Life Insurance - Chapter 8: Life Insurance and Annuities - Policy Replacement and Cancellation

What is true regarding a policy with a face value less than $10,000

If it's returned during the free look period, the agreement will be void

The notice to senior consumers regarding their right to cancel a policy must be printed on the cover or policy jacket in at least what type of print?

12 point bold print

An agent who violates the Code with respect to insurance replacement shall on the FIRST violation

Be fined a sum of $1,000

An insurer who violates the Code with respect to insurance replacement shall on the first violation

Be fined a sum of $10,000 (first offense)

During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT a. money-market funds b. mutual funds (only upon the investor's request) c. value funds d. fixed-income investments

C. Value Funds

A legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called

Conservation

Who has the right to cancel an individual life policy for a full refund within 30 days of policy delivery

Insureds who are 60+ years old

An insured has the right to cancel a policy by written notification to the insurer. This notification may be mailed to the insurer or returned to the original agent who made the sale. Upon receipt of the cancellation request, the insurer will

Refund any premiums and policy fees within 30 days of notice if the policy is within the cancellation period specified by the insurer

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

An insured has the right to return the new insurance policy for a full refund during the

Free-look period (10-30 days)

During replacement of life insurance, a replacing insurer must do?

Obtain a list of all life insurance policies that will be replaced

An insurer has been found guilty of a Code violation regarding replacement. The insurer then repeats the violation. What will be the minimum penalty?

Minimum: $30,000 Maximum: $300,000

What document must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

To which products does the Replacement Regulation apply

Whole life insurance -Not: group, credit lift, and when converting an existing policy with the same insurer