LORIDA 2-15 INSURANCE
LICENSE EXAM LATEST 2023-2024
ACTUAL EXAM 300 QUESTIONS
AND CORRECT ANSWERS WITH
RATIONALES |AGRADE|NEW!!
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 - ANSWER- B. RATIONALE: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 -
ANSWER- C. RATIONALE:The parol evidence rule states that when
parties put their agreement in writing, all previous verbal statements
come together in that 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
LORIDA
,D. premiums and renewability - ANSWER- B.RATIONALE; 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 - ANSWER- A. RATIONALE; 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
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 - ANSWER- D. RATIONALE; 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 - ANSWER- B. RATIONALE; To be insurable, a
risk must involve the chance of loss that is fortuitous and outside the insured's
control.
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 - ANSWER- C. RATIONALE; If an applicant does not submit an initial
premium with the application, the applicant is inviting the insurance company to
LORIDA
, 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.
All statements made by an applicant in an application for life insurance are considered
to be
A. warranties
B. affirmations
C. representations
D. declarations - ANSWER- C RATIONALE;. Most states require that life insurance
policies contain a provision that all statements made in application be deemed
representation not warranties. A representation is a statement made by the applicant
that the applicant believes to be true. A warranty is a statement made by the
applicant that is guaranteed to be true. If an insurance company rejects a claim on
the basis of a representation, the company bears the burden of proving materiality.
Which of the following legal terms indicates that a life insurance contract contains the
enforceable promises of only one
party?
A. adhesion
B. unilateral
C. conditional
D. aleatory - ANSWER- B. RATIONALE; Insurance contracts are unilateral in that only
one party - the insurer - makes any kind of enforceable promise.
Which of the following types of agent authority is specifically set forth in writing in the
agent's contract?
A. express
B. implied
C. apparent
D. personal - ANSWER- A. RATIONALE; Express authority is the authority a principal
gives to its agent. Express authority is granted by means of the agent's contract,
which is the principal's appointment of the agent to act on its behalf.
Assume a home catches fire after it is struck by lightning and the fire destroys
its
structure and contents. By insurance definition, the fire
is
A. the risk
B. the hazard C. the peril
LORIDA
, D. the proximate cause - ANSWER- C. RATIONALE; A peril is the immediate specific
event causing loss and giving rise to risk. When a building burns, fire is the peril.
What constitutes "consideration" for a life insurance policy?
A. application and initial premium
B. agent's commission
C. adhesion feature of the contract
D. policy's benefits - ANSWER- A RATIONALE;. Consideration is the value given in
exchange for the promises sought. In an insurance contract, consideration is given
by the applicant in exchange for the insurer's promise to pay benefits, and it consists
of the application and the initial premium.
Statements made by an applicant for life insurance that are guaranteed to be true are
A. warranties
B. material statements
C. representations
D. declarations - ANSWER- A. RATIONALE; A warranty in insurance is a statement
made by the applicant that is guaranteed to be true. It becomes part of the contract
and, if found to be untrue, can be grounds for revoking the contract. Warranties are
presumed to be material because they affect the insurer's decision to accept or reject
an applicant.
Which of the following insurance companies is owned by its policyholders?
A. service insurer
B. stock insurer C. reinsurer
D. mutual insurer - ANSWER- D. RATIONALE; Mutual insurers are owned by the
policyholders. Anyone purchasing insurance from a mutual insurer is both a customer
and an owner.
With regard to life insurance, all of the following statements are correct EXCEPT
A. all individuals are considered to have insurable interests in themselves
B. spouses are automatically considered to have insurable interests in each other
C. a creditor has an insurable interest in a debtor
D. insurable interest must be maintained throughout the life of the contract - ANSWER-
D. Insurable interest is required only when a contract is issued; RATIONALE; it does
not have to be maintained throughout the life of the contract nor is it necessary at the
time of claim.
