State RegulationsFL specificDifficulty 3/5
Under Florida law, what is the maximum rate of interest an annuity contract may charge on an overdue premium during its grace period?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Fla. Stat. 627.465, an annuity contract's grace period runs 1 month but not less than 30 days, and interest on an overdue premium is capped at 6% per year. This is deliberately lower than the 8% per year cap for life policy premiums under Fla. Stat. 627.453; 10% is the fixed policy-loan cap under Fla. Stat. 627.4585, and 12% appears in late-payment contexts elsewhere.
Why the other options are wrong
- B) Eight percent is the cap on overdue life insurance premiums under Fla. Stat. 627.453; annuities use 6%.
- C) Ten percent is the fixed-rate cap on policy loan interest under Fla. Stat. 627.4585, not the annuity grace cap.
- D) Twelve percent belongs to late health claim payment interest, not annuity grace.
Memory hook
Annuity grace interest: 6, not 8 - a point lower than life.