Health Insurance Florida 2-40 Practice
Exam Questions Latest Edition
1. On what basis may a variable annuity be purchased?
A) Fixed or variable
B) Flexible or fixed
C) Deferred or immediate
D) Delayed or detained - ANSWER Deferred or immediate
(The annuitant may receive payments either immediately or in the future.)
2. Which of the following definitions are INCORRECT?
A) Annuity units are the basic measure and method by which annuity
income is determined.
B) The two factors that determine the annuitant's dollar income are the
number of annuity units and the value of each unit.
C) A variable annuity does not have a loan value because of its variable
value.
D) There is no capital gains tax to the individual during the accumulation
period of a variable annuity. - ANSWER A variable annuity does not
have a loan value because of its variable value.
(There is a cash value so there is a loan value.)
3. Can you add a waiver of premium to a variable annuity contract?
A) Yes, only during the accumulation period.
B) No, because of the fluctuation.
C) Yes, throughout the lifetime of the entire contract, no limitations.
, D) No, because of the tax consequences. - ANSWER Yes, only during
the accumulation period.
(Once payouts begin, the contract pays according to how it was set up.)
4. Which is NOT a rating factor for small employer carriers?
A) All plans issued or renewed in the same calendar month shall have the
same rating period.
B) They use anticipated claim experience.
C) They shall apply rating factors consistent among all small employers.
D) Preexisting conditions may not be excluded any longer than 1 year. -
ANSWER They use anticipated claim experience.
(Small employer carriers utilize actual claim experience, not anticipated claim
experience.)
5. Which statement is INCORRECT regarding HMOs?
A) HMOs must provide basic health care services to include
hospitalization, laboratory services, optical services, physical therapy,
dental care and preventive services.
B) HMOs are sponsored by medical schools, hospitals, employers, labor
unions, consumer groups, commercial insurers, governments, and
hospital-medical service plans.
C) Members are required to pay a small copayment for basic health care
services.
D) The copayment discourages unnecessary use of medical resources. -
ANSWER HMOs must provide basic health care services to include
hospitalization, laboratory services, optical services, physical therapy,
dental care and preventive services.
(Usually optical services, physical therapy, dental care are supplemental and
offered as an option.)
,6. An agent is guilty of ______ when he / she makes a false or malicious
statement about a competing insurer's financial condition.
A) Twisting
B) Intimidation
C) Defamation
D) Boycott - ANSWER Defamation
(Defamation is defined as making false oral or written statements that are
critical or derogatory of an insurer's financial condition and is intended to cause
injury to someone in the insurance business.)
7. This is the fixed amount paid by the HMO to a health care physician or
provider in exchange for medical services rendered by that provider?
A) Copayment
B) Prepaid plan
C) Deductible
D) Capitation - ANSWER Capitation
8. An agent may have no more than ________ of his total business within a 12-
month period be from controlled business.
A) 25%
B) 35%
C) 50%
D) 65% - ANSWER 50%
(Controlled business is the practice of an agent selling policies or annuity
contracts to himself or family members, officers, directors, stockholders,
partners, or employees of a business in which he or a family member is
engaged, or the debtors of a firm, association, or corporation of whom he or she
is an officer, director, stockholder, partner, or employee.)
, 9. An insurance license may not be suspended for which of the following?
A) Cheating on the license exam
B) Twisting
C) Over-insuring a health insurance risk
D) Violating the code of ethics - ANSWER Over-insuring a health
insurance risk
(An agent's license will not be suspended for over-insuring a health insurance
risk unless the agent willfully over-insured it.)
10.A life agent may not sell which type of insurance?
A) Annuities
B) Viatical settlement broker
C) Limited credit insurance
D) Variable contracts - ANSWER Limited credit insurance
(A life agent is appointed to also sell life insurance and fixed-dollar annuity
contracts, but no limited credit insurance.)
11.All insurance carriers authorized in Florida must be audited by the Office of
Financial Regulation once every __________.
A) Year
B) 3 years
C) 5 years
D) 7 years - ANSWER 3 years
(The Office of Financial Regulation protects the public against unauthorized
behavior by audited insurance companies at least once every 3 years, and more
frequently if warranted.)
