FLORIDA 2-15 INSURANCE LICENSE EXAM
PRACTICE QUESIONS WITH 100% CORRECT
ANSWERS NEW MODIFIED EXAM
Which of the following constitutes an insurable interest?
A. the policyowner must expect to benefit from the insured's death
B. the policyowner must expect to suffer a loss when the insured dies or
becomes disabled
C. the beneficiary, by definition, has an insurable interest in the insured
D. the insured must have a personal or business relationship with the
beneficiary --CORRECT ANSWER--B. Insurable interest requires the
policyowner to benefit from the insured's continuing to live or enjoy good
health or to suffer a loss when the insured dies or is disabled.
Which of the following statements describes the parol evidence rule?
A. a written contract cannot be changed once it is signed
B. an oral contract cannot be modified by written evidence
C. a written contract cannot be changed by oral evidence
D. an oral contract takes precedence over any earlier written contract --
CORRECT ANSWER--C. The parol evidence rule states that when parties put
their agreement in writing, all previous verbal statements come together in that
Page 1 of 50
,writing, and a written contract cannot be changed or modified by parol (oral)
evidence.
Which of the following factors determines whether policy dividends will be
paid on a participating policy?
A. reserves and experience
B. expenses and claims costs
C. interest and benefits
D. premiums and renewability --CORRECT ANSWER--B. If expenses and
claims costs are less than expected, dividends are likely to be paid.
A licensed agent legally represents
A. the insurer
B. the applicant/insured
C. the state insurance department
D. himself or herself --CORRECT ANSWER--A. An agent is an individual who
has been authorized by an insurer to be its representative to the public and to
offer for sale its goods and services.
All of the following statements regarding policy replacement are correct
EXCEPT
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,A. replacement involves convincing a policyholder to lapse or terminate an
existing policy and to purchase another
B. interrupting one cash value insurance plan to begin another could cause
serious financial problems for the policyowner
C. even if the customer wants to replace his or her existing policy, an agent can
effect a policy replacement only by following the replacement regulations in the
agent's state
D. premiums for the replacement policies are generally lower than premiums for
the existing policies they replace --CORRECT ANSWER--D. The new policy
will probably be at a higher premium rate because it will be based on the
insured's then-attained age.
With regard to insurable risks, which of the following statements is NOT
correct?
A. only pure risks are insurable
B. an insurable risk must involve loss that is within the insured's control
C. insurers will not insure risks that are catastrophic in nature
D. an insurable risk must be measurable --CORRECT ANSWER--B. To be
insurable, a risk must involve the chance of loss that is fortuitous and outside
the insured's control.
Page 3 of 50
, On August 9, Albert made an application for life insurance that his agent
submitted a day later without a premium payment. On August 21, the insurer
issued the policy as applied for and on August 24, the agent delivered the policy
and collected the initial premium. On what day was the contract offer made?
A. August 9
B. August 10
C. August 21
D. August 24 --CORRECT ANSWER--C. If an applicant does not submit an
initial premium with the application, the applicant is inviting the insurance
company to make a contract offer. The insurer can respond by issuing a policy
(the offer) that the applicant can accept by paying the premium when the policy
is delivered.
In the insurance business, risk can best be defined as:
A. sharing the possibility of a loss
B. uncertainty regarding the future
C. uncertainty regarding financial loss
D. uncertainty regarding when death will occur --CORRECT ANSWER--C.
The concept of insurance developed from the need to minimize the adverse
effects of risk associated with the probability of financial loss.
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PRACTICE QUESIONS WITH 100% CORRECT
ANSWERS NEW MODIFIED EXAM
Which of the following constitutes an insurable interest?
A. the policyowner must expect to benefit from the insured's death
B. the policyowner must expect to suffer a loss when the insured dies or
becomes disabled
C. the beneficiary, by definition, has an insurable interest in the insured
D. the insured must have a personal or business relationship with the
beneficiary --CORRECT ANSWER--B. Insurable interest requires the
policyowner to benefit from the insured's continuing to live or enjoy good
health or to suffer a loss when the insured dies or is disabled.
Which of the following statements describes the parol evidence rule?
A. a written contract cannot be changed once it is signed
B. an oral contract cannot be modified by written evidence
C. a written contract cannot be changed by oral evidence
D. an oral contract takes precedence over any earlier written contract --
CORRECT ANSWER--C. The parol evidence rule states that when parties put
their agreement in writing, all previous verbal statements come together in that
Page 1 of 50
,writing, and a written contract cannot be changed or modified by parol (oral)
evidence.
Which of the following factors determines whether policy dividends will be
paid on a participating policy?
A. reserves and experience
B. expenses and claims costs
C. interest and benefits
D. premiums and renewability --CORRECT ANSWER--B. If expenses and
claims costs are less than expected, dividends are likely to be paid.
A licensed agent legally represents
A. the insurer
B. the applicant/insured
C. the state insurance department
D. himself or herself --CORRECT ANSWER--A. An agent is an individual who
has been authorized by an insurer to be its representative to the public and to
offer for sale its goods and services.
All of the following statements regarding policy replacement are correct
EXCEPT
Page 2 of 50
,A. replacement involves convincing a policyholder to lapse or terminate an
existing policy and to purchase another
B. interrupting one cash value insurance plan to begin another could cause
serious financial problems for the policyowner
C. even if the customer wants to replace his or her existing policy, an agent can
effect a policy replacement only by following the replacement regulations in the
agent's state
D. premiums for the replacement policies are generally lower than premiums for
the existing policies they replace --CORRECT ANSWER--D. The new policy
will probably be at a higher premium rate because it will be based on the
insured's then-attained age.
With regard to insurable risks, which of the following statements is NOT
correct?
A. only pure risks are insurable
B. an insurable risk must involve loss that is within the insured's control
C. insurers will not insure risks that are catastrophic in nature
D. an insurable risk must be measurable --CORRECT ANSWER--B. To be
insurable, a risk must involve the chance of loss that is fortuitous and outside
the insured's control.
Page 3 of 50
, On August 9, Albert made an application for life insurance that his agent
submitted a day later without a premium payment. On August 21, the insurer
issued the policy as applied for and on August 24, the agent delivered the policy
and collected the initial premium. On what day was the contract offer made?
A. August 9
B. August 10
C. August 21
D. August 24 --CORRECT ANSWER--C. If an applicant does not submit an
initial premium with the application, the applicant is inviting the insurance
company to make a contract offer. The insurer can respond by issuing a policy
(the offer) that the applicant can accept by paying the premium when the policy
is delivered.
In the insurance business, risk can best be defined as:
A. sharing the possibility of a loss
B. uncertainty regarding the future
C. uncertainty regarding financial loss
D. uncertainty regarding when death will occur --CORRECT ANSWER--C.
The concept of insurance developed from the need to minimize the adverse
effects of risk associated with the probability of financial loss.
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