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2-15 > Unit 27 > Flashcards

Unit 27 Flashcards

1
Q

Which of the following is CORRECT about the replacement rule?

(A) The replacement rule applies only to health insurance policies
(B) The agent has 90 days from the effective date to deliver a buyer’s guide
(C) Instructions regarding the rule are available from appointed life insurers
(D) Up to 30 days is allowed for a full refund of premium

A

(C) Instructions regarding the rule are available from appointed life insurers

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2
Q

Which of the following is NOT considered to be an element of replacement?

(A) The agent knows a new policy will take the place of an existing policy
(B) An existing policy is subjected to a loan of 10% of its value
(C) An existing policy is allowed to lapse
(D) An existing policy is reissued with a reduced cash value

A

(B) An existing policy is subjected to a loan of 10% of its value

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3
Q

In which of the following ways is a beneficiary protected from the creditors of the deceased insured?

(A) The proceeds of an insurance policy can always be claimed by the deceased insured’s creditors
(B) When the policy is made payable to the estate, the proceeds are protected from the creditors
(C) If the policy is made payable to a named beneficiary, then the creditors can make no claim on the proceeds
(D) The cash surrender value of a life insurance policy can be attached by an ordinary creditor

A

(C) If the policy is made payable to a named beneficiary, then the creditors can make no claim on the proceeds

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4
Q

All of the following statements are correct about policy loan interest rates EXCEPT:

(A) an insurance company can charge a fixed rate of interest up to a maximum of 10%, with some restrictions
(B) an adjustable interest rate can be used if the insurance company follows a national corporate bond index
(C) an adjustable interest rate can be used if the limit is based on the average monthly published interest rate set by Moody’s
(D) policy loan interest rates were set by the Office of Insurance Regulation in 1933 and may not be changed

A

(D) policy loan interest rates were set by the Office of Insurance Regulation in 1933 and may not be changed

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5
Q

Which of the following applies when an insured wishes to convert industrial insurance policies for an ordinary policy?

(A) This is not permitted under Florida law
(B) It is possible to convert $3,000 or more of industrial insurance
(C) Any such conversion requires a physical examination
(D) The multiple policies can only be reissued as one industrial policy

A

(B) It is possible to convert $3,000 or more of industrial insurance

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6
Q

In a typical family policy, coverage on the children is usually provided by which of the following?

(A) Whole life
(B) Term life
(C) Endowment plan
(D) Fixed annuity

A

(B) Term life

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7
Q

All of the following groups are eligible for group life insurance EXCEPT:

(A) employer and employee groups
(B) labor unions
(C) trustee groups
(D) social clubs

A

(D) social clubs

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8
Q

Which of the following is the CORRECT number of lives required in Florida for a group life insurance policy?

(A) 3
(B) 8
(C) 10
(D) No minimum

A

(D) No minimum

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9
Q

Which of the following is NOT required when a group life insurance policy is cancelled?

(A) The insurance company must notify the group policyowner
(B) The policyowner must notify the department of the cancellation
(C) The insurance company must notify the group members (but may request this to be done by the policyowner)
(D) The policyowner must notify the group members

A

(B) The policyowner must notify the department of the cancellation

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10
Q

A trusteeship group insurance policy:

(A) covers all full-time employees of a single employer
(B) insures the debtors of one lender
(C) covers students participating in sports
(D) insures employees of two or more employers

A

(D) insures employees of two or more employers

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11
Q

Which of the following is a requirement of a participating life insurance policy?

(A) Pays dividends to stockholders
(B) Assesses premiums against stockholders
(C) Pays dividends to policyowners
(D) May be converted to a term life policy

A

(C) Pays dividends to policyowners

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12
Q

All of the following apply under the federal ERISA law EXCEPT:

(A) the Florida law on retirement plans supersedes ERISA
(B) qualified pension plans receive favorable tax treatment
(C) Fiduciary responsibility is required
(D) funding, participation, and vesting are addressed

A

(A) the Florida law on retirement plans supersedes ERISA

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13
Q

Variable life insurance policies involve all of the following EXCEPT:

(A) an approach to counter the effects of inflation
(B) compliance with the Securities and Exchange Commission
(C) benefits that vary with investment experience
(D) a traditional approach to term life insurance

A

(D) a traditional approach to term life insurance

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14
Q

All of the following apply to a universal life insurance policy EXCEPT:

(A) the coverage includes an annual renewable term policy
(B) there are no restrictions on it as far as receiving favorable tax treatment
(C) there can be a flexible premium and an adjustable benefit
(D) the accumulations in the policy grow on a tax-sheltered basis

A

(B) there are no restrictions on it as far as receiving favorable tax treatment

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15
Q

Which of the following statements applies to the rights of a surviving spouse under a group insurance policy?

