Table of Contents

• IMPORTANT FACTS YOU NEED TO KNOW
  • Student Verification and Security Pop-Up Questions
  • Florida Study Manual
  • Final Examination
  • Practice Exam Generator
  • Applying For New License
  • The Course Basics
  • Need Help?
  • Frequently Asked Questions (FAQs)
  • Meet Your Instructor
• LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY
• 1.1 The Role of Insurance
  • Section 1.1 Quiz
• 1.2 Industry Overview
• 1.3 The Nature of Insurance
  • 1.3.1 Risk Pooling
  • 1.3.2 Law of Large Numbers
  • Section 1.3 Quiz
• 1.4 The Concept of Risk and Risk Management
  • 1.4.1 Speculative and Pure Risks
  • 1.4.2 Perils and Hazards
  • 1.4.3 Treatment of Risk
  • 1.4.4 Elements of Insurable Risk
  • Section 1.4 Quiz
• 1.5 Private Insurers
  • 1.5.1 Stock Insurers
  • 1.5.2 Mutual Insurers
  • 1.5.3 Assessment Mutual Insurers
  • 1.5.4 Reciprocal Insurers
  • 1.5.5 Lloyd's of London
  • 1.5.6 Reinsurers
  • 1.5.7 Risk Retention Groups
  • 1.5.8 Fraternal Benefit Societies
  • 1.5.9 Home Service Insurers
  • 1.5.10 Service Insurers
  • 1.5.11 Self-Insurers
  • Section 1.5 Quiz
• 1.6 Government Insurers
• 1.7 Distribution Systems
  • 1.7.1 Captive vs. Independent Agents
  • 1.7.2 Solicitors, Consultants, and Special Agents
  • 1.7.3 Excess or Rejected Business
  • 1.7.4 Agency Systems
  • 1.7.5 Other Methods of Selling Insurance
  • Section 1.7 Quiz
• 1.8 History of Regulation
  • 1.8.1 Paul v. Virginia (1868)
  • 1.8.2 United States v. Southeastern Underwriters Association (1944)
  • 1.8.3 The McCarran-Ferguson Act (1945)
  • 1.8.4 Intervention by the FTC (1958)
  • 1.8.5 Intervention by the SEC (1959)
  • 1.8.6 Fair Credit Reporting Act (1970)
  • 1.8.7 Financial Services Modernization Act (1999)
• 1.9 State Self-Regulation
  • 1.9.1 Domestic Insurer
  • 1.9.2 Foreign Insurer
  • 1.9.3 Alien Insurer
• 1.10 Marketing and Sales Practices
  • 1.10.1 Needs-Based Selling
  • 1.10.2 Full and Accurate Disclosure
  • 1.10.3 Client Service Follow-up
  • Section 1.10 Quiz
• 1.11 Prohibited Practices
  • 1.11.1 Policy Replacement
  • 1.11.2 Twisting
  • 1.11.3 Churning
  • 1.11.4 Misrepresentation
  • 1.11.5 Misuse of Premiums
  • 1.11.6 Rebating
  • Section 1.11 Quiz
• 1.12 Regulatory Associations
  • 1.12.1 National Association of Insurance Commissioners (NAIC)
  • 1.12.2 Florida Life and Health Guaranty Association
  • 1.12.3 NAIFA & NAHU
  • Section 1.12 Quiz
• 1.13 Independent Rating Services
• Lesson 1 Review
  • Key Concepts
  • Lesson 1 Quiz
• LESSON 2: LEGAL CONCEPTS OF THE INSURANCE CONTRACT
• 2.1 Elements of the Contract
  • 2.1.1 Offer and Acceptance
  • 2.1.2 Consideration
  • 2.1.3 Legal Purpose
  • 2.1.4 Competent Parties
  • Section 2.1 Quiz
• 2.2 Special Features of the Insurance Contract
  • 2.2.1 Aleatory
  • 2.2.2 Adhesion
  • 2.2.3 Unilateral
  • 2.2.4 Value vs. Indemnity
  • 2.2.5 Insurable Interest
  • Section 2.2 Quiz
• 2.3 Agents and Brokers
  • 2.3.1 Agent Authority
  • 2.3.2 Fiduciary Responsibilities
  • Section 2.3 Quiz
• 2.4 Other Legal Concepts
• Lesson 2 Review
  • Key Concepts
  • Lesson 2 Quiz
• LESSON 3: LIFE INSURANCE POLICIES, PROVISIONS, OPTIONS AND RIDERS
• 3.1 Categories of Life Insurance
  • 3.1.1 Ordinary Life Insurance
  • 3.1.2 Industrial Life Insurance
  • 3.1.3 Group Insurance
  • Section 3.1 Quiz
• 3.2 Term Life Insurance
  • 3.2.1 Term Life Premiums
  • 3.2.2 Level Term
  • 3.2.3 Decreasing Term
  • 3.2.4 Increasing Term
  • Section 3.2 Quiz
• 3.3 Option To Renew and Option To Convert
• 3.4 Whole Life (Permanent) Insurance
• 3.5 Endowment Policies
  • 3.5.1 Endowment Premiums
  • 3.5.2 Modified Endowment Contracts
• 3.6 Special Use Policies
• 3.7 Nontraditional Life Policies
  • 3.7.1 Variable Insurance Products
  • 3.7.2 Adjustable Life Policies
  • 3.7.3 Universal Life Policies
  • Section 3.7 Quiz
• 3.8 Rights of Ownership
• 3.9 Standard Policy Provisions
  • 3.9.1 Entire Contract Provision
  • 3.9.2 The Insuring Clause
  • 3.9.3 Free Look Provision
  • 3.9.4 Consideration Clause
  • 3.9.5 Grace Period
  • 3.9.6 The Reinstatement Clause
  • 3.9.7 Policy Loan Provision
  • 3.9.8 The Incontestable Clause
  • 3.9.9 Assignment Provision - Absolute and Collateral
  • 3.9.10 Accelerated Death Benefits Provision
  • 3.9.11 The Suicide Provision