A life insurance company is organized in Orlando where it maintains its home office. In
Florida, the company is classified as
LORIDA
LICENSE EXAM LATEST 2023-2024
ACTUAL EXAM 300 QUESTIONS
AND CORRECT ANSWERS WITH
RATIONALES |AGRADE|NEW!!
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 - ANSWER- B. RATIONALE: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 -
ANSWER- C. RATIONALE:The parol evidence rule states that when
parties put their agreement in writing, all previous verbal statements
come together in that 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
LORIDA
,D. premiums and renewability - ANSWER- B.RATIONALE; 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 - ANSWER- A. RATIONALE; 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
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 - ANSWER- D. RATIONALE; 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 - ANSWER- B. RATIONALE; To be insurable, a
risk must involve the chance of loss that is fortuitous and outside the insured's
control.
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 - ANSWER- C. RATIONALE; If an applicant does not submit an initial
premium with the application, the applicant is inviting the insurance company to
LORIDA
, 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.
All statements made by an applicant in an application for life insurance are considered
to be
A. warranties
B. affirmations
C. representations
D. declarations - ANSWER- C RATIONALE;. Most states require that life insurance
policies contain a provision that all statements made in application be deemed
representation not warranties. A representation is a statement made by the applicant
that the applicant believes to be true. A warranty is a statement made by the
applicant that is guaranteed to be true. If an insurance company rejects a claim on
the basis of a representation, the company bears the burden of proving materiality.
Which of the following legal terms indicates that a life insurance contract contains the
enforceable promises of only one
party?
A. adhesion
B. unilateral
C. conditional
D. aleatory - ANSWER- B. RATIONALE; Insurance contracts are unilateral in that only
one party - the insurer - makes any kind of enforceable promise.
Which of the following types of agent authority is specifically set forth in writing in the
agent's contract?
A. express
B. implied
C. apparent
D. personal - ANSWER- A. RATIONALE; Express authority is the authority a principal
gives to its agent. Express authority is granted by means of the agent's contract,
which is the principal's appointment of the agent to act on its behalf.
Assume a home catches fire after it is struck by lightning and the fire destroys
its
structure and contents. By insurance definition, the fire
is
A. the risk
B. the hazard C. the peril
LORIDA
, D. the proximate cause - ANSWER- C. RATIONALE; A peril is the immediate specific
event causing loss and giving rise to risk. When a building burns, fire is the peril.
What constitutes "consideration" for a life insurance policy?
A. application and initial premium
B. agent's commission
C. adhesion feature of the contract
D. policy's benefits - ANSWER- A RATIONALE;. Consideration is the value given in
exchange for the promises sought. In an insurance contract, consideration is given
by the applicant in exchange for the insurer's promise to pay benefits, and it consists
of the application and the initial premium.
Statements made by an applicant for life insurance that are guaranteed to be true are
A. warranties
B. material statements
C. representations
D. declarations - ANSWER- A. RATIONALE; A warranty in insurance is a statement
made by the applicant that is guaranteed to be true. It becomes part of the contract
and, if found to be untrue, can be grounds for revoking the contract. Warranties are
presumed to be material because they affect the insurer's decision to accept or reject
an applicant.
Which of the following insurance companies is owned by its policyholders?
A. service insurer
B. stock insurer C. reinsurer
D. mutual insurer - ANSWER- D. RATIONALE; Mutual insurers are owned by the
policyholders. Anyone purchasing insurance from a mutual insurer is both a customer
and an owner.
With regard to life insurance, all of the following statements are correct EXCEPT
A. all individuals are considered to have insurable interests in themselves
B. spouses are automatically considered to have insurable interests in each other
C. a creditor has an insurable interest in a debtor
D. insurable interest must be maintained throughout the life of the contract - ANSWER-
D. Insurable interest is required only when a contract is issued; RATIONALE; it does
not have to be maintained throughout the life of the contract nor is it necessary at the
time of claim.
A life insurance company is organized in Orlando where it maintains its home office. In
Florida, the company is classified as
LORIDA
