LORIDA 2-15 INSURANCE LICENSE EXAM ACTUAL EXAM QUESTIONS AND CORRECT ANSWERS WITH RATIONALES GRADED A+

LORIDA 2-15 INSURANCE LICENSE EXAM ACTUAL EXAM QUESTIONS AND CORRECT ANSWERS WITH RATIONALES GRADED A+ .__________ is when policy values of an insurance policy are used to purchase another policy with the same insurer for the sole purpose of earning additional premiums or commissions. - ANSWER-Churning .___________ refers to the monies set aside by insurers for future claims costs. - ANSWER-Reserve funds .____________ term insurance provides a level amount of protection for a specified period, after which the policy expires. - ANSWER-Level ._____________ health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group is constantly changing. - ANSWER-Blanket ._______________ policies are commonly used as a hedge against inflation to ward off decreased purchasing power. - ANSWER-Increasing term .__________________ are the two most important factors in the health insurance underwriting process. - ANSWER-Medical history and occupation ."ACC" refers to the type of disability that prevents someone from performing the job he was performing prior to the disability. - ANSWER-FALSE .A _____________ group involves combining several parties into a group for the purpose of obtaining insurance. - ANSWER-fictitious .A complete examination of an HMO's affairs is conducted at least: - ANSWER-once every five years. .A group life insurance plan in which the employer pays the entire premium is known as a ________________ plan. - ANSWER-noncontributory .A health plan with a $5-per-point conversion factor would pay _______ for a 200-point procedure. - ANSWER-$1,000 .A life insurance policy will not be reinstated if it has been: - ANSWER-surrendered for its cash value. .A life insurance policy's cash value belongs to the insured. - ANSWER-FALSE .A man commits suicide 30 months after purchasing a life insurance policy and his wife is the named beneficiary. What amount will his wife receive? - ANSWER-The face amount of the policy .A medical expense policy states that it will pay a flat $200 a day for each day of hospitalization. The policy pays benefits on what basis? - ANSWER-Indemnity .A portion of a mutual insurer's premiums are paid out as policy dividends and are considered: - ANSWER-refunds .A prospectus for an individual variable insurance contract: - ANSWER-must accompany every sales presentation. .A term life insurance policy's cash value builds during a specifically limited period of time. - ANSWER-FALSE .A Variable annuity separate account will be invested in: - ANSWER-common stocks and other securities. .According to Florida's Standard Valuation Law, the __________________ is mandatory. - ANSWER-legal reserve .Accumulation units are converted into annuity units: - ANSWER-at the time of annuity payout. .AD&D policies make benefits payable in the form of principal sum and capital sum. - ANSWER-TRUE .Agents should check with _________________ to determine if the insurer they are representing is a properly authorized insurer. - ANSWER-the Department of Financial Services .All statements made on an application are considered ________________ because there can be no guarantee that they are true. - ANSWER-representations .An agent engaged in churning as a result of fraudulent conduct is subject to a fine of ________ for each willful violation. (2012) - ANSWER-$50,000 .An agreement that provides that upon a business owner's death, surviving owners will purchase the deceased's interest, often with funds from life insurance policies owned by each principal on the lives of all other principals is the: - ANSWER-Buy-Sell plan. .An immediate annuity is designed to provide income: - ANSWER-Immediately. .An insurance clause is a distinct article in a formal document that establishes the rules in the contract that _____________________ must adhere to. - ANSWER-both the insurer and the insured .An organization outside the members of a self-insurance group which, for a fee, processes claims, completes benefits paperwork and often analyzes claims information is known as the: - ANSWER-third-party administrator (TPA). .Annuity payment amounts are based upon which of the following factors? - ANSWER-Starting principal, interest, and income period .Anyone under the age of _____ who has earned income may open a traditional IRA. - ANSWER-70 1/2 .Basic Medical Expense insurance limits coverage to specific types of medical care. - ANSWER-TRUE .Bill gives Jim a couple of tickets to a Florida Gators game to thank him for purchasing a policy. This is an example of: - ANSWER-rebating .Bob's life insurance policy cash value is $10,000 and he has paid $8,000 in premiums. He now wants to surrender the policy for its cash value. How much is considered taxable? - ANSWER-$2,000 .Both supplementary and comprehensive major medical plans contain deductibles and coinsurance. - ANSWER-true