Florida Insurance 2-14 Exam Terms Questions And Answers

Florida Insurance 2-14 Exam Terms
Questions And Answers
A.M.vBestvRatingvAgencyv-vCORRECTvvANSWER--vProfitability,vleverage,v&vliquidity
-vA++vtovFvandvSv(suspended)

AbsolutevAssignmentv-vCORRECTvvANSWER--
vThevtransfervisvirrevocablevandvthevassigneevreceivesvfullvcontrolvofvthevpolicy.v-

vThevassigneevcanvevenvchangevthevbeneficiaryvwithoutvthevbeneficiary'svpermission,vunle

ssvotherwisevstated.

AcceleratedvBenefitvRiderv-vCORRECTvvANSWER-
Paysvavportionvofvthevdeathvbenefitvifvthevinsuredvisvdiagnosedvwithvavterminalvillness.

AcceleratedvDeathvBenefitsvProvisionv-vCORRECTvvANSWER--
vAllowsvthevpolicyownervtovwithdrawvfundsvfromvtheirvlifevinsurancevpolicyvearly,vbeforevdea

th.

AccidentalvDeathvandvDismembermentvInsurancev-vCORRECTvvANSWER--
v(AD&D)vconsideredvthevpuristvformvofvaccidentvinsurancevandvisvtypicallyvsoldvthroughvgro

upvinsurancevplans

AccidentalvDeathvBenefitvRiderv-vCORRECTvvANSWER--v"DoublevIndemnity"
-
vProvidevanvadditionalvamountvusuallyvequalvtovthevfacevamountvifvdeathvoccursvundervcerta

invconditionsvstatedvinvthevpolicy.v
-vCanvbevwrittenvtovtriplevthevpolicy'svfacevamount.

AccidentalvDeathvBenefitvRiderv-vCORRECTvvANSWER-
paysvavmultiplevofvthevdeathvproceedsvifvthevcausevofvdeathvisvavcoveredvaccidentalvevent.

AccidentalvMeansv-vCORRECTvvANSWER-
Bothvthevcausevandvthevresultvofvthevaccidentvmustvhavevbeenvunintentional.vNormally,vthev
deathvcausevbyvthevaccidentvmustvoccurvwithinv90vorv190vdaysvofvthevincident

,AccumulationvUnitsv-vCORRECTvvANSWER--vTypicallyvisvavfunctionvofvthevafter-
taxvinterestvearned,vdividendsvreceivedvandvcapitalvgainsv(orvlosses)vincurred,vminusvinves
tmentvexpensesvassociatedvwithvthevinsurervequityvinvestmentvportfoliovsupportingvthevann
uity

AdditionalvInsuredvRiderv-vCORRECTvvANSWER-
Providesvavdeathvbenefitvonvthevlivesvofvfamilyvmembers

Adhesionv-vCORRECTvvANSWER-
Thevcontractvhasvbeenvpreparedvbyvonevpartyv(thevinsurer),vrathervthanvbyvnegotiationvbetw
eenvthevcontractingvparties.

AdjustablevLifev-vCORRECTvvANSWER-Permanentv+vTerm
Combinesvpermanentvandvtermvlifevpoliciesvallowingvchangesvtovfacevamount,vperiodvpay
ments,vandvtermvduringvpolicyvlifetime.

AdministrativevServicesvOnlyv(ASO)v(TPA)v-vCORRECTvvANSWER-
ovPaidvavfeevtovprovidevthevservicevofvhandlingvpaperworkvandvprocessingvclaims,vwhichvall
eviatesvthevtaskvfromvcorporations

Admittedv-vCORRECTvvANSWER-
insurancevcompanyvisvonevthatvthevOfficevofvInsurancevRegulationvhasvlicensedvtovtransact
vinsurancevbusinessvinvFloridavinvaccordancevwithvstatevlaws




Admittedvinsurancevcompanyv-vCORRECTvvANSWER--
vOfficevofvInsurancevRegulationvhasvlicensedvthemvtovcarryvoutvbusinessvinvFlorida




AdvantagesvofvWholevLifev-vCORRECTvvANSWER--vAdvantages
ovGuaranteedvforvlifevandvwillvnotvcancelvbecausevofvage
ovCashvvaluevbuilds
ovPremiumvcostsvcanvbevfixedvorvflexible
ovCashvvaluevcanvbevusedvtovpayvthevpremiums
ovAdditionalvinsurancevcanvbevaddedvwithoutvthevneedvforvmedicalvexamination
ovThevpolicyvcanvbevconvertedvtovanvannuity
ovLoanvvaluesvarevavailablevforvborrowingvagainstvthevprincipal

AdversevSelectionv-vCORRECTvvANSWER-
Refersvtovthevtendencyvforvthosevindividualsvwhovpresentvlessvfavorablevinsurancevriskvtovs
eekvorvcontinuevinsurancevtovavgreatvextentvthanvothervrisks.

Agentvinvchargev-vCORRECTvvANSWER-
Avinsurancevagencyvmustvhavevone,vbutvthevagentvdoesvnotvhavevanyvspecificvdutiesvorvres
ponisbilities

Agentsv-vCORRECTvvANSWER--
vThevactsvofvthevagentvarevconsideredvthevactsvofvthevcompany

,-vCanvbindvthevcontract

Aleatoryv-vCORRECTvvANSWER-(1)vTherevisvanvelementvofvchancevforvbothvparties
(2)vThevdollarvvaluesvexchangedvmayvnotvbevequal

AllowvDividendsvtovAccumulatevatvInterestv-vCORRECTvvANSWER--
vTheyvdovnotvhavevtovbevdisbursed.vCanvbevleftvinvthevaccountvtovaccumulatevinterest.vDivid

endsvarevnotvtaxable,vhowevervthevinterestvearnedvisvtaxable.

