Chapter 6: Florida Statutes, Rules, and Regulations Pertinent to Life Insurance Products

An annuity contract is issued to a senior consumer over age 65. What is the maximum surrender charge for a withdrawal of money allowed on this annuity?

10%

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.

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 days

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%. 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.

If an employee is accepted into a group insurance plan, which status will the employee have?

Certificate holder. In group insurance, plan participants (insureds) do not receive a policy. Instead, they receive certificates of insurance, indicating that they are covered by the policy.

An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?

Free look. The free-look provision generally allows an insured a specified number of days from the delivery date of the policy to look over a new policy and return it for a full premium refund if dissatisfied for any reason. For life policies and annuities in Florida, that time period is extended to 14 days.

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

Notice Regarding Replacement

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.

The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the

Spendthrift Clause

How will a life insurance beneficiary designation naming a spouse be changed by divorce?

The beneficiary designation will be voided.

An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?

The cost of coverage is a deductible expense by the employer

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

What kind of policy does NOT typically require proof of insurability?

group insurance

Certificates of coverage are issued to

participants in a group plan