Chapter 19/4: Florida Life Review ctd with complete solutions

An agent must believe that the sale of a fixed, indexed, or variable annuity is: An agent must believe that the sale of a fixed, indexed, or variable annuity is suitable for the person. The correct answer is: Suitable To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis is divided by: To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. The correct answer is: The number of years the annuitant is expected to live 00:32 01:40 All of the following are duties of insurers when selling annuities, EXCEPT: Insurers must determine the suitability of annuity products for applicants by reasonably informing the applicants of various features and the benefit of those features, that the particular annuity as a whole is suitable and considerations if the annuity is a replacement. Insurers are under no obligation to discuss their competitors. The correct answer is: Informing the consumer of the cost comparison to competitors How much time does an individual have to convert to a new individual life policy after the termination of their group life policy? If a group life policy is terminated, the members and dependents may convert their group coverage to individual life coverage. The individual must apply for individual coverage within 31 days after the date of group coverage termination. The correct answer is: 31 days What type of annuity allows the owner to set up an annuity and then make premium payments however and whenever they want? A flexible premium annuity allows the owner to set up an annuity and then make premium payments however and whenever they want. The correct answer is: Flexible premium annuity What must an agent furnish an applicant before selling a variable life insurance policy or variable annuity? An agent must furnish an applicant with a prospectus before selling a variable life insurance policy or variable annuity. The correct answer is: Prospectus A person insured under a group life insurance policy may make an assignment of all of the following, EXCEPT: Any person insured under a group life insurance policy may make an assignment of all or any part of his incidents of ownership under such policy including: conversion, the right to name a beneficiary, assign policy proceeds. All incidents of ownership may be assigned, without prejudice to the insurer on account of any payment it may make or individual policy it may issue. The correct answer is: Insured Who pays the claim if someone dies during the conversion period from a group life policy to an individual life policy? If a person who was insured under a group life policy dies during the conversion period to an individual life policy, the group policy pays the claim. The correct answer is: Group life policy Insurers and agents must keep all information collected from a consumer and all information used in making insurance recommendations for how many years after the transaction? Insurers and agents must keep all information collected from a consumer and all information used in making insurance recommendations for 5 years after the transaction. The correct answer is: 5 years In transactions involving replacement of an annuity, an agent must tell the applicant that they should consult a: In transactions involving replacement of an annuity, an agent must disclose that there may be tax consequences and the applicant should consult a tax adviser. The correct answer is: Tax adviser If an annuitant purchased a variable annuity at age 70 for $20,000 and is expected to live another 10 years, what is the annual amount that can be distributed each year tax-free? To determine the amount that can be withdrawn from a variable annuity each year tax-free, the cost basis (total premiums) is divided by the number of years the annuitant is expected to live. $20,000 divided by 10 is $2,000. The correct answer is: $2,000 How is an immediate annuity funded? An immediate annuity can only be funded by a single premium. The correct answer is: Single payment