©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Life, Health & Variable Annuity (2-15 Exam)
Questions With Verified Answers
Law of Averages - Answers✔Insurance concept founded on the ability to predict the approximate
number of deaths or frequency of disabilities within a certain group during a specific time.
Moral Hazard - Answers✔An owner is worried that employees will help themselves to products
on the shelf without paying for them. This is an example of what type of hazard?
Risk Avoidance - Answers✔Won't fly an airplane, never drives a car and keeps money out of the
stock market is known as what type of risk ?
Risk - Answers✔Uncertainty regarding financial loss best describes this term?
Transferring Risk - Answers✔Buying insurance is one of the most effective ways of...
The function of Insurance - Answers✔Spreads financial risk over a large group to minimize the
loss to any one individual.
Peril - Answers✔A Tornado is an example of a what type of hazard?
Risk Reduction - Answers✔Tom buys his wife a $50,000 diamond ring. When she is not wearing
it he locks it up in his safe. This is an example of what type of risk?
Domestic - Answers✔An insurance company organized and headquartered in Florida is what
type of company?
Insurer - Answers✔In an insurance transaction, licensed agents legally represent who?
-Applicant
-Themselves
-Insurer
Applicant & Insured - Answers✔In Florida, properly licensed and appointed agents may act as
brokers in insurance transactions , in which case they may legally represent who?
-Themselves
1
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
-Applicant & Insured
-State office of Insurance Regulation
Foreign - Answers✔A Life Insurance company organized in IL, with it's home office in
Philadelphia, is licensed to conduct business in Florida. In Florida, this company is classified as?
Assumes a portion of the risk from another insurer - Answers✔A reinsurer is a company that...
SEC (Securities & Exchange Commission) - Answers✔In addition to the state, the organization
that regulates variable life and variable annuities is the..
-FTC
-NAIC
-SEC
A claim will be paid if the insurer becomes insolvent - Answers✔The State Guaranty Association
guarantees that..
Direct Selling Systems - Answers✔All of the following methods support the sale of insurance
through agents and brokers EXCEPT
-Independant agency systems
-Career agency systems
-Direct selling systems
Express Authority - Answers✔The authority that an insurer gives to its agents by means of the
agent's contract is known as
-Implied Authority
-General Authority
-Express Authority
The contract is of Adhesion - Answers✔An insurance contract is prepared by one party, the
insurer, rather than by negotiation between the contracting parties. Which of the following
statements explains the characterisitcs of insurance contracts?
-The contract is Aleatory
-The contract is of Adhesion
-The contract is of Acceptance
2
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
The policy owner must expect to suffer a loss when the insured dies or becomes disabled -
Answers✔Which of the following statements describes an insurable interest?
-The beneficiary, by definition, has an insurable interest in the insured
-The insured must have a personal or business relationship with the beneficiary
-The policy owner must expect to suffer a loss when the insured dies or becomes disabled
TRUE - Answers✔A written contract cannot be changed by oral evidence.
TRUE or FALSE?
Conditional - Answers✔Which of the following is a distinguishing characteristic of an insurance
contract?
-Consideration
-Conditional
-Offer & Acceptance
TRUE - Answers✔An insurer is considered competent if it is licensed or authorized by the state.
TRUE or FALSE?
All of the above - Answers✔Competent parties who can enter into contracts are...
-Applicants
-Trusts & Estates
-Business Entities
-All of the above
Initial Premium - Answers✔Which of the following is an example of legal consideration?
-Politeness
-Legal Purpose
-Initial Premium
At the inception of the policy - Answers✔With life and health contracts, when must an insurable
interest exist?
Two years - Answers✔An insurance company has how many years to challenge the validity of a
life insurance contract?
3
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Waiver - Answers✔Which of the following terms is used for the voluntary relinquishment of a
known right?
-Adhesion
-Estoppel
-Waiver
VOID - Answers✔Bob and Tom enter into a contract in which Bob agrees to fraudulently induce
sick people to sell their insurance contracts to Tom's company can best be described as?
Level Term - Answers✔Which of the following terms bests describes a life insurance policy that
provides a straight $100,000 of coverage for a period of 5 years?
-Level Term
-Whole Term
-Permanent Level
FALSE - Answers✔A 3 year renewable policy allows a term policy owner to increase coverage
for the next 3 years.
TRUE or FALSE?
Step Rate - Answers✔When level premium insurance is renewed, the premium amount rises to
reflect the increased mortality risk of the insured's older age. What phrase best describes this
approach to increasing premiums?
-Step Rate
-Seniority Rate
-Targeted Rate
TRUE - Answers✔Whole life insurance is designed to mature at age 100.
TRUE or FALSE?
Policyowner - Answers✔The cash values of life insurance policies belong to which of the
following?
-Beneficiary
-Insured
-Policyowner
4
ALL RIGHTS RESERVED.
