FX LIFE INSURANCE 2026 LATEST EXAMS
QUESTIONS AND ANSWERS SURE A+
✔✔When risks with higher probability of loss are seeking insurance more often than
other risks, this is known as what? - ✔✔Adverse selection
✔✔The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what? - ✔✔Loss
✔✔What document is required for an insurance company to transact insurance? -
✔✔Certificate of Authority
✔✔What is the term for the causes of loss insured against in an insurance policy? -
✔✔Peril
✔✔The type of insurance company organized to return any surplus money to its
policyholders is known as what? - ✔✔Mutual company
✔✔In insurance, when is the offer usually made on a contract? - ✔✔When the
insurance application is submitted.
,✔✔What two elements are necessary for a life insurance contract to have a legal
purpose? - ✔✔Insurable interest and consent.
✔✔In forming an insurance contract, when does an acceptance usually occur? -
✔✔When the insurer approves a prepaid application.
✔✔What do individuals use to transfer their risk of loss to a larger group? -
✔✔Insurance.
✔✔What are the three types of hazards? - ✔✔Physical, Moral, Morale
✔✔A situation in which a person can only experience a loss and no gain presents what
type of risk? - ✔✔Pure risk
✔✔If an agent fails to obtain the applicant's signature on the insurance application, what
must the insurer do? - ✔✔Send the application back to the applicant for a signature
✔✔A person who does not lock the doors to his or her house shows an indifferent
attitude. This person presents what type of hazard? - ✔✔Morale
✔✔What are the four elements of an insurance contract? - ✔✔Agreement (offer and
acceptance), consideration, competent parties, and legal purpose
✔✔Insurance is a contract that protects the insured from what? - ✔✔Loss
✔✔What entities make up the medical information bureau? - ✔✔Insurers
✔✔Whose responsibility is it to determine that all the questions on an insurance
application are answered? - ✔✔The agent's
✔✔An applicant conceals relevant health information on the application. The applicant
presents what type of hazard? - ✔✔Moral
✔✔Who owns stock companies? - ✔✔Stockholders
✔✔In the agent/insurer relationship, who is considered the principal? - ✔✔Insurer
✔✔When does an insurance policy go into effect? - ✔✔When the policy is delivered and
the premium is paid
✔✔An insurance policy paid a nontaxable dividend to the insured one year, and nothing
the next. From what type of insurer did the insured purchase the policy? - ✔✔Mutual
, ✔✔The requirement that agents must account for and promptly remit all insurance
funds collected is known as what type of agent responsibility? - ✔✔Fiduciary
✔✔Wagering on a sporting event is known as what type of risk? - ✔✔Speculative
✔✔The insurer organized to return a profit to the stockholders is what type of insurer? -
✔✔Stock Company
✔✔When agents act within the scope of their contract, their actions will be assumed to
be the acts of whom? - ✔✔Insurer
✔✔What type of insurer is formed under the laws of another country? - ✔✔Alien
✔✔What are the three types of agent authority? - ✔✔Express, implied, apparent
✔✔What is the best way to handle incomplete insurance applications? - ✔✔Return the
application to the applicant for completion.
✔✔When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - ✔✔Complete a new application or ask the
applicant to initial the correction on the original application.
✔✔An insurance company is domiciled in California and transacts insurance in Nevada.
What is this insurer's classification in Nevada? - ✔✔Foreign.
✔✔Conditions that increase the chance of loss are known as what? - ✔✔Hazards
✔✔If an applicant does not receive his or her insurance policy, who would be held
responsible? - ✔✔The agent
✔✔When would a misrepresentation on an insurance application be considered fraud? -
✔✔When it is intentional and material.
✔✔What are the strategies used by underwriters to prevent adverse selection? -
✔✔Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher
rate.
✔✔If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ✔✔Authorized or admitted.
✔✔An insurance company that is formed under the laws of another state is known as
what type of insurer? - ✔✔Foreign.
