FLORIDA LIFE INSURANCE/ ANNUITIES 2-14 STUDY SET EXAM WITH CORRECT AND VERIFIED ANSWERS

FLORIDA LIFE INSURANCE/ ANNUITIES 2-14 STUDY SET EXAM WITH CORRECT AND VERIFIED ANSWERS Common Disaster Clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true? - Correct Answer This clause provides the payment of proceeds to the insured's estate" "Under a life insurance policy the ___ has the authority to name the beneficiary? - Correct Answer owner" "Which statement regarding third-party ownership of a life insurance policy is true? - Correct Answer it's used extensively in estate-planning as well as business circumstances" "group life policies in Florida are required to contain a conversion privilege that allows - Correct Answer for conversion to an individual policy for a specified period of time." "Which entity approves the insurance policy forms used in Florida? - Correct Answer Office of Insurance Regulation (OIR)" "T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as - Correct Answer fiduciary responsibility" "B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will - Correct Answer Pay the amount that the premium would have purchased at the correct age." "Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock? *Twisting *Intimidation *Misrepresentation *Sliding - Correct Answer misrepresentation" "L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will - Correct Answer adjust the death benefit to a reduced amount" "W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim? - Correct Answer The proceeds would be reduced based on whatever the premium would have been if purchased at age 59" "The financial services commission may hold hearings - Correct Answer for any reason deemed necessary" "In Florida, which agency is responsible for the rehabilitation or liquidation of insurers? - Correct Answer The Department of Financial Services" "All of the following entries are classified under the four principles areas of Florida insurance law EXCEPT - Correct Answer An agent's commission" "All of the following are Nonforfeiture Options EXCEPT - Correct Answer Automatic Premium Loan Option" "Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? - Correct Answer Portion of the premiums paid for by the employer may be a tax deduction" "What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - Correct Answer Conversion" "A return of Premium life insurance policy is: - Correct Answer Whole life and Increasing term" "Which of the following is the best description of 'insurer'? - Correct Answer Any person, corporation, association or society that writes insurance contracts" "How are Roth IRA distributions normally taxed? - Correct Answer Distributions are received tax-free" "What kind of policy either pays the face value upon the death of the insured or when the insured reaches age 100? - Correct Answer Whole Life" "According to Florida's life insurance replacement laws, a policyowner must be proved with a written Comparison and Summary statement when it's requested by: - Correct Answer the policyowner" "Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE? - Correct Answer Each partner owns a $500,000 policy on their partner's life" "Agents that have been licensed for less than six years must complete __ hours of continuing education every two years. - Correct Answer 24" "Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - Correct Answer inspection report" "Which department oversees Market Conduct Examinations in Florida? - Correct Answer The Office of Insurance Regulation (OIR)" "Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - Correct Answer Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company." "Which of the following factors is NOT considered when the Department of Financial Services determines if an agent's home is an insurance agency? - Correct Answer The amount of premium collected at this location" "K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? - Correct Answer Proceeds will be payable to K's estate if P dies within a specified time" "Omitting information that affects the issuance or the rate of an insurance contract is called: - Correct Answer Concealment" "Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - Correct Answer Legal Purpose (Insurable Interest)" "A variable life insurance agent must be licensed and appointed as a life and variable contract agent, as well as a(n) - Correct Answer broker dealer" "all of these are characteristics of an adjustable life policy except - Correct Answer face amount can be adjusted using policy dividends" "Which of the following acts is an agent NOT authorized to do on behalf of an insurer? - Correct Answer Which of the following acts is an agent NOT authorized to do on behalf of an insurer?" "During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of - Correct Answer Misrepresentation" "The insurer must provide a prospective buyer with a(n) - Correct Answer Buyer's Guide and Policy Summary" "A life insurance policyowner may sell their policy to a __ in order to receive a percentage of the policy's face value - Correct Answer viatical settlement provider" "According to Florida law, which of the following information does NOT need to be obtained by an agent recommending an annuity purchase? - Correct Answer Marital status" "An applicant who pays the initial premium at the time of application is typically given a(n) - Correct Answer conditional receipt" "What percentage of eligible persons must a policyowner cover in a noncontributory group? - Correct Answer 100%" "A mutual insurance company is owned by: - Correct Answer Its policyholders" "An insurance company can contest a life insurance contract due to application fraud within - Correct Answer 2 years" "A license may be denied, suspended, or revoked if the licensee - Correct Answer is found guilty of misrepresentation" "Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? - Correct Answer Annuity" "Which of the following information is NOT required to be included in a Whole Life policy? - Correct Answer Policy's guaranteed dividend table" "An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed - Correct Answer twisting" "A life insurance policy's grace period entitles the insured a period of time no less than __ days to make the premium payment - Correct Answer 30" "When replacing or exchanging an annuity, the agent must disclose to the annuitant - Correct Answer the possible tax ramifications as a result of the transaction" "Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? - Correct Answer All proceeds are income tax free in the year they are received" "hich of the following situations does NOT apply to the Florida Replacement Rule - Correct Answer An existing policyholder purchases an additional policy from the same insurer" "S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? - Correct Answer -Return of premium rider" "A provision in life insurance policy that pays the policy owner an amount that does not surpass the guaranteed cash value is called - Correct Answer Policy Loan Provision" "Which of the following statements is correct about accelerated death benefits - Correct Answer must have a