My license

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?

Applicants who may require a larger death benefit on the future should buy convertible term insurance

If a life insurance company uses HIV testing as a part it's underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test

How long is the grace period for an individual life insurance policy?

1 month

How long does the law required agents to maintain records of transactions pertaining to premium payments?

3 years

Which of the following is NOT considered eligible for group life insurance?

A credit union that needs coverage only for its top 10 employees

According to the insurance statutes definition, an insurer who transacts insurance in this state, but whose articles of incorporation are registered in Canada is considered what type of insurer?

Alien

All of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT

An association formed 1 year ago

A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal?

Family term

All advertisements, regardless of their source of creation, are the responsibility of the

Insurer

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?

Never; the insurer has waived it's right to those answers buy issuing the policy

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT

Pay next year's premium in advance

All of the following are true of annually renewable term insurance EXCEPT

Proof of insurability must be provided at each renewal

What Florida insurance regulation established an outline of appropriate and inappropriate business behavior for life insurance agents?

The Code of Ethics of the Florida Association of Insurance and Financial Advisor

Which statement is an accurate description of the life insurance policy dividends?

They are not taxable and are not guaranteed

Which method of dealing with risk is applied when insurance is purchased?

Transfer

All of the following statements about indexed whole life insurance are correct EXCEPT

The death benefit is not guaranteed

Which of the following entities is considered the Principal?

The insurer issuing a policy

Which department or division of an insurance company is responsible for the selection, evaluation, and distributions from risks?

Underwriting

If a life insurance policy is purchased by someone who has no insurance interest in the insured, it is considered

A STOLI policy

Joe moved last year and forgot to notify the Department of is change of address. He was charged a $250 fine. This year joe moved again, and again forgets to notify the Department within the required time. What will Joe's penalty be?

A minimum fine of $500 or revocation of his license

Agents in this state are required to promptly report all of the following to the Department EXCEPT

change in material status

In life insurance, which of the following is NOT required to have an insurable interest in the insured?

The beneficiary

Insurance contracts are unilateral in nature. What does that mean?

Only one party makes a promise

The renewable provision allows the policyowner to renew the coverage at the expiration date

Without evidence of insurability

A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will

Continue to increase

An agent is filling out an insurance application for a client. The applicant realizes she should have answered an earlier question differently. Which of the following methods should the agent use to make the change?

Cross out the incorrect information, write in the correct answer, and have the applicant initial the change

Which of the filling is NOT a standard exclusion in life insurance policies?

Disability

When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as what?

Estate conversion

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. Which policy provision allowed for this?

Grace period

Which of the following types of policies would NOT be subject to Florida regulations on life insurance solicitation?

Annuities

Decreasing Term Insurance is often used to

Cover a mortgage

Which of the following is NOT true regarding a deferred annuity?

Income payments begins within 1 year from the date of purchase.

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he know me would be possible. Which term describes what the agent has done?

Misrepresentation

In the state of Florida, which of the following government entities is responsible for the administration and regulation of insurance?

The Department of Financial Services

Which of the following is required in order for a plan to be qualified?

The plan must be written and communicated to the employees

According to the "Common Disaster" clause, if the insured and the primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured

Which of the following policies would NOT offer a policy loan option?

Term life

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable whole life

What does the application of "Contract of Adhesion" mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

Which risk classification is representative of the majority of people in a certain age group and with similar lifestyles?

Standard

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as

Twisting

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

With adjustable life, the owner can change all of the following EXCEPT

The insured

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico

An IRA owner who is 57 years old wants to make a withdrawal from her traditional IRA. What penalty will be imposed?

10%

In a no contributory group policy

100% of eligible employees must participate

The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called

A collateral assignment

According to the terms of the policy or an agreement between the insured, the group policyholder, and the insurer, the insured person may not do which of the following?

Assign an appropriate premium based on preference

Which of the following would NOT trigger the payment of Accelerated Death Benefits?

Being permanently disable

What is the difference between straight life policy and a 20-pay whole life policy?

Premium payment period

Which of the following is a provision found in life insurance policies

Reinstatement

An agent tells an insured that if he replaces his current policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?

Twisting

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

All of the following are consideration in a insurance policy EXCEPT

the cash value in the policy

Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?

Occupation

Where are premiums from fixed annuities invested?

A general account

The family term rider incorporates

Spouse term and children's term

Life insurance creates an immediate estate. Which of the following best explains this statement?

The face value of the policy is payable to the beneficiary upon death of the insured

In a life insurance application, all of the following signatures will be required EXCEPT

The home office of underwriter

All of the following informations needs to be included on an application for life insurance EXCEPT

Health insurance policies in force

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called

Insuring clause

Which of the following is consideration on part of an insurer?

Paying a claim

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following?

A percentage of the face amount of the policy

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a reduction in cash value

Which of the following is a correct statement about annuities?

Fixed annuities do not provide protection against inflation

An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this agreement?

Level

Life insurance can provide which of the following?

Survivor protection

Which of following types of insurance products would be appropriate for an individual with low income and high insurance needs?

Term insurance

When term insurance is added to main policy to enhance the policy or provide added benefit or coverage, it is called a

Term rider

In a replacement situation, all of the following are prohibited practices EXCEPT

Borrowing 50% of a policy's cash value to fund a new life insurance contract

Which of the following would be TRUE of both fixed-period and fixed-amount settlement option?

Both guarantee that the principal and interest will be fully paid

Variable insurance and variable annuities are regulated by

SEC, FIRNA and Department of insurance

An applicant for an agent's Life only license must complete a minimum of how many hours of prelicensing education?

40

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer?

If there are no unauthorized insurers for a specific type of coverage in this state

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and Survivor

Cash value guarantees in a whole life policy are called

Nonforfeiture values

Answers to questions in an insurance application are called representations and, as such, they are

Believed to be true to the best of the applicant's knowledge

In this state owner gets a "free look" of a specified number of days from

Delivery of the policy

Which of the following would NOT be eligible for coverage under key person?

The owner of a shop

What does the Guaranty Association guard against?

Insurer insolvency

Which of the following sources would explain the state policies regarding appropriate agent conduct?

Code of Ethics of the Florida Association of Insurance and Financial Advisers

An insurer mails an insurance to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

Delivered

When comparing a Joint Life Policy to two individual life policies of the same insureds, which condition is true?

Joint Life has a lower premium than the total of the two individual policies

What does an annuity protect the contract owner against?

Living longer than expected

When an insured terminates membership in the insured group, the insured can convert to

Whole life without proof of insurability

An insurer recently collected information from a senior consumer, and used that information to make recommendations regarding insurance transaction. For how many years must this information be maintained after the transaction has been completed?

5

Which statement best describes "agreement" as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

A married couple purchased a life insurance policy on their newborn baby. They are concerned about what would happen if either one of them were unable to continue making premium payments due to death or disability. Which policy rider should their agent recommend?

Payor benefit

The policyowner's spouse was designated as the primary beneficiary on a life policy issued 3 years ago. Last year, the couple got divorced. Which of the following is true regarding the beneficiary designation of the former spouse?

The designation will be void

Failing to acknowledge and act reasonably promptly upon communications with respect to an insurance claim is in violation of what insurance regulation?

Unfair claims settlement

Consideration the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?

Use it for emergency expenses

Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suited for transitioning the business?

Buy-Sell Agreement