FLA Health and Life and Annuity (inc.Var.Contracts) Agent (0215) - Part 2

Qualified Plan Requirements

1) Be in writing 2)provided for benefit of employee 3) must satisfy age and serive standards 4) cannot be discriminatory 5) contributions cannot exceed yearly maximus 6) must provide survivorship benefits 7) must meet miniumum vesting standards 8) cannot be top heavy

Office of Insurance Regulation (OIR)

1. Examines the qualifications of the insurance companies doing business in FL 2. Examines the financial conditions of companies 3. Approves forms, rules, and rates

Unilateral Contract

A contract that results when an offer can be accepted only by the offeree's performance.

Qualified Plan

A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.

Defamation

Act of harming or ruining another's reputation

Personal Contract

An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

A Life insurance policy must be signed by all except

Beneficiary

Which two entities regulate variable annuities?

Department of Financial Services; and Securities Exchange Commission

fidiciary responsibility

Fiduciary responsibility refers to the legal and ethical obligation that one party has to act in the best interests of another party when entrusted with assets, responsibilities, or decisions on behalf of that other party. The person or entity with the fiduciary duty is called the "fiduciary," and the party whose interests they must prioritize is referred to as the "beneficiary."

Contributory Plan

Group insurance plan under which the employees contribute a portion to the payment of premiums.

which of following statements about health reimbursement arrangements is correct

If the employee paid for qualified medical expenses, the reimbursements may be tax-free

Immediate Annuity v. Deferred Annuity

Immediate: A Life Annuity contract where the first pay-out is made within 12 months after it is purchased. Can only be purchased with a single premium/lump-sum payment. Deferred: A Life Annuity contract where the first pay-out is made 12 months after it is purchased. Can be purchased with either a single premium or with continuous premium payments.

Handicapped Children

In Florida, coverage for a child who is dependent on the parents for support due to a physical handicap may be continued beyond the contractual limiting age when the child is incapable of self sustaining employment.

what is sliding in the insurance industry

In the insurance industry, "sliding" typically refers to a deceptive practice where an insurance agent or broker includes additional coverage or features in an insurance policy without the knowledge or consent of the policyholder. This is done to increase the premium and, consequently, the commission earned by the agent or broker.

The principal indemnity

Insured is intended to be restored to the same financial or economic condition that existed prior to the loss, depending on the amount and type of insurance purchased. Insured should not profit from an insurance transaction, but be made "whole again"

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Level

Approves Insurance Policy in Florida

National Association of Insurance Commissioners (NAIC) Department of Florida

Policy Funding

Neither life insurance nor annuity premiums are tax deductible for any type of life insurance policy or annuity, except for a percentage of an individual's contribution in an individual retirement account or individual retirement annuity.

Florida Life Insurance Group Life Policy

No Minimum

Joint and Survivor Option

The joint and survivor option is a settlement option that guarantees that benefits will be paid on a life-long basis to two or more people. This option may include a period certain, and the amount payable is based on the ages of the beneficiaries.

Policy Loan

The underwriting process involves all of these, EXCEPT for:

Nonforfeiture Options

Three options available by law to policyowners that enable them to recover a policy's cash-value upon surrender of that policy. (1) Cash (2) Reduced Paid-Up Insurance (3) Extended Term Insurance

Owner's Rights

What explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

Extended Term

Which nonforfeiture option has the highest amount of insurance protection?

403b retirement plan

a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers

nonforfeiture clause

allows you to receive the savings you accumulated if you terminate your whole life policy

Immediate Annuity

an annuity in which the annuitant begins receiving monthly benefits immediately

Suitability of recommended products

an ethical agent must be able to assess the correlation between a recommended product and the consumer's needs

Indemnity insurance plan

are health insurance contracts will only reimburse the actual cost of the loss (Pay medical bills) - You cannot profit from indemnity contract.

Nonforfeiture Values

benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses

Family Plan Policies

designed to insure all family members under one policy. Coverage is sold in units. Usually the insurance covering the family head is permanent and that covering the spouse and children is level or decreasing term. Children who are born later are covered automatically.

reserve

funds held by the company to help fulfill future claims. Minimum reserves are usually set by the state Department of Insurance.

Basic Medical Expense Insurance

has lower benefit limits than Major Medical insurance

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

immediate annuity

Which of the following types of term life policies most likely contain a renewability feature

increasing term

Increasing Term

is term life insurance that provides an increasing face amount over time based on specific amounts or a percentage of the original face amount.

The Principal Sum under an AD&D

is the amount payable as a death benefit. It is the amount of insurance purchased. The principal sum represents the maximum amount the policy will pay if the insured dies or suffers a severe accident. (Equal to the face value of the life insurance policy the A&D Rider

increasing term policy

level premium, as do all policies, but the face amount increases every year of the policy term

Valued insurance policy

life insurance contracts will pay a stated amount

Policy Outline of Coverage must include

limitations and exceptions

Irrevocable Beneficiary

one that cannot be changed without the beneficiary's consent

Single Premium

pays a single premium that provides protection for life as paid up policy

Annuities

protect against the financial risk of out living a normal life expectancy

Florida Life Insurance Solicitation Law

spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer.

morbidity rate

the incidence of disease in a given population

mortality rate (death rate)

the number of deaths per thousand people

Revocable Beneficiary

the policyholder reserves the right to change the beneficiary designation without the beneficiary's consent

Human Life Value Approach

the present value of the family's share of the deceased breadwinner's future earnings

Contestable Clause

• after the first 2 years, • an honest mistake is incontestable by the Insurer; • fraud is incontestable by Life Insurers and Group Health Insurers; but • fraud remains contestable forever by Individual Health Insurers