers to:

The Office of Insurance Regulation of the Financial Services Commission

Section 624.05(3) defines "Office" as the Office of Insurance Regulation of the Financial Services Commission. OFR, although also an office of the Commission, is not the defined term.

Source: Fla. Stat. § 624.05(3) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

In the Florida Insurance Code, "Commission" is a defined term. What does it mean?

The Financial Services Commission

Section 624.05(2) defines "Commission" as the Financial Services Commission -- the Governor and Cabinet acting as agency head over OIR and OFR.

Source: Fla. Stat. § 624.05(2) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Who heads the Florida Department of Financial Services?

The Chief Financial Officer

The Department of Financial Services is headed by Florida's Chief Financial Officer, an elected statewide Cabinet officer.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

How does Florida's Chief Financial Officer come to hold that position?

By statewide election, as one of the three Cabinet officers

The CFO is one of Florida's three elected Cabinet officers, with the Attorney General and the Commissioner of Agriculture, and heads the Department of Financial Services independently of the Governor.

Source: Fla. Const. art. IV, s. 4(a) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

The Financial Services Commission is made up of:

The Governor and the Cabinet, acting collegially as agency head

The Financial Services Commission is not a standing board of appointees; it is the Governor and Cabinet acting collegially as agency head over OIR and OFR.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Which two functions does the Financial Services Commission itself perform?

It adopts insurance rules and appoints the directors of its two constituent offices

The Commission, sitting as the Governor and Cabinet, adopts insurance rules and appoints the directors of OIR and OFR; the day-to-day regulation is done by those offices and by DFS.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Which two offices operate under the Financial Services Commission?

The Office of Insurance Regulation and the Office of Financial Regulation

The Commission's two constituent offices are OIR, facing insurers, and OFR, facing banks, credit unions, finance companies, money services businesses, and securities professionals.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

The State Fire Marshal is a function of which Florida body?

The Department of Financial Services

The explainer lists the State Fire Marshal among the functions housed in the Department of Financial Services under the CFO, alongside licensing, appointments, agency regulation and consumer services.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Under section 624.6012, kinds of insurance are classified into "lines of insurance." Who adopts those lines, and with what constraint?

The Commission adopts the lines by rule, consistent with NAIC reporting requirements

Section 624.6012 provides that the commission shall adopt by rule the lines of insurance to be utilized, and that those lines shall be consistent with the reporting requirements of the National Association of Insurance Commissioners.

Source: Fla. Stat. § 624.6012 ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Who chairs the board of directors of the Florida Healthy Kids Corporation under section 624.91?

The Chief Financial Officer or the CFO's designee

Section 624.91(6)(a) provides that the corporation operates under a board of directors chaired by the Chief Financial Officer or her or his designee.

Source: Fla. Stat. § 624.91(6)(a) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Which Florida body is described as not a standing board of appointees, but the Governor and Cabinet acting together?

The Financial Services Commission

The Financial Services Commission is the Governor and Cabinet acting collegially as agency head, not a separate panel of appointees.

Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

An agent reads a sentence in the Insurance Code that begins, "The commission may adopt rules..." In that sentence, "commission" means:

The Financial Services Commission, the Governor and Cabinet

Section 624.05(2) defines "Commission" as the Financial Services Commission; rulemaking under the Code is that body's function.

Source: Fla. Stat. § 624.05(2) ·Florida statutes, rules, and regulations common to all lines · From Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

In which life insurance distribution system do agents primarily represent one insurer and receive recruiting, training, and support through that insurer's branch or general agency offices?

The career, or captive, agency system

The career, also called captive or exclusive, agency system uses agents who represent primarily one insurer and are recruited, trained, and supported through that insurer's branch or general agency offices.

Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Which description best fits a personal-producing general agent?

An experienced independent producer who contracts directly with an insurer and is paid mainly on personal sales

A personal-producing general agent is an experienced independent producer who contracts directly with an insurer and is compensated mainly on his or her own sales.

Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

What is the stated purpose of Florida's life insurance solicitation law?

