Florida Life Insurance Exam Study Modules

What must be done if changes are made to an application?

• Changes must be made by the applicant and initialed; never erase or use white-out.

• Changes can be made by anyone as long as they are documented.

• Changes should be made in pencil to allow for easy corrections.

• Changes must be approved by a supervisor before being made.

What are the penalties for twisting and churning in Florida insurance practices?

• Fine up to $75,000 per willful violation.

• Imprisonment for up to 5 years.

• Suspension of insurance license for 1 year.

• Mandatory community service for 100 hours.

What are essential policy provisions?

• Entire Contract

• Grace Period

• Premium Payment

• Incontestability

What is universal life insurance?

• Insurance with fixed premiums and face amount, with no death benefit options.

• Insurance with flexible premiums and face amount, with death benefit options and interest rates.

• Insurance that only covers accidental death and has no cash value.

• Insurance that requires a medical exam and has a fixed interest rate.

What does the Fair Credit Reporting Act protect?

• Protects consumers' credit information rights.

• Regulates interest rates on loans.

• Ensures privacy of medical records.

• Mandates free credit scores for all consumers.

What is variable life insurance?

• Insurance where cash value is invested in a separate account, requires two licenses (insurance + securities), regulated by SEC and FINRA, policyowner assumes investment risk.

• A type of insurance that guarantees a fixed cash value and does not involve investment risk.

• Insurance that provides a death benefit only, with no cash value accumulation.

• A policy that allows the policyholder to choose the investment options for their cash value, but does not require any licenses.

What is the tax treatment of life insurance?

• Premiums are tax deductible, death benefit is taxable, cash value grows tax-free.

• Premiums not tax deductible, death benefit tax-free if lump sum, interest on installment payments is taxable, cash value grows tax-deferred.

• Premiums are tax deductible, death benefit is tax-free, cash value grows tax-deferred.

• Premiums not tax deductible, death benefit taxable, cash value grows taxable.

What are the phases of an annuity?

• Accumulation (pay-in period, tax-deferred), Annuitization (pay-out period, taxable interest).

• Investment (growth phase), Distribution (withdrawal phase).

• Funding (initial investment), Maturity (final payout).

• Deposit (contribution phase), Liquidation (cash-out phase).

What are the solicitation requirements for life insurance in Florida?

• Buyer's Guide and Policy Summary must be given no later than when application is signed.

• A medical examination must be completed before the application is submitted.

• The applicant must provide a list of previous insurance policies.

• The insurance agent must have a license from the state of Florida.

What are common riders in life insurance?

• Waiver of Premium

• Term Life Extension

• Investment Growth Option

• Health Insurance Rider