Exam Questions
When replacing life insurance, the duties of the replacing insurance company include all of the following EXCEPT
Maintaining a copy of the Notice Regarding Replacement and all sales proposals used for at least 5 years.
Which of the following types of insurance is owned by stockholders?
Mutual Companies
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? $8,000, tax on growth only $10,000, tax on growth only $10,000, no tax consequence $8,000, no tax consequence
$10,000, no tax consequence
What is the maximum allowed value of promotional gifts that an agent?
$100
In a life settlement contract, whom does the life settlement broker represent?
)a) The owner (is a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. Life settlement brokers represent only the policyowners.
In order for a debtor group what should be the minimum number of participants joining the plan evey year?
100
What percentage of a company's employees must take part in a noncontributory group life plan?
100%. If the employer pays all of the premium, all employees must be covered to avoid adverse selection.
Free-look period
14 days after deliver of contract
An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?
14. The free-look provision in Florida allows the insured to return a life policy or annuity after 14 days if dissatisfied for any reason.
the minimum age for purchasing life insurance policy in florida is
15 years
An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance
30 days
All agents licensed in this state must complete how many hours of continuing education specific to law and ethics?
4 (all agents must complete a 4-hour Law and Ethics updates course every 2 year)
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
In state issued life policies what is the maximum annual interest?
8%
Fraternal Benefit Society
A life or health insurance company formed to provide insurance for members of an affiliated lodge, religious, or fraternal organization with a representative form of government.
Which of the following is true regarding the agent's appointments?
A person may hold several appointments at one time
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
If a company has a Simplified Employee Pension plan, what type of plan is it?
A qualified plan for a small business
When replacing a policy, insurers require all of the following EXCEPT _____ D_____
A)the applicant's signed statement as to whether the transaction will involve replacement .B)a list of the applicant's existing life insurance policies to be replaced. C)the agent's signed statement certifying that he or she knows that replacement may be involved. D)the existing insurer's signed statement allowing the replacement.
The automatic premium loan provision is activated at the end of the
grace period
Which of the following is another term for an authorized insurer?
Admitted
Which of the following would NOT be a violation of state insurance regulations?
Agent C uses her license to write only business other than controlled.
Florida Insurance Agent Continuing Education Requirements
Agents Licensed 6 or More Years : 20 Total Credits / 4 Credits Must Be in "Florida Law Update" Specific to Line of License. Agents Licensed Less than 6 Years: 24 Total Credits / 4 Credits Must Be in "Florida Law Update" Specific to Line of License.
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain ! Annuity certain option allows the annuitant to select the time period or the amount of the benefits to be paid out. Under the installments for a fixed period, distribution begins on a specific date and stops on a specific date.
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized
Which of the following protects the insured from an unintentional policy lapse?
Automatic Premium Loan Provision
All of the following information about a customer must be used in determining annuity suitability EXCEPT
Beneficiary's age.
A producer who fails to segregate premium monies from his own personal funds is guilty of
Commingling
What is another name for interest-sensitive whole life insurance?
Current assumption life
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term A decreasing term policy's face amount decreases as the amount of debt is reduced.
If an insurer appoints a customer representative, the appointment needs to be filed with which of the following entities?
Department
Which of the following authorities grants and revokes licenses?
Department of Financial Services
#5. When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Discrimination.
All of the following statements are true regarding tax-qualified annuities EXCEPT Employer contributions are not tax deductible. Annuity earnings are tax deferred. They must be approved by the IRS. Withdrawals are taxed.
Employer contributions are not tax deductible.
What type of premium do both universal life and variable life
Flexible Premium
In insurance transactions, fiduciary responsibility means
Handling insurer funds in a trust capacity.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
under what conditions will proof of insurability not be required of an employee
If an employee enrolls within a certain time period
Under what conditions will proof of insurability NOT be required of an employee wanting to enroll in a group insurance plan?