QUESTIONS AND ANSWERS SURE A+
✔✔When risks with higher probability of loss are seeking insurance more often than
other risks, this is known as what? - ✔✔Adverse selection
✔✔The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what? - ✔✔Loss
✔✔What document is required for an insurance company to transact insurance? -
✔✔Certificate of Authority
✔✔What is the term for the causes of loss insured against in an insurance policy? -
✔✔Peril
✔✔The type of insurance company organized to return any surplus money to its
policyholders is known as what? - ✔✔Mutual company
✔✔In insurance, when is the offer usually made on a contract? - ✔✔When the
insurance application is submitted.
,✔✔What two elements are necessary for a life insurance contract to have a legal
purpose? - ✔✔Insurable interest and consent.
✔✔In forming an insurance contract, when does an acceptance usually occur? -
✔✔When the insurer approves a prepaid application.
✔✔What do individuals use to transfer their risk of loss to a larger group? -
✔✔Insurance.
✔✔What are the three types of hazards? - ✔✔Physical, Moral, Morale
✔✔A situation in which a person can only experience a loss and no gain presents what
type of risk? - ✔✔Pure risk
✔✔If an agent fails to obtain the applicant's signature on the insurance application, what
must the insurer do? - ✔✔Send the application back to the applicant for a signature
✔✔A person who does not lock the doors to his or her house shows an indifferent
attitude. This person presents what type of hazard? - ✔✔Morale
✔✔What are the four elements of an insurance contract? - ✔✔Agreement (offer and
acceptance), consideration, competent parties, and legal purpose
✔✔Insurance is a contract that protects the insured from what? - ✔✔Loss
✔✔What entities make up the medical information bureau? - ✔✔Insurers
✔✔Whose responsibility is it to determine that all the questions on an insurance
application are answered? - ✔✔The agent's
✔✔An applicant conceals relevant health information on the application. The applicant
presents what type of hazard? - ✔✔Moral
✔✔Who owns stock companies? - ✔✔Stockholders
✔✔In the agent/insurer relationship, who is considered the principal? - ✔✔Insurer
✔✔When does an insurance policy go into effect? - ✔✔When the policy is delivered and
the premium is paid
✔✔An insurance policy paid a nontaxable dividend to the insured one year, and nothing
the next. From what type of insurer did the insured purchase the policy? - ✔✔Mutual
, ✔✔The requirement that agents must account for and promptly remit all insurance
funds collected is known as what type of agent responsibility? - ✔✔Fiduciary
✔✔Wagering on a sporting event is known as what type of risk? - ✔✔Speculative
✔✔The insurer organized to return a profit to the stockholders is what type of insurer? -
✔✔Stock Company
✔✔When agents act within the scope of their contract, their actions will be assumed to
be the acts of whom? - ✔✔Insurer
✔✔What type of insurer is formed under the laws of another country? - ✔✔Alien
✔✔What are the three types of agent authority? - ✔✔Express, implied, apparent
✔✔What is the best way to handle incomplete insurance applications? - ✔✔Return the
application to the applicant for completion.
✔✔When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - ✔✔Complete a new application or ask the
applicant to initial the correction on the original application.
✔✔An insurance company is domiciled in California and transacts insurance in Nevada.
What is this insurer's classification in Nevada? - ✔✔Foreign.
✔✔Conditions that increase the chance of loss are known as what? - ✔✔Hazards
✔✔If an applicant does not receive his or her insurance policy, who would be held
responsible? - ✔✔The agent
✔✔When would a misrepresentation on an insurance application be considered fraud? -
✔✔When it is intentional and material.
✔✔What are the strategies used by underwriters to prevent adverse selection? -
✔✔Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher
rate.
✔✔If an insurer meets the state's financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ✔✔Authorized or admitted.
✔✔An insurance company that is formed under the laws of another state is known as
what type of insurer? - ✔✔Foreign.