  • 3.9.12 The Misstatement of Age or Sex Provision
  • Section 3.9 Quiz
• 3.10 Exclusions
• 3.11 Nonforfeiture Options
  • 3.11.1 Cash Surrender Value
  • 3.11.2 Reduced Paid-Up Insurance
  • 3.11.3 Extended Term Insurance
  • Section 3.11 Quiz
• 3.12 Policy Dividends
  • 3.12.1 Dividend Options
• 3.13 Policy Riders
  • 3.13.1 Guaranteed Insurability Rider
  • 3.13.2 Waiver of Premium
  • 3.13.3 Automatic Premium Loan Rider
  • 3.13.4 Payor Rider
  • 3.13.5 Accidental Death Benefit Rider
  • 3.13.6 Return of Premium Rider
  • 3.13.7 Cost of Living Adjustment Rider
  • 3.13.8 Other Insureds Rider
• Lesson 3 Review
  • Key Concepts
  • Lesson 3 Quiz
• LESSON 4: LIFE INSURANCE PREMIUMS, PROCEEDS AND BENEFICIARIES
• 4.1 Primary Factors In Premium Calculations
  • 4.1.1 Mortality Factor
  • 4.1.2 Interest Factor
  • 4.1.3 Level Premium Funding
  • 4.1.4 Policy Reserves vs. Cash Values
  • 4.1.5 Other Premium Factors
  • 4.1.6 Methods of Rating Substandard Risks
  • Section 4.1 Quiz
• 4.2 Policy Proceeds and Settlement Options
  • 4.2.1 Single Premium Payment or Lump Sum Method
  • 4.2.2 Interest Only Payments
  • 4.2.3 Installment Payments
  • 4.2.4 Accelerated Benefits
  • 4.2.5 Viatical Settlements
  • 4.2.6 Life Settlements
  • Section 4.2 Quiz
• 4.3 Tax Treatment of Proceeds
  • 4.3.1 Proceeds Paid at Death
  • 4.3.2 1035 Contract Exchanges
  • Section 4.3 Quiz
  • Key Concepts
• 4.4 Beneficiaries
• 4.5 Naming an Entity as Beneficiary
  • 4.5.1 Trusts
  • 4.5.2 Estates
  • 4.5.3 Charities
  • Section 4.5 Quiz
• 4.6 Naming Individuals as Beneficiaries
  • 4.6.1 Per Capita Method
  • 4.6.2 Per Stirpes Method
  • 4.6.3 Minors
  • 4.6.4 Specific Class Designations
  • 4.6.5 Changing Beneficiaries
  • Section 4.6 Quiz
• 4.7 Special Situations
  • 4.7.1 Uniform Simultaneous Death Act
  • 4.7.2 Common Disaster Provision
  • 4.7.3 Spendthrift Trust Clause
  • 4.7.4 Facility-of-Payment Provision
• Lesson 4 Review
  • Key Concepts
  • Lesson 4 Quiz
• LESSON 5: LIFE INSURANCE UNDERWRITING AND POLICY ISSUANCE
• 5.1 Purpose of Underwriting
  • Section 5.1 Quiz
• 5.2 Underwriting Process
  • 5.2.1 Underwriting Classifications
  • Section 5.2 Quiz
• 5.3 The Application
  • 5.3.1 Part I - General
  • 5.3.2 Part II - Medical
  • 5.3.3 Part III - Agent's Report
  • 5.3.4 Special Questionnaires
  • 5.3.5 Medical Information Bureau
  • Section 5.3 Quiz
• 5.4 Fair Credit Reporting Act of 1970
• 5.5 Field Underwriting Procedures
  • 5.5.1 Proper Solicitation
  • 5.5.2 Backdating
  • 5.5.3 Term Insurance for Interim Coverage
  • 5.5.4 The Conditional Receipt
  • 5.5.5 The Binding Receipt
  • 5.5.6 Policy Effective Date
  • Section 5.5 Quiz
• 5.6 Policy Issue and Delivery
  • 5.6.1 Constructive Delivery
• Lesson 5 Review
  • Key Concepts
  • Lesson 5 Review Quiz
• LESSON 6: GROUP LIFE INSURANCE
• 6.1 Principles of Group Insurance
  • 6.1.1 Contributory and Noncontributory
  • Section 6.1 Quiz
• 6.2 Features of Group Life Insurance
• 6.3 Eligible Groups
• 6.4 Group Life Characteristics
  • 6.4.1 Group Term Life
  • 6.4.2 Group Permanent Life Insurance
  • 6.4.3 Conversion Privileges
  • Section 6.4 Quiz
• 6.5 Other Forms of Life Insurance
  • 6.5.1 Franchise Life Insurance
  • 6.5.2 Blanket Life Insurance
  • 6.5.3 Credit Life Insurance
• Lesson 6 Review
  • Key Concepts
  • Lesson 6 Quiz
• LESSON 7: ANNUITIES - FIXED AND VARIABLE
• 7.1 Purpose and Function of Annuities
• 7.2 Annuity Basics
• 7.3 Annuity Structure and Design
  • 7.3.1 Funding Method
  • 7.3.2 Date Income Payments Begin
  • 7.3.3 Payout Options
  • 7.3.4 Payout Options at a Glance
  • 7.3.5 Investment Configuration
  • Section 7.3 Quiz
• 7.4 Income Tax Treatment of Benefits
  • 7.4.1 Exclusion Ratio
  • Section 7.4 Quiz
• 7.5 Uses of Annuities
• 7.6 Fixed Annuity
  • 7.6.1 Equity Indexed Annuities
  • 7.6.1.1 The Indexing Method
  • 7.6.1.2 The Participation Rate
  • Section 7.6 Quiz
• 7.7 Variable Annuities
  • 7.7.1 Accumulation Units and Annuity Units
  • 7.7.2 Variable Annuity Regulation and Licensing
  • Section 7.7 Quiz
• 7.8 Comparing Variable Annuities and Fixed Annuities
• 7.9 Annuity Investments by Seniors
• Lesson 7 Review
  • Key Concepts
  • Lesson 7 Quiz
• LESSON 8: SOCIAL SECURITY
• 8.1 Purpose of Social Security
• 8.2 Eligibility - Who Is Covered?
