Chapter 8: Life Insurance and Annuities - Policy Replacement and Cancellation
Every individual life insurance policy must provide for a free-look provision that lasts for at least
10 days
How must a replacing producer respond to an applicant wishing to replace existing life insurance?
The producer must provide the applicant with a Notice Regarding Replacement.
The notice to senior consumers regarding their reight to cancel a policy must be printed on the cover or policy jacket in at least what type of print?
12-point bold print
Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for
An administrative penalty of no less than $5,000 and no more than $50,000 per violation.
A legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called
Conservation.
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
An insurer has been found guilty of a Code violation regarding replacement. The insruer then repeats the violation. What will be the minimum penalty?
$30,000
Which of the following insured have a right to cancel an individual life policy for a full refund within 30 days of policy delivery?
Insureds who are 60 years of age or older
Which of the following documents must be provided to the policy owner or applicant during policy replacement?
Notice Regarding Replacement
Every policy of individual life insurance must include a notice of right to cancel the policy stating the specific time frame for the free-look period. Once the insured has canceled the policy, within how many days must the insurer refund all premiums and policy fees?
30 days.
Which of the following is true regarding policy with a face value less than $10,000?
If it's returned during the free look period, the agreement will be void.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced.