Florida Life, Health and Variable Annuity
Exam
"Leeway" or "Basket" Provision - ANS -refers to a section of the insurance code that allows
domestic insurance companies the flexibility to loan or invest funds to a stipulated percentage of
their total admitted assets in loans or investments not otherwise allowed by law.
\"Nonadmitted Life or Health Insurance Company - ANS -insurance companies that have not
been licensed by the Florida office of insurance regulation to transact business within the state.
\1035 Exchange - ANS -if a policy is exchanged for another policy it stipulates that no gain(or
loss) will be recognized. Consequently the transaction is not subject to tax.
\3 Ways to Contest After 2 Years - ANS -impersonation, no insurable interest, and intent to
murder
\401K Plan - ANS -a qualified employer retirement plan whereby employees can elect to take a
reduction in their current salaries by deferring amounts into a retirement plan. These plans are
called CASH or DEFERRED ARRANGEMENTS.
\403(b) Plan - ANS -employer retirement plan also known as the TAX SHELTERED ANNUITY.
They are only available to employees of specified nonprofit, charitable, educational, and
religious organizations.
\457 Plan - ANS -a deferred compensation plan which allows participants to defer compensation
without current taxation as long as certain conditions are met.
\Accelerated Benefits Provision - ANS -provide for the early payment of some portion of the
policy's face amount should the insured suffer from a terminal illness or injury.(up to 75%)
\Accidental Death Benefit Rider (Double Indemnity Provision) - ANS -will pay you extra if you die
from an accident and death must occur within 90 days of accident to get "double indemnity"
which is where you get paid twice the policy's face value.`
\Accumulation Units - ANS -premiums an annuitant pays into a variable annuity are credited as
______. At the end of the accumulation period accumulation units are converted to annuity
units.
\Actuaries - ANS -in charge of determining the company's premium "rates"
\Adjustable Life - ANS -distinguished by their flexibility that comes from combining term and
permanent insurance into a single plan. Can make adjustments such as (1)increasing or
decreasing the premium, the premium-paying period, or both; or (2)increasing or decreasing the
face amount, the period of protection, or both.
\An Annuity Contract Provides: - ANS -income for life.
\Annuities VS Life Insurance - ANS -buy life insurance to create an estate(sum of money) and
you buy annuities to liquidate an estate. Life insurance is concerned with how soon one will die
and annuities are how long one will live.
\Annuity - ANS -start with a lump sum of money, pay it out in equal installments over a period of
time until the original fund is exhausted. Simply a vehicle for liquidating a sum of money.
\Annuity Rule - ANS -the portion of the proceeds representing principal is received tax free and
the balance of each payment representing interest income is taxable as ordinary income.
, \Assignment Provision - ANS -sets forth the procedure necessary for ownership transfer.
(usually must notify in writing)Does not need the insurer's permission.
\Automatic Premium Loan Provision - ANS -company can take a missed premium out of your
equity.
\Automatic Premium Loan Rider - ANS -allows the insurer to pay premiums from the policy's
cash value if premiums have not been paid by the end of the grace period.
\Back Dating - ANS -making a policy effective at an earlier date than the present in order to save
age(up to 6 months)
\Basic Forms of Whole Life - ANS -straight whole life, limited pay whole life and single-premium
whole life
\Binding Receipt - ANS -(or temporary insurance agreement) coverage is guaranteed even if the
proposed insured is found to be un-insurable until the insurer formally rejects the application.
\Bonds and Mortgages - ANS -the 2 most prominent categories of life insurer investments.
\Business Uses For Life Insurance - ANS -a funding medium, sole proprietor buy-sell plans,
partnership buy-sell plans, key person insurance and employee benefit plans.
\Buy-sell Plans - ANS -an agreement that guarantees that cash will be available at the owner's
death to purchase the deceased owner's interest, so the business can continue without financial
disruption. May be used in any form of business- sole proprietorship, partnership, or close
corporation.
\Buyer's Guide and Policy Summary - ANS -an insurer must provide these to any prospective
purchaser upon request or prior to accepting the applicant's initial premium or premium deposit
unless there is a 14 day free-look provision.
\Cash Refund Option - ANS -annuity option that provides a guaranteed income to the annuitant
for life and if the annuitant dies before the annuity fund is depleted a lump sum cash payment of
the remainder is made to the annuitants beneficiary. Insurance company gets the interest.
\Cash Surrender Option - ANS -policyowners may request an immediate cash payment of their
cash values when their policies are surrendered.
\Cash Value - ANS -a tangible amount that represents the additional funds paid in the early
years of a whole life policy, it is quiet literally the savings element of a whole life policy.
\Categories of Life Insurance - ANS -Ordinary, Industrial and Group
\Churning - ANS -the practice by which policy values in an existing life insurance policy or
annuity contract are used to purchase another policy or contract with that same insurer for the
purpose of earning additional premiums or commissions without an objectively reasonable basis
for believing that the new policy will result in an actual and demonstrable benefit.
\Code of Ethics - ANS -establishes a broad outline defining appropriate and inappropriate
business behavior for the life insurance agents, also establishes the activities of agents as one
of public trust.
\Collateral Assignment - ANS -assignment of a policy to a creditor as security for a debt.
Creditor gets reimbursed out of policy proceeds and the beneficiary gets the excess.
\Common Disaster Provision - ANS -sometimes added to a policy a d designed to provide an
alternative beneficiary in the event that the insured as well as the original beneficiary dies as a
result of a common accident.
