FLORIDA 2-15 INSURANCE EXAM (LATEST 2024/2025
UPDATE) | VERIFIED Q&A – 100% CORRECT | GRADE A
◉ Each of the following statements about the incontestable clause in a life
insurance policy is correct EXCEPT
A. the clause gives people assurance that when their policies become claims,
they will be paid without delays or protest
B. the incontestable clause means that after a certain period, an insurer cannot
refuse to pay the proceeds of a policy or void the contract
C. incontestable clauses usually become effective from the issue date of the
policy
D. insurers can void a contract even after the specified period provided they
can prove the policy was purchased fraudulently. Answer: D. After the policy
has been in force for the specified period, the company cannot contest a death
claim or refuse payment of the proceeds even on the basis of a material
misstatement, concealment, or fraud.
◉ All of the following statements correctly describe the purpose of Social
Security EXCEPT
A. to provide basic protection against financial problems accompanying death,
disability, and retirement
B. to augment a sound personal insurance plan
C. to provide a source of income for a meaningful standard of living
D. to protect workers, their spouses, and dependent children. Answer: C. The
purpose of the Social Security system is to provide a basic floor of protection
,to augment - not protect - a sound personal insurance plan. Many expect Social
Security to fulfill all their financial needs and to provide a meaningful standard
of living. The consequences of this misunderstanding have been
disillusionment by many Americans who found they were inadequately
covered when they needed life insurance, disability income, or retirement
income.
◉ Ralph owns a $50,000 nonpar whole life policy. Its cash value has
accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he
surrenders the policy for its cash value, how will it be taxed?
A. Ralph will receive the $15,000 tax free
B. Ralph will receive $5,500 tax free; the $9,500 balance is taxable as income
C. Ralph will receive the $9,500 tax free; the $5,500 balance is taxable as
income
D. Ralph will receive the $15,000 as taxable income. Answer: C. A policyowner
is allowed to receive tax free an amount equal to what the policyowner paid
into the policy over the years in the form of premiums.
◉ Which of the following would NOT apply when a life insurance policy is
reinstated after a lapse?
A. all back premiums must be paid
B. all outstanding loans must be paid
C. a new contestable period goes into effect
D. a new suicide exclusion period goes into effect. Answer: D. There is no new
suicide exclusion period when a policy is reinstated.
,◉ Jane, age 35, has just purchased a 20-pay whole life policy. When she turns
55, she will
A. receive the policy's face value benefit
B. have a fully matured policy
C. cease paying premiums
D. no longer be covered by the policy. Answer: C. Limited pay whole life
policies have level premiums that are limited to a certain period (less than
life), after which no more premiums are owed.
◉ If a life insurance applicant is given a binding receipt, when does the
applicant's coverage become effective?
A. the date the policy is issued
B. the date the applicant proves to be insurable
C. the date the receipt is given
D. the date the policy is delivered. Answer: C. Under a binding receipt (or
temporary insurance agreement), coverage is guaranteed at the time of
application for the amount of insurance applied for. The temporary coverage
continues until the policy is issued as requested, until the company offers a
different policy or until the company rejects the application, but in no event
for more than 60 days from the date the agreement was signed.
◉ Who performs the function of risk selection in determining an individual's
insurability for policy issue?
, A. actuary
B. agent
C. fiduciary
D underwriter. Answer: D. Who is qualified to purchase life insurance and who
is not? The process of answering this question is called risk selection, a
function that is performed by insurance company underwriters.
◉ Regular notices sent to policyowners for payment of their life insurance
policy premiums reflect
A. gross premium
B. net level premium
C. net single premium
D. none of the above. Answer: A. Gross premium equals net single premium
plus expense. The gross premium is what the policyowners are required to
pay.
◉ in which of the following situations would the premium payor of a life
insurance policy be able to deduct the premium payments for tax purposes?