To require insurers to deliver information that helps buyers select an appropriate plan, understand its basic features, and compare the costs of similar plans

The solicitation law requires insurers to deliver information that improves the buyer's ability to select the most appropriate plan, understand the policy's basic features, and evaluate the relative costs of similar plans.

Source: Fla. Stat. § 626.99(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Florida's life insurance cost comparison formula for the equivalent level annual dividend accumulates annual cash dividends at what interest rate?

5 percent compounded annually

The equivalent level annual dividend is calculated by accumulating annual cash dividends at 5 percent interest compounded annually to the end of the 10th and 20th policy years.

Source: Fla. Stat. § 626.99(3)(c) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Florida law makes it unfair and deceptive to issue a statement that is misleading as to the financial condition of any person, or as to:

The legal reserve system upon which any life insurer operates

The misrepresentation rule covers statements that are misleading as to the financial condition of any person or as to the legal reserve system upon which any life insurer operates.

Source: Fla. Stat. § 626.9541(1)(a)4. ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Before a Florida life insurer or life agent offers a value-added product or service to customers, what must be true of its cost?

It must be reasonable in comparison to the customer's premiums or coverage for the policy class

The cost to the life insurer or agent of offering a value-added product or service must be reasonable in comparison to the customer's premiums or insurance coverage for the policy class.

Source: Fla. Stat. § 626.9541(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

If a life insurer believes in good faith, but cannot yet show with enough evidence, that a value-added service qualifies, how long may it offer the service as a pilot or testing program?

Up to 1 year

A life or health insurer or agent with a good faith belief but insufficient evidence may provide the product or service, in a manner that is not unfairly discriminatory, as part of a pilot or testing program for up to 1 year.

Source: Fla. Stat. § 626.9541(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

A life insurer notifies the regulator before starting a pilot program for a value-added service. Unless the regulator objects within how many days after receiving the notice may the insurer begin?

21 days

The insurer or agent must notify the office or department before commencing the pilot and may commence it unless the regulator objects within 21 days after receiving the notice.

Source: Fla. Stat. § 626.9541(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

What standard does Florida require of an agent who recommends an annuity?

The agent must act in the best interest of the consumer

The purpose of Florida's annuity suitability law is to require agents to act in the best interest of the consumer when recommending an annuity, and to require insurers to supervise so consumers' needs and objectives are addressed.

Source: Fla. Stat. § 627.4554(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

To which annuity transactions does Florida's best-interest annuity law apply?

Any sale or recommendation of an annuity

The scope section of Florida's annuity suitability law states that it applies to any sale or recommendation of an annuity.

Source: Fla. Stat. § 627.4554(2) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Under Florida's annuity rules, who must establish and maintain a system to supervise annuity recommendations?

The insurer

The law requires insurers to establish and maintain a system to supervise so that consumers' insurance needs and financial objectives are effectively addressed, including informing agents of the requirements.

Source: Fla. Stat. § 627.4554(1) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

Which relative is included in the definition of family member for Florida's life agent beneficiary prohibition?

First cousin

Family member means a relative such as a parent, child, sibling, grandparent, uncle, aunt, first cousin, nephew, niece, spouse, in-law, step-relative, or half sibling of the life agent.

Source: Fla. Stat. § 626.798(3)(a) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

For Florida's life agent beneficiary rule, how is insurable interest defined?

An actual, lawful, and substantial economic interest in the insured's life, or a reasonable expectation of benefit from the insured's continued life

Insurable interest means the agent or family member has an actual, lawful, and substantial economic interest in the safety and preservation of the insured's life, or a reasonable expectation of benefit or advantage from the insured's continued life.

Source: Fla. Stat. § 626.798(3)(b) ·Florida statutes pertinent to life and annuity insurance · From Life and annuity marketing methods and practices

An individual health policy's premium is payable monthly. How long is the grace period under the standard provisions?

10 days

The grace period is 7 days for weekly premiums, 10 days for monthly premiums and 31 days for all other modes. A monthly-premium policy therefore has a 10-day grace period.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the entire contract provision, who may change or waive a provision of an individual health policy?