Exam
"Leeway" or "Basket" Provision - ANS -refers to a section of the insurance code that allows
domestic insurance companies the flexibility to loan or invest funds to a stipulated percentage of
their total admitted assets in loans or investments not otherwise allowed by law.
\"Nonadmitted Life or Health Insurance Company - ANS -insurance companies that have not
been licensed by the Florida office of insurance regulation to transact business within the state.
\1035 Exchange - ANS -if a policy is exchanged for another policy it stipulates that no gain(or
loss) will be recognized. Consequently the transaction is not subject to tax.
\3 Ways to Contest After 2 Years - ANS -impersonation, no insurable interest, and intent to
murder
\401K Plan - ANS -a qualified employer retirement plan whereby employees can elect to take a
reduction in their current salaries by deferring amounts into a retirement plan. These plans are
called CASH or DEFERRED ARRANGEMENTS.
\403(b) Plan - ANS -employer retirement plan also known as the TAX SHELTERED ANNUITY.
They are only available to employees of specified nonprofit, charitable, educational, and
religious organizations.
\457 Plan - ANS -a deferred compensation plan which allows participants to defer compensation
without current taxation as long as certain conditions are met.
\Accelerated Benefits Provision - ANS -provide for the early payment of some portion of the
policy's face amount should the insured suffer from a terminal illness or injury.(up to 75%)
\Accidental Death Benefit Rider (Double Indemnity Provision) - ANS -will pay you extra if you die
from an accident and death must occur within 90 days of accident to get "double indemnity"
which is where you get paid twice the policy's face value.`
\Accumulation Units - ANS -premiums an annuitant pays into a variable annuity are credited as
______. At the end of the accumulation period accumulation units are converted to annuity
units.
\Actuaries - ANS -in charge of determining the company's premium "rates"
\Adjustable Life - ANS -distinguished by their flexibility that comes from combining term and
permanent insurance into a single plan. Can make adjustments such as (1)increasing or
decreasing the premium, the premium-paying period, or both; or (2)increasing or decreasing the
face amount, the period of protection, or both.
\An Annuity Contract Provides: - ANS -income for life.
\Annuities VS Life Insurance - ANS -buy life insurance to create an estate(sum of money) and
you buy annuities to liquidate an estate. Life insurance is concerned with how soon one will die
and annuities are how long one will live.
\Annuity - ANS -start with a lump sum of money, pay it out in equal installments over a period of
time until the original fund is exhausted. Simply a vehicle for liquidating a sum of money.
\Annuity Rule - ANS -the portion of the proceeds representing principal is received tax free and
the balance of each payment representing interest income is taxable as ordinary income.
, \Assignment Provision - ANS -sets forth the procedure necessary for ownership transfer.
(usually must notify in writing)Does not need the insurer's permission.
\Automatic Premium Loan Provision - ANS -company can take a missed premium out of your
equity.
\Automatic Premium Loan Rider - ANS -allows the insurer to pay premiums from the policy's
cash value if premiums have not been paid by the end of the grace period.
\Back Dating - ANS -making a policy effective at an earlier date than the present in order to save
age(up to 6 months)
\Basic Forms of Whole Life - ANS -straight whole life, limited pay whole life and single-premium
whole life
\Binding Receipt - ANS -(or temporary insurance agreement) coverage is guaranteed even if the
proposed insured is found to be un-insurable until the insurer formally rejects the application.
\Bonds and Mortgages - ANS -the 2 most prominent categories of life insurer investments.
\Business Uses For Life Insurance - ANS -a funding medium, sole proprietor buy-sell plans,
partnership buy-sell plans, key person insurance and employee benefit plans.
\Buy-sell Plans - ANS -an agreement that guarantees that cash will be available at the owner's
death to purchase the deceased owner's interest, so the business can continue without financial
disruption. May be used in any form of business- sole proprietorship, partnership, or close
corporation.
\Buyer's Guide and Policy Summary - ANS -an insurer must provide these to any prospective
purchaser upon request or prior to accepting the applicant's initial premium or premium deposit
unless there is a 14 day free-look provision.
\Cash Refund Option - ANS -annuity option that provides a guaranteed income to the annuitant
for life and if the annuitant dies before the annuity fund is depleted a lump sum cash payment of
the remainder is made to the annuitants beneficiary. Insurance company gets the interest.
\Cash Surrender Option - ANS -policyowners may request an immediate cash payment of their
cash values when their policies are surrendered.
\Cash Value - ANS -a tangible amount that represents the additional funds paid in the early
years of a whole life policy, it is quiet literally the savings element of a whole life policy.
\Categories of Life Insurance - ANS -Ordinary, Industrial and Group
\Churning - ANS -the practice by which policy values in an existing life insurance policy or
annuity contract are used to purchase another policy or contract with that same insurer for the
purpose of earning additional premiums or commissions without an objectively reasonable basis
for believing that the new policy will result in an actual and demonstrable benefit.
\Code of Ethics - ANS -establishes a broad outline defining appropriate and inappropriate
business behavior for the life insurance agents, also establishes the activities of agents as one
of public trust.
\Collateral Assignment - ANS -assignment of a policy to a creditor as security for a debt.
Creditor gets reimbursed out of policy proceeds and the beneficiary gets the excess.
\Common Disaster Provision - ANS -sometimes added to a policy a d designed to provide an
alternative beneficiary in the event that the insured as well as the original beneficiary dies as a
result of a common accident.
