Florida Life, Health and Variable Annuity Exam Questions with answers. Rated A. 2022/2023

Florida Life, Health and Variable Annuity Exam Questions with answers. Rated A. 2022/2023 Document Content and Description Below Florida Life, Health and Variable Annuity Exam Questions with answers. Rated A. 2022/2023 Categories of Life Insurance - Ordinary, Industrial and Group Ordinary Life - is individua l life insurance that includes many types of TERM and PERMANENT insurance and is usually paid with monthly premiums. Is the principal type of life insurance purchased in the United States. Industrial Insurance - small issue amounts with premiums collected weekly or monthly by agents at policyowner's home. Also known as BURIAL INSURANCE Group Insurance - written for employer-employee groups to provide coverage for a number of individuals under one contract. Underwriting is based on the group and not the individual. Premiums are lower but when you leave it gets expensive. Term Life Insurance - simplest type of life insurance, provides insurance protection for a specified period and pays a benefit only if the insured dies during the period. Like renting your insurance but it's more affordable but as you get older it goes up.(No Equity) Forms of Term Life Insurance - level, decreasing and increasing Level Term Insurance - provides a level amount of protection for a specified period, after which the policy expires. Level premium and level death benefit Decreasing Term Insurance - characterized by benefit amounts that decrease gradually over the term of protection but the premium stays the same throughout. Used to cover LOANS or MORTGAGES. Increasing Term Insurance - insurance that provides a death benefit that increases at periodic intervals over the policy's term. Usually used to cover a BUY SELL AGREEMENT and is usually purchased as a COST OF LIVING RIDER. Features of Term Life - option to renew an option to convert Option to Renew - allows policyowner to renew the term policy before its termination date without having to provide evidence of insurability/good health. Option to Convert - gives the insured the right to convert or exchange the term policy for a whole life(or permanent) plan without evidence of insurability. Whole Life Insurance - also known as permanent or cash value insurance, provides permanent protection for the whole of life and you pay premiums which are locked in for the entire life as well as the benefit which is also constant throughout the life. Designed to mature at age 100. Invest in bonds, treasuries and mortgages to guarantee it endows. Endow - when cash value = death benefit Basic Forms of Whole Life - straight whole life, limited pay whole life and single-premium whole life Straight Whole Life - whole life insurance providing permanent level protection with level premiums from the time the policy is issued until the insured's death(or age 100). Most affordable-longer you pay the more affordable. Limited Pay Whole Life - have level premiums that are limited to a certain period(less than life). The period can be of any duration. Ex: 20-pay life, pay premiums for 20 years and then you are fully covered until your 100. Single Premium Whole Life - involves a large one-time-only premium payment at the beginning of the policy period and from that point on the policy is completely paid for. Modified Whole Life - distinguished by premiums that are lower than typical whole life premiums during the first few years(usually 5) and then higher than typical thereafter. Designed to make initial purchase of insurance easier and more attractive with a promise of an improved financial position in the future. Endowment Policies - endows at the end of the premium paying period, always before age 100. Normally for college funding but is taxed every year and is not popular. Special Use Policies - combination or "packaging" of different policy types, designed to serve a variety of needs. 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. Joint Life Policies - one policy that covers two or more people using some type of permanent insurance it pays the death benefit when one of the insureds dies. Last Survivor Policy - also known as "second to die" policy, covers two lives but the benefits are paid upon the death of the last to survive. Juvenile Insurance - insurance written on the lives of children(usually one day old to fourteen or fifteen), application for insurance and ownership rest with an adult. Payor Provision - typically attached to Juvenile Insurance Policies, provides that in the event of death or disability of the adult premium-payor, the premiums will be waived until the insured child reaches a specified age or until the maturity date of the contract which ever comes first. Credit Life Insurance - a decreasing term policy designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid. Beneficiary is normally the lender. Non-Traditional Life Policies - interest sensitive whole life, adjustable life, universal life, variable life, and variable universal life Adjustable Life - distinguished by their flexibility that comes from combining term and permanent insurance into a single plan. Can make adjustments such as (1)increasing or decreasing the premium, the premium-paying period, or both; or (2)increasing or decreasing the face amount, the period of protection, or both. Universal Life - a variation of whole life insurance characterized by considerable flexibility, allows it policyowners to determine the amount and frequency of premium payments and to adjust the policy face amount up or down to reflect changes in needs. Term insurance with an investment fund, buying term and investinf the difference for you. Equity Indexed Universal Life (EIUL) - indexed universal life insurance