Chapter 19/4: Florida Life Review ctd

If a group life policy is converted to an individual life policy, the individual life policy can have a maximum coverage of:

If a group life policy is converted to an individual life policy, the individual life policy can have a maximum coverage of $10,000. The correct answer is: $10,000

To determine the amount that can be withdrawn from a variable annuity each year tax-free, what value must be determined?

The exclusion ratio is used to determine the amount that can be withdrawn from a variable annuity each year tax-free: the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. The correct answer is: Exclusion ratio

If an annuitant purchased a variable annuity at age 70 for $20,000 and is expected to live another 10 years, what is the annual amount that can be distributed each year tax-free?

To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. $20,000 divided by 10 is $2,000. The correct answer is: $2,000

What type of annuity allows the owner to set up an annuity and then make premium payments however and whenever they want?

A flexible premium annuity allows the owner to set up an annuity and then make premium payments however and whenever they want. The correct answer is: Flexible premium annuity

An arbitrary rate of return set up by the insurer in any separate account it establishes is the:

An arbitrary rate of return set up by the insurer in any separate account it establishes is the assumed interest rate (AIR). The correct answer is: Assumed interest rate

How is an immediate annuity funded?

An immediate annuity can only be funded by a single premium. The correct answer is: Single payment

If an annuitant purchased a variable annuity at age 68 for $36,000 and is expected to live another 12 years, what is the annual amount that can be distributed each year tax-free?

To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. $36,000 divided by 12 is $3,000. The correct answer is: $3,000

To sell variable insurance products in Florida a person must first be licensed and appointed as what type of agent

To sell variable insurance products in Florida a person must first be licensed and appointed as a life including variable products agent. The correct answer is: Life including variable products agent

How much time does an individual have to convert to a new individual life policy after they are terminated from employment covered by a group life policy?

Under a group life policy, if a member's coverage is terminated, the member and dependents may convert their group coverage to individual life coverage. The individual must apply for individual coverage within 31 days after the date of their coverage termination. The correct answer is: 31 days

An agent must believe that the sale of a fixed, indexed, or variable annuity is:

An agent must believe that the sale of a fixed, indexed, or variable annuity is suitable for the person. The correct answer is: Suitable

What must an agent furnish an applicant before selling a variable life insurance policy or variable annuity?

An agent must furnish an applicant with a prospectus before selling a variable life insurance policy or variable annuity. The correct answer is: Prospectus

Who determines the arbitrary rate of return in any separate account?

An arbitrary rate of return set up by the insurer in any separate account is the assumed interest rate (AIR). The correct answer is: Insurer

In Florida, what is the maximum surrender charge that may be charged to a senior citizen for withdrawal from an annuity?

For a senior citizen 65 or older, a surrender or deferred sales charge for withdrawal from an annuity may not exceed 10% of the amount withdrawn. The correct answer is: 10%

How much time does an individual have to convert to a new individual life policy after the termination of their group life policy?

If a group life policy is terminated, the members and dependents may convert their group coverage to individual life coverage. The individual must apply for individual coverage within 31 days after the date of group coverage termination. The correct answer is: 31 days

Who pays the claim if someone dies during the conversion period from a group life policy to an individual life policy?

If a person who was insured under a group life policy dies during the conversion period to an individual life policy, the group policy pays the claim. The correct answer is: Group life policy

In the replacement of an annuity, the insurer must determine the suitability by considering all the following, EXCEPT:

In the replacement of an annuity, the insurer must determine the suitability by considering whether the person: will incur a surrender charge, be subject to a new surrender period, lose existing benefits, would benefit from product enhancements, and has had another annuity replacement with 36 months. The correct answer is: Whether the person will have to payback a commission

In transactions involving replacement of an annuity, an agent must tell the applicant that they should consult a:

In transactions involving replacement of an annuity, an agent must disclose that there may be tax consequences and the applicant should consult a tax adviser. The correct answer is: Tax adviser

Insurers and agents must keep all information collected from a consumer and all information used in making insurance recommendations for how many years after the transaction?

Insurers and agents must keep all information collected from a consumer and all information used in making insurance recommendations for 5 years after the transaction. The correct answer is: 5 years

Appropriately addressing an applicant's financial objectives is known as determining:

Insurers must determine the suitability of annuity products for applicants by establishing standards and procedures for making recommendations that appropriately address the applicant's financial objectives. The correct answer is: Suitability

All of the following are duties of insurers when selling annuities, EXCEPT:

Insurers must determine the suitability of annuity products for applicants by reasonably informing the applicants of various features and the benefit of those features, that the particular annuity as a whole is suitable and considerations if the annuity is a replacement. Insurers are under no obligation to discuss their competitors. The correct answer is: Informing the consumer of the cost comparison to competitors

Who chooses the payment cycles for an immediate annuity?

Payment cycles for an immediate annuity are based on the mode of distribution chosen by the annuitant. The correct answer is: The annuitant

A person insured under a group life insurance policy may make an assignment of all of the following, EXCEPT:

Any person insured under a group life insurance policy may make an assignment of all or any part of his incidents of ownership under such policy including: conversion, the right to name a beneficiary, assign policy proceeds. All incidents of ownership may be assigned, without prejudice to the insurer on account of any payment it may make or individual policy it may issue. The correct answer is: Insured

In transactions involving replacement of an annuity, differences between the existing annuity and the replacing annuity must be provided, including all the following, EXCEPT:

In transactions involving replacement of an annuity, differences between the existing annuity and the replacing annuity must be provided, including a comparison of the benefits, terms, and limitations, a comparison of any fees and charges, the overall advantages and disadvantages and any other relevant information. The correct answer is: Comparison of commissions

There must be no surrender or deferred sales charge for withdrawal from an annuity after the end of the what policy year?

There must be no surrender or deferred sales charge for withdrawal from an annuity after the end of the tenth policy year. The correct answer is: 10

To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis is divided by:

To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. The correct answer is: The number of years the annuitant is expected to live