  • 8.2.1 Currently Insured vs. Fully Insured
• 8.3 How Benefits Are Determined
  • 8.3.1 SS Death Benefits
  • 8.3.2 SS Retirement Benefits
  • 8.3.3 SS Disability Benefits
• Lesson 8 Review
  • Key Concepts
  • Lesson 8 Quiz
• LESSON 9: RETIREMENT PLANS
• 9.1 Qualified Versus Nonqualified Plans
  • 9.1.1 Qualified Employer Plans
• 9.2 ERISA
• 9.3 Favorable Tax Treatments
• 9.4 Defined Contribution Plans
• 9.5 Defined Benefit Plans
• 9.6 Employer-Employee Plans
  • 9.6.1 Cash or Deferred Arrangements - 401(k) Plans
  • 9.6.2 403(b) Plans
  • 9.6.3 IRC Section 457 Deferred Compensation Plans
  • Section 9.6 Quiz
• 9.7 Plans For The Small Employer
  • 9.7.1 Keogh Plans (HR-10)
  • 9.7.2 Simplified Employee Pension Plans (SEP)
  • 9.7.3 Salary Reduction SEP Plans (SARSEP)
  • 9.7.4 Savings Incentive Match Plan for Employees (SIMPLE)
  • Section 9.7 Quiz
• 9.8 Individual Retirement Plans
  • 9.8.1 The Traditional IRA
  • 9.8.2 The Roth IRA
  • 9.8.3 Spousal IRA
  • 9.8.4 Rollover IRA & Pension Protection Act
• Lesson 9 Review
  • Key Concepts
  • Lesson 9 Quiz
• LESSON 10: USES OF LIFE INSURANCE
• 10.1 Determining Needs
  • 10.1.1 Human Life Value Approach
  • 10.1.2 The Needs Approach
  • 10.1.3 Coverdell Education Savings Accounts
  • Section 10.1 Quiz
• 10.2 Individual Uses of Life Insurance
  • 10.2.1 Final Expenses
  • 10.2.2 Readjustment Timeframe
  • 10.2.3 Dependency Period
  • 10.2.4 Blackout Period
  • 10.2.5 Retirement
  • Section 10.2 Quiz
• 10.3 Business Uses of Life Insurance
  • 10.3.1 Options for Divesting
  • 10.3.2 Buy-Sell Plans
  • 10.3.2.1 Partnership Cross-Purchase Buy-Sell Plans
  • 10.3.2.2 Close Corporation Cross-Purchase Plans
  • 10.3.2.3 Partnership Entity Buy-Sell Plan
  • 10.3.2.4 Close Corporation Stock Redemption Plans
  • 10.3.3 Key Person Insurance
  • Section 10.3 Quiz
• 10.4 Employee Benefit Plans
  • 10.4.1 Salary Continuation Plans
  • 10.4.2 Split Dollar Plans
  • 10.4.3 Deferred Compensation Plans
• Lesson 10 Review
  • Key Concepts
  • Lesson 10 Quiz
• LESSON 11: HEALTH AND ACCIDENT INSURANCE
• 11.1 Basic Forms of Coverage
  • 11.1.1 Medical Expense Insurance
  • 11.1.2 Disability Income Insurance
  • 11.1.3 Accidental Death and Dismemberment Insurance
• 11.2 Purchasing Health Insurance
  • 11.2.1 Individual Health Insurance
  • 11.2.2 Group Health Insurance
• 11.3 Characteristics
  • 11.3.1 Renewability Provisions
  • 11.3.2 Premium Factors
  • 11.3.3 Participating vs. Nonparticipating Policies
  • 11.3.4 Reserves
  • 11.3.5 Claims
• 11.4 Uses of Health Insurance
  • 11.4.1 Individual Needs
  • 11.4.2 Business Needs
  • 11.4.3 Business Continuation Plans
  • 11.4.4 Key Person Disability Insurance
• 11.5 Group Health Insurance
  • 11.5.1 Contributory and Noncontributory Plans
  • 11.5.2 Conversion Privileges
  • 11.5.3 Preexisting Conditions
  • 11.5.4 Coverages
  • 11.5.5 Group Disability Income
  • 11.5.6 Other Types of Group Health Plans
  • 11.5.7 Tax Treatment of Group Health Plans
• Lesson 11 Review
  • Key Concepts
  • Lesson 11 Quiz
• LESSON 12: HEALTH INSURANCE PROVIDERS
• 12.1 Commercial Insurance Providers
• 12.2 Service Providers
• 12.3 Health Maintenance Organizations Overview
  • 12.3.1 HMO Operation
  • 12.3.2 Florida Laws and Regulations Regarding HMOs
  • 12.3.3 Unfair Trade Practice Activities by HMOs
  • 12.3.4 Comprehensive Health Care
  • Florida HMO Contract Requirements
  • Section 12.3 Quiz
• 12.4 Preferred Provider Organizations
• 12.5 Government Health Insurance Programs
• 12.6 Medicare
  • 12.6.1 Medicare Part A - Hospital Insurance
  • 12.6.2 Medicare Part B - Medical Insurance
  • 12.6.3 Medicare Part C - Medicare Advantage
  • 12.6.4 Medicare Part D - Prescription Drug Plan
  • Section 12.6 Quiz
• 12.7 Medicaid
  • 12.7.1 Medicaid Reform
  • 12.7.2 Florida Healthy Kids Corporation
• 12.8 State Workers' Compensation Programs
• 12.9 Alternative Methods
• Lesson 12 Review
  • Key Concepts
  • Lesson 12 Quiz
• LESSON 13: MEDICAL EXPENSE INSURANCE
• 13.1 The Purpose of Medical Expense Insurance
• 13.2 Basic Medical Expense Plans
  • 13.2.1 Hospital Expenses
  • 13.2.2 Basic Surgical Expense
  • Section 13.2 Quiz
• 13.3 Major Medical Expense Plans
  • 13.3.1 Deductibles
  • 13.3.2 Coinsurance
  • 13.3.3 Preexisting Conditions
  • 13.3.4 Health Savings Accounts (HSA)
  • Section 13.3 Quiz
• 13.4 Other Types of Medical Expense Coverage
• Lesson 13 Review
  • Key Concepts
  • Lesson 13 Quiz
• LESSON 14: DISABILITY INCOME INSURANCE
• 14.1 The Purpose of Disability Coverage
  • 14.1.1 "OCC" and "ACC"
• 14.2 Calculating Benefits
• 14.3 Policy Provisions
  • 14.3.1 Presumptive Disability
  • 14.3.2 Probationary Period
  • 14.3.3 Elimination Period Provision
  • 14.3.4 Benefit Period Provision