If the employee enrolls within a certain time period
In which of the following cases will the insured be able to receive the full face amount from a whole life policy?
If the insured lives to age 100
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstance
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
Where are premiums invested in a fixed anuity?
Into the life insurance companys General Account
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
Which of the following best describes annually renewable term insurance?
It is level term insurance.
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status.
Which statement is NOT true regarding a policy summary?
It must be combined with a sales illustration.
A policy will pay the death benefit if the insured dies during the 20-year
Level term
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
On its advertisement, a company claims that it has funds in its possession that are in fact
not available for the payment of losses or claims.
Which of the following is TRUE about nonforfeiture values?
Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the policyowner. A table showing the nonforfeiture values for the next 20 years must be included in the policy.
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease. ! Straight or pure life annuity will pay a specific amount of income for the remainder of the annuitant's life. This payment will cease at death, regardless of the amount of principal that hasn't been paid out. There is no refund or payments to survivors
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease. ! Straight or pure life annuity will pay a specific amount of income for the remainder of the annuitant's life. This payment will cease at death, regardless of the amount of principal that hasn't been paid out. There is no refund or payments to survivors. TERM ENGLISH
What are the 2 offices of the financial services commission
Office of Financial Regulation, Office of Insurance Regulation
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Payor Benefit If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.
Which of the following will be included in a policy summary"
Premium amounts and surrender values
another name for a substandard risk classification is
Rated
Rebating
Rebating occurs when an insured is offered something of value in order to induce the sale of an insurance product. Both the offer and acceptance of a rebate are illegal.
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
Which rule would apply if an agent knows an applicant?
Replacement rule
For variable products, underlying assets must be kept in
Seperate acount
An insurance agent B likes to add additional coverages to applicants' policies and charge them for such coverages without their knowledge. The agents is guilty of
Sliding
An agent's appointment has been denied. Which of the following is true?
State taxes may be refunded upon a written request.
All of the following could be considered rebates if offered to an insured in the sale of insurance
Stocks, securities, or bonds. An offer to share in commissions generated by the sale. Dividends from a mutual insurer.**** An offer of employment.
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection.
Which of the following is an example of a producer involved in an unfair trade practice of rebating
Telling a client that his or her's first premium will be waived if he/she purchased the insurance policy today.
Children's riders attached to whole life policies are usually issued as what type of insurance?
Term
#43. Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment. The payments that the annuitant invests into the variable annuity are invested in the insurer's separate account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds". Therefore, the annuitant assumes the risk of the investment.
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return. Equity indexed annuities have a guaranteed minimum interest rate, so while they are aggressive in nature, the annuitant will not have to worry about receiving less than what the minimum interest rate would yield.
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
Who does the secondary addressee provision protect?
The insured over the age of 64
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured's premiums will be waived until she is 21.
failure of a licensee to maintain an appointment with an insurance company
The license will expire if it goes 48 months without an appointment.
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
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. The parties to a contract must be capable of entering into a contract in the eyes of the law. Generally, this requires that both parties be of legal age, mentally competent to understand the contract, and not under the influence of drugs or alcohol.
Which of the following is an example of a producer's fiduciary responsibilities?
The trust that a client places in the producer in regard to handling premiums.
An agent transacts business for Insurer A and Insurer B, both selling life insurance, and for Insurer C, selling health insurance. How many appointments must the agent hold?
Three - one for each insurer
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
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.
True
An annuity contract issued to a senior consumer age 65 or older may not contain a surrender or deferred sales charge for a withdrawal of money from an annuity exceeding 10% of the amount withdrawn.
True
Which type of misrepresentation persuades an insured
Twisting
An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?
Unfair claims settlement
Which of the following is a key distinction between variable whole life and variable universal life?
Variable whole life has a guaranteed death benefit.
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
All of the following benefits are available under Social Security EXCEPT a) Death benefits. b) Welfare benefits. c) Old-age and retirement benefits. d) Disability benefits.
