FLORIDA 240 LICENSE EXAM AND PRACTICE
EXAM NEWEST 2024 ACTUAL EXAM COMPLETE 300
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
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: - ANSWER Reserves
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ANSWER 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: - ANSWER 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? - ANSWER Fair Credit Reporting
Act
Who elects the governing body of a mutual insurance company? - ANSWER
Policyholders
A group-owned insurance company that is formed to assume and spread the liability
ricks of its members is known as a: - ANSWER Risk retention group
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWER treaty
What year was the McCarran-Ferguson Act enacted? - ANSWER 1945
Which of these describe a participating life insurance policy? - ANSWER 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? - ANSWER Upon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated: - ANSWER 1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWER Treaty
,A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a: - ANSWER risk retention group
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - ANSWER Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) - ANSWER
warranty
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANSWER 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? - ANSWER
Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? -
ANSWER When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: -
ANSWER Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? - ANSWER Legal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? - ANSWER
Insurance company
A policy of adhesion can only be modified by whom? - ANSWER insurance company
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - ANSWER insurable interest in the proposed
insured
Which of these is considered a statement that is assured to be true in every aspect? -
ANSWER Warranty
Which of these require an offer, acceptance, and consideration? - ANSWER contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - ANSWER insured
Insurance contracts are known as _____ because certain future conditions or acts must
occur before any claims can be paid. - ANSWER conditional
, Insurance policies are offered on a "take it or leave it" basis, which make them: -
ANSWER Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? -
ANSWER If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? - ANSWER
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? - ANSWER unilateral
Which of these is NOT a type of agent authority? - ANSWER 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? -
ANSWER 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? - ANSWER
Inception of the contract
Life and health insurance policies are: - ANSWER unilateral contracts
A policy of adhesion can only be modified by whom? - ANSWER insurance company
At what point does an informal contract become binding? - ANSWER 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? - ANSWER Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? -
ANSWER Promise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: - ANSWER performance
is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is an example
of - ANSWER fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent
information? - ANSWER The schedule and amount of premium payments
EXAM NEWEST 2024 ACTUAL EXAM COMPLETE 300
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
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: - ANSWER Reserves
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ANSWER 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: - ANSWER 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? - ANSWER Fair Credit Reporting
Act
Who elects the governing body of a mutual insurance company? - ANSWER
Policyholders
A group-owned insurance company that is formed to assume and spread the liability
ricks of its members is known as a: - ANSWER Risk retention group
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWER treaty
What year was the McCarran-Ferguson Act enacted? - ANSWER 1945
Which of these describe a participating life insurance policy? - ANSWER 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? - ANSWER Upon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated: - ANSWER 1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWER Treaty
,A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a: - ANSWER risk retention group
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - ANSWER Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) - ANSWER
warranty
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANSWER 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? - ANSWER
Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? -
ANSWER When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: -
ANSWER Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? - ANSWER Legal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? - ANSWER
Insurance company
A policy of adhesion can only be modified by whom? - ANSWER insurance company
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - ANSWER insurable interest in the proposed
insured
Which of these is considered a statement that is assured to be true in every aspect? -
ANSWER Warranty
Which of these require an offer, acceptance, and consideration? - ANSWER contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - ANSWER insured
Insurance contracts are known as _____ because certain future conditions or acts must
occur before any claims can be paid. - ANSWER conditional
, Insurance policies are offered on a "take it or leave it" basis, which make them: -
ANSWER Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? -
ANSWER If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? - ANSWER
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? - ANSWER unilateral
Which of these is NOT a type of agent authority? - ANSWER 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? -
ANSWER 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? - ANSWER
Inception of the contract
Life and health insurance policies are: - ANSWER unilateral contracts
A policy of adhesion can only be modified by whom? - ANSWER insurance company
At what point does an informal contract become binding? - ANSWER 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? - ANSWER Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? -
ANSWER Promise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: - ANSWER performance
is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is an example
of - ANSWER fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent
information? - ANSWER The schedule and amount of premium payments
