Home › Florida › Florida Life and Annuity Law

Florida Life and Annuity Law: Practice Questions

20 free practice questions with explanations. Pick an answer for each, then check your score.

Exam weight: About 10% of the exam (life, annuities and variable products) on the Florida-law portion of the Florida 2-15 Life, Health and Annuities exam. Updated 2026-11-04.

Quick study guide

Florida's life and annuity rules sit mainly in chapters 626 and 627 of the Florida Statutes (F.S.) and chapter 69O-151 of the Florida Administrative Code. The exam tests Florida's exact numbers.

Selling and disclosure

Under F.S. 626.99, an agent must say at the start of a sales presentation that he or she is a life insurance agent and name the insurer. The buyer gets a buyer's guide (a general explanation of life insurance) and a policy summary (the "Statement of Policy Cost and Benefit Information" for this policy) before the insurer accepts the first premium, unless the policy offers a 14-day unconditional refund. Titles like "financial planner" must not imply an advisory business unrelated to sales, and dividends must be described as not guaranteed.

For annuities, F.S. 627.4554 requires the agent to act in the consumer's best interest: gather profile information, disclose his or her role and compensation, manage conflicts and document the recommendation. It is a regulatory duty, not a fiduciary one. Agents need a one-time 4-hour annuity course, and records are kept for 5 years.

Replacement

Replacement means buying new insurance while existing coverage is lapsed, surrendered, converted, reduced, or borrowed against for more than 25% of its loan value (Rule 69O-151.002). Each application carries signed applicant and agent statements on replacement; if it applies, the agent submits the replacement notice and sales proposals, and the replacing insurer notifies the existing insurer. Recommending a plain surrender requires written facts on charges, lost guarantees and taxes (F.S. 627.4553).

Item	Florida rule
Annuity free look	21 days (F.S. 626.99)
Individual life grace period	30 days minimum; interest up to 8% (F.S. 627.453)
Group life grace period	31 days (F.S. 627.559)
Lapse notice, insured 64 or older	21 days, to owner and secondary addressee (F.S. 627.4555)
Annuity buyer 65 or older	Surrender charge 10% maximum, none after year 10 (F.S. 627.4554)
Group conversion	Apply within 31 days (F.S. 627.566)
Group policy ends	Conversion if insured 5 years; may be capped at $10,000 (F.S. 627.567)

Policy provisions

Proceeds payable to a named beneficiary are exempt from the insured's creditors; proceeds payable to the estate become estate assets (F.S. 222.13). Cash values and annuity proceeds are exempt too (F.S. 222.14). Divorce voids a designation of the former spouse (F.S. 732.703). Coupon and founder's policies are banned (F.S. 627.479). If no nonforfeiture option is chosen within 60 days of default, the policy's stated paid-up option applies. Lump-sum death claims earn interest from receipt of due proof of death (F.S. 627.4615).

Group life

Eligible groups include employers, debtors, labor unions, trustee funds, credit unions and professional associations. Dependent coverage cannot exceed the employee's amount, and an insured may assign the incidents of ownership.