policy offering an equity index feature that offers the potential for cash value accumulation and basic interest guarantees. Variable Insurance Products - opportunity for policy owners to achieve higher than usual investment returns on their policy cash values by accepting the risk of the policy's performance. No guarantees, money invested in stocks, mutual funds, equity investments. Buy these to keep up with inflation and agents must be dually licensed to sell these. Variable Universal Life - product that blends many features of whole life, universal life, and variable life. Key features are premium flexibility, cash value investment control, and death benefit flexibility. Prospectus - contains information about the nature and purpose of the insurance plan, the separate account and the risk involved. By law a variable insurance sales presentation cannot be conducted unless it's preceded or accompanied by... Variable Whole Life Insurance - permanent life insurance with many of the same characteristics of traditional whole life insurance but instead of the insurer's money being kept in general accounts and invested in conservative investments with contractual guarantees it is invested in separate accounts which house common stock, bond, money-market and other securities investment options with no guarantees. There is a minimum guaranteed death benefit. Rights of Policy Ownership - to designate and change the beneficiary of the policy proceeds, select how the death proceeds will be paid to the beneficiary, cancel the policy and select non-forfeiture option, take out a policy loan, receive policy dividends and select dividend payment option, and to assign ownership of the policy to someone else. Standard Policy Provisions - entire contract provision, insuring clause, free look provision, consideration clause, grace period provision, reinstatement provision, policy loan provision, incontestable clause, assignment provision, accelerated benefits provision, suicide provision, misstatement of age or sex provision and automatic premium loan provision Entire Contract Provision - found at the beginning of the policy, saying that the policy cannot refer to any outside documents as being part of the contract and prohibiting the insurer from making any changes to the policy after it has been issued. (can only make good changes not bad) Insuring Clause - sets forth the company's basic promise to pay benefits upon the insured's death. Free-Look Provision - gives policyowners the right to return the policy for a full premium refund within a specified period of time (14 days) if they decide not to purchase the insurance. Consideration Clause - specifies the amount and frequency of premium payments that the policyowners must make to keep the insurance in force. Grace Period Provision - prevents policies from lapsing if a policyowner forgets or neglects to pay their premium it gives them a grace period of 30 days Reinstatement Provision - a period of 3 to 7 years with a new contestable clause being created but no new suicide clause. Allows reinstatement of policy after all back premiums have been paid, interest paid, outstanding loans paid, and policyowner may be asked to prove insurability. Policy Loan Provision - with cash value life insurance policyowners may borrow money from the cash values of their policies if they wish to do so. Incontestable Clause - specifies that after a certain period of time (usually 2 years from the date of issue) the insurer no longer has the right to contest the validity of the life insurance policy so long as the contract continues in force even on the basis of a material misstatement, concealment, or fraud. 3 Ways to Contest After 2 Years - impersonation, no insurable interest, and intent to murder Assignment Provision - sets forth the procedure necessary for ownership transfer. (usually must notify in writing)Does not need the insurer's permission. Accelerated Benefits Provision - provide for the early payment of some portion of the policy's face amount should the insured suffer from a terminal illness or injury.(up to 75%) Suicide Provision - 2 year period where if the insured commits suicide before then they will not receive the benefits they will just get their premium payments back. After 2 years they can receive the entire proceeds. Misstatement of Age or Sex Provision - the company can make an adjustment due to a misunderstanding of age or sex at any time and adjust the payout or premiums accordingly. Automatic Premium Loan Provision - company can take a missed premium out of your equity. Policy Exclusions - war, aviation, hazardous occupations or hobbies, commission of a felony,and suicide. Nonforfeiture Values - refers to the fact that a policy's cash value is not forfeitable. Nonforfeiture Options - the ways in which cash values can be paid out to or used by policyowners if they choose to lapse or surrender their policies. Cash Surrender Option - policyowners may request an immediate cash payment of their cash values when their policies are surrendered. Reduced Paid-up Option - policyowner takes a paid-up policy for a reduced face amount of insurance. Policyowner does not make any more premiums and still retains some amount of life insurance. The cash value is used as the premium for a single-premium whole life policy at a lesser face amount than the original policy. Extended Term Option - use the policy's cash value to purchase a term insurance policy in an amount equal to the original policy's face value for as long a period as the cash value will purchase. Policy Dividends - a return of part of the premiums paid and are generally not taxable income or guaranteed. Policy Riders - an extra or something that makes your policy better. Can also be things they can take