Exam Questions Latest Edition
1. On what basis may a variable annuity be purchased?
A) Fixed or variable
B) Flexible or fixed
C) Deferred or immediate
D) Delayed or detained - ANSWER Deferred or immediate
(The annuitant may receive payments either immediately or in the future.)
2. Which of the following definitions are INCORRECT?
A) Annuity units are the basic measure and method by which annuity
income is determined.
B) The two factors that determine the annuitant's dollar income are the
number of annuity units and the value of each unit.
C) A variable annuity does not have a loan value because of its variable
value.
D) There is no capital gains tax to the individual during the accumulation
period of a variable annuity. - ANSWER A variable annuity does not
have a loan value because of its variable value.
(There is a cash value so there is a loan value.)
3. Can you add a waiver of premium to a variable annuity contract?
A) Yes, only during the accumulation period.
B) No, because of the fluctuation.
C) Yes, throughout the lifetime of the entire contract, no limitations.
, D) No, because of the tax consequences. - ANSWER Yes, only during
the accumulation period.
(Once payouts begin, the contract pays according to how it was set up.)
4. Which is NOT a rating factor for small employer carriers?
A) All plans issued or renewed in the same calendar month shall have the
same rating period.
B) They use anticipated claim experience.
C) They shall apply rating factors consistent among all small employers.
D) Preexisting conditions may not be excluded any longer than 1 year. -
ANSWER They use anticipated claim experience.
(Small employer carriers utilize actual claim experience, not anticipated claim
experience.)
5. Which statement is INCORRECT regarding HMOs?
A) HMOs must provide basic health care services to include
hospitalization, laboratory services, optical services, physical therapy,
dental care and preventive services.
B) HMOs are sponsored by medical schools, hospitals, employers, labor
unions, consumer groups, commercial insurers, governments, and
hospital-medical service plans.
C) Members are required to pay a small copayment for basic health care
services.
D) The copayment discourages unnecessary use of medical resources. -
ANSWER HMOs must provide basic health care services to include
hospitalization, laboratory services, optical services, physical therapy,
dental care and preventive services.
(Usually optical services, physical therapy, dental care are supplemental and
offered as an option.)
,6. An agent is guilty of ______ when he / she makes a false or malicious
statement about a competing insurer's financial condition.
A) Twisting
B) Intimidation
C) Defamation
D) Boycott - ANSWER Defamation
(Defamation is defined as making false oral or written statements that are
critical or derogatory of an insurer's financial condition and is intended to cause
injury to someone in the insurance business.)
7. This is the fixed amount paid by the HMO to a health care physician or
provider in exchange for medical services rendered by that provider?
A) Copayment
B) Prepaid plan
C) Deductible
D) Capitation - ANSWER Capitation
8. An agent may have no more than ________ of his total business within a 12-
month period be from controlled business.
A) 25%
B) 35%
C) 50%
D) 65% - ANSWER 50%
(Controlled business is the practice of an agent selling policies or annuity
contracts to himself or family members, officers, directors, stockholders,
partners, or employees of a business in which he or a family member is
engaged, or the debtors of a firm, association, or corporation of whom he or she
is an officer, director, stockholder, partner, or employee.)
, 9. An insurance license may not be suspended for which of the following?
A) Cheating on the license exam
B) Twisting
C) Over-insuring a health insurance risk
D) Violating the code of ethics - ANSWER Over-insuring a health
insurance risk
(An agent's license will not be suspended for over-insuring a health insurance
risk unless the agent willfully over-insured it.)
10.A life agent may not sell which type of insurance?
A) Annuities
B) Viatical settlement broker
C) Limited credit insurance
D) Variable contracts - ANSWER Limited credit insurance
(A life agent is appointed to also sell life insurance and fixed-dollar annuity
contracts, but no limited credit insurance.)
11.All insurance carriers authorized in Florida must be audited by the Office of
Financial Regulation once every __________.
A) Year
B) 3 years
C) 5 years
D) 7 years - ANSWER 3 years
(The Office of Financial Regulation protects the public against unauthorized
behavior by audited insurance companies at least once every 3 years, and more
frequently if warranted.)