A. Joe, the sole proprietor of a grocery store, purchases and pays premiums on
a $75,000 term life policy on his life and names his wife as beneficiary
B. Leland, a local board member of the United Way, assigns his $25,000 whole
life policy to that organization, but continues to make the premium payments
C. Michelle, the legal guardian of 5-year-old Angela, makes the premium
payments on Angela's $5,000 juvenile life insurance policy
UPDATE) | VERIFIED Q&A – 100% CORRECT | GRADE A
◉ Each of the following statements about the incontestable clause in a life
insurance policy is correct EXCEPT
A. the clause gives people assurance that when their policies become claims,
they will be paid without delays or protest
B. the incontestable clause means that after a certain period, an insurer cannot
refuse to pay the proceeds of a policy or void the contract
C. incontestable clauses usually become effective from the issue date of the
policy
D. insurers can void a contract even after the specified period provided they
can prove the policy was purchased fraudulently. Answer: D. After the policy
has been in force for the specified period, the company cannot contest a death
claim or refuse payment of the proceeds even on the basis of a material
misstatement, concealment, or fraud.
◉ All of the following statements correctly describe the purpose of Social
Security EXCEPT
A. to provide basic protection against financial problems accompanying death,
disability, and retirement
B. to augment a sound personal insurance plan
C. to provide a source of income for a meaningful standard of living
D. to protect workers, their spouses, and dependent children. Answer: C. The
purpose of the Social Security system is to provide a basic floor of protection
,to augment - not protect - a sound personal insurance plan. Many expect Social
Security to fulfill all their financial needs and to provide a meaningful standard
of living. The consequences of this misunderstanding have been
disillusionment by many Americans who found they were inadequately
covered when they needed life insurance, disability income, or retirement
income.
◉ Ralph owns a $50,000 nonpar whole life policy. Its cash value has
accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he
surrenders the policy for its cash value, how will it be taxed?
A. Ralph will receive the $15,000 tax free
B. Ralph will receive $5,500 tax free; the $9,500 balance is taxable as income
C. Ralph will receive the $9,500 tax free; the $5,500 balance is taxable as
income
D. Ralph will receive the $15,000 as taxable income. Answer: C. A policyowner
is allowed to receive tax free an amount equal to what the policyowner paid
into the policy over the years in the form of premiums.
◉ Which of the following would NOT apply when a life insurance policy is
reinstated after a lapse?
A. all back premiums must be paid
B. all outstanding loans must be paid
C. a new contestable period goes into effect
D. a new suicide exclusion period goes into effect. Answer: D. There is no new
suicide exclusion period when a policy is reinstated.
,◉ Jane, age 35, has just purchased a 20-pay whole life policy. When she turns
55, she will
A. receive the policy's face value benefit
B. have a fully matured policy
C. cease paying premiums
D. no longer be covered by the policy. Answer: C. Limited pay whole life
policies have level premiums that are limited to a certain period (less than
life), after which no more premiums are owed.
◉ If a life insurance applicant is given a binding receipt, when does the
applicant's coverage become effective?
A. the date the policy is issued
B. the date the applicant proves to be insurable
C. the date the receipt is given
D. the date the policy is delivered. Answer: C. Under a binding receipt (or
temporary insurance agreement), coverage is guaranteed at the time of
application for the amount of insurance applied for. The temporary coverage
continues until the policy is issued as requested, until the company offers a
different policy or until the company rejects the application, but in no event
for more than 60 days from the date the agreement was signed.
◉ Who performs the function of risk selection in determining an individual's
insurability for policy issue?
, A. actuary
B. agent
C. fiduciary
D underwriter. Answer: D. Who is qualified to purchase life insurance and who
is not? The process of answering this question is called risk selection, a
function that is performed by insurance company underwriters.
◉ Regular notices sent to policyowners for payment of their life insurance
policy premiums reflect
A. gross premium
B. net level premium
C. net single premium
D. none of the above. Answer: A. Gross premium equals net single premium
plus expense. The gross premium is what the policyowners are required to
pay.
◉ in which of the following situations would the premium payor of a life
insurance policy be able to deduct the premium payments for tax purposes?
A. Joe, the sole proprietor of a grocery store, purchases and pays premiums on
a $75,000 term life policy on his life and names his wife as beneficiary
B. Leland, a local board member of the United Way, assigns his $25,000 whole
life policy to that organization, but continues to make the premium payments
C. Michelle, the legal guardian of 5-year-old Angela, makes the premium
payments on Angela's $5,000 juvenile life insurance policy