Life, Health & Variable Annuity (2-15 Exam)
Questions With Verified Answers
Law of Averages - Answers✔Insurance concept founded on the ability to predict the approximate
number of deaths or frequency of disabilities within a certain group during a specific time.
Moral Hazard - Answers✔An owner is worried that employees will help themselves to products
on the shelf without paying for them. This is an example of what type of hazard?
Risk Avoidance - Answers✔Won't fly an airplane, never drives a car and keeps money out of the
stock market is known as what type of risk ?
Risk - Answers✔Uncertainty regarding financial loss best describes this term?
Transferring Risk - Answers✔Buying insurance is one of the most effective ways of...
The function of Insurance - Answers✔Spreads financial risk over a large group to minimize the
loss to any one individual.
Peril - Answers✔A Tornado is an example of a what type of hazard?
Risk Reduction - Answers✔Tom buys his wife a $50,000 diamond ring. When she is not wearing
it he locks it up in his safe. This is an example of what type of risk?
Domestic - Answers✔An insurance company organized and headquartered in Florida is what
type of company?
Insurer - Answers✔In an insurance transaction, licensed agents legally represent who?
-Applicant
-Themselves
-Insurer
Applicant & Insured - Answers✔In Florida, properly licensed and appointed agents may act as
brokers in insurance transactions , in which case they may legally represent who?
-Themselves
1
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
-Applicant & Insured
-State office of Insurance Regulation
Foreign - Answers✔A Life Insurance company organized in IL, with it's home office in
Philadelphia, is licensed to conduct business in Florida. In Florida, this company is classified as?
Assumes a portion of the risk from another insurer - Answers✔A reinsurer is a company that...
SEC (Securities & Exchange Commission) - Answers✔In addition to the state, the organization
that regulates variable life and variable annuities is the..
-FTC
-NAIC
-SEC
A claim will be paid if the insurer becomes insolvent - Answers✔The State Guaranty Association
guarantees that..
Direct Selling Systems - Answers✔All of the following methods support the sale of insurance
through agents and brokers EXCEPT
-Independant agency systems
-Career agency systems
-Direct selling systems
Express Authority - Answers✔The authority that an insurer gives to its agents by means of the
agent's contract is known as
-Implied Authority
-General Authority
-Express Authority
The contract is of Adhesion - Answers✔An insurance contract is prepared by one party, the
insurer, rather than by negotiation between the contracting parties. Which of the following
statements explains the characterisitcs of insurance contracts?
-The contract is Aleatory
-The contract is of Adhesion
-The contract is of Acceptance
2
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
The policy owner must expect to suffer a loss when the insured dies or becomes disabled -
Answers✔Which of the following statements describes an insurable interest?
-The beneficiary, by definition, has an insurable interest in the insured
-The insured must have a personal or business relationship with the beneficiary
-The policy owner must expect to suffer a loss when the insured dies or becomes disabled
TRUE - Answers✔A written contract cannot be changed by oral evidence.
TRUE or FALSE?
Conditional - Answers✔Which of the following is a distinguishing characteristic of an insurance
contract?
-Consideration
-Conditional
-Offer & Acceptance
TRUE - Answers✔An insurer is considered competent if it is licensed or authorized by the state.
TRUE or FALSE?
All of the above - Answers✔Competent parties who can enter into contracts are...
-Applicants
-Trusts & Estates
-Business Entities
-All of the above
Initial Premium - Answers✔Which of the following is an example of legal consideration?
-Politeness
-Legal Purpose
-Initial Premium
At the inception of the policy - Answers✔With life and health contracts, when must an insurable
interest exist?
Two years - Answers✔An insurance company has how many years to challenge the validity of a
life insurance contract?
3
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Waiver - Answers✔Which of the following terms is used for the voluntary relinquishment of a
known right?
-Adhesion
-Estoppel
-Waiver
VOID - Answers✔Bob and Tom enter into a contract in which Bob agrees to fraudulently induce
sick people to sell their insurance contracts to Tom's company can best be described as?
Level Term - Answers✔Which of the following terms bests describes a life insurance policy that
provides a straight $100,000 of coverage for a period of 5 years?
-Level Term
-Whole Term
-Permanent Level
FALSE - Answers✔A 3 year renewable policy allows a term policy owner to increase coverage
for the next 3 years.
TRUE or FALSE?
Step Rate - Answers✔When level premium insurance is renewed, the premium amount rises to
reflect the increased mortality risk of the insured's older age. What phrase best describes this
approach to increasing premiums?
-Step Rate
-Seniority Rate
-Targeted Rate
TRUE - Answers✔Whole life insurance is designed to mature at age 100.
TRUE or FALSE?
Policyowner - Answers✔The cash values of life insurance policies belong to which of the
following?
-Beneficiary
-Insured
-Policyowner
4
