FLORIDA INSURANCE 2-14 Insurance License Exam Questions and Answers with Complete Solutions

401K Plan - A qualified retirement plan in which the employee can set aside a portion of their income with pre-tax dollards Absolute Assigment vs. Collateral Asssigment - Absolute: A permanent and irrevocable transfer of rights and/or benefits by the policyowner. Collateral: A temporary and/or revocable transfer of benefits by the policyowner. Accelerated Death Benefit - Policy provision that allows full or partial payment of the policy's death benefit before the insured's death if he/she is terminally ill. Accidental Death Benefit - An extra cost rider that requires the insurance company to pay an additional benefit in the event that the insured dies within 90 days of an accident as a direct result of the accident. Accumulate at Interest - The Dividend Option where the policyowner leaves the dividens with the insurer to invest and earn interest Adhesion - Since the insurer created all the documents of the contract, any ambiguities in the contract will be settled in favor of the insured. Since the insurer wrote the contract they are stuck with it. Adverse Selection - The tendency for less favorable risks to seek or continue insurance to a greater extent than more favorable risks Agency Agreement or Agency Contract - A legal document containing the terms of the agreement between the agent and the insurance company. It clearly defines what an agent can and cannot do, and how he/she will be compensated. Agent Authorities - Expressed: Power or authority specifically granted in writin to an agent by the insurance company in their Agency Agreement. Apparent: Power or authority that the public reasonably assumes an agent has based upon his/her actions. Implied: Power or authority that is not expressely granted by the company but that an agent can assume or that are implied he/she has in order to transact insurance business. Agent/ Producer - Anyone who sell or aids in the selling of insurance. Legally represents the company Agent's Report - A written report from the agent submitted to the insurer along with the application disclosing what the agent knows, observed, or learned about the proposed insured's risks. Aleatory - Unequal exchange of value. One party may obtain a far greater value than the other under the contract. Annual Renewable Term - A Term Life Insurance contract which gives the policyower the option to revew the policy each year without showing proof of insuranbility. Premiums increase at each renewal. Annuitant - The person that buys an annuity; may or may not be an annuity's policyowner.