LIFE INSURANCE LICENSE ACTUAL TEST
SCRIPT WITH SOLVED QUESTIONS AND
VERIFIED ANSWERS
●● Risk
Answer: Uncertainty as to the outcome of an event whentwo or more
possibilities exist
●● Three types of hazards
Answer: Physical, Moral, Morale
●● peril
Answer: the cause of a possible loss
●● Elements of insurable risk
Answer: Loss must be (1) due to chance, (2) definite and measurable, (3)
statistically predictable, (4) not catastrophic, (5) with large loss
exposure, and (6) insurance cannot be mandatory
●● The difference between an authorized/admitted and
unauthorized/non-admitted insurer
Answer: And admitted or authorizing insurer is qualified and receives a
certificate of authority from the Department of insurance to transact
,insurance in the state. A nonadmitted or an authorized insurer is an
insurance company that has not applied for or has been denied a
certificate of authority and may not transact insurance
●● The difference between domestic, foreign and alien insurance
companies
Answer: Domestic insurer is incorporated in this state. A foreign insurer
is incorporated in another state. A alien insurer is incorporated outside of
the United States
●● Three types of agent authority
Answer: Express, a parent, and implied
●● Four elements of an insurance contract
Answer: Agreement - offer and acceptance, consideration, competent
parties, and legal purpose
●● indemnify
Answer: To "restore" an insured to the same financial status as before
the loss
●● Representation and how it differs from a warranty
, Answer: Representations are statements believed to be true to the best of
one's knowledge. A warranty is an absolutely true statement upon which
the validity of the insurance policy depends.
●● Insurable interest - when it should exist
Answer: Insurable interest must exist between the policy owner and the
insured at the time of application (or the time of policy issue), but not at
the time of loss
●● Common personal uses of life insurance
Answer: Survivor protection, estate creation and conservation, cash
accumulation, and liquidity
●● Needs approach
Answer: The needs approach is based on the predicted needs of the
family after the premature death of the insured
●● The purpose of key person insurance
Answer: To minimize the risk of a financial loss because of premature
death of a key employee that has specialize knowledge, skills, or
business contacts
●● Insurance solicitation
SCRIPT WITH SOLVED QUESTIONS AND
VERIFIED ANSWERS
●● Risk
Answer: Uncertainty as to the outcome of an event whentwo or more
possibilities exist
●● Three types of hazards
Answer: Physical, Moral, Morale
●● peril
Answer: the cause of a possible loss
●● Elements of insurable risk
Answer: Loss must be (1) due to chance, (2) definite and measurable, (3)
statistically predictable, (4) not catastrophic, (5) with large loss
exposure, and (6) insurance cannot be mandatory
●● The difference between an authorized/admitted and
unauthorized/non-admitted insurer
Answer: And admitted or authorizing insurer is qualified and receives a
certificate of authority from the Department of insurance to transact
,insurance in the state. A nonadmitted or an authorized insurer is an
insurance company that has not applied for or has been denied a
certificate of authority and may not transact insurance
●● The difference between domestic, foreign and alien insurance
companies
Answer: Domestic insurer is incorporated in this state. A foreign insurer
is incorporated in another state. A alien insurer is incorporated outside of
the United States
●● Three types of agent authority
Answer: Express, a parent, and implied
●● Four elements of an insurance contract
Answer: Agreement - offer and acceptance, consideration, competent
parties, and legal purpose
●● indemnify
Answer: To "restore" an insured to the same financial status as before
the loss
●● Representation and how it differs from a warranty
, Answer: Representations are statements believed to be true to the best of
one's knowledge. A warranty is an absolutely true statement upon which
the validity of the insurance policy depends.
●● Insurable interest - when it should exist
Answer: Insurable interest must exist between the policy owner and the
insured at the time of application (or the time of policy issue), but not at
the time of loss
●● Common personal uses of life insurance
Answer: Survivor protection, estate creation and conservation, cash
accumulation, and liquidity
●● Needs approach
Answer: The needs approach is based on the predicted needs of the
family after the premature death of the insured
●● The purpose of key person insurance
Answer: To minimize the risk of a financial loss because of premature
death of a key employee that has specialize knowledge, skills, or
business contacts
●● Insurance solicitation