Only an executive officer of the insurer, by endorsement or attached rider

The entire contract provision makes the policy, attached application and riders the whole contract, and allows changes only when approved by an executive officer of the insurer. Agents cannot change or waive provisions.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

A lapsed individual health policy's premium is accepted with a conditional receipt, and the insurer takes no action on the reinstatement application. When is the policy reinstated automatically?

45 days after the date of the conditional receipt

Under the reinstatement provision, if the insurer issues a conditional receipt and does not approve or disapprove the application within 45 days, the policy is reinstated automatically.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the standard notice of claim provision, within how many days after a loss should the insured give the insurer written notice?

20 days, or as soon as reasonably possible

The notice of claim provision requires written notice within 20 days of the loss, or as soon as reasonably possible.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the standard proof of loss provision, how soon after a loss must written proof of loss normally be furnished?

Within 90 days

Written proof of loss is due within 90 days after the loss.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the time of payment of claims provision, how often must periodic benefits such as disability income be paid?

At least monthly

Claims other than periodic benefits are paid immediately upon receipt of proof of loss; periodic benefits such as disability income are paid at least monthly.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the physical examination and autopsy provision, who pays for an examination the insurer requires while a claim is pending?

The insurer

The insurer may have the claimant examined as often as reasonably required while a claim is pending, and may request an autopsy where not forbidden by law, all at its own expense.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under the payment of claims provision, to whom are death benefits under an individual health policy paid?

The named beneficiary

The payment of claims provision directs death benefits to the named beneficiary and all other benefits to the insured.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

How does Florida law define group health insurance?

Health insurance covering groups of persons under a master policy issued to one of the groups the statute lists

Florida defines group health insurance as health insurance covering groups of persons under a master group health insurance policy issued to one of the groups listed in ss. 627.653-627.656.

Source: Fla. Stat. § 627.652(1) ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

In group health insurance, what does each covered member typically receive?

A certificate of coverage

Group coverage is written as one master policy held by the group; each covered person receives a certificate evidencing coverage.

Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

In Florida's group health part, small employer health alliance groups are addressed in the same section as which other groups?

Labor union and association groups

Florida's group health part has a single section covering labor union, association, and small employer health alliance groups.

Source: Fla. Stat. § 627.654 ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

A group health policy is issued in Georgia and covers a Florida resident. What is the general rule in Florida?

The policy must comply with Florida's group health part in the same manner as a policy issued in Florida

Any group health policy issued or delivered outside Florida under which a Florida resident is covered must comply with Florida's group health part in the same manner as policies issued in Florida, unless an exemption applies.

Source: Fla. Stat. § 627.6515(1) ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

For an out-of-state group health policy to be exempt from Florida's group health part, how must the certificates issued to Florida residents display the notice that benefits are governed primarily by another state's law?

In contrasting color and at least 10-point type

Certificates issued to Florida residents must state, in contrasting color and not less than 10-point type, that the benefits are governed primarily by the law of a state other than Florida.

Source: Fla. Stat. § 627.6515(2) ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

What is the purpose of the Florida Health Insurance Coverage Continuation Act?

To give continued access to coverage for small employers' employees and dependents not protected by federal COBRA

The act's purpose is to ensure continued access to affordable health insurance coverage for employees of small employers and their dependents and other qualified beneficiaries not protected by COBRA.

Source: Fla. Stat. § 627.6692(2) ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

Under Florida's continuation act, a qualified beneficiary determined disabled by the Social Security Administration may extend continuation to how many months in total?

29 months

A qualified beneficiary determined disabled under Title II or XVI of the Social Security Act at the time of the qualifying event may continue for an additional 11 months, 29 months in total.

Source: Fla. Stat. § 627.6692 ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility

During the 11-month disability extension under Florida's continuation act, what may the carrier charge?

Up to 150 percent of the group rate

During the 11-month disability extension, the insurance carrier can charge up to 150 percent of the group rate.

Source: Fla. Stat. § 627.6692 ·Florida statutes pertinent to health insurance · From Standard health policy provisions and group health eligibility