Annuitiesv-vCORRECTvvANSWER-
Providevavstreamvofvincomevbyvmakingvavseriesvofvpaymentsvtovthevannuitantvforvthevannuit
ant'svlifetimevorvforvavspecificallyvdesignatedvperiodvofvtime.

AnnuitiesvPurposev-vCORRECTvvANSWER--
Providevcashvcontractsvwithvanvinsurancevcompanyvthatvarevbasedvprimarilyvonvequityvinve
stmentsvandvshouldvbevundertakenvonlyvasvavlong-termvprogram
-vBasicvpurposevisvtovliquidatevanvassetvthroughvperiodicvpayments

AnnuityvUnitsv-vCORRECTvvANSWER-
Atvthevtimevthevvariablevannuityvbenefitsvarevtovbevpaidvoutvtovthevannuitant,vthevaccumulati
onvunitsvinvthevparticipant'svindividualvaccountvarevconvertedvintovannuityvunits.

ApparentvAuthorityv-vCORRECTvvANSWER-
Avthirdvpartyvisvledvtovbelievevandvthatvthevagentvisvgivenvduevtovthevagent'svactions.

ApplyvDividendsvAgainstvPremiumvPaymentsv-vCORRECTvvANSWER--
vUsedvtovpayvpolicyvpremiumsvandvlessenvthevoutvofvpocketvexpenses




ApprovalvReceiptv-vCORRECTvvANSWER-
ovStatesvthatvtheveffectivevdatevofvthevpolicyvisvthevdatevofvapproval.v
ovNotvusedvasvcommonvtodayvsincevcourtsvfrownvuponvthem

AssessmentvMutualvInsurersv-vCORRECTvvANSWER-ProhibitedvinvFlorida

Authorityvovervthevinsurancevindustryv-vCORRECTvvANSWER-1.vThevStatevLegislature
2.vThevDepartmentvofvFinancialvServices
3.vThevOfficevofvInsurancevRegulation
4.vThevStatevCourtvSystem

AuthorizedvInsurersv-vCORRECTvvANSWER--
vonevdulyvauthorizedvbyvavsubsistingvcertificatevofvauthorityvissuedvbyvthevofficevtovtransactvi

nsurancevinvthisvstate

AutomaticvPremiumvLoanvProvisionv-vCORRECTvvANSWER--
vEnablesvthevinsurervtovwithdrawvfundsvfromvthevpolicyvifvanyvcashvvaluevhasvaccumulatedv

withinvthevcontract

, AutomaticvPremiumvLoanvRiderv(AVC)v-vCORRECTvvANSWER--
vIfvthevpremiumvisvnotvpaidvaftervgracevperiod,vthevcashvvaluevofvthevpolicyvcanvbevusedvtovp

ayvthevpremium
-vCreatingvreducedvpaid-upvinsurance

Badvpolicyvremplacementvissuesv-vCORRECTvvANSWER--
vMostvthevfirstvyear'svpremiumvisvconsumedvbyvthevcommission

-vThevpremiumvisvhighervduevtovthevinsured'svadvancedvage
-vWaitingvperiodsvbeginvanew

BenefitvPeriodvProvisionv-vCORRECTvvANSWER-ovShort-termvbenefitvperiod
•vRangesvfromvsixvmonthsvtovavyear
ovLong-termvbenefitvperiod
•vMorevthanvavfewvyears,vsuchvasv5,v10,vorv20vyears
•vSometimevwillvcovervinsuredvtillvagev65
ovBenefitvperiodvdependsvonvthevpolicy

BindingvReceiptsv-vCORRECTvvANSWER--
vStatesvthatvtheveffectivevdatevofvpolicyvisvthevdatevofvreceiptvofvthevinitialvpremium

ovShouldvthevapplicantvdievbeforevitvisvfullvprocessed
•vThevbenefitsvarevfullvpayable
•vWillvpayvthisvwhethervorvnotvtheyvwouldvhavevbeenvapproved

BlanketvLifevInsurancev-vCORRECTvvANSWER--
vTemporaryvcoveragevofvavspecificvhazardvforvavspecificvgroup.

-
vAirlinevcompaniesvcoveringvthevpassengersvwhilevtheyvarevonvthevflightvforvavtemporaryvtim

e

Brokersv-vCORRECTvvANSWER--Floridavdoesvnotvissuevseparatevlicensesvforvbrokers
-vCannotvbindvthevcontract

BusinessvOverheadvExpensev(B.O.E.)v-vCORRECTvvANSWER--
vdesignedvtovkeepvavbusinessvgoingvwhenvthevownervisvdisabled

-vsoldvonvanvindividualvbasis

CafeteriavPlansv-vCORRECTvvANSWER--vAlsovcalledvSectionv125vplans
-vEmployeevbenefitsvarevpaidvforvonvavpretaxvbasis,vwhichvamountsvforvvaluablevsavings

CancelablevPoliciesv-vCORRECTvvANSWER--
vStatevtheyvcanvbevterminatedvatvanyvtimevbyvthevinsurer

-vInsurervmustvprovidevwrittenvnotificationvofvcontractvcancelationv45vdaysvinvadvance
-vArevallowedvtovincreasevpremiumsvinvavcancelablevpolicy