6/28/25, 9:28
AM
FLORIDA INSURANCE 2-15 EXAM TERMS QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED GRADED A++ VERSION
2025/2026
Terms in this set (434)
Financial protection against loss or harm
Insurance - An arrangement by which company
gives customers financial protection
against loss or harm such as theft or
illness in return for premium payments.
Life Insurance Is based on actuarial or mathematical
principles and guarantees a specified
sum of money upon the death of the
person who is insured.
Health Insurance Evolved from scientific principles to
provide funds for medical expensed due
to sickness or injury and to cover loss of
income during disability
Annuities Provide a stream of income by making a
series of payments to the annuitant for
the annuitant's lifetime or for a
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AM
specifically designated period of time.
Risk Uncertainty regarding loss; the
probability of loss occurring for an
insured or prospect
Speculative Risks Involve the possibility of loss and gain. (Not
Insurable)
Pure Risks Involve the possibility of loss only. (Insurable)
Peril Cause of risk (when a building burns, fire is the
peril)
Hazards The source of danger
A hazard being of physical nature.
Physical Hazard A person being treated of cancer, the
disease is the physical endangerment.
(Blindness & deafness)
Risk Avoidance Occurs when individuals evade risk
entirely. "If you don't drive, then you
avoid getting in an auto accident."
Risk Reduction Takes place when the chances of loss
are lessened. Changing a lifestyle to
minimize a known risk.
Risk Retention Being aware of the risks involved and
taking precautions for financial
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19
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AM
protection. Auto policy's deductible is an
illustration of risk retention
Risk Transference The act of shifting the responsibility of risk
to another in the form of an insurance
contract.
Adverse Selection Refers to the tendency for those
individuals who present less favorable
insurance risk to seek or continue
insurance to a great extent than other
risks.
Loss must be due to chance
Loss must be
definite and
Insuring Pure Risk measurable Risk
must be predictable
Loss must NOT
be
catastrophic
Exposure to
loss must be
large
Loss exposures must be randomly selected
3/
19
AM
FLORIDA INSURANCE 2-15 EXAM TERMS QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED GRADED A++ VERSION
2025/2026
Terms in this set (434)
Financial protection against loss or harm
Insurance - An arrangement by which company
gives customers financial protection
against loss or harm such as theft or
illness in return for premium payments.
Life Insurance Is based on actuarial or mathematical
principles and guarantees a specified
sum of money upon the death of the
person who is insured.
Health Insurance Evolved from scientific principles to
provide funds for medical expensed due
to sickness or injury and to cover loss of
income during disability
Annuities Provide a stream of income by making a
series of payments to the annuitant for
the annuitant's lifetime or for a
1/
19
,6/28/25, 9:28
AM
specifically designated period of time.
Risk Uncertainty regarding loss; the
probability of loss occurring for an
insured or prospect
Speculative Risks Involve the possibility of loss and gain. (Not
Insurable)
Pure Risks Involve the possibility of loss only. (Insurable)
Peril Cause of risk (when a building burns, fire is the
peril)
Hazards The source of danger
A hazard being of physical nature.
Physical Hazard A person being treated of cancer, the
disease is the physical endangerment.
(Blindness & deafness)
Risk Avoidance Occurs when individuals evade risk
entirely. "If you don't drive, then you
avoid getting in an auto accident."
Risk Reduction Takes place when the chances of loss
are lessened. Changing a lifestyle to
minimize a known risk.
Risk Retention Being aware of the risks involved and
taking precautions for financial
2/
19
, 6/28/25, 9:28
AM
protection. Auto policy's deductible is an
illustration of risk retention
Risk Transference The act of shifting the responsibility of risk
to another in the form of an insurance
contract.
Adverse Selection Refers to the tendency for those
individuals who present less favorable
insurance risk to seek or continue
insurance to a great extent than other
risks.
Loss must be due to chance
Loss must be
definite and
Insuring Pure Risk measurable Risk
must be predictable
Loss must NOT
be
catastrophic
Exposure to
loss must be
large
Loss exposures must be randomly selected
3/
19
