Free Florida Life & Health Insurance License Practice Test

Correct answer: It pays only for deaths that meet a narrow accidental-cause test, so the great majority of deaths collect nothing extra

Most deaths are from natural causes. A rider that pays only on an accident that caused death independently of all other causes, within a short period, and outside a list of exclusions leaves the ordinary case uncovered.

From the free practice set Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: One year from the time proof was otherwise required

Failure to furnish proof within 90 days does not invalidate the claim if it was not reasonably possible, provided proof is furnished as soon as reasonably possible and in no event later than one year from the time proof was otherwise required, except in the absence of legal capacity.

From the free practice set Standard health policy provisions and group health eligibility

Correct answer: It remains valid; insurable interest was required only at the time the contract was made.

Fla. Stat. 627.404(1) requires insurable interest at the time the contract was made and states that it need not exist after the inception date of coverage. The husband had an insurable interest in his spouse when he bought the policy, so the later divorce does not affect the contract's validity, and ownership stays where it was.

From the free practice set Third-party ownership of life insurance

Correct answer: It is fully paid up; no further premiums are due and the coverage continues for life.

20-pay life is a limited-pay whole life design: premiums are compressed into 20 years. Once the 20 payments are complete, the policy is fully paid up and coverage continues for the insured's entire life.

From the free practice set Traditional whole life products

Correct answer: Up to that date's option amount only -- the option that lapsed is gone and is not added to it

Options are use-it-or-lose-it. A missed option expires at its own date and is not banked or carried forward, but the remaining scheduled options are unaffected and may still be exercised in the ordinary way.

From the free practice set Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: 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.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: Residual: how much income was lost? Recurrent: is a relapse close enough in time and cause to be the same claim?

Total asks whether the insured can do their job (own occupation) or any suitable job; partial asks whether they can do some duties; residual asks how much income was lost; recurrent asks whether a relapse is close enough in time and cause to be the same claim.

From the free practice set Disability classifications: total, partial, recurrent, and residual

Correct answer: 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.

From the free practice set Standard health policy provisions and group health eligibility

Correct answer: It goes to the underwriter and does not become part of the policy

The agent's report is the agent's own statement to the underwriter. It is used in underwriting but is not attached to the policy.

From the free practice set Completing the health insurance application

Correct answer: The producer must record the answers exactly as the applicant gave them.

The applicant is accountable for answering truthfully and completely; the producer is accountable for recording those answers exactly as given. The producer neither guarantees nor independently verifies them.

From the free practice set Application mechanics: signatures, changes, and incomplete applications

Correct answer: 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.

From the free practice set Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: The Office of Financial Regulation

Securities professionals are among the industries the Office of Financial Regulation regulates, while the same person's insurance license is a DFS matter.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: 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.

From the free practice set Disability income and accidental death and dismemberment policies

Correct answer: Guaranteed insurability, or future increase, option

A guaranteed insurability or future increase option lets the insured buy additional disability coverage at specified times or as income rises, without evidence of insurability.

From the free practice set Disability income and accidental death and dismemberment policies

Correct answer: 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.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: The applicant signs an amendment or endorsement at delivery accepting the new terms.

A change made by the insurer at issue -- a rated policy or a lower face amount than requested -- is handled by an amendment or endorsement that the applicant signs at delivery. Coverage on the changed terms does not begin until that signed amendment is accepted.

From the free practice set Application mechanics: signatures, changes, and incomplete applications

Correct answer: The CFO both heads the Department of Financial Services and sits as one member of the Commission that oversees OIR and OFR

Because the Commission is the Governor and Cabinet, and the CFO is a Cabinet officer, the CFO participates in the Commission while separately heading DFS as an independently elected official.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: Yes; upon proper request within 60 days of the due date, the insurer may substitute an actuarially equivalent alternative paid-up benefit that provides a greater amount or longer period of death benefits.

Fla. Stat. § 627.476(2)(a) allows the company, upon proper request not later than 60 days after the due date of the premium in default, to substitute an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits (or, if applicable, a greater amount or earlier payment of endowment benefits).

From the free practice set Traditional whole life products

Correct answer: The producer has altered the applicant's representations without authority, and the applicant never attested to the changed answer.

Every change must be initialed by the applicant because the answers are the applicant's representations. A producer who rewrites an answer alone has substituted his or her own statement for the applicant's, and the applicant's signature no longer covers what is on the form.

From the free practice set Application mechanics: signatures, changes, and incomplete applications

Correct answer: The exclusion applies, because the agent had no authority to waive a policy provision

No agent has authority to change the policy or waive any of its provisions. The policy, with its endorsements and attached papers, is the entire contract, so the written exclusion controls.

From the free practice set Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: No, because an approved change must also be endorsed on or attached to the policy

A change requires both approval by an executive officer and endorsement on, or attachment to, the policy. Without the endorsement the change is not part of the entire contract.

From the free practice set Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: 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.

From the free practice set Disability income and accidental death and dismemberment policies

Correct answer: A Medicare supplement (Medigap) policy

Original Medicare leaves gaps such as deductibles and 20 percent Part B coinsurance with no annual cap. Medicare supplement (Medigap) policies are designed to fill those gaps.