  • 14.3.5 Delayed Disability Provision
  • 14.3.6 Recurrent Disability Provision
  • 14.3.7 Non-Disabling Injury Provision
  • Section 14.3 Quiz
• 14.4 Policy Exclusions
• 14.5 Policy Riders
  • 14.5.1 Waiver of Premium Rider
  • 14.5.2 Social Security Rider
  • 14.5.3 Cost of Living Adjustment Rider
  • 14.5.4 Guaranteed Insurability Rider
• Lesson 14 Review
  • Key Concepts
  • Lesson 14 Quiz
• LESSON 15: ACCIDENTAL DEATH & DISMEMBERMENT INSURANCE
• 15.1 Benefits
  • 15.1.1 Principal Sum vs. Capital Sum
• 15.2 Limited Risk Policies vs. Special Risk Policies
• Lesson 15 Review
  • Key Concepts
  • Lesson 15 Quiz
• LESSON 16: PRIVATE INSURANCE PLANS FOR SENIORS
• 16.1 Medicare Supplement Policies
  • 16.1.1 Core Benefits
  • 16.1.2 Medigap Plans
  • Section 16.1 Quiz
• 16.2 Long-Term Care Insurance
  • 16.2.1 LTC Coverages
  • 16.2.2 LTC Provisions and Limits
• Lesson 16 Review
  • Key Concepts
  • Lesson 16 Quiz
• LESSON 17: HEALTH INSURANCE POLICY PROVISIONS
• 17.1 NAIC Model Health Insurance Policy Provisions
  • 17.1.1 Mandatory Provisions
  • 17.1.2 Optional Provisions
  • 17.1.3 Other Provisions
• 17.2 Common Exclusions or Restrictions
• 17.3 Renewability Provisions
• Lesson 17 Review
  • Key Concepts
  • Lesson 17 Quiz
• LESSON 18: HEALTH INSURANCE UNDERWRITING
• 18.1 Major Risk Factors
  • 18.1.1 Classifying Risks
  • 18.1.2 Physical Condition
  • 18.1.3 Moral Hazards
  • 18.1.4 Occupation
  • 18.1.5 Other Risk Factors
  • Section 18.1 Quiz
• 18.2 Premium Factors
• 18.3 Tax Treatment of Premiums and Benefits
  • 18.3.1 Disability Income Insurance
  • 18.3.2 Medical Expense Insurance
• 18.4 Managed Care
  • 18.4.1 Medical Cost Management
• Lesson 18 Review
  • Key Concepts
  • Lesson 18 Quiz
• LESSON 19: FLORIDA LAWS AND RULES PERTINENT TO LIFE AND HEALTH INSURANCE
• 19.1 Florida Insurance Regulation
  • 19.1.1 The State Legislature
  • 19.1.2 The Department of Financial Services Headed by the Chief Financial Officer
  • 19.1.3 The Commissioner of the Office of Insurance Regulation
  • 19.1.4 The State Court System
  • Section 19.1 Quiz
• 19.2 Insurers
  • 19.2.1 Unauthorized Entities
  • Section 19.2 Quiz
• 19.3 Marketing Practices
  • 19.3.1 Agents' Responsibilities
  • 19.3.2 Agents' Responsibilities to the Principal
  • 19.3.3 Agents' Responsibilities to Policyowners
  • 19.3.4 Notice of Replacement
  • Section 19.3 Quiz
• 19.4 Code of Ethics
  • 19.4.1 Agent Ethics
• 19.5 Policy Clauses and Provisions
  • 19.5.1 Preexisting Conditions
  • 19.5.2 Free Look
  • 19.5.3 Grace Period
  • 19.5.4 Mental and Nervous Disorders
  • 19.5.5 Handicapped Children
  • 19.5.6 Newborn Children
  • 19.5.7 Coordination of Benefits
  • 19.5.8 Alcoholism and Drug Dependency
  • 19.5.9 Ambulatory Surgical Centers
  • 19.5.10 Dentists
  • 19.5.11 Optometrists and Podiatrists
  • 19.5.12 Chiropractic Treatment
  • 19.5.13 Bones and Joints of the Jaw and Facial Region
  • 19.5.14 Diabetes
  • 19.5.15 Maternity
  • 19.5.16 Breast Cancer and Mastectomies
  • 19.5.17 Cleft Lip and Palate
  • Section 19.5 Quiz
• 19.6 Health Insurance Portability and Accountability Act of 1996
• 19.7 Group Life Insurance
  • 19.7.1 Eligibility
  • 19.7.2 Mini-COBRA
• 19.8 Par and Nonpar Policies
• 19.9 Retirement Plans
  • 19.9.1 Cliff Vesting and Graded Vesting
  • 19.9.2 Tax Treatment
• 19.10 Flexible Life Products
• 19.11 Types of Health Plans
• 19.12 Florida Employee Health Care Access Act
  • 19.12.1 Modified Community Rating
  • 19.12.2 Composite Rating
• 19.13 Florida Health Insurance Plan
• 19.14 Small Employers Access Program
• 19.15 Cover Florida Plan
• Lesson 19 Review
  • Lesson 19 Quiz
• LESSON 20: AGENT LICENSING
• 20.1 Persons Required to be Licensed
• 20.2 Maintaining a License
  • 20.2.1 Continuing Education
  • 20.2.2 Change of Address
  • 20.2.3 Suspension, Termination, Revocation of License
• 20.3 Unfair Trade Practices
  • 20.3.1 Sliding
  • 20.3.2 Coercion, Boycott and Intimidation
  • 20.3.3 Misrepresentation
  • 20.3.4 Defamation of Character
  • 20.3.5 Unfair Discrimination
  • 20.3.6 Fraud
  • 20.3.7 Controlled Business
• 20.4 Unfair Claim Settlement Practices
• 20.5 Action To Be Taken
• Lesson 20 Review
  • Lesson 20 Quiz
• LESSON 21: DEFINITIONS
  • 21.1 Insurance Transaction
  • 21.2 Domestic, Foreign, and Alien Companies
  • 21.3 Authorized and Unauthorized Insurers
  • 21.4 Stock and Mutual Companies
  • 21.5 Certificate of Authority
  • 21.6 Florida Life and Health Guaranty Association
  • 21.7 ACRONYMS
  • Lesson 21 Quiz
• IMPORTANT FACTS YOU NEED TO KNOW
  • Student Verification and Security Pop-Up Questions
  • Florida Study Manual
  • Final Examination
  • Practice Exam Generator
  • Applying For New License
  • The Course Basics
  • Need Help?
