Florida 240 License Exam Questions With Verified Correct Answers| GUARANTEED SUCCESS!!
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called:
✔️Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: ✔️Fair Credit
Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: ✔️A fraternal
benefit society
What I the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? ✔️Fair
Credit Reporting Act
Who elects the governing body of a mutual insurance company? ✔️Policyholders
A group-owned insurance company that is formed to assume and spread the liability ricks of its members is known as a: ✔️Risk retention group
What type of reinsurance contract involves two companies automatically sharing their risk exposure? ✔️treaty
What year was the McCarran-Ferguson Act enacted? ✔️1945
Which of these describe a participating life insurance policy? ✔️Policy owners are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? ✔️Upon completion of the
application
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: ✔️1970 - Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk exposure? ✔️Treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: ✔️risk retention group
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: ✔️Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) ✔️warranty
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called ✔️representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid
$500,000. This exchange of unequal values reflects which of the following insurance contract features? ✔️Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? ✔️When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: ✔️Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? ✔️Legal Purpose
(Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? ✔️Insurance company
A policy of adhesion can only be modified by whom? ✔️insurance company
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: ✔️insurable
interest in the proposed insured
Which of these is considered a statement that is assured to be true in every aspect? ✔️Warranty
Which of these require an offer, acceptance, and consideration? ✔️contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? ✔️insured
, Insurance contracts are known as _____ because certain future conditions or acts must occur before any claims can be paid. ✔️conditional
Insurance policies are offered on a "take it or leave it" basis, which make them: ✔️Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? ✔️If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? ✔️Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? ✔️unilateral
Which of these is NOT a type of agent authority? ✔️principal
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F
eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary
beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? ✔️In
this situation, the proceeds from E's life insurance policy will go to F.
When must insurable interest exist for a life insurance contract to be valid? ✔️Inception of the contract
Life and health insurance policies are: ✔️unilateral contracts
A policy of adhesion can only be modified by whom? ✔️insurance company
At what point does an informal contract become binding? ✔️When one party makes an offer and the other party accepts that offer
What is the consideration given by an insurer in the Consideration clause of a life policy? ✔️Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? ✔️Promise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: ✔️performance is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is an example of ✔️fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent information? ✔️The schedule and amount of premium payments
Which of the following consists of an offer, acceptance, and consideration? ✔️Contract
Which of the following consists of an offer, acceptance, and consideration? ✔️contract
Which of these is NOT considered to be an element of an insurance company? ✔️Negotiating
What is a warranty? ✔️is a statement guaranteed to be true
A life insurance policy would be considered a wagering contract WITHOUT: ✔️insurable interest
G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of
policy which BEST addresses this concern is ✔️Business Overhead Expense
Which of the following claims are typically excluded from Medical expense policies? ✔️Intentionally self-inflicted injuries
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
✔️100%
A Business Overhead Expense policy: ✔️covers business expenses such as rent and utilities
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled? ✔️Utilities and office rent
What is issued to each employee of an employer health plan? ✔️certificate
The benefits under a Disability Buy-Out policy are ✔️payable to the company or another shareholder
A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation
would fulfill this need? ✔️irrevocable
Which contract permits the remaining partners to buy-out the interest of a disabled business partner? ✔️Disability Buy-Sell
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called:
✔️Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: ✔️Fair Credit
Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: ✔️A fraternal
benefit society
What I the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? ✔️Fair
Credit Reporting Act
Who elects the governing body of a mutual insurance company? ✔️Policyholders
A group-owned insurance company that is formed to assume and spread the liability ricks of its members is known as a: ✔️Risk retention group
What type of reinsurance contract involves two companies automatically sharing their risk exposure? ✔️treaty
What year was the McCarran-Ferguson Act enacted? ✔️1945
Which of these describe a participating life insurance policy? ✔️Policy owners are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? ✔️Upon completion of the
application
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: ✔️1970 - Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk exposure? ✔️Treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: ✔️risk retention group
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: ✔️Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) ✔️warranty
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called ✔️representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid
$500,000. This exchange of unequal values reflects which of the following insurance contract features? ✔️Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? ✔️When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: ✔️Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? ✔️Legal Purpose
(Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? ✔️Insurance company
A policy of adhesion can only be modified by whom? ✔️insurance company
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: ✔️insurable
interest in the proposed insured
Which of these is considered a statement that is assured to be true in every aspect? ✔️Warranty
Which of these require an offer, acceptance, and consideration? ✔️contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? ✔️insured
, Insurance contracts are known as _____ because certain future conditions or acts must occur before any claims can be paid. ✔️conditional
Insurance policies are offered on a "take it or leave it" basis, which make them: ✔️Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? ✔️If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? ✔️Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? ✔️unilateral
Which of these is NOT a type of agent authority? ✔️principal
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F
eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary
beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? ✔️In
this situation, the proceeds from E's life insurance policy will go to F.
When must insurable interest exist for a life insurance contract to be valid? ✔️Inception of the contract
Life and health insurance policies are: ✔️unilateral contracts
A policy of adhesion can only be modified by whom? ✔️insurance company
At what point does an informal contract become binding? ✔️When one party makes an offer and the other party accepts that offer
What is the consideration given by an insurer in the Consideration clause of a life policy? ✔️Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? ✔️Promise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: ✔️performance is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is an example of ✔️fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent information? ✔️The schedule and amount of premium payments
Which of the following consists of an offer, acceptance, and consideration? ✔️Contract
Which of the following consists of an offer, acceptance, and consideration? ✔️contract
Which of these is NOT considered to be an element of an insurance company? ✔️Negotiating
What is a warranty? ✔️is a statement guaranteed to be true
A life insurance policy would be considered a wagering contract WITHOUT: ✔️insurable interest
G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of
policy which BEST addresses this concern is ✔️Business Overhead Expense
Which of the following claims are typically excluded from Medical expense policies? ✔️Intentionally self-inflicted injuries
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
✔️100%
A Business Overhead Expense policy: ✔️covers business expenses such as rent and utilities
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled? ✔️Utilities and office rent
What is issued to each employee of an employer health plan? ✔️certificate
The benefits under a Disability Buy-Out policy are ✔️payable to the company or another shareholder
A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation
would fulfill this need? ✔️irrevocable
Which contract permits the remaining partners to buy-out the interest of a disabled business partner? ✔️Disability Buy-Sell