From the free practice set Medicare Parts A, B, C, and D

Correct answer: An annual dividend payment

The three guarantees are the level premium, the guaranteed death benefit, and the guaranteed minimum cash value. Dividends are never guaranteed; they are paid only on participating policies and only when the insurer's experience is more favorable than assumed.

From the free practice set Traditional whole life products

Correct answer: To keep someone from reinstating a lapsed policy only after an illness has already started

The 10-day sickness rule protects the insurer against adverse selection: an insured who lets a policy lapse should not be able to reinstate only once an illness is already under way. Accidents, which cannot be anticipated, are covered immediately after reinstatement.

From the free practice set Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: Choosing a longer elimination period, such as 180 days instead of 30

The elimination period works like a deductible in time: the longer the insured waits before benefits start, the less the insurer is likely to pay, so the premium falls. A client with savings to cover the gap is a natural fit for a longer elimination period.

From the free practice set Disability income and accidental death and dismemberment policies

Correct answer: The rider pays the policy's premiums, not a benefit to the insured; income replacement is the job of disability income insurance

Waiver of premium protects the policy, not the paycheck. Its entire benefit is that the premiums get paid so the coverage survives the disability. Replacing lost earnings requires a separate disability income contract.

From the free practice set Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: The bonuses are paid to all policyholders and are fair and equitable to all and in the best interests of the company and its policyholders

Bonuses or premium abatements from surplus on nonparticipating life insurance or annuities are not an unlawful rebate if paid to all policyholders and fair and equitable to all, in the best interests of the company and its policyholders.

From the free practice set Life and annuity marketing methods and practices

Correct answer: The Financial Services Commission

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

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: 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.

From the free practice set Third-party ownership of life insurance

Correct answer: 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.

From the free practice set Traditional whole life products

Correct answer: 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.

From the free practice set Waiver, guaranteed-insurability, payor, and accidental-death riders

Correct answer: The husband's as owner, the wife's as proposed insured, and the producer's as witness.

When the owner is someone other than the insured, both sign: the owner as the party to the contract and the insured as consent to being insured and to the investigation of his or her health. The producer signs as witness to those signatures and to the producer's report.

From the free practice set Application mechanics: signatures, changes, and incomplete applications

Correct answer: Permitted, as long as the additional material does not violate the insurance code or another statute or regulation

The solicitation law states that it does not prohibit an insurer from using additional material that is not in violation of the chapter or any other statute or regulation.

From the free practice set Life and annuity marketing methods and practices

Correct answer: 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.

From the free practice set Life and annuity marketing methods and practices

Correct answer: Yes, because the condition was excluded by specific description

The time limit on certain defenses protects against denial for preexisting conditions after 2 years unless the condition was excluded by name or specific description. This one was.

From the free practice set Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: 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.

From the free practice set Third-party ownership of life insurance

Correct answer: A certificate of coverage

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

From the free practice set Standard health policy provisions and group health eligibility

Correct answer: 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.

From the free practice set Standard health policy provisions and group health eligibility

Correct answer: 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.

From the free practice set Mandatory provisions I: entire contract, incontestability, grace period, reinstatement

Correct answer: No. Fla. Stat. § 627.522(1) prohibits an industrial life policy from excluding or restricting payment of the face amount because death occurred due to the act of another.

Fla. Stat. § 627.522(1) provides that an industrial life insurance policy may not exclude or restrict payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another.

From the free practice set Traditional whole life products

Correct answer: When the agent is acting as a fiduciary, is a licensed CPA, and is a registered investment adviser or registered securities dealer or associated person

A life agent may not serve as trustee, guardian, or attorney-in-fact for a person he or she does insurance business with unless a family member of that person, or acting as a fiduciary while also a licensed CPA and a registered investment adviser or dealer.

From the free practice set Life and annuity marketing methods and practices

Correct answer: 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.

From the free practice set Disability income and accidental death and dismemberment policies

Correct answer: 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.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: 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.

From the free practice set Medicare Parts A, B, C, and D

Correct answer: Yes, the law expressly applies to any issuer of life insurance contracts, including a fraternal benefit society

The law applies to any solicitation, negotiation, or procurement of life insurance in Florida and to any issuer of life insurance contracts, including a fraternal benefit society.

From the free practice set Life and annuity marketing methods and practices

Correct answer: Contact the applicant so the applicant can make and initial the correction

An agent never changes an answer after the applicant has signed. Any correction must be made and initialed by the applicant.

From the free practice set Completing the health insurance application

Correct answer: 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.

From the free practice set Florida insurance regulators: CFO, Financial Services Commission, OIR, and OFR

Correct answer: 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.

From the free practice set Disability classifications: total, partial, recurrent, and residual

Correct answer: 60 days after April 1

The legal actions provision bars a lawsuit until 60 days after written proof of loss has been furnished, giving the insurer time to process the claim.

From the free practice set Standard health policy provisions and group health eligibility