  • Frequently Asked Questions (FAQs)
  • Meet Your Instructor
• LESSON 1: BASIC PRINCIPLES OF LIFE AND HEALTH INSURANCE and THE INSURANCE INDUSTRY
• 1.1 The Role of Insurance
  • Section 1.1 Quiz
• 1.2 Industry Overview
• 1.3 The Nature of Insurance
  • 1.3.1 Risk Pooling
  • 1.3.2 Law of Large Numbers
  • Section 1.3 Quiz
• 1.4 The Concept of Risk and Risk Management
  • 1.4.1 Speculative and Pure Risks
  • 1.4.2 Perils and Hazards
  • 1.4.3 Treatment of Risk
  • 1.4.4 Elements of Insurable Risk
  • Section 1.4 Quiz
• 1.5 Private Insurers
  • 1.5.1 Stock Insurers
  • 1.5.2 Mutual Insurers
  • 1.5.3 Assessment Mutual Insurers
  • 1.5.4 Reciprocal Insurers
  • 1.5.5 Lloyd's of London
  • 1.5.6 Reinsurers
  • 1.5.7 Risk Retention Groups
  • 1.5.8 Fraternal Benefit Societies
  • 1.5.9 Home Service Insurers
  • 1.5.10 Service Insurers
  • 1.5.11 Self-Insurers
  • Section 1.5 Quiz
• 1.6 Government Insurers
• 1.7 Distribution Systems
  • 1.7.1 Captive vs. Independent Agents
  • 1.7.2 Solicitors, Consultants, and Special Agents
  • 1.7.3 Excess or Rejected Business
  • 1.7.4 Agency Systems
  • 1.7.5 Other Methods of Selling Insurance
  • Section 1.7 Quiz
• 1.8 History of Regulation
  • 1.8.1 Paul v. Virginia (1868)
  • 1.8.2 United States v. Southeastern Underwriters Association (1944)
  • 1.8.3 The McCarran-Ferguson Act (1945)
  • 1.8.4 Intervention by the FTC (1958)
  • 1.8.5 Intervention by the SEC (1959)
  • 1.8.6 Fair Credit Reporting Act (1970)
  • 1.8.7 Financial Services Modernization Act (1999)
• 1.9 State Self-Regulation
  • 1.9.1 Domestic Insurer
  • 1.9.2 Foreign Insurer
  • 1.9.3 Alien Insurer
• 1.10 Marketing and Sales Practices
  • 1.10.1 Needs-Based Selling
  • 1.10.2 Full and Accurate Disclosure
  • 1.10.3 Client Service Follow-up
  • Section 1.10 Quiz
• 1.11 Prohibited Practices
  • 1.11.1 Policy Replacement
  • 1.11.2 Twisting
  • 1.11.3 Churning
  • 1.11.4 Misrepresentation
  • 1.11.5 Misuse of Premiums
  • 1.11.6 Rebating
  • Section 1.11 Quiz
• 1.12 Regulatory Associations
  • 1.12.1 National Association of Insurance Commissioners (NAIC)
  • 1.12.2 Florida Life and Health Guaranty Association
  • 1.12.3 NAIFA & NAHU
  • Section 1.12 Quiz
• 1.13 Independent Rating Services
• Lesson 1 Review
  • Key Concepts
  • Lesson 1 Quiz
• LESSON 2: LEGAL CONCEPTS OF THE INSURANCE CONTRACT
• 2.1 Elements of the Contract
  • 2.1.1 Offer and Acceptance
  • 2.1.2 Consideration
  • 2.1.3 Legal Purpose
  • 2.1.4 Competent Parties
  • Section 2.1 Quiz
• 2.2 Special Features of the Insurance Contract
  • 2.2.1 Aleatory
  • 2.2.2 Adhesion
  • 2.2.3 Unilateral
  • 2.2.4 Value vs. Indemnity
  • 2.2.5 Insurable Interest
  • Section 2.2 Quiz
• 2.3 Agents and Brokers
  • 2.3.1 Agent Authority
  • 2.3.2 Fiduciary Responsibilities
  • Section 2.3 Quiz
• 2.4 Other Legal Concepts
• Lesson 2 Review
  • Key Concepts
  • Lesson 2 Quiz
• LESSON 3: LIFE INSURANCE POLICIES, PROVISIONS, OPTIONS AND RIDERS
• 3.1 Categories of Life Insurance
  • 3.1.1 Ordinary Life Insurance
  • 3.1.2 Industrial Life Insurance
  • 3.1.3 Group Insurance
  • Section 3.1 Quiz
• 3.2 Term Life Insurance
  • 3.2.1 Term Life Premiums
  • 3.2.2 Level Term
  • 3.2.3 Decreasing Term
  • 3.2.4 Increasing Term
  • Section 3.2 Quiz
• 3.3 Option To Renew and Option To Convert
• 3.4 Whole Life (Permanent) Insurance
• 3.5 Endowment Policies
  • 3.5.1 Endowment Premiums
  • 3.5.2 Modified Endowment Contracts
• 3.6 Special Use Policies
• 3.7 Nontraditional Life Policies
  • 3.7.1 Variable Insurance Products
  • 3.7.2 Adjustable Life Policies
  • 3.7.3 Universal Life Policies
  • Section 3.7 Quiz
• 3.8 Rights of Ownership
• 3.9 Standard Policy Provisions
  • 3.9.1 Entire Contract Provision
  • 3.9.2 The Insuring Clause
  • 3.9.3 Free Look Provision
  • 3.9.4 Consideration Clause
  • 3.9.5 Grace Period
  • 3.9.6 The Reinstatement Clause
  • Policy Loan Provision
  • 3.9.8 The Incontestable Clause
  • 3.9.9 Assignment Provision - Absolute and Collateral
  • 3.9.10 Accelerated Death Benefits Provision
  • 3.9.11 The Suicide Provision
  • 3.9.12 The Misstatement of Age or Sex Provision
  • Section 3.9 Quiz
• 3.10 Exclusions
• 3.11 Nonforfeiture Options
