1. Which Unfair Trade Practice involves making a false statement on an insurance application
in order to receive money from an insurer?
Answer: Misrepresentation
2. Who owns a stock company?
Answer: A stock insurance company is owned by itsstockholders.
3. In Florida, which of the following is considered an Unfair Trade Practice?
Answer: -Coercion
4. Which of these options can an individual use their medical flexible spendingaccount to pay
for?
Answer: Prescription drugs are an allowable expense when paid for by a medical flexible
spending account.
5. Which of the following features of a group Term Life policy enables an individual to leave
the group and continue his or her insurance without providingevidence of insurability?
Answer: The conversion privilege allows an individual to leave the group term plan and
continue his or her insurance without providing evidence ofinsurability.
6. An example of false advertising would be
Answer: An insurer exaggerating its dividends in a magazine advertisement
7. Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six
months. Q dies suddenly and the beneficiary is paid $500,000.This exchange of unequal values
reflects which of the following insurance contract features?
Answer: Aleatory.
Insurance contracts are aleatory in that the amount the insured will pay in premiumsis unequal
to the amount that the insurer will pay in the event of a loss.
8. An example of an unfair trade practice is
Answer: Making a material misrepresentationto an insured is considered to be an unfair trade
practice.
9. How would a contingent beneficiary receive the policy proceeds in an Accidental Death
and Dismemberment (AD&D) policy?
Answer: A contingent beneficiarywill receive the policy proceeds if the primary beneficiary
dies before the insured'sdeath.
10. Which of these terms accurately defines an underwriter's assessment of information on a
life insurance application?
, Answer: Risk classification.
Underwriting, another term for risk selection, is the process of reviewing the many
characteristics that make up the risk profile of an applicant to determine if the applicant is
insurable and, if so, at standard or substandard rates.
11. T applies for a life insurance policy and is told by the producer that the insurer is bound
to the coverage as of the date of the application or medicalexamination, whichever is later.
Assuming that T is an acceptable risk, whatitem is given to T?
Answer: Conditional receipt.
A conditional receipt binds the insurer to coverage as of the date of the application
or medical exam, provided the proposed insured is determined to be an acceptablerisk.
12. What is required in the Florida Employee Health Care Access Act?
Answer: Smallgroup benefit plans are to be issued on a "guarantee-issue" basis
13. P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent
beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The
Accidental Death benefits will be paid to
Answer: P.
In this situation, benefits will be paid to P because P survived the accident and isthe primary
beneficiary.
14. The health insurance program which is administered by each state and funded by both the
federal and state governments is called
Answer: Medicaid- is fundedby both the federal and state governments and administered by
individual states.
15. Which of the following BEST describes a short-term medical expensepolicy?
Answer: Nonrenewable.
A typical short-term medical expense policy is best described as nonrenewable.
16. Which of the following statements about noncontributory employee group life insurance is
FALSE?
Answer: A minimum number of employees is required to participate". Noncontributory
employee group life insurance plans must cover ALL eligibleemployees at all times
17. A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injuryoccurred before the application
was taken 5 years prior. The neck injury wasnever disclosed to the insurer at the time of
application. How will the insurerhandle this claim?
Answer: Claim will be paid and coverage will remain in force.
After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable period, in
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