Florida Life Insurance Exam with
Complete Solutions
Mutual Insurance Companies - ANSWER-organized and incorporated under state laws.
No stockholders.
Mutual companies - ANSWER-Participating, they pay dividends.
Stock company - ANSWER-Owns Stock. Nonparticipating (no dividends)
Risk Retention Group - ANSWER-Mutual company formed to insure ppl in the same
business, occupation, profession (pharmacists, dentists, engineers)
Fraternal Benefit Societies - ANSWER-Non profit organization, lodge system that
includes ritualistic work, and maintain a rep form of gov with elected officers.
FICA - ANSWER-Made up of Social Security and Medicare
Variable Product - ANSWER-Dual license. One license issued by FINRA & the other
Life & Annuity (issued by the state)
Fair Credit Reporting Act - ANSWER-Consumers have the right to question what is on
their credit report
Domestic insurer - ANSWER-company doing business in the state in which it is
incorporated
Foreign insurer - ANSWER-company licensed & doing business in states other than the
one in which it is incorporated
Buyers Guides - ANSWER-generic (explain various types of life insurance products,
including variable annuities)
Policy Summaries - ANSWER-Specific to the Policy - ids the agent, insurer, policy, each
rider, and includes info about premiums, dividends, benefit amounts, cash surrender
values, policy loan interest rates, and life insurance cost indexes of the specific policy
being considered
National Association of Ins Commissioners (NAIC) - ANSWER-Encourage Uniformity,
Assist in admin of laws & regs, Protect interest of policy owners, Preserve state
regulation
, Warranty - ANSWER-a statement guaranteed to be true
Representation - ANSWER-statement by client (best of their knowledge). We give the
client the benefit of the doubt
Concealment - ANSWER-failure by applicant to disclose a known material fact at time of
application
Insurable interest - ANSWER-Interest must exist at the inception of the policy
Fiduciary - ANSWER-a person holds a special FINANCIAL trust and confidence (agent)
Producer - ANSWER-Broker or agent
Professional Liability Ins - ANSWER-protect against legal liability (like malpractice ins)
Fraud - ANSWER-Insurer reason to void a contract (2 years from date insurance
issued)
Fudiciary - ANSWER-special financial trust
Twisting - ANSWER-External - Illegal if not in the best interest for the client
Churning - ANSWER-Internal - replacing policies within the same company. Illegal if not
in the best interest for the client
Coercion - ANSWER-apply physical or mental force or threat to persuade (the mafia)
Unfair Discrimination - ANSWER-making a distinction, in sales, underwriting, pricing,
claims handling, or other ins applicant function, between 2 diff individuals of
substantially the same classification
Term Life Insurance - ANSWER-simplest type of life ins plan. Provides protection for a
specified period (term) & pays a benefit only if the insured dies during that period
Level Term Ins - ANSWER-provides a level amount of protection for a specified period,
after which the policy expires.
Decreasing Coverage Level Premium - ANSWER-characterized by benefit amts that
decrease gradually over the term of protection (cover debt or mortgage)
Whole Life - ANSWER-Ordinary Straight Life - cash values & maturity @ age 100
Living benefits - ANSWER-If loan outstanding at the time the insured dies, the amount
of the loan + interest due will be subtracted from the death benefit before it is paid.
Complete Solutions
Mutual Insurance Companies - ANSWER-organized and incorporated under state laws.
No stockholders.
Mutual companies - ANSWER-Participating, they pay dividends.
Stock company - ANSWER-Owns Stock. Nonparticipating (no dividends)
Risk Retention Group - ANSWER-Mutual company formed to insure ppl in the same
business, occupation, profession (pharmacists, dentists, engineers)
Fraternal Benefit Societies - ANSWER-Non profit organization, lodge system that
includes ritualistic work, and maintain a rep form of gov with elected officers.
FICA - ANSWER-Made up of Social Security and Medicare
Variable Product - ANSWER-Dual license. One license issued by FINRA & the other
Life & Annuity (issued by the state)
Fair Credit Reporting Act - ANSWER-Consumers have the right to question what is on
their credit report
Domestic insurer - ANSWER-company doing business in the state in which it is
incorporated
Foreign insurer - ANSWER-company licensed & doing business in states other than the
one in which it is incorporated
Buyers Guides - ANSWER-generic (explain various types of life insurance products,
including variable annuities)
Policy Summaries - ANSWER-Specific to the Policy - ids the agent, insurer, policy, each
rider, and includes info about premiums, dividends, benefit amounts, cash surrender
values, policy loan interest rates, and life insurance cost indexes of the specific policy
being considered
National Association of Ins Commissioners (NAIC) - ANSWER-Encourage Uniformity,
Assist in admin of laws & regs, Protect interest of policy owners, Preserve state
regulation
, Warranty - ANSWER-a statement guaranteed to be true
Representation - ANSWER-statement by client (best of their knowledge). We give the
client the benefit of the doubt
Concealment - ANSWER-failure by applicant to disclose a known material fact at time of
application
Insurable interest - ANSWER-Interest must exist at the inception of the policy
Fiduciary - ANSWER-a person holds a special FINANCIAL trust and confidence (agent)
Producer - ANSWER-Broker or agent
Professional Liability Ins - ANSWER-protect against legal liability (like malpractice ins)
Fraud - ANSWER-Insurer reason to void a contract (2 years from date insurance
issued)
Fudiciary - ANSWER-special financial trust
Twisting - ANSWER-External - Illegal if not in the best interest for the client
Churning - ANSWER-Internal - replacing policies within the same company. Illegal if not
in the best interest for the client
Coercion - ANSWER-apply physical or mental force or threat to persuade (the mafia)
Unfair Discrimination - ANSWER-making a distinction, in sales, underwriting, pricing,
claims handling, or other ins applicant function, between 2 diff individuals of
substantially the same classification
Term Life Insurance - ANSWER-simplest type of life ins plan. Provides protection for a
specified period (term) & pays a benefit only if the insured dies during that period
Level Term Ins - ANSWER-provides a level amount of protection for a specified period,
after which the policy expires.
Decreasing Coverage Level Premium - ANSWER-characterized by benefit amts that
decrease gradually over the term of protection (cover debt or mortgage)
Whole Life - ANSWER-Ordinary Straight Life - cash values & maturity @ age 100
Living benefits - ANSWER-If loan outstanding at the time the insured dies, the amount
of the loan + interest due will be subtracted from the death benefit before it is paid.