  • 3.11.1 Cash Surrender Value
  • 3.11.2 Reduced Paid-Up Insurance
  • 3.11.3 Extended Term Insurance
  • Section 3.11 Quiz
• 3.12 Policy Dividends
  • 3.12.1 Dividend Options
• 3.13 Policy Riders
  • 3.13.1 Guaranteed Insurability Rider
  • 3.13.2 Waiver of Premium
  • 3.13.3 Automatic Premium Loan Rider
  • 3.13.4 Payor Rider
  • 3.13.5 Accidental Death Benefit Rider
  • 3.13.6 Return of Premium Rider
  • 3.13.7 Cost of Living Adjustment Rider
  • 3.13.8 Other Insureds Rider
• Lesson 3 Review
  • Key Concepts
  • Lesson 3 Quiz
• LESSON 4: LIFE INSURANCE PREMIUMS, PROCEEDS AND BENEFICIARIES
• 4.1 Primary Factors In Premium Calculations
  • 4.1.1 Mortality Factor
  • 4.1.2 Interest Factor
  • 4.1.3 Level Premium Funding
  • 4.1.4 Policy Reserves vs. Cash Values
  • 4.1.5 Other Premium Factors
  • 4.1.6 Methods of Rating Substandard Risks
  • Section 4.1 Quiz
• 4.2 Policy Proceeds and Settlement Options
  • 4.2.1 Single Premium Payment or Lump Sum Method
  • 4.2.2 Interest Only Payments
  • 4.2.3 Installment Payments
  • 4.2.4 Accelerated Benefits
  • 4.2.5 Viatical Settlements
  • 4.2.6 Life Settlements
  • Section 4.2 Quiz
• 4.3 Tax Treatment of Proceeds
  • 4.3.1 Proceeds Paid at Death
  • 4.3.2 1035 Contract Exchanges
  • Section 4.3 Quiz
  • Key Concepts
• 4.4 Beneficiaries
• 4.5 Naming an Entity as Beneficiary
  • 4.5.1 Trusts
  • 4.5.2 Estates
  • 4.5.3 Charities
  • Section 4.5 Quiz
• 4.6 Naming Individuals as Beneficiaries
  • 4.6.1 Per Capita Method
  • 4.6.2 Per Stirpes Method
  • 4.6.3 Minors
  • 4.6.4 Specific Class Designations
  • 4.6.5 Changing Beneficiaries
  • Section 4.6 Quiz
• 4.7 Special Situations
  • 4.7.1 Uniform Simultaneous Death Act
  • 4.7.2 Common Disaster Provision
  • 4.7.3 Spendthrift Trust Clause
  • 4.7.4 Facility-of-Payment Provision
• Lesson 4 Review
  • Key Concepts
  • Lesson 4 Quiz
• LESSON 5: LIFE INSURANCE UNDERWRITING AND POLICY ISSUANCE
• 5.1 Purpose of Underwriting
  • Section 5.1 Quiz
• 5.2 Underwriting Process
  • 5.2.1 Underwriting Classifications
  • Section 5.2 Quiz
• 5.3 The Application
  • 5.3.1 Part I - General
  • 5.3.2 Part II - Medical
  • 5.3.3 Part III - Agent's Report
  • 5.3.4 Special Questionnaires
  • 5.3.5 Medical Information Bureau
  • Section 5.3 Quiz
• 5.4 Fair Credit Reporting Act of 1970
• 5.5 Field Underwriting Procedures
  • 5.5.1 Proper Solicitation
  • 5.5.2 Backdating
  • 5.5.3 Term Insurance for Interim Coverage
  • 5.5.4 The Conditional Receipt
  • 5.5.5 The Binding Receipt
  • 5.5.6 Policy Effective Date
  • Section 5.5 Quiz
• 5.6 Policy Issue and Delivery
  • 5.6.1 Constructive Delivery
• Lesson 5 Review
  • Key Concepts
  • Lesson 5 Review Quiz
• LESSON 6: GROUP LIFE INSURANCE
• 6.1 Principles of Group Insurance
  • 6.1.1 Contributory and Noncontributory
  • Section 6.1 Quiz
• 6.2 Features of Group Life Insurance
• 6.3 Eligible Groups
• 6.4 Group Life Characteristics
  • 6.4.1 Group Term Life
  • 6.4.2 Group Permanent Life Insurance
  • 6.4.3 Conversion Privileges
  • Section 6.4 Quiz
• 6.5 Other Forms of Life Insurance
  • 6.5.1 Franchise Life Insurance
  • 6.5.2 Blanket Life Insurance
  • 6.5.3 Credit Life Insurance
• Lesson 6 Review
  • Key Concepts
  • Lesson 6 Quiz
• LESSON 7: ANNUITIES - FIXED AND VARIABLE
• 7.1 Purpose and Function of Annuities
• 7.2 Annuity Basics
• 7.3 Annuity Structure and Design
  • 7.3.1 Funding Method
  • 7.3.2 Date Income Payments Begin
  • 7.3.3 Payout Options
  • 7.3.4 Payout Options at a Glance
  • 7.3.5 Investment Configuration
  • Section 7.3 Quiz
• 7.4 Income Tax Treatment of Benefits
  • 7.4.1 Exclusion Ratio
  • Section 7.4 Quiz
• 7.5 Uses of Annuities
• 7.6 Fixed Annuity
  • 7.6.1 Equity Indexed Annuities
  • 7.6.1.1 The Indexing Method
  • 7.6.1.2 The Participation Rate
  • Section 7.6 Quiz
• 7.7 Variable Annuities
  • 7.7.1 Accumulation Units and Annuity Units
  • 7.7.2 Variable Annuity Regulation and Licensing
  • Section 7.7 Quiz
• 7.8 Comparing Variable Annuities and Fixed Annuities
• 7.9 Annuity Investments by Seniors
• Lesson 7 Review
  • Key Concepts
  • Lesson 7 Quiz
• LESSON 8: SOCIAL SECURITY
• 8.1 Purpose of Social Security
• 8.2 Eligibility - Who Is Covered?
