Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Common to Life and Health InsuranceEasy
A Florida licensed life and health agent is preparing to meet with a prospect to discuss a new life insurance policy. The prospect already has an existing life insurance policy with another insurer. In this scenario, when is the agent required to provide the prospect with a 'Notice Regarding Replacement of Life Insurance or Annuity'?
- AOnly if the new policy's premium is higher than the existing policy's premium.
- BAfter the new policy has been issued and delivered to the client.
- CIf the existing policy has been in force for less than one year.
- DAt the time of taking the application for the new policy.
Show answer & explanationAnswer & explanation
Correct answer: D. At the time of taking the application for the new policy.
Florida law mandates that when a replacement of life insurance or annuity is involved, the agent must present the applicant with the 'Notice Regarding Replacement' at the time of taking the application. This ensures the applicant is fully informed before making a decision.
Why the other options are wrong
- A. The requirement for a replacement notice is not contingent on the premium difference; it's triggered by the act of replacement itself.
- B. Providing the notice after policy issuance defeats its purpose, which is to inform the client *before* they apply for the new policy.
- C. The length of time the existing policy has been in force does not waive the replacement notice requirement.
Replacement Notice Timing
When replacing an existing life insurance policy or annuity, the agent must provide the 'Notice Regarding Replacement' to the applicant at the time of application.
- Ensures informed decision-making by the applicant.
- Required by Florida Statute 626.99.
- Must be presented and left with the applicant.
Memory trick: Replace with care, inform early, and document everywhere.