Florida Life Insurance Practice Exam Free - 2026

• A. 25 percent
• B. 20 percent
• C. 15 percent
• D. 10 percent

Correct answer: D. 10 percent

Explanation: For annuity contracts issued to senior consumers age 65 or older, Florida limits surrender or deferred sales charges to 10 percent of the amount withdrawn. See Fla. Stat. § 627.4554.

• A. Care, disclosure, conflict of interest, and documentation
• B. Suitability, delivery, replacement, and recordkeeping
• C. Loyalty, prudence, diversification, and impartiality
• D. Care, compensation, certification, and confirmation

Correct answer: A. Care, disclosure, conflict of interest, and documentation

Explanation: An agent recommending an annuity must act in the consumer's best interest without placing the agent's or insurer's financial interest ahead of the consumer's, which is satisfied by the care, disclosure, conflict of interest, and documentation obligations. See Fla. Stat. § 627.4554.

• A. The rebate may not exceed 5 percent of the first-year premium
• B. The rebate must be available to all insureds in the same actuarial class under a schedule filed with the insurer
• C. The rebate must be approved in advance by the Department of Financial Services
• D. Rebating is always prohibited in Florida

Correct answer: B. The rebate must be available to all insureds in the same actuarial class under a schedule filed with the insurer

Explanation: Florida permits agents to rebate commissions if the rebate is available to all insureds in the same actuarial class, follows a rebating schedule filed with the insurer and prominently displayed in the agent's office, is applied uniformly, is not conditioned on collateral business, and is not based on characteristics such as age, sex, residence, race, or occupation. See Fla. Stat. § 626.572.

• A. Twisting
• B. Sliding
• C. Churning
• D. Defamation

Correct answer: C. Churning

Explanation: Churning is using the values of an existing policy to purchase another policy with the same insurer for the purpose of earning additional compensation, without an objectively reasonable basis for believing the new policy benefits the policyholder, or through deception. Twisting, by contrast, involves inducing a change to another insurer through misrepresentation. See Fla. Stat. § 626.9541(1)(aa).

• A. Application information and health history
• B. A beneficiary's favorite investment account
• C. The producer's personal opinion only
• D. The state capital city

Correct answer: A. Application information and health history

Explanation: Life underwriting commonly considers application answers, health history, medical information, lifestyle factors, and other allowed risk information.

• A. A financial interest that the beneficiary must hold at the time of the insured's death
• B. A valid financial or personal interest in the continued life of the insured
• C. A blood or marital relationship between the insured and every named beneficiary
• D. A written consent from the insured that must be renewed each time a premium is paid

Correct answer: B. A valid financial or personal interest in the continued life of the insured

Explanation: Insurable interest means the policyowner must have a recognized interest in the insured's continued life when the policy is issued.

• A. Principle of indemnity
• B. Utmost good faith
• C. Insurable interest
• D. Adverse selection

Correct answer: C. Insurable interest

Explanation: Life insurance generally requires insurable interest at policy inception. A purely speculative policy on a stranger's life conflicts with that requirement.

• A. the amount the insurer pays the beneficiary at the insured's death
• B. the fee the policyowner pays to take out a loan against cash value
• C. the portion of the premium the producer keeps as a commission
• D. the payment required to keep insurance coverage in force

Correct answer: D. the payment required to keep insurance coverage in force

Explanation: The premium is the payment charged by the insurer for coverage under the policy.

• A. Preferred
• B. Declined
• C. Rated-up only
• D. Substandard

Correct answer: A. Preferred

Explanation: A preferred risk classification is generally used for applicants who meet favorable underwriting standards and may qualify for lower premiums.

• A. the same premium as a standard risk with a longer grace period
• B. a higher premium or rating because of increased risk
• C. a preferred classification with a discounted premium
• D. an automatic decline with no option to be rated

Correct answer: B. a higher premium or rating because of increased risk

Explanation: Substandard applicants present higher-than-standard risk and may be rated, charged an extra premium, or declined depending on underwriting guidelines.

• A. It changes the state exam vendor
• B. It guarantees a higher commission
• C. Application accuracy is important to underwriting and contract validity
• D. It makes the policy automatically tax-free

Correct answer: C. Application accuracy is important to underwriting and contract validity

Explanation: Accurate application information is essential because the insurer relies on it for underwriting. Unauthorized changes can create serious compliance and validity issues.

• A. To replace auto liability coverage
• B. To insure a house against fire
• C. To pay a death benefit only after accidental death
• D. To provide income, often during retirement

Correct answer: D. To provide income, often during retirement

Explanation: An annuity is primarily designed to accumulate funds and/or provide income, often for retirement planning.