terminal illness to qualify" "Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? - Correct Answer Entire Contract" "if a corporation pays the premium on a group life policy for its employees, The corporation is required to report how much additional taxable income for each employee? - Correct Answer nothing" "Convincing a prospective insured to buy an insurance policy based on exaggerations is called - Correct Answer misrepresentation" "One of the purposes of a qualified profit-sharing plan is to - Correct Answer distribute a portion of company earnings to employees" "How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated? - Correct Answer 45" "Life insurance that covers an insured's whole life with level premiums paid over a limited time is called - Correct Answer Limited Pay Life" "J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? - Correct Answer twisting" "K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs? - Correct Answer Straight Life" "In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the - Correct Answer Florida Replacement Rule" "The incontestable clause allows an insurer to - Correct Answer contest a claim during the contestable period" "The Payor clause of an insurance policy on a juvenile provides which of the following benefits - Correct Answer A waiver of premiums if the payor becomes disabled" "How Long Does the Coverage normally remain on a limited pay life policy - Correct Answer until age 100 or until death" "If an annuity is terminated prior to the beginning of the income payment period - Correct Answer the contract owner receives the contract surrender value at that time." "a policy that becomes a modified endowment contract - Correct Answer gets stripped of many tax benefits" "K is an annuitant currently receiving payments. if she were to die before recieving payments equal to the correct value , a beneficiary will continue receiving payment until an amount equal to the contract value has been paid- this is a - Correct Answer Installment refund annuity" "Which of these is NOT a legal entity for selling life insurance in Florida? - Correct Answer Risk management advisers" "Which of the following situations are NOT subject to Florida life insurance laws? - Correct Answer Insurance companies' day-to-day operations" "How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? - Correct Answer Claims are denied under the Suicide clause of the policy" "Insurance Guaranty Fund Association is - Correct Answer funded by admitted insurance companies through assessments" "Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? - Correct Answer Misrepresentation" "Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called - Correct Answer fraternal life insurance organizations" "What is the purpose of a Policy Summary - Correct Answer It highlights the critical parts of the policy issued" "Florida's 14-day free-look period for life insurance policies begins at the - Correct Answer date of delivery" "B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of - Correct Answer Additional whole life coverage at specified times" "Which two entities regulate variable annuities? - Correct Answer Department of Financial Services; and Securities Exchange Commission" "The policy summary contains specific information on all of the following EXCEPT: - Correct Answer commission" "Which of the following employees may NOT be excluded from a group life plan - Correct Answer Full-time employees after the probationary period" "Who is NOT required to sign a life insurance application? - Correct Answer beneficiary" "P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own? - Correct Answer Endowment at Age 70" "An agent that sells ___ Life insurance MUST be registered with the Financial Industry Regulatory Authority - Correct Answer variable" "A $20000 life insurance policy application is completed , however the producer does not collect the initial premium . At what point does the coverage go into effect - Correct Answer when the applicant receives the policy and pays the initial" "Any violations of the Florida financial institutions code may be investigated by the - Correct Answer Department of Financial Services" "What is the main reason for regulating the insurance industry? - Correct Answer Maintain the solvency of insurance companies" "T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert - Correct Answer To an individual policy upon employment termination." "Advertising gifts not to exceed ___ are allowed to be given by an agent to a prospective client. - Correct Answer $100" "What are adjustable rates for life policy loans in Florida based on? - Correct Answer Moody's corporate bond index" "The Bureau of Unclaimed Property is overseen by the - Correct Answer Chief Financial Officer" "K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase? - Correct Answer Single Premium immediate Joint With Survivor Annuity" "Insurance policies are offered on a take it or leave it basis, which make them - Correct Answer Contracts of Adhesion" "What is Old Age and Survivors Health Insurance (OASDHI) also known as? - Correct Answer social security" "Which of the following employer tasks does a Professional Employer Organization normally handle? - Correct Answer Administration Tasks" "An example of rebating would be - Correct Answer offering a client something of value not stated in the contract in exchange for their business" "What is the purpose of the Insurance Guaranty Fund Association? - Correct Answer Protects policyowners against insolvent insurance companies" "What is considered to be a characteristic of an immediate annuity? - Correct Answer Benefit payments start within one payment period of purchase" "An insured inability to perform two or more activities of daily living may trigger which type of policy rider? - Correct Answer long term care" "A life insurance policyowner would like to file a complaint against a life insurance agent. In Florida, the entity that oversees these complaints is called the - Correct Answer Office of Financial Regulation" "N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? - Correct Answer 30 Pay Life" "Which of these is NOT considered rebating - Correct Answer sharing commissions with an agent licensed in the same line of business" "___ can be defined as "using the contract values of an existing policy to purchase a new policy with an existing insurer" - Correct Answer churning" "The act of an insurance company publishing misleading information about its policy's provisions is called - Correct Answer false advertising" "Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? - Correct Answer Notice to existing and replacing insurers of intention to replace" "An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - Correct Answer $6,000" "A policyowner is able to choose the frequency of premium payments through what policy feature? - Correct Answer premium mode" "The Department of Financial Services serves as the court appointed Receiver of any insurer placed into - Correct Answer receivership" "An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? - Correct Answer key person life policy"