Practice questions

Under Florida's life insurance solicitation law, an insurer must give the buyer's guide and policy summary before accepting the initial premium, unless the policy provides an unconditional refund period of at least:
1. A.7 days
2. B.14 days
3. C.30 days
4. D.21 days
Show answer
Answer: B. F.S. 626.99(4)(a) requires the buyer's guide and policy summary before the insurer accepts the first premium, unless the policy (or the policy summary) offers an unconditional refund for at least 14 days; then both may be delivered with or before the policy. The 21-day period is Florida's refund period for annuities, not life policies.
Source: Florida content outline II.A.2.a–b; F.S. 626.99 (life insurance solicitation)
A Florida resident aged 52 buys a fixed deferred annuity. Under Florida law, the contract must give her an unconditional refund (free look) period of at least:
1. A.14 days
2. B.10 days
3. C.21 days
4. D.30 days
Show answer
Answer: C. F.S. 626.99(4)(b) requires fixed and variable annuities to provide an unconditional refund for at least 21 days, whatever the buyer's age; for a fixed annuity the refund includes premiums plus contract fees and charges. The insurer must also attach a cover page stating the refund period. Fourteen days is the life insurance figure tied to the buyer's guide.
Source: Florida content outline II.C.1.c; F.S. 626.99(4)(b)–(c) (annuity refund period and cover page)
Before beginning a life insurance sales presentation in Florida, an agent must tell the prospective buyer:
1. A.The agent's license number and the date of each appointment held.
2. B.That he or she is a life insurance agent, and the insurer's full name.
3. C.The exact dollar amount of commission the agent will earn on the sale.
4. D.The insurer's financial strength rating from a rating agency.
Show answer
Answer: B. F.S. 626.99(5)(b) requires the agent to say, before the sales presentation starts, that he or she is acting as a life insurance agent and to name the insurer in full; where no agent is involved, the insurer must identify itself. The statute does not require a commission figure, license number or financial rating at that point.
Source: Florida content outline II.A.1; F.S. 626.99(5)(b)
Which statement about Florida's best-interest standard for annuity recommendations (F.S. 627.4554) is correct?
1. A.It makes the agent a fiduciary of the consumer for every purpose of the sale.
2. B.It requires the agent to review the annuity's performance with the consumer each year.
3. C.It requires acting in the consumer's best interest, ahead of the agent's or insurer's own interest.
4. D.It requires the agent to recommend whichever annuity pays the lowest commission.
Show answer
Answer: C. F.S. 627.4554(5)(a) requires the agent to act in the consumer's best interest under the circumstances known at the time of the recommendation, meeting care, disclosure, conflict-of-interest and documentation obligations. The same section says these duties do not create a fiduciary relationship, do not require recommending the lowest-compensation annuity, and do not impose ongoing monitoring.
Source: Florida content outline II.A.5; F.S. 627.4554 (suitability in annuity transactions)
A Florida insurer issues a deferred annuity to a 70-year-old who is not an accredited investor. Under F.S. 627.4554, any surrender charge on a withdrawal:
1. A.Is capped at 7% of the amount withdrawn and must end after the 7th policy year.
2. B.Is capped at 15% of the amount withdrawn during the first 5 policy years.
3. C.Is capped at 10% of the amount withdrawn and must end after the 10th policy year.
4. D.Is banned entirely, because the buyer is aged 65 or older.
Show answer
Answer: C. F.S. 627.4554(9) caps the surrender or deferred sales charge on an annuity issued to a senior consumer aged 65 or older at 10% of the amount withdrawn, and the charge must disappear after the 10th policy year or 10 years after each premium payment, whichever is later. Surrender charges are limited, not banned, and the rule does not apply to accredited investors.
Source: Florida content outline II.A.4–5; F.S. 627.4554(9) (prohibited charges)
Under Florida's life insurance replacement rule, which transaction counts as a replacement when new life insurance is bought?
1. A.Adding a waiver of premium rider to the existing policy at its next anniversary
2. B.Naming a new primary beneficiary on the existing policy after a marriage
3. C.Borrowing more than 25% of the existing policy's loan value to help fund the new one
4. D.Switching the existing policy's premium mode from monthly to annual
Show answer