Welfare benefits.
When does the free look period begin?
When the policy is delivered
The Keogh or HR-10 plan allow self-employed individuals to establish tax favored retirement plans for themselves and their eligible employees.
Which of the following is an IRS qualified retirement program for the self-employed?
The two types of assignments are
a) Absolute and collateral. Absolute assigns the entire policy. Collateral assigns a part or all of the benefits.
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
a) Level term A 20-year term policy is written to provide a level death benefit for 20 years.
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
a) Spendthrift provision When a life insurance policy contains a spendthrift provision, all rights of the beneficiary to change time of payment or amount of installments, surrender for cash, borrow against, or assign for any purpose, are withdrawn and those parts of the policy that may give the beneficiary such rights are declared inoperative and void.
#55. All of the following are true regarding a decreasing term policy EXCEPT
a) The payable premium amount steadily declines throughout the duration of the contract. Premiums remain level with a decreasing term policy; only the face amount decreases.
#16. Which of the following statements is correct regarding a whole life policy?
a) The policyowner is entitled to policy loans. Whole life policies offer level premium based on the issue age, guaranteed, level death benefit, cash value that is scheduled to equal the face amount at the insured's age 100, and living benefits, which include policy loans.
#32. All of the following are true regarding the guaranteed insurability rider EXCEPT a) This rider is available to all insureds with no additional premium. b) The insured may purchase additional coverage at the attained age. c) The insured may purchase additional insurance up to the amount specified in the base policy. d) It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events.
a) This rider is available to all insureds with no additional premium.
Guaranteed Insurability rider
allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
b) Equal to the original policy for as long as the cash values will purchase. With this option, the cash value is used as a single premium to purchase the same face amount as the original policy for as long a period of time as the cash will buy at the insured's current age.
#27. All of the following are duties and responsibilities of producers at the time of application EXCEPT a) Check to make sure that there are no unanswered questions on the application. b) Change any incorrect statement on the application by personally initialing next to the corrected statement. c) Explain the nature and type of any receipt the producer is giving to the applicant. d) Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. Any changes to information on an application must be initialed by the applicant.
b) Change any incorrect statement on the application by personally initialing next to the corrected statement.
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a) The premium for individual coverage will be based upon the insured's attained age. b) The insured may choose to convert to term or permanent individual coverage. c) The insured would not need to prove insurability for a conversion policy. d) The insured may convert coverage to an individual policy within 31 days.
b) The insured may choose to convert to term or permanent individual coverage.
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
c) Joint Life A Joint Life policy covering two lives would be the least expensive because the premiums are based on an average age, and it would pay a death benefit only at the first death.
The premium of a survivorship life policy compared with that of a joint life policy would be
c) Lower. Survivorship Life is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age. The major difference is that survivorship life pays on the last death rather than upon the first death. Since the death benefit is not paid until the last death, the joint life expectancy in a sense is extended, resulting in a lower premium than that which is typically charged for joint life.
#37. Social Security was created to provide all of the following benefits EXCEPT
c) Unemployment income. Social Security is designed to provide protection against financial loss due to old age, disability, or death. It also provides income during retirement.
What percentage of a company's employees must take part in a noncontributory group life plan?
d) 100%
#19. An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?
d) Pay the death benefit The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact.
An employee will be taxed on the cost of group life insurance paid by the employer
he IRS considers group-term life insurance provided by your employer to be a tax-free benefit so long as the policy's death benefit is less than $50,000.
A foreign insurer
is an insurance company that is located in one state, but also writes policies for clients in other states
A producer involved in a replacement transaction must
leave with the applicant a notice regarding replacement and all of the sales material used in the presentation.
if an agent does not notify the insurer of an address change
maximum penalty $250
It would be considered unfair discrimination to ask an insurance applicant about which
sexual orientation
In insurance, the offer is usually made when
the application is submitted
Which dates are included in the policy summary?
the beginning and end date of the current report period
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting