214 FLORIDA INSURANCE ACTUAL EXAM WITH QUESTIONS AND ANSWERS VERIFIED

This type of insurance pays when an insured has died to offset the economic loss to dependents. A) life B) health C) annuity D) property and casualty - Life Insurance An insurance _________ is the device used by insurance companies to accumulate funds to meet uncertain losses. - Policy Insurance companies aggregate (collect) premiums to make claims payments - the aggregating of premiums to pay claims is called _____ ___________. - Risk Pooling The more _______ units an insurance company has to study the more likely any projections made will equal what actually occurs. - Exposure Units Which type of risk is ONLY the chance of loss? A) speculative risk B) gambling risk C) pure risk D) risk and return - Pure Risk A ________ hazard is an UNCONSCIOUS mental attitude which increases the probability and severity of loss. - Morale Hazard An insured that purposely inflates the value of his claim is guilty of a _______ hazard. A) typical B) physical C) moral D) morale - Moral Hazard A _______ is defined as a contingency that may cause a loss and a hazard is a condition that increases the likelihood of a loss from a _______. - Peril Never flying in a plane to reduce the likelihood of being involved in an airplane crash is an example of? A) risk reduction B) risk retention C) risk avoidance D) risk transfer - Risk Avoidance Risk ___________ involves efforts to mitigate the exposure "to" and effects "of" a loss. - Risk Reduction For an individual who owns a motorcycle and does not insure it what type of so called risk technique is being used by the individual if the motorcycle is stolen and the insured pays for its loss out of his own savings? A) risk avoidance B) risk reduction C) risk retention D) risk transfer - Risk Retention What is the most common form of risk transfer? A) risk retention B) contractual transfer C) insurance D) luck - Insurance Which of the following is NOT an element of an insurable risk? A) exposure to loss must be due to chance B) exposure to loss must be definite and measurable C) exposure to loss cannot be catastrophic D) exposure to loss must be entirely unpredictable - Unpredictable Loss Exposures are not Insurable _______ _______ _______is the economic valuation of an individual based on the individual's earning potential both present and future. - Human Life Value Tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others - also, tendency of policyowners to take advantage of favorable options in insurance contracts. - Adverse Selection