Answer: C. Rule 69O-151.002 defines replacement to include an existing policy that is lapsed, surrendered, converted to reduced paid-up or extended term, amended to reduce benefits, reissued with less cash value, or pledged or borrowed against for amounts totaling more than 25% of its loan value. Adding a rider, changing a beneficiary or changing the premium mode does not reduce the existing coverage.
Source: Florida content outline II.B; F.A.C. 69O-151.002 (definition of replacement)
Under Florida's replacement rule, what must accompany every completed application for life insurance?
1. A.Written consent from the insurer whose existing policy may be replaced
2. B.A copy of the applicant's most recent federal income tax return
3. C.A paramedical exam report signed by the examiner and the applicant
4. D.Signed statements by the applicant and the agent on whether replacement is involved
Show answer
Answer: D. Rule 69O-151.007(2) requires the insurer to obtain, with each application, a statement signed by the applicant on whether the insurance will replace existing coverage and a statement signed by the agent on whether he or she knows replacement is or may be involved. If it is, the agent also submits the completed Notice to Applicant Regarding Replacement of Life Insurance (Form OIR-B2-312) and copies of all sales proposals used. The existing insurer's consent is never required.
Source: Florida content outline II.B.1; F.A.C. 69O-151.007 (duties of replacing insurers)
In a Florida life insurance replacement, if the applicant asks for a Comparative Information Form on the proposed policy, the replacing insurer must send it within:
1. A.5 working days after it receives the application and replacement notice
2. B.30 days after the new policy is delivered to the applicant
3. C.60 days after the existing policy is surrendered for cash
4. D.10 days after the free-look period on the new policy ends
Show answer
Answer: A. Rule 69O-151.007(3)(b) sets 5 working days from receipt of the application and the replacement notice at the home or regional office, or the policy issue date if sooner. The replacing insurer must also send a copy of the replacement notice to the existing insurer immediately. The existing insurer, if asked, has 10 days to furnish its own form on the existing policy under Rule 69O-151.008.
Source: Florida content outline II.B.2; F.A.C. 69O-151.007 (duties of replacing insurers); F.A.C. 69O-151.008 (duties of the existing insurer)
A Florida agent recommends that a client surrender a cash-value life policy for its cash value, without recommending that the money buy another policy or annuity. Before the surrender, the agent must:
1. A.Give written facts on surrender charges, lost guarantees, tax consequences and lost death benefits.
2. B.Send the Notice to Applicant Regarding Replacement to the existing insurer.
3. C.Get written approval for the surrender from the Office of Insurance Regulation.
4. D.Wait 30 days after the recommendation before the client may sign the surrender.
Show answer
Answer: A. F.S. 627.4553 applies when an agent recommends surrendering a cash-value annuity or life policy without recommending a new purchase. The agent must give written information including surrender charges, lost minimum interest guarantees, possible tax consequences and forfeited death benefits, and keep a copy with the date given. Because nothing new is bought, it is not a replacement, so replacement forms do not apply.
Source: Florida content outline II.A.1 and II.B.1; F.S. 627.4553 (recommendations to surrender)
A Florida resident dies owning a life insurance policy that names his estate as the beneficiary. Under Florida law, the death proceeds:
1. A.Become part of his estate and are administered under probate law.
2. B.Must be paid directly to his closest living relative.
3. C.Go to the state because no person was named as beneficiary.
4. D.Are exempt from all creditors and pass outside probate to his children.
Show answer
Answer: A. F.S. 222.13 makes proceeds payable to a named beneficiary exempt from the insured's creditors, but when the insurance is payable to the insured or the insured's estate, the proceeds become part of the estate and are administered through probate. Separately, F.S. 222.14 shields cash surrender values and annuity proceeds from the owner's or annuitant's creditors unless the contract was taken out for the creditor's benefit.
Source: Florida content outline II.C.1.a; F.S. 222.13 (life insurance proceeds); F.S. 222.14 (cash surrender values and annuities)
A Florida individual life insurance policy must give the insured a grace period for premiums after the first of at least:
1. A.60 days, with any interest on the overdue premium capped at 6% a year
2. B.30 days, with any interest on the overdue premium capped at 8% a year
3. C.10 days, with any interest on the overdue premium capped at 10% a year
4. D.31 days, with no interest allowed on the overdue premium
Show answer
Answer: B. F.S. 627.453 requires a grace period of not less than 30 days, during which the policy stays in force; the insurer may charge interest of no more than 8% a year, and if the insured dies during the grace period the overdue premium can be deducted from the claim. The 31-day period is the Florida rule for group life policies (F.S. 627.559).
Source: Florida content outline II.C.1.d; F.S. 627.453 (grace period); F.S. 627.559 (group life grace period)
A Florida life policy insures a 68-year-old, has been in force for three years, and is billed annually. Before it can lapse for nonpayment, the insurer must mail a notice of the impending lapse to the owner and any designated secondary addressee at least:
1. A.31 days before the lapse takes effect
2. B.21 days before the lapse takes effect
3. C.10 days before the lapse takes effect
4. D.45 days before the lapse takes effect
Show answer
Answer: B. F.S. 627.4555 covers life policies on insureds aged 64 or older that have been in force at least one year: after the grace period, notice must go to the owner and any secondary addressee at least 21 days before the lapse. Insurers must tell applicants of the right to name a secondary addressee. The rule does not apply when premiums are paid monthly or more often by automatic debit or credit card, or are regularly collected by an agent.
Source: Florida content outline II.C.1.f; F.S. 627.4555 (secondary notice)
A Florida resident named his wife as beneficiary of his individual life policy. They later divorced, he never changed the designation, and he died two years after the divorce. Unless an exception applies, Florida law treats the proceeds as payable:
1. A.As if the former spouse died before him, passing to the next beneficiary in line.
2. B.To the former spouse, because he never changed the beneficiary designation.
3. C.Half to the former spouse and half to his estate under probate law.
4. D.To the former spouse, but only if she has not remarried since the divorce.
Show answer
Answer: A. F.S. 732.703 makes a pre-divorce designation of a former spouse void as of the divorce, and the asset passes as if the former spouse had died first. Exceptions include a designation signed after the divorce that expressly names the former spouse, a divorce order requiring the insurance for the former spouse or children, an irrevocable designation, and cases where federal law controls.
Source: Florida content outline II.C.1.e.1; F.S. 732.703 (effect of divorce on disposition of certain assets at death)
Which type of policy may NOT be issued in Florida under F.S. 627.479?
1. A.A policy with an automatic premium loan option
2. B.A participating policy that pays dividends
3. C.A joint life policy covering a married couple
4. D.A coupon-bearing policy or a founder's policy
Show answer
Answer: D. F.S. 627.479 prohibits plans that group policyholders by age and pay contingent endowment benefits to the oldest member, as well as annual-endowment, founder's and coupon-bearing policies, and the Office of Insurance Regulation must revoke the certificate of authority of an insurer that issues them. Participating and joint policies are lawful, and Florida treats an offered automatic premium loan option as elected unless the applicant declines it (F.S. 627.4556).
Source: Florida content outline II.C.1.b; F.S. 627.479 (prohibited policy plans)
A Florida whole life policy that has been in force for six years lapses for nonpayment, and the owner does not choose a nonforfeiture option. Under Florida's Standard Nonforfeiture Law:
1. A.The policy ends with no value because the owner made no election.
2. B.The insurer must mail the cash surrender value to the owner within 10 days.
3. C.The owner has 3 years to choose an option before any benefit begins.
4. D.The policy's stated paid-up option applies unless another is chosen within 60 days.
Show answer
Answer: D. F.S. 627.476(2)(c) requires the policy to name a paid-up nonforfeiture benefit that becomes effective unless another available option is elected within 60 days after the due date of the defaulted premium. The owner may instead surrender for cash, but the insurer may defer paying a cash surrender value for up to 6 months (F.S. 627.476(3)); 3 years is the reinstatement window, not an election period.
Source: Florida content outline II.C.2; F.S. 627.476 (Standard Nonforfeiture Law for Life Insurance)