(A) Coverage continues at the same rate and premium
(B) Conversion privileges must be provided for dependents
(C) Conversion privileges extend to the spouse but not to the children
(D) Conversion rights of the surviving spouse are less than those which the insured employee possessed

A

(B) Conversion privileges must be provided for dependents

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16
Q

Which of the following rules would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

(A) Conversion rule
(B) Disclosure rule
(C) Replacement rule
(D) Reinstatement rule

A

(C) Replacement rule

17
Q

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

(A) During the 14 days prior to its effective date
(B) Within 14 days after delivery of the policy
(C) Within 30 days of purchase
(D) After receipt, but only with the prior approval of the agent

A

(B) Within 14 days after delivery of the policy

18
Q

All of the following statements about life insurance benefits are correct EXCEPT:

(A) benefits designated for a named beneficiary are protected from the insured’s creditors
(B) benefits payable to the insured’s estate are protected from the insured’s creditors
(C) the cash surrender value of a life insurance policy is subject to garnishment if the policy was taken out for the creditor’s benefit
(D) benefits designated for a named beneficiary are protected from the beneficiary’s creditors

A

(B) benefits payable to the insured’s estate are protected from the insured’s creditors

19
Q

All of the following are correct about the policy loan interest rate EXCEPT:

(A) an adjustable rate of interest can be charged
(B) an insurance company can charge a fixed rate of up to 10%
(C) adjustable interest rates are based on a published index
(D) there are no restrictions or limitations on policy loan interest rates

A

(D) there are no restrictions or limitations on policy loan interest rates

20
Q

All of the following statements are correct about the law for conversion (change of plan) EXCEPT:

(A) it applies to the conversion of industrial life insurance policies
(B) conversion is permitted without evidence of insurability
(C) the maximum amount of face value that can be converted is $2,000
(D) an insured can convert several industrial life insurance policies into one ordinary life insurance policy

A

(C) the maximum amount of face value that can be converted is $2,000

21
Q

All of the following are correct about a family plan policy EXCEPT:

(A) term insurance is provided for children
(B) the named insured has a whole life policy
(C) only children living when the policy is issued are covered
(D) the coverage for the spouse may be term or whole life

A

(C) only children living when the policy is issued are covered

22
Q

Which of the following statements is CORRECT about group life insurance?

(A) It is written with a master policy for members of qualified groups
(B) A group member is prohibited from assigning incidents of ownership
(C) Group life rates are generally higher than those for individual policies
(D) Only the group member can pay the premiums for the group policy

A

(A) It is written with a master policy for members of qualified groups

23
Q

Under group life insurance, which of the following statements is CORRECT?

(A) If cancelled, the members must be notified
(B) There must be at least 25 lives int he group
(C) A group member cannot name a beneficiary
(D) Any group of individuals is eligible for group life

A

(A) If cancelled, the members must be notified

24
Q

All of the following are eligible groups under Florida law EXCEPT:

(A) associations of licensed professionals
(B) debtors of a single creditor
(C) members of a credit union
(D) groups established to buy insurance

A

(D) groups established to buy insurance

25
Q

All of the following statements are correct about group life insurance EXCEPT:

(A) a member can assign her incidents of ownership
(B) certificate holders need not be notified if the policy expires
(C) rates are typically more favorable than for individual policies
(D) it is generally written as a one-year renewable term plan

A

(B) certificate holders need not be notified if the policy expires

26
Q

All of the following statements are correct about a participating policy EXCEPT:

(A) dividends are not considered in comparison to nonparticipating policies
(B) dividends are paid to the policyowner
(C) dividends may be used to pay premiums
(D) dividends may be left with the insurer to accumulate interest

A

(A) dividends are not considered in comparison to nonparticipating policies

27
Q

An insurance policy dividend can be all of the following EXCEPT:

(A) paid as a return of premium
(B) paid as a division of surplus
(C) paid by a nonparticipating policy
(D) applied to pay premium

A

(C) paid by a nonparticipating policy

28
Q

Which of the following applies to retirement plans in Florida?

(A) They are regulated by the Chief Financial Officer
(B) No plan may qualify for favorable tax treatment
(C) Only funding and participation methods are regulated
(D) Federal ERISA regulations override Florida law

A

(D) Federal ERISA regulations override Florida law

29
Q

Which of the following is a requirement that a professional association must meet to obtain group insurance?

(A) It must have been in existence for at least 2 years
(B) It must have at least 200 members that participate
(C) It must be formed for the sole purpose of purchasing insurance
(D) Its members must contribute premiums on a strictly voluntary basis

A

(A) It must have been in existence for at least 2 years

30
Q

All of the following statements about a participating policy are correct EXCEPT:

(A) premiums may be higher than those for a nonparticipating policy
(B) the surrender values are generally the same as a nonparticipating policy
(C) policy dividends may be paid in cash
(D) policy dividends paid in cash are taxable

A

(D) policy dividends paid in cash are taxable

2-15 (33 decks)

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