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

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

free-look period

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

$30,000

All insurance policies and annuity contracts delivered to senior citizens in the State of California are subject to a cancellation period of at least

30 days

which of the following documents must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

How must a replacing producer respond to an applicant wishing to replace existing life insurance?

the producer must provide the applicant with a Notice Regarding Replacement

to which of the following products does the Replacement Regulation apply?

whole life insurance

Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for

an administrative penalty of no less than $5,000 and no more than $50,000 per violation

Any insurer who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

be fined a sum of $10,000

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

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

the right of the applicant to rescind the policy for a full refund of all premiums

must be clearly stated in the policy's text

Replacement Regulations does NOT apply to

credit life, group life, and group annuities or transactions with the same insurer

which of the following insureds have a right to cancel an individual life policy for a full refund within 30 days of policy delivery?

insured's who are 60 years of age or older

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

which of the following is true regarding a policy with a face value less than $10,0000

it if is returned during the free look period, the agreement will be void

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

Every policy of individual life insurance must include a notice of right to cancel the policy, stating the specific time frame for the free-look period. Once the insured has cancelled the policy, within how many days must the insurer refund all premiums and policy fees?

30 days

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

conservation

During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT

value funds can be invested in mutual funds (upon the investor's request), money-market funds, fixed-income investments