FL Insurance practice exam 2

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Cash value of the plan

An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

$3,000 The difference between the premiums paid and the cash value would be taxable. In this example, the difference between the premiums paid ($15,000) and the cash value ($18,000) is $3,000.

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000 The face of the term policy would be the same as the face amount provided under the whole life policy.

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800 In this scenario, the death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy.

When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?

5 years. When a group policy terminates, every individual insured under the policy at the date of such termination who has been so insured for at least 5 years prior to such termination date will be entitled to have issued to him by the insurer an individual policy of life insurance.

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

The death benefit in a variable universal life policy

Depends on the performance of a separate account.

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured.

A Return of Premium term life policy is written as what type of term coverage?

Increasing

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

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.

Upon policy delivery, the agent may be required to obtain any of the following EXCEPT

Signed waiver of premium.

What are the 2 offices of the Financial Services Commission?

The Office of Financial Regulation and the Office of Insurance Regulation.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of medical exam.

Which of the following dates must be contained in a policy summary?

The date the summary was prepared.

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 other than the policy owner.

What is true about nonforfeiture values?

They are required by state law to be included in the policy.

Which of the following is true for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true to the best of the applicant's knowledge.