  • 8.2.1 Currently Insured vs. Fully Insured
• 8.3 How Benefits Are Determined
  • 8.3.1 SS Death Benefits
  • 8.3.2 SS Retirement Benefits
  • 8.3.3 SS Disability Benefits
• Lesson 8 Review
  • Key Concepts
  • Lesson 8 Quiz
• LESSON 9: RETIREMENT PLANS
• 9.1 Qualified Versus Nonqualified Plans
  • 9.1.1 Qualified Employer Plans
• 9.2 ERISA
• 9.3 Favorable Tax Treatments
• 9.4 Defined Contribution Plans
• 9.5 Defined Benefit Plans
• 9.6 Employer-Employee Plans
  • 9.6.1 Cash or Deferred Arrangements - 401(k) Plans
  • 9.6.2 Tax-Sheltered Annuities (403(b) Plans)
  • 9.6.3 IRC Section 457 Deferred Compensation Plans
  • Section 9.6 Quiz
• 9.7 Plans For The Small Employer
  • 9.7.1 Keogh Plans (HR-10)
  • 9.7.2 Simplified Employee Pension Plans (SEP)
  • 9.7.3 Salary Reduction SEP Plans (SARSEP)
  • 9.7.4 Savings Incentive Match Plan for Employees (SIMPLE)
  • Section 9.7 Quiz
• 9.8 Individual Retirement Plans
  • 9.8.1 The Traditional IRA
  • 9.8.2 The Roth IRA
  • 9.8.3 Spousal IRA
  • 9.8.4 Rollover IRA & Pension Protection Act
• Lesson 9 Review
  • Key Concepts
  • Lesson 9 Quiz
• LESSON 10: USES OF LIFE INSURANCE
• 10.1 Determining Needs
  • 10.1.1 Human Life Value Approach
  • 10.1.2 The Needs Approach
  • 10.1.3 Coverdell Education Savings Accounts
  • Section 10.1 Quiz
• 10.2 Individual Uses of Life Insurance
  • 10.2.1 Final Expenses
  • 10.2.2 Readjustment Timeframe
  • 10.2.3 Dependency Period
  • 10.2.4 Blackout Period
  • 10.2.5 Retirement
  • Section 10.2 Quiz
• 10.3 Business Uses of Life Insurance
  • 10.3.1 Options for Divesting
  • 10.3.2 Buy-Sell Plans
  • 10.3.2.1 Partnership Cross-Purchase Buy-Sell Plans
  • 10.3.2.2 Close Corporation Cross-Purchase Plans
  • 10.3.2.3 Partnership Entity Buy-Sell Plan
  • 10.3.2.4 Close Corporation Stock Redemption Plans
  • 10.3.3 Key Person Insurance
  • Section 10.3 Quiz
• 10.4 Employee Benefit Plans
  • 10.4.1 Salary Continuation Plans
  • 10.4.2 Split Dollar Plans
  • 10.4.3 Deferred Compensation Plans
• Lesson 10 Review
  • Key Concepts
  • Lesson 10 Quiz
• LESSON 11: HEALTH AND ACCIDENT INSURANCE
• 11.1 Basic Forms of Coverage
  • 11.1.1 Medical Expense Insurance
  • 11.1.2 Disability Income Insurance
  • 11.1.3 Accidental Death and Dismemberment Insurance
• 11.2 Purchasing Health Insurance
  • 11.2.1 Individual Health Insurance
  • 11.2.2 Group Health Insurance
• 11.3 Characteristics
  • 11.3.1 Renewability Provisions
  • 11.3.2 Premium Factors
  • 11.3.3 Participating vs. Nonparticipating Policies
  • 11.3.4 Reserves
  • 11.3.5 Claims
• 11.4 Uses of Health Insurance
  • 11.4.1 Individual Needs
  • 11.4.2 Business Needs
  • 11.4.3 Business Continuation Plans
  • 11.4.4 Key Person Disability Insurance
• 11.5 Group Health Insurance
  • 11.5.1 Contributory and Noncontributory Plans
  • 11.5.2 Conversion Privileges
  • 11.5.3 Preexisting Conditions
  • 11.5.4 Coverages
  • 11.5.5 Group Disability Income
  • 11.5.6 Other Types of Group Health Plans
  • 11.5.7 Tax Treatment of Group Health Plans
• Lesson 11 Review
  • Key Concepts
  • Lesson 11 Quiz
• LESSON 12: HEALTH INSURANCE PROVIDERS
• 12.1 Commercial Insurance Providers
• 12.2 Service Providers
• 12.3 Health Maintenance Organizations Overview
  • 12.3.1 HMO Operation
  • 12.3.2 Florida Laws and Regulations Regarding HMOs
  • 12.3.3 Unfair Trade Practice Activities by HMOs
  • 12.3.4 Comprehensive Health Care
  • Florida HMO Contract Requirements
  • Section 12.3 Quiz
• 12.4 Preferred Provider Organizations
• 12.5 Government Health Insurance Programs
• 12.6 Medicare
  • 12.6.1 Medicare Part A - Hospital Insurance
  • 12.6.2 Medicare Part B - Medical Insurance
  • 12.6.3 Medicare Part C - Medicare Advantage
  • 12.6.4 Medicare Part D - Prescription Drug Plan
  • Section 12.6 Quiz
• 12.7 Medicaid
  • 12.7.1 Medicaid Reform
  • 12.7.2 Florida Healthy Kids Corporation
• 12.8 State Workers' Compensation Programs
• 12.9 Alternative Methods
• Lesson 12 Review
  • Key Concepts
  • Lesson 12 Quiz
• LESSON 13: MEDICAL EXPENSE INSURANCE
• 13.1 The Purpose of Medical Expense Insurance
• 13.2 Basic Medical Expense Plans
  • 13.2.1 Hospital Expenses
  • 13.2.2 Basic Surgical Expense
  • Section 13.2 Quiz
• 13.3 Major Medical Expense Plans
  • 13.3.1 Deductibles
  • 13.3.2 Coinsurance
  • 13.3.3 Preexisting Conditions
  • 13.3.4 Health Savings Accounts (HSA)
  • Section 13.3 Quiz
• 13.4 Other Types of Medical Expense Coverage
• Lesson 13 Review
  • Key Concepts
  • Lesson 13 Quiz
• LESSON 14: DISABILITY INCOME INSURANCE
• 14.1 The Purpose of Disability Coverage
  • 14.1.1 "OCC" and "ACC"
• 14.2 Calculating Benefits
• 14.3 Policy Provisions