When a Florida life policy pays its death benefit in a lump sum, the payment must include interest:
1. A.From receipt of written due proof of death, at no less than a Moody's corporate bond yield average.
2. B.From the policy's issue date, at the policy loan interest rate stated in the contract.
3. C.From the date of death, at the prime rate published by the Federal Reserve.
4. D.Only if the claim is paid more than 60 days after the death, at a flat 6% a year.
Show answer
Answer: A. F.S. 627.4615 requires interest on lump-sum death proceeds from the date the insurer receives written due proof of death, at an annual rate at least equal to the Moody's Corporate Bond Yield Average (monthly average corporate) on the day the claim was received; an 8% floor applies only if Moody's substantially changes how the index is calculated. F.S. 627.461 requires settlement on receipt of due proof of death.
Source: Florida content outline II.C.3; F.S. 627.4615 (interest on death claim payments); F.S. 627.461 (settlement on proof of death)
An employee insured under a Florida group life policy leaves her job. To convert to an individual policy without evidence of insurability, she must apply and pay the first premium within:
1. A.6 months after her coverage ends
2. B.90 days after her coverage ends
3. C.60 days after her coverage ends
4. D.31 days after her coverage ends
Show answer
Answer: D. F.S. 627.566 gives a 31-day conversion window, with the premium based on her attained age and the amount no greater than the coverage that ended; the group policy may exclude term insurance as a conversion choice. If she dies during the 31 days before converting, F.S. 627.568 makes the amount she could have converted payable as a group claim.
Source: Florida content outline II.D.2; F.S. 627.566 (conversion on termination of eligibility); F.S. 627.568 (death pending conversion)
A Florida employer cancels its group life policy. An employee insured under it for six years may convert, but the group policy may limit the individual policy to the smaller of the coverage lost (less any group coverage the employee becomes eligible for within 31 days) or:
1. A.$50,000
2. B.$5,000
3. C.$25,000
4. D.$10,000
Show answer
Answer: D. F.S. 627.567 gives a conversion right when the group policy itself ends, but only to people insured for at least 5 years before the termination, and the group policy may cap the individual policy at the smaller of the lost coverage (less any group coverage the person becomes eligible for within 31 days) or $10,000. Leaving employment is covered by the broader conversion right in F.S. 627.566.
Source: Florida content outline II.D.2; F.S. 627.567 (conversion on termination of policy)
Under Florida law, group life coverage on an employee's spouse or dependent child:
1. A.May not be more than the amount of insurance on the employee.
2. B.Is not allowed under an employer group policy.
3. C.Must equal at least half of the employee's own coverage.
4. D.Must always be issued without evidence of insurability.
Show answer
Answer: A. F.S. 627.5575 lets group life policies (other than debtor group policies) cover employees' or members' spouses and dependent children, but the amount on a dependent may not exceed the employee's or member's own amount. The insurer may exclude or limit coverage on a dependent whose evidence of insurability is not satisfactory.
Source: Florida content outline II.D.4; F.S. 627.5575 (group life insurance for dependents)
Under F.S. 627.571, a person insured under a Florida group life policy:
1. A.May assign the coverage only to a spouse or a dependent child.
2. B.May assign the coverage only after converting it to an individual policy.
3. C.Can never assign the coverage, because the employer owns the master policy.
4. D.May assign the incidents of ownership, including conversion and beneficiary rights.
Show answer
Answer: D. F.S. 627.571 states that nothing in Florida law prevents a group life insured from assigning all or part of the incidents of ownership, including the conversion privilege and the right to name a beneficiary, subject to the terms of the policy. The insurer is protected for payments or conversions it makes before it receives notice of the assignment.
Source: Florida content outline II.D.7; F.S. 627.571 (assignment of incidents of ownership in group life)

Where these questions come from: Florida content outline (Pearson VUE, effective 1 Jan 2026), Florida Agent's Health & Life (2-15), Florida statutes, rules and regulations, section II: Florida statutes, rules, and regulations pertinent to life and annuity insurance, including variable products. See how we write questions.