Life & Health Chapter 27

Temporary term for interim coverage may be used to defer the effective date of an original policy for how many months?

1-11

In Florida, an insurer is required to issue an additional lapse notice after the applicable statutory grace period has expired for which age group?

64 or older

Florida rules on disclosure require:

A 14 day free look and buyers guide provided at delivery

"Twisting" in policy replacement involves

Any form of misrepresentation; Failure to disclose all relevant facts; Stripping cash values to make outside investments

what constitutes replacement?

Any reduction in values, face amount or cash value

Benefits payable to the insured's estate

are not protected from the creditors

Instructions regarding the replacement rule are

available from appointed life insurers

Suitability information gathered from consumers must be retained for review by the department

by both agents and insurers for 5 years

moat insurance companies require that notice of any assignment of a policy be

filed at the home office

Group life premiums are usually deductible

if the program benefits are not discriminatory.

What applies when an insured wishes to convert industrial insurance policies for an ordinary policy?

it is possible to convert $3000 or more of industrial insurance

Which of the following must be given to an insured when a replacement occurs?

notice regarding replacement

are premiums higher for par or non par policies?

participating

uses of dividends include:

reducing premium; accumulate interest; buy reduced paid-up insurance

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

Churning is

replacement with misrepresentation with-in the same company.

Twisting is defined as

replacement with misrepresentation; external, from one company to another

the limit Florida insurance regulations set for the combining of advertising for insurance policies with association membership requires

separate applications and separate signatures

After 2 years, the policy will pay for

suicide. Before then, the company will return the premiums

If the insured's age has been understated, the Misstatement of Age provision in a life insurance policy provides

that a Death benefit smaller than the face amount of the policy will be payable.

Titus has absolutely assigned his $100,000 life insurance policy to the bank to cover a $75,000 mortgage. His wife is named as primary beneficiary. If Titus were to die which statement correctly reflects the insurance company's obligation?

the bank would receive the entire amount

How will a beneficiary naming a former spouse on a preexisting insurance contract be changed by the divorce?

the beneficiary designation is voided by the divorce

If the error was discovered after death,

the benefit would be adjusted

If the error was discovered before death,

the premium would be adjusted

When must an agent present to the applicant a "Notice of Applicant regarding Replacement of Life Insurance" ?

when taking the application

During what period is a new life insurance policy owner entitled to review a policy and return it for a full refund?

within 14 days after delivery of the policy

Who can negotiate viatical contract?

Those holding a life insurance license

A viatical settlement broker is deemed to represent only the

Viator (the owner of the policy)

Dividend Options (CRAPT)

Cash, Reduce the premium, Accumulate with the company, Paid-up insurance, Term (annual renewable term)

What are the rights of a surviving spouse under a group insurance policy?

Conversion privileges must be provided for dependents

A way in which the existing insurance may be modified that brings the transaction within the definition of replacement is:

Conversion to reduced paid-up ins, continued as extended term Insurance, or otherwise reduced in value by use of nonforfeiture benefits or other policy values.

disadvantages of naming the insured's estate as beneficiary:

Creditors can easily attach the proceeds; Proceeds increase the size of the estate; If there is a will it may be contested; The advantages of settlement options are lost

Who regulates qualified retirement plans?

Employee Retirement Income Security Act (ERISA)

How is a beneficiary protected from the creditors of the deceased insured?

If the policy is made payable to a named beneficiary, then the creditors can make no claim to the proceeds.

Which 3 things can be contestable forever?

Impersonation, Intent to Murder, no Insurable Interest

For an individual life insurance contract on an insured 64 years of age or older, the insurer must advise the applicant

Of their right to designate a secondary addressee to receive a copy of any policy lapse notice

The Florida Uniform Simultaneous Death act

Provides that when it is impossible to determine who dies last it is assumed the insured died last; It was designed to clear the way for paying claims

The Viatical Settlement Act

Requires licensing for brokers and providers; Allows licensed life agents to perform the functions of a Viatical Broker; Provides for regulation of these products by the Dept. of Financial Services

The "Spendthrift Clause" enables a beneficiary to collect all policy proceeds even though:

The Insured had large outstanding debts

The law in Florida says that an agent who assists an applicant in the replacement of insurance coverage must provide all disclosure forms and sales materials used to whom, if it is requested?

The applicant

Munch withdraws $2,000 of accumulated dividends from his life insurance policy. What will be the TAX RESULT?

The dividends are exempt from income tax, but any interest credited will be taxable.