  • 14.3.1 Presumptive Disability
  • 14.3.2 Probationary Period
  • 14.3.3 Elimination Period Provision
  • 14.3.4 Benefit Period Provision
  • 14.3.5 Delayed Disability Provision
  • 14.3.6 Recurrent Disability Provision
  • 14.3.7 Non-Disabling Injury Provision
  • Section 14.3 Quiz
• 14.4 Policy Exclusions
• 14.5 Policy Riders
  • 14.5.1 Waiver of Premium Rider
  • 14.5.2 Social Security Rider
  • 14.5.3 Cost of Living Adjustment Rider
  • 14.5.4 Guaranteed Insurability Rider
• Lesson 14 Review
  • Key Concepts
  • Lesson 14 Quiz
• LESSON 15: ACCIDENTAL DEATH & DISMEMBERMENT INSURANCE
• 15.1 Benefits
  • 15.1.1 Principal Sum vs. Capital Sum
• 15.2 Limited Risk Policies vs. Special Risk Policies
• Lesson 15 Review
  • Key Concepts
  • Lesson 15 Quiz
• LESSON 16: PRIVATE INSURANCE PLANS FOR SENIORS
• 16.1 Medicare Supplement Policies
  • 16.1.1 Core Benefits
  • 16.1.2 Medigap Plans
  • Section 16.1 Quiz
• 16.2 Long-Term Care Insurance
  • 16.2.1 LTC Coverages
  • 16.2.2 LTC Provisions and Limits
• Lesson 16 Review
  • Key Concepts
  • Lesson 16 Quiz
• LESSON 17: HEALTH INSURANCE POLICY PROVISIONS
• 17.1 NAIC Model Health Insurance Policy Provisions
  • 17.1.1 Mandatory Provisions
  • 17.1.2 Optional Provisions
  • 17.1.3 Other Provisions
• 17.2 Common Exclusions or Restrictions
• 17.3 Renewability Provisions
• Lesson 17 Review
  • Key Concepts
  • Lesson 17 Quiz
• LESSON 18: HEALTH INSURANCE UNDERWRITING
• 18.1 Major Risk Factors
  • 18.1.1 Classifying Risks
  • 18.1.2 Physical Condition
  • 18.1.3 Moral Hazards
  • 18.1.4 Occupation
  • 18.1.5 Other Risk Factors
  • Section 18.1 Quiz
• 18.2 Premium Factors
• 18.3 Tax Treatment of Premiums and Benefits
  • 18.3.1 Disability Income Insurance
  • 18.3.2 Medical Expense Insurance
• 18.4 Managed Care
  • 18.4.1 Medical Cost Management
• Lesson 18 Review
  • Key Concepts
  • Lesson 18 Quiz
• LESSON 19: FLORIDA LAWS AND RULES PERTINENT TO LIFE AND HEALTH INSURANCE
• 19.1 Florida Insurance Regulation
  • 19.1.1 The State Legislature
  • 19.1.2 The Department of Financial Services Headed by the Chief Financial Officer
  • 19.1.3 The Commissioner of the Office of Insurance Regulation
  • 19.1.4 The State Court System
  • Section 19.1 Quiz
• 19.2 Insurers
  • 19.2.1 Unauthorized Entities
  • Section 19.2 Quiz
• 19.3 Marketing Practices
  • 19.3.1 Agents' Responsibilities
  • 19.3.2 Agents' Responsibilities to the Principal
  • 19.3.3 Agents' Responsibilities to Policyowners
  • 19.3.4 Notice of Replacement
  • Section 19.3 Quiz
• 19.4 Code of Ethics
  • 19.4.1 Agent Ethics
• 19.5 Policy Clauses and Provisions
  • 19.5.1 Preexisting Conditions
  • 19.5.2 Free Look
  • 19.5.3 Grace Period
  • 19.5.4 Mental and Nervous Disorders
  • 19.5.5 Handicapped Children
  • 19.5.6 Newborn Children
  • 19.5.7 Coordination of Benefits
  • 19.5.8 Alcoholism and Drug Dependency
  • 19.5.9 Ambulatory Surgical Centers
  • 19.5.10 Dentists
  • 19.5.11 Optometrists and Podiatrists
  • 19.5.12 Chiropractic Treatment
  • 19.5.13 Bones and Joints of the Jaw and Facial Region
  • 19.5.14 Diabetes
  • 19.5.15 Maternity
  • 19.5.16 Breast Cancer and Mastectomies
  • 19.5.17 Cleft Lip and Palate
  • Section 19.5 Quiz
• 19.6 Health Insurance Portability and Accountability Act of 1996
• 19.7 Group Life Insurance
  • 19.7.1 Eligibility
  • 19.7.2 Mini-COBRA
• 19.8 Par and Nonpar Policies
• 19.9 Retirement Plans
  • 19.9.1 Cliff Vesting and Graded Vesting
  • 19.9.2 Tax Treatment
• 19.10 Flexible Life Products
• 19.11 Types of Health Plans
• 19.12 Florida Employee Health Care Access Act
  • 19.12.1 Modified Community Rating
  • 19.12.2 Composite Rating
• 19.13 Florida Health Insurance Plan
• 19.14 Small Employers Access Program
• 19.15 Cover Florida Plan
• Lesson 19 Review
  • Lesson 19 Quiz
• LESSON 20: AGENT LICENSING
• 20.1 Persons Required to be Licensed
• 20.2 Maintaining a License
  • 20.2.1 Continuing Education
  • 20.2.2 Change of Address
  • 20.2.3 Suspension, Termination, Revocation of License
• 20.3 Unfair Trade Practices
  • 20.3.1 Sliding
  • 20.3.2 Coercion, Boycott and Intimidation
  • 20.3.3 Misrepresentation
  • 20.3.4 Defamation of Character
  • 20.3.5 Unfair Discrimination
  • 20.3.6 Fraud
  • 20.3.7 Controlled Business
• 20.4 Unfair Claim Settlement Practices
• 20.5 Action To Be Taken
• Lesson 20 Review
  • Lesson 20 Quiz
• LESSON 21: DEFINITIONS
  • 21.1 Insurance Transaction
  • 21.2 Domestic, Foreign, and Alien Companies
  • 21.3 Authorized and Unauthorized Insurers
  • 21.4 Stock and Mutual Companies
  • 21.5 Certificate of Authority
  • 21.6 Florida Life and Health Guaranty Association
  • 21.7 ACRONYMS
  • Lesson 21 Quiz