ExamFX CH. 1 & 2; CH. 9-12
Regulations for annuity recommendations would apply when a consumer is at least what age? 65 years old
65 years old
In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate? 8%
8% The time that may elapse between a premium's due date and its eventual payment is called the grace period. Insurer's may impose interest charges not to exceed 8% per year for the number of days elapsing before the premium is paid..
When transacting business in this state an insurer formed under the laws of another country is known as a/an Alien insurer
Alien insurer
A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive $12,000, all of which is taxable.
$12,000, all of which is taxable.
What is the statute of limitation on lawsuits for health insurance policies? 5 years
5 years
Which of the following is NOT a type of whole life insurance? Level term
Level term
In the case of producer solicitation, at what point must a long-term care Shopper's Guide must be presented to the applicant? Prior to the time of application
Prior to the time of application
The death protection component of Universal Life Insurance is always Annually Renewable Term
Annually Renewable Term REASON: A universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance.
A Universal Life Insurance policy is best described as a/an Annually Renewable Term policy with a cash value account.
Annually Renewable Term policy with a cash value account.
Which of the following is INCORRECT regarding a $100,000 20-year level term policy? At the end of 20 years, the policy's cash value will equal $100,000.
At the end of 20 years, the policy's cash value will equal $100,000.
Which of the following is a feature of a variable annuity? Benefit payment amounts are not guaranteed.
Benefit payment amounts are not guaranteed.
All of the following are true of the Key Person disability income policy EXCEPT Benefits are considered taxable income to the business.
Benefits are considered taxable income to the business.
Which policy component decreases in decreasing term insurance? Face amount
Face amount REASON: Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.
If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised? Replacement regulations will not apply in this situation.
Replacement regulations will not apply in this situation.
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
Replacement rule
To sell variable life insurance policies, an agent must receive all of the following EXCEPT SEC registration.
SEC registration. REASON: Agents selling variable life products must be registered with FINRA, have a securities license, and must be licensed within the state to sell life insurance. SEC registration is for securities, not agents
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called Single premium whole life.
Single premium whole life. REASON: Single premium whole life requires the entire premium to be paid in one lump sum at the policy's inception.
All of the following entities regulate variable life policies EXCEPT The Guaranty Association.
The Guaranty Association.
Which of the following dates must be contained in a policy summary? The date the summary was prepared
The date the summary was prepared
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? The death benefit can be increased by providing evidence of insurability.
The death benefit can be increased by providing evidence of insurability.
All of the following are true regarding a decreasing term policy EXCEPT The payable premium amount steadily declines throughout the duration of the contract.
The payable premium amount steadily declines throughout the duration of the contract.
Which of the following determines the cash value of a variable life policy? The performance of the policy portfolio
The performance of the policy portfolio
A person insured under a group life insurance policy can make an assignment of all or any part of the incidents of ownership conferred on the insured by the policy or by law, to any of the following EXCEPT The policyholder.
The policyholder.
When an HMO knowingly makes any misleading representations, incomplete or fraudulent comparisons for the purpose of inducing any person to lapse, forfeit, terminate, surrender or convert any insurance policy or contract with another insurance company or HMO, they are in violation of the unfair trade practice of Twisting
Twisting
What kind of policy allows withdrawals or partial surrenders? Universal life
Universal life REASON: Universal Life products allow the partial withdrawal, or surrender, of the policy cash value
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than With the policy
With the policy
Stranger-originated life insurance policies are in direct opposition to the principle of Insurable interest
Insurable interest
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? It does not guarantee that the entire principal amount will be paid out.
It does not guarantee that the entire principal amount will be paid out.
Which of the following is TRUE regarding the accumulation period of an annuity? It is a period during which the payments into the annuity grow tax deferred.
It is a period during which the payments into the annuity grow tax deferred.
Coverage of a newborn includes all of the following EXCEPT Transportation costs of up to $3,000 if medically necessary.
Transportation costs of up to $3,000 if medically necessary.
A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default? 60
60
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds $50,000
$50,000
In order for a debtor group to qualify for group life insurance, what should be the minimum number of participants joining the plan every year? 100
100
What is the maximum elimination period in long-term care policies issued in Florida? 180 Days
180 Days
How long must an insurer retain an advertisement for its long-term care policies? 3 years
3 years
In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year? 50%
50%
Which of the following insurance products will be subject to the regulation on life insurance solicitation? A term life policy
A term life policy
What is another name for interest-sensitive whole life insurance? Current assumption life
Current assumption life REASON: Interest-sensitive whole life, also referred to as current assumption life, is a whole life policy that provides a guaranteed death benefit to age 100.
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? Decreasing term
Decreasing term REASON: A decreasing term policy's face amount decreases as the amount of debt is reduced.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? Fair Credit Reporting Act
Fair Credit Reporting Act REASON: The Fair Credit Reporting Act governs what information can be collected and how the information can be used.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? False advertising
False advertising
How long must insurers maintain records of the information collected from senior consumers and other information used in making recommendations that were the basis for insurance transactions? For 5 years after the insurance transaction is completed by the insurer
For 5 years after the insurance transaction is completed by the insurer
When replacing life insurance, the duties of the replacing insurance company include all of the following EXCEPT Maintaining a copy of the Notice Regarding Replacement and all sales proposals used for at least 5 years.
Maintaining a copy of the Notice Regarding Replacement and all sales proposals used for at least 5 years.
A 65-year-old enrolls for benefits under Medicare Part B and submits an application for a Medicare supplement policy two months later. For which of the following reason may the insurer deny the application? Material misrepresentation
Material misrepresentation
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
Obtain a list of all life insurance policies that will be replaced
Which of the following is NOT an Unfair Trade Practice under Florida law with regard to HMO plans? Operating an HMO on a closed-panel basis
Operating an HMO on a closed-panel basis
An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase? Payments for 15 years
Payments for 15 years REASON: With any period certain, death of the annuitant within the stated period will provide payments to the beneficiary only for the remainder of the period certain.
Which of the following will be included in a policy summary? Premium Amounts and Surrender Values
Premium Amounts and Surrender Values
All of the following are true about variable products EXCEPT The premiums are invested in the insurer's general account.
The premiums are invested in the insurer's general account.
If a life insurer holds the proceeds of any policy it issues, which of the following is true? The proceeds may be exempt from any creditor's claims against a beneficiary
The proceeds may be exempt from any creditor's claims against a beneficiary
Which of the following is NOT true regarding Equity Indexed Annuities? They earn lower interest rates than fixed annuities.
They earn lower interest rates than fixed annuities.
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization? Fraternal benefit society
Fraternal benefit society
What kind of policy does NOT typically require proof of insurability? Group Insurance
Group Insurance
Under what conditions will proof of insurability NOT be required of an employee wanting to enroll in a group insurance plan? If the employee enrolls within a certain time period
If the employee enrolls within a certain time period
Annually renewable term policies provide a level death benefit for a premium that Increases annually.
Increases annually. REASON: Annually renewable term policies provide a level death benefit for a premium that increases each year with the age of the insured.
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy? Joint life
Joint life
Which of the following is true regarding Medicare supplement policies? They must be guaranteed renewable
They must be guaranteed renewable