Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Common to Life and Health InsuranceMedium
A Florida licensed agent is preparing to meet with a prospect to discuss a new life insurance policy. The prospect currently holds an existing life insurance policy with another insurer. Which of the following actions is the agent legally required to take regarding replacement?
- AAdvise the applicant orally that replacement may not be in their best interest.
- BProvide the applicant with a 'Notice Regarding Replacement of Life Insurance' form and obtain their signature.
- CObtain a signed statement from the applicant that they are aware of the potential disadvantages of replacement.
- DComplete a 'Notice Regarding Replacement of Life Insurance' form and submit it to the existing insurer.
Show answer & explanationAnswer & explanation
Correct answer: B. Provide the applicant with a 'Notice Regarding Replacement of Life Insurance' form and obtain their signature.
When replacement of life insurance is involved, the agent is legally required to provide the applicant with a 'Notice Regarding Replacement of Life Insurance' form and obtain their signature, ensuring the applicant is fully informed.
Why the other options are wrong
- A. Oral advice alone is insufficient; a specific written notice and signature are required.
- C. While awareness of disadvantages is important, the specific legal requirement is the signed 'Notice Regarding Replacement' form.
- D. The agent provides the notice to the applicant and a copy to the replacing insurer, not directly to the existing insurer.
Replacement Notice Requirement
In Florida, when an agent proposes to replace an existing life insurance policy, they must provide the applicant with a 'Notice Regarding Replacement of Life Insurance' form and obtain the applicant's signature on it.
- Required for all life insurance replacements.
- Must be signed by the applicant and the agent.
- A copy is given to the applicant and one sent to the replacing insurer.
Memory trick: When replacing a policy, always hand over the 'Notice' and get